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Assignment: Business Strategy and Environment

Submitted to: Dr. Sasmita Palo

Submitted By:

Mayur Soni M2018HRM064

M.A. Human Resources Management & Labour Relations (2018-20) - 3nd Semester

Management & Labour Relations (2018-20) - 3nd Semester School of Management and Labor Studies Tata Institute

School of Management and Labor Studies Tata Institute of Social Sciences

1. What do you think about the trend towards autonomous vehicles (AVs)? Is it decisive and irreversible? Why or why not?

The world is becoming more connected and technologically advanced, the concept of autonomous or self-driving vehicles has evolved from an idea to a major trend.

Automation and innovative technologies such as artificial intelligence (AI) are disrupting the business landscape, and the automotive industry is no exception. Leading car makers are embracing the concept of smart vehicles and delivering captivating car models that can offer a safe and efficient ride.

The market is booming, and autonomous vehicles are finding their place in various industries. For instance, fleets of self-driving vehicles have already proven to be an amazing solution for struggling logistics, and with hundreds of miles under their belt, they’re reshaping the supply chain.

Self-driving systems are set to disrupt public transportation as well, and soon-to-be smart cities are testing the waters of automated public transport by implementing self-driving buses.

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Not only would autonomous public transportation make commutes more efficient and comfortable, it would also lead to a significant reduction in traffic-related pollution.

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And while some safety issues still need to be addressed, developers are steadily continuing to improve their designs, delivering increasingly promising so Automation and innovative technologies such as artificial intelligence (AI) are disrupting the business landscape, and the automotive industry is no exception.

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As the world is becoming more connected and technologically advanced, the concept of autonomous or self-driving vehicles has evolved from an idea to a major trend. Leading car makers are embracing the concept of smart vehicles and delivering captivating car models that can offer a safe and efficient ride.

The market is booming, and autonomous vehicles are finding their place in various industries. For instance, fleets of self-driving vehicles have already proven to be an amazing solution for struggling logistics, and with hundreds of miles under their belt,

they’re reshaping the supply chain.

o

Self-driving systems are set to disrupt public transportation as well, and soon-to-be smart cities are testing the waters of automated public transport by implementing self-driving buses.

o

Not only would autonomous public transportation make commutes more efficient and comfortable, it would also lead to a significant reduction in traffic-related pollution.

o

And while some safety issues still need to be addressed, developers are steadily continuing to improve their designs, delivering increasingly promising solutions to ensure the safety of passengers and pedestrians alike.

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AI-powered cars are making our roads safer and less congested, while at the same time reshaping industries across the board. And smarter infrastructure will make it possible for intelligent vehicles to eventually replace our traditional cars.

According to me these trends are completely decisive as they are changing the way transportation from one place to other is perceived.

In future these changes will be irreversible as well because the organization and governments are learning to draw synergies in their operations through these innovative solutions, and in near future it will be difficult to avoid adoption of such solutions and still be relevant in the business domain.

Another reason for these changes to be irreversible and decisive in nature because it is solving a problem of traffic regulations, congestions, and road accidents which governments are struggling to solve for decades

2. Choose an industry you understand and explain how autonomous vehicles might impact that industry. Think about a to-be new opportunity that AVs enable and briefly explain your idea using Kim and Mauborgne's Eliminate-Reduce-Raise-Create Grid.

According to me autonomous vehicles can turn out to be a pathbreaker innovation for retail industry as they have led to the emergence of few innovative business models which have drastically changed the way business is conducted in this arena as well as it has set up new dimensions for better customer experience.

AVs can unlock an opportunity to for FMCG manufacturers and retail players to directly be in touch with consumers eliminating the mediators completely from the picture through new and innovative business models like Direct to consumer model.

In this model the retail players and FMCG manufacturers can directly deliver their products to the end consumer using autonomous vehicles completely eliminating needs for these supermarkets and hypermarkets. It has the potential to completely change the shape of retail sector. They can also help eliminate uncertainties in last mile deliveries and make the supply chain more effective and efficient.

Further in order to analyze the detailed impact of autonomous vehicles on retail sector using Kim and Mauborgne's Eliminate-Reduce-Raise-Create Grid, lets us first understand what it is all about the processes.

Eliminate-Reduce-Raise-Create Grid developed by Kim and Mauborgne is a tool that helps organization to concentrate simultaneously on eliminating, reducing as well as simultaneously raising and creating which helps the organization to unlock a new blue ocean of opportunities.

Now focusing on each factor one by one I will try to explain the various aspects of this emergent business model using above mentioned ERRC grid-

1. Eliminate- This will largely eliminate traditional store based model of retail sector and in a way change the landscape of competition among brands to occupy more shelf-space. However the competition will shift its form and turn into a new race to occupy more online shelf space to grab consumer visibility.

2. Raise- It will give boost to e retail and innovations in supply chain to improve consumer

experience as well as gain more efficiencies. It will increase the reach of online retailers in terms of direct connectivity to consumers and will help them generate loads of consumer data to effectively

predict consumer behaviors and craft their services specific to the needs of consumers. Hence consumer-centricity will also see a boost because of it.

3. Reduce- The most important factors that needs to be reduced are the costs of transportation,

because in retail sector apart from raw material transportation costs are the second largest cost associated with cost of goods sold. Hence the technology of autonomous vehicles need to be developed further and made affordable to be used for daily business operations so that large businesses can have a profit of large scale deliveries using fleet of autonomous vehicles.

4. Create- As mentioned earlier the industry should trend towards more consumer centric offerings

while keeping the costs limited to certain levels. The whole mindset needs to be shifted from product based to service based. The use of autonomous vehicles is a touchpoint to consumers hence organizations can employ innovative ways to provide seamless consumer experience

The model has the potential to completely change the shape of retail sector. They can also help eliminate uncertainties in last mile deliveries and make the supply chain more effective and efficient.

Further in order to analyze the detailed impact of autonomous vehicles on retail sector using Kim and Mauborgne's Eliminate-Reduce-Raise-Create Grid, lets us first understand what it is all about the processes.

Q 3. Use autonomous vehicles to discuss the industry's evolution, the roles of different players, and the shift in the profit pool.

Auto manufacturers, such as Toyota, have already partnered with several companies, including Amazon, to create self-driving package and food delivery vehicles. With autonomous vehicles in their infancy, it can be difficult for any industry to imagine and, more importantly, implement innovative use cases. But the retailer of the future has to explore the opportunities autonomous vehicles offer from deliveries to roving showrooms to other capabilities not yet imagined.

After the disruption of retail sector in the form of online retail and closure of many traditional brick and mortar businesses there is something more disruptive going to happen in the retail sector which is autonomous delivery.

Retail e-commerce sales represent only 10 percent of total retail sales in the US. Companies such as Casper and Warby Parker succeeded by combining the e-commerce business model with the ability to touch and feel a physical product through a delivery system. They successfully connected the online to offline worlds and bridged that gap. While they eventually opened up popup locations and, in some cases, physical retail locations, it is this connection between the physical and digital worlds that created a recipe for success.

In the near future, autonomous vehicles powered by AI will be able to bridge that same gap for other retailers while gathering insights on where the most successful target markets are likely to be.

Therefore, it’s safe to say that businesses will adopt autonomous vehicles faster than consumers with the exception of some exceptionally keen early-adopter types. With the potential cost savings that can materialize throughout the supply chain by integrating machine learning and AI and by reducing the overhead of physical stores, commerce will find itself evolving from traditional brick and mortar stores to mobile stores that are on-demand and that relocate in response to customer and business demands. It’s only a matter a time.

4. Is autonomous driving technology a Blue Ocean Strategy? Why or why not? What if anything is the difference between technology invention and value innovation.

Meaning of Blue Ocean Strategy: Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.

No, the autonomous driving technology will not move towards blue ocean strategy in future. The key reasons other players in automobile manufacturing and technology based companies are already having serious discussion and strategy to build the capability to jump on the band wagon of autonomous driving technology vehicles and it is more relevant to note that, respective governments of multiple nations across continents are changing their respective policies and incentivizing the first movers to leverage the same in their respective geographies by signing MOU with prominent players for technological research and collaborating with other players to bring down the cost of research and development.

For instance, Waymo, the self-driving car division of Google, has ordered 82,000 self-driving cars for delivery through 2020. Cruise Automation, from General Motors, is perfecting their own fleet. Countless companies are driving full-throttle into the future. Hence, the autonomous driving technology is not a blue ocean strategy in present and neither will be in future.

Yes, the autonomous driving technology will be move in arena of blue ocean strategy if the organisation is able to manage the differentiation and sustaining the competitive advantage through wither technology invention in existing technology or value addition that is delivering service in very effective manner and devising the different ways to add more values to customer or both.

In any of the case organisation will be in blue ocean area if they keep it difficult to copy by the competitors and keep innovating for a longer period of time in the market.

5. Use autonomous technology vehicles to illustrate the difference between disruptive innovation and Blue ocean strategy, and to discuss a growth model in terms of market creating strategy.

Meaning of Blue Ocean Strategy: Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.

Meaning of Disruptive Innovation: In business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances. Disruptive innovations tend to be produced by outsiders and entrepreneurs in startups, rather than existing market-leading companies. The business environment of market leaders does not allow them to pursue disruptive innovations when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from sustaining innovations (which are needed to compete against current competition).

In context of autonomous technology vehicles, both Blue Ocean and disruptive innovation advocates recognize the need to do far more than to simply mirror “best practices” or to use their competition as a benchmark for performance. In an automobiles world, uptight with competition for customers with competitors fighting for market space and adding value, firms that compete using traditional strategic assumptions have found that their competitors are growing, their margins are shrinking, and their ability to differentiate themselves and demonstrate unique advantages has become more complex. Although the focus of blue ocean and disruptive innovation approaches differs somewhat, both strategies emphasize the value of constantly assessing how products and services can best serve present and future customers. Carving out a new market space allows firms to create superordinate profits and allows innovating companies to enjoy the benefits of limited competition that the ongoing pursuit of improvement and meeting customer needs can sustain .As a critical element for economic success, innovating in ways that create new markets and that best serve the needs of customers in accomplishing their high priority tasks enables companies to outperform their competitors.

The difference between blue ocean strategy and disruptive innovation comes from the understanding of market capture. The initial strategy primarily focus on making competitor irrelevant in the existing market for greater market share by differentiating the offering and continuous innovation. Whereas the disruptive innovation focus on displacing existing market, competitors, value chain, business model with its disruption. The blue ocean strategy doesnt completely displace business models, markets and competitor it focus on differentiating offering and becoming more superior for customer preference with respect to competitors. Whereas, the disruptive innovation focus on changing the market offerings and expectations completely by displacing the existing system.

Coming to the growth model market creating strategy in terms of AV technology, in initial years the service providers can charge premium for the offering being the first mover in the niche area. The more industry becomes mature and more players enter in the market the firm should retain the customer base and offer value added services to capture greater market share. The time will come over a period of time where market will be high saturated at that time the firm should differentiate themselves and try to shift them towards blue ocean strategy to develop the strong positioning in markets and continue to retain the marketing in the business and leveraging the brand power to create better value proposition and sustain in market.

Thank-you.