Abstract
The word disruption, in its original sense, expresses the concept that even successful companies can fail, despite continuing to do what they did before well. In the digital era, it is often used both when a company is well-managed but fails, and when it fails because it is badly managed. In the car industry potential disruption is generated by the combined effect of more digital technologies, platforms (Uber, Lyft, Didi), electromobility (Tesla), and autonomous driving (Apple and Google). Disruptors in automotive industry are big data and machine intelligence companies, at their core; they use direct-to-consumer models; they are venture-backed startups; they make decisions with incomplete data and uncertainty; they hire the best; they are organised in small teams; and they take risks and break rules. Choosing the most appropriate moment to enter the market or drastically change strategies is more important than ever in a highly changing environment. The history of technological innovation is full of potential disruptors that could offer superior performance to rivals, but which failed to identify the right moment to enter the market. Finally, how can disruption be managed? The first step is to predict the impact of a new disruptive business model on consumer behaviour. The second involves estimating how many consumers could move to the new product. In the automotive industry, how many consumers would adopt a level 4 or level 5 driverless car? The third step is to extend the analysis of the impact of a disruptive business model to other related sectors.
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Notes
- 1.
For example, Thompson B, “What Clayton Christensen got wrong” Stratechery, September 22, 2013.
- 2.
For more than a century, the auto industry's cultural identity was defined by calloused hands and brute force shaping steel. But as the industry perches on the edge of a drastic technological disruption, its mechanical engineering prowess is no longer enough, experts say. The autonomous and connected future is going to require a new set of tools. “Why the auto industry needs a new toolbox”. Automotive News, 4 December 2017.
- 3.
In their article, Henderson and Clark have explicitly related the success or failure of incumbent firms to whether they needed to undertake in architectural and component innovation. Their theory is that incumbent firms are great at supplying component innovations but may be unable to adopt architectural innovation Henderson R., Clark K., “Architectural innovation: The reconfiguration of Existing Product Technologies and the Failure of Established Firms” Administrative Science Quarterly, 35, no. 1 (1990) 13.
- 4.
“As BMW marks its 100-year anniversary, it finds itself entering a new disruptive digital age commonly called the Fourth Industrial Revolution. A resurgent Mercedes-Benz, slowing China car sales and rising competition from tech juggernauts Google and Apple are just some of the challenges it faces. “BMW's innovation, adaptability will be tested in the 21st century”. BMW is already changing as it prepares for a time when it is no longer on top. “Volume is not everything” said Reithofer, BMW chairman, in a provocative statement. Automotive News, 7 March 2016.
- 5.
The text quotations are taken from Downes and Nunes (2014).
- 6.
Seeking to explain how, why, and at what rate new ideas and technology spread, Rogers (1962) developed a theory on the “Diffusion of Innovations” (also the title of his book). New products are not adopted as soon as they are launched. Some consumers are driven to buy new products as soon as they become available, while others prefer to wait before buying, so as to avoid wasting their money. Rogers identified six categories of adopters: innovators, early adopters, early majority, late majority, and laggards. Innovators are consumers that want to be the first to own the latest products. They are at the very beginning of the product life cycle. Early adopters are those that are open to new ideas, who prefer to wait until after the launch of the product. They make up a significant share in the early stages of the cycle.
- 7.
The textual quotation by the CEO of Ford is taken from Venkatraman (2017).
- 8.
“Will disruptors of the taxi market become disruptees?” Automotive News, 26 March 2017.
- 9.
“Volkswagen and Ford have joined forces on electric and self-driving vehicles, capital-intensive areas that are reshaping the auto industry. The investment in Argo is significant, as it could accelerate VW and Ford's self-driving efforts, a costly but crucially important element of the auto industry's future. Both carmakers have been dogged by the perception they're lagging behind in developing the technology, and cooperation would allow them to share costs and potentially catch up faster”. Source “VW may invest in Ford-backed Argo as alliance talks advance”, Automotive News, 9 November 2018.
- 10.
“BMW and Daimler join forces to bolster tech prowess”. Financial Times, 29 March 2018.
- 11.
Apple and other super-rich tech companies should not be feared as auto industry disrupters, Carlos Ghosn says. They should be embraced. “There’s been a lot of talk about disruption, about new competitors who promise a new approach to what a car can be,” Ghosn told an industry audience. “Much of this unease over potential disruption has resulted from the rapid emergence of new technologies and so-called mobility services. Ghosn argued that tech giants such as Apple, which is now developing autonomous-drive vehicle technology, do not want to be automakers because the profit potential is too small. “Don't fear the tech giants”, Ghosn says. Automotive News, 23 March 2016.
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Candelo, E. (2019). Is Disruption Taking Apart the Carmakers’ World?. In: Marketing Innovations in the Automotive Industry . International Series in Advanced Management Studies. Springer, Cham. https://doi.org/10.1007/978-3-030-15999-3_15
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