Shifting Paradigms In The Automotive Industry - Essay Example

SHIFTING PARADIGMS IN THE AUTOMOTIVE INDUSTRY al Affiliation) Question The automobile industry deals in a unique economic product. Most of the households spend more on the commodities in relation to the acquisition and maintenance of the automobile. The industry contributes greatly to the economic position of a given country, for instance, it creates a greater percentage of jobs worldwide. There has been a growing competition of the players in the industry, which creates a vast base of possible changes in the industry. The industry has always been restructuring since its inception due to some significant drivers. Two of the drivers that create a great impact of the transition in the industry are market expansion and technological innovation. Different firms in the industry have responded to the increase in the market share of automotive products by increasing their production. A single product could contain different product characteristics such that their development results into other different products. There has been an evolution in the basic technologies in the industry, which has led to a range of technical characteristics of the products. In the market expansion, there could be a budget scenario. This is where a reduction in the purchasing power of consumers occurs. The reduction could be due to the combination of an increase in taxes and inflation with a decrease in the income levels. The cars could become less affordable and be perceived as a luxury goods (Hubbard, 2004). For the people who have the ability to afford the automobile, they could require tailor made products that meet their needs. This could lead to the reduction of skilled labor with the expertise in the automobile industry. The market share could reduce, skilled labor shortage could occur, and there could be an increase in the demand of tailor made automotive products. The second scenario could be on the manufacturing of high tech automotive products. There could be a need to fit the automotive with devices that could allow drivers to access the internet. The consumers could want the automotive to have software installed, which could allow them to personalize the interface features of the machine during driving (Ginsberg, 2008). The younger people who form a major part of middle-income earners could demand for internet connectivity on their automobiles. This could be a compulsory feature for all the automotive if there is a need for a strong and large market share. There could be a need for the development of new business models aimed at the production of high tech automotive products. A valuable strategy for Better Place could better work for the company, in order to gain a large market share and for the production of high tech automotive (Automotive Industrial Strategy). Since there could be a reduction of the consumers’ purchasing power, Better Place needs to initiate alternative cash incentives for the purposes of customer loyalty. This could lead to an increase in sales for the company, which could lead to increased profits. For the firm to achieve a large market share, it needs to consider its marketing goals for the promotion of its designs and brand. Technological changes could lead to a demand in the high-tech products. This facilitates the need to define a target market for the electric automobile made by Better Place. The production of the firm needs to differentiate particular brands for a given market share. Since the market share for electric automotive could be about 40% in the future, Better Place could lose some market for its products. This could occur if the firm does not consider the incorporation of high-tech products as defined by the consumers. The firm needs to change from a price focused strategy to a customer-employee satisfaction strategy for long-term benefits. The figure below shows the sales fluctuations by technology in the future http://www.futuretimeline.net/21stcentury/2015.htm#.VFp7S1d41ut Question 2 The key stakeholders of Better Place include potential investors, the government, and the media. The media is interested in the business environment of the company. It monitors the business network of the company in order to evaluate the need for electric vehicles in relation to the national agenda. The media support the business goals of Better Place to convince other stakeholders on the benefits of electric vehicles as an alternative to vehicles powered by fuel. The potential investors in the company include individuals who have a high net worth in addition to large organizations. They support the goals of the business in terms of injecting capital for the acquisition of resources for manufacturing purposes. The government is also interested in Better Place business through government agencies that monitor and represent the environment. Such stakeholders ensure that the company remains determined in the production of automotive for sustainable transport. The government also favors the company through the provision of infrastructure that supports electric vehicles for renewable energy. In addition, there are programs that enhance the relationship between the government and the government. All the stakeholders are important for the Better Place, but at different levels. The stakeholders have different interests in the company. The media uses its platform market the electric vehicles and in the process, they gain in monetary terms. The investors are determined that if they place capital in the business they will gain profits depending on their shareholding ratio. The government’s interest in the firm is majorly in relation to the environmental impact the electric vehicles are likely to cause. There are conflicts between the government and the investors. This is because the investors require earning profits regardless of the environmental impact the electric vehicles could cause. Moreover, the investors complain that most of the resources used relate to research and development on the environment and the cost of electricity. The media relate to both the government and the investors through analyzing the potential effects of the company’s project. The investors participate in the events of the company at most times and ensure that their finances become profitable. Through this Power Interest Grid, they are ranked higher as they have direct influence to the success or failure of Better Place. The government is ranked second to the investors because its decision determines whether the company will undertake the project. The media comes last as it gives minimal support in terms of major decisions made by the investors and the shareholders. Appendix The figure below is the Power Interest Grid Detailed in this paper is the development of two scenarios for the future of automotive. The scenarios are used to give the implication to Better Place. The key stakeholders are determined and ranked according to the Power Interest Grid. Self-Assessment Grade A (70-100) The theory work is well applied and presented. The graphs in the paper are relevant to the case and there is a flow of information. Finally, there is proper referencing in the paper. References Top of Form Bottom of Form Ginsburg, D. 2008. Government, technology, and the future of the automobile. New York: McGraw-Hill. Hubbard, G. 2004. Strategic management: Thinking, analysis & action (2nd ed.). Frenchs Forest, NSW: Pearson/Prentice Hall. Top of Form Bottom of Form Timeline of Events | Genome Sequencing Timeline | Global Economic Recovery 2015 | Windows 9 | 2015 | Future Timeline | Technology | Predictions | Events | 2015 | 21st century | 300gb optical discs | Large Hadron Collider 2015. (n.d.). Retrieved November 5, 2014, from http://www.futuretimeline.net/21stcentury/2015.htm#.VFp7S1d41ut Read More