.

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

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.
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 so
Automation and innovative technologies such as artificial intelligence (AI) are
disrupting the business landscape, and the automotive industry is no exception.
o 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.
o 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 doesn’t 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.