Article
http://news.bbc.co.uk/2/hi/business/7957671.stm
Summary
The Indian car company Tata is going to launch the world's cheapest car next month. The car is called the Tata Nano, is about 100,000 rupees ($1,979; £1,366). With such a low price, Tata hopes it can encourage the Indian people to buy the car. About the car, it is 10 foot long and has five seats. Because of the price is so cheap, the function of the car is not going to be as good as the others. "The basic model has no airbags, air conditioning, radio, or power steering. However, more luxurious versions will be available." says in the article.
Connection
The connection is the increase in the net income. In the last section of chapter 11, it mentions about how to increse the net income. Use Tata as an example, it uses the low price and high sells strategy to increase its net income. It also connects to the JA Titan game that we had played earlier.
Reflection
Some people think it may increase the company's revenur rapidly, because a lot of people are going to buy the car. In fact it is not, "Even if Tata can sell 250,000 models a year, it will add only 3% to the firm's revenues." says Vaishali Jajoo. Although it is not very successful, but personaly I think this strategy is going work well in the future. As we know, the US's car companies are all facing difficulty during the recession. Those companies could try the low price strategy to save themselve.
