Development of Alternative Options - Case Study Example

Operations Management – Case Study Name: Institution: Course: Lecturer: Date: Contents Executive Summary...................................................................................................................3 Introduction................................................................................................................................4 The Aim......................................................................................................................................4 Problem Definition.....................................................................................................................4 Situational Analysis....................................................................................................................4 Strength......................................................................................................................................5 Weaknesses................................................................................................................................6 Opportunities..............................................................................................................................6 Threats........................................................................................................................................7 Development of alternative options...........................................................................................7 Evaluation of alternative options................................................................................................9 Conclusion................................................................................................................................10 Recommendations....................................................................................................................11 References................................................................................................................................12 Executive Summary Self-driving vehicles have been assumed as a dream since the inception of automobiles. Automobile is ubiquitous within the developed world while it’s been adopted in the developing countries. In 2009, Google announced that her self-driving vehicle travelled a distance of 1.3 million miles free of accident. Although autonomous driving is perceived as a science fiction, Google, auto suppliers as well as industry analyst predicts the cars will be prevalent in the year 2020. This paper describes Google as the main player within self-driving car market. The entire capabilities, opportunities as well as limitations surrounding self-driving vehicles are reviewed. The paper further depicts how the self-driving car project relates with the vision of the company, the reliability of the venture, the need for partnership, the interrelationship between the project and the entire mission of Google as well as the legal issues involved. Introduction Self driving vehicles have ‘evolved’ overtime since the concept was introduced in the year 1920s. The actual road-worth vehicles got introduced in 1980s. The main two projects within this era were Mercedes-Benz’s Prometheus and Carnegie Mellon University projects. In the recent past, Google has developed an autonomous car which has generated lot of attention. However, Google has not at one time operated her vehicles without human driver on-board. The existing laws prohibit such vehicles to run without minimal controls and there are many obstacles to be overcome before computers can be entrusted to assume full driver’s role. The Aim The aim of this analysis is to synthesize about Google’s car project. The analysis focuses on the major objectives behind the project, the internal strengths and weaknesses within the company, market opportunities and threats as well as the major alternatives available for Google. Problem Definition How did Google Car project relate to Google’s corporate vision of organising the world’s information? Would the Google Car project be a worthwhile investment of the company’s resources? Could Google compete against established auto manufacturers working in self-driving technology, or should it establish a partnership? Would Google manufacture its own vehicles or license its own self-driving software? What are the main legal issues surrounding this new technology? How would an autonomous car fit into Google’s core search business and its advertising-based revenue model? Situational Analysis The situational analysis in this case is performed through SWOT. SWOT analysis looks at the internal strengths and weaknesses of the Google in handling the car project, plus the opportunities and threats prevailing in the market. 1. Strengths Two features exists which has resulted to the enormous transformation in Google car. Arguably, Adwords has emerged as the best money making tool in business history, mandating Google to finance the non-core activities. The decision makers within the company gets really motivated to improve the world. This forms part of the company secret. It forms the basis of developing the self-driving car. It is a normal occurrence that while driving, the ability of accessing other vital information as well as data is severely impaired. Then, if the car is performing the drive, then this makes all the difference (Guizzo, 2011). Arguably, Google Car project may be connected to the supplementary mission of the company which is linked to ‘generating massive revenues’. The assumption emanates from the time saved. For instance, if the billions of hours lost while driving could be spent performing most productive activities including Google search, then more revenue would be generated. Google cars use a computer which is a perfect motorist. Since more than 80 percent of vehicle crashes results from human error, computers would ensure that the danger is waved out of equation entirely. The computers use advanced algorithms in determining appropriate stopping distance, the distance from other vehicles as well as other barriers that would be a cause of accident. In this sense, no opportunity exists in which a computer will be distracted which acts as a leading cause of accidents especially in the developed nations. Although the extent in which life would be saved has not been defined, human driven cars yields heightened costs related to danger. In the United States, human life value equates to 9.2 million dollars data derived from the Department of Transportation. This means that Google Cars would cause significant cost savings especially in different venues such as insurance costs as well as healthcare costs related with accident recovery (Alberto & Patrick, 2011). 2. Weaknesses Google will not manufacture her own vehicle. While her competitors like Uber rolls out conventional cars with autopilot features, Google’s vision is to have a vehicle without pedals as well as the steering wheel. Instead of producing its own vehicle, the company would focus on coming up with its own driving software, which would be licensed to automakers. This move would be assumed as chucking from the original ambitious goal, backing down from the highly competitive and hostile R&D race. Rather, the company would have decided to assume a smarter path in its preparation to venture in the market. Among the company’s executives, there are those who favour the idea of manufacturing the car from scratch to the end, while others support licensing idea (Fisher, 2013). Transferring the entire manufacturing project to another firm means that Google has technology which will be ready in the next step, since the company lacks some vital elements. This then makes partnership quite ideal. 3. Opportunities In the recent past, Google hired John Krafcik to act as the CEO of the Company’s Car project. This signalled that Google has been crafting a related business plan around her autonomous technology. In September 2015, Google communicated her intentions of establishing partnerships with the existing manufacturers mainly to assist in bringing the cars to the market. However, the intention of Google in this regard has not been to co-own the project but rather to ride-share the service. This stand means that Google does not intend to compete with the existing manufacturers. In fact, the company has for long dispelled claims that it seeks to be a car maker. Its focus is to work with top-tier partners in order to fully market the product in a span of five years. The assertions of the CEO (Krafcik) raised more speculations that Google could be looking for firms which would be engaged in building the cars that would later use Google’s software. 4. Threats The main adverse effect with partnership is that it could cause failure of Google car project. The larger plan of the company is to manufacture self-driving cars. A general shift to collaborating with other players could stifle the very main idea of producing exclusively Google brand of self driving cars. Historically, states had assumed the responsibility of controlling drivers. The argument crops up regarding the vehicle as the driver. Safety Administrations across the states had pointed out that legal issues are likely to impact self-driving car technology. These include licensing; driver’s training as well as full operation of the cars. In a matter of fact, the states that have taken the initiative of legalizing autonomous vehicle have sharply deferred with motor vehicle departments in addressing questions related to regulation of such issues (Araujo, Mason & Spring, 2012). The departments are likely to face questions like; do the drivers of autonomous vehicles require extra training? How will these vehicles be registered as well as inspected? Development of Alternative Options Google’s vision of organising the world’s information directly relate to the Google Car project. After organising the world’s information, the main mission is to make it universally accessible as well as useful. By using the words of mission statement, there is a comprehensible connection. Arguably, self-driving vehicle stands as a ‘useful’ application related to organised maps as well as other related data. Critically, there is no human activity which can be denoted as organising information. Luckily, Google did not have to change her slogan despite expansion of her product range (Birdsall, 2014). Apparently, the most prevailing way of approaching Google is to perceive it as a quasi-philanthropic firm, whose vision is solving the global challenges by applying computer science. Incidentally, the Google Car project yields a business rational whose activity of self-driving cars depicts a reverse side. However, this does not necessarily mean that the company does not in any way diversify or increase its revenues. But, it is worthwhile noting that the return on investment has never been taken as the main criterion of majority of Google’s products (Alberto & Patrick, 2011). One of the main topics which have lately yielded great attention within public policy sphere, the media and general health, is discussion about making roadways safer. According to Centres for Disease Control, substantial number of fatalities occurs on roads whilst a high number results from distracted driving. A major fraction of these accidents can be prevented. The fatalities are caused by a number of factors. They include speeding, distraction by some happenings outside or within the car, failing to drive as per the road laws, driving under influence of drugs and driving while tired. All of these factors increase the chances of causing road accidents. While these factors occur with human-driven cars, the same does not happen with self-driving cars (Fisher, 2013). Google stressed on the need of building partnership relations at every stage of the Car project. In the year 2009 the company started a program to step the self-driving car that travelled for 1.3 million miles using the computer control system. The existing prototypes are been tested to log for the utmost 15,000 miles in a week. The company is continuously refining her technology. According to Krafcik the company goals has been curved around testing the prototypes in areas far from California whilst refining their performance in harsh weather conditions coupled with intense rain and snow (Azmat & Schuhmayer, 2015). Evaluation of Alternative Options Google had faced similar dilemma when it intended to manufacturer its own phones. The market entry related to smart-phone was ignited by the Android operating system. During the operation of the android system, the company concentrated working on the gadgets. While android software made appearance on Samsung phones in the year 2008, Nexus phone (Google’s product) reached the market two years later. When the autonomous vehicle starts moving, legal issue regarding personal injury crops up. In case the vehicle causes collision, who is likely to be sued? Will it be the driver of the car or the manufacturer, or both? What is the meaning of negligence, in a case of self driving vehicle? What standards will producers of such vehicles be held liable in relation to safe design? Under what form will transitioning from manual unto auto-pilot take? Liability is the main issue related to autonomous vehicles. Complex systems contain errors and hence Google Cars are never immune to such software failures. Therefore, the main legal issue in this respect will be to assign fault in case the car crashes. However, the only instance where autonomous vehicle was involved in an accident was directly attributed to the human error from the other car. Nevertheless, since self-driving cars are still prevalent, system of responsibility should be established (Azmat & Schuhmayer, 2015). Self driving cars would be a detriment to insurance companies since fewer vehicles would be insured. Law firms would have fewer law suits to handle assuming that fewer wrecks plus injuries will be reported. Moreover, Google Car which is likely electric means that gasoline industry would record low sales. The idea behind a need to manufacture self driving cars by Google is very confined. However, it is quite clear that the resultant data about autonomous vehicle will be applied to improve Google-search and advertising. It is quite possible that Google is not interested in making the car, but rather to licence the software and open-source it, just like the Android, with an aim of winning the market share. The car manufacturers will then spend billions of dollars making the product while Google benefit with valuable data related to where people visit, their movements within the cities and hence incorporating the information into its search as well as in the context-delivery products (Fisher, 2013). Business modelling is common-place to the very established companies such as Google. Such firms focus on developing a product which deals with a unique problem and concentrate on obtaining unit economics by finding the most appropriate market fit for their products (Litman, 2014). It is then probable that developing the autonomous vehicle at Google emanated from this idea, ‘building autonomous cars and then targeting ubiquity within this large market’. Conclusion There exist many economic motivators regarding adoption of self-driving cars by Google. This includes human safety and infrastructural efficiency which will make autonomous cars a reality. There is a rapid divergence of technology from the existing vendors as well as new entrants. Such vehicles possess the capability to receive commands, process them and implement decisions regarding complex situations. The only hurdles to be resolved revolve around legal as well as liability infrastructure. However, gradual combination of technological features coupled with economic motivators will overcome the hurdles (Guizzo, 2011). Recommendations A long list pertaining safety as well as legal issues prevails which needs ironing before autonomous cars can be fully embraced. Several states within the developed nations have passed laws allowing self-driving cars but for testing purposes. However, more research needs to be conducted regarding safety issues, testing, licensing as well as regulations about autonomous vehicles (Schoettle & Sivak, 2014). Obtaining the right technology to advance autonomous vehicles is a minor challenge. The major challenge is creation of a legal framework to govern the vehicles on the public streets. References Alberto Savoia and Patrick Copeland 2011. Entrepreneurial Innovation at Google, accessed 23rd May 2017, http://www.albertosavoia.com/uploads/1/4/0/9/14099067/entrepreneurialinnovationatgoogle_publishedversion.pdf Fisher, A., 2013. Inside Google's Quest to Popularize Self-Driving Cars. Popular Science, 18, pp.2013-09. Azmat, M.M. and Schuhmayer, C., 2015. Self Driving Cars. Araujo, L., Mason, K. and Spring, M., 2012. Self-driving cars. A case study in making new markets–London, UK: Big Innovation Centre, 9. Guizzo, E., 2011. How google’s self-driving car works. IEEE Spectrum Online, October, 18. Birdsall, M., 2014. Google and ITE: The road ahead for self-driving cars. Institute of Transportation Engineers. ITE Journal, 84(5), p.36. Schoettle, B. and Sivak, M., 2014. A survey of public opinion about autonomous and self-driving vehicles in the US, the UK, and Australia. Litman, T., 2014. Autonomous vehicle implementation predictions. Victoria Transport Policy Institute, 28. Read More