Name Kyle Mens NetID kmen956 Group Number: 082 Website Link: http://infosys1102014fcgroup082.blogspot.co.nz/p/d1.html Tutorial Details Tutor: Day: Time: Kayur Ramson Monday 3pm Time Spent on Assignment: 11 hours Word Count: 1666 2
Automated Vehicles Concept Introduction: In deliverable 1, I looked at the problems society faces as a result of our current systems transportation with emphasise on the issues stemming from human error/ miscommunication during driving vehicles on roads. These problems include long travel times, potential for accidents and parking scarcity. The solution that we proposed was that we automate vehicles so that they do not require a driver to manually control the vehicle. This solution could solve several problems with our current systems as it will ensure clear communication between vehicles meaning travel could be must faster and safer. 3. Business section 3.1 Vision: Our vision is to simply the experience of everyday travel, bringing the world closer to its people. 3.2 Industry Analysis: The industry being analysed will be the Driverless/automated vehicle industry. Forces High/Low Justification: Buyer power High Buyer power is estimated to be high due to the fact that manual operated vehicles will still be available at cheaper prices. It is also expected that it will take time for society to be comfortable with the technology as there are high risks associated with the removal of human interpretation in driving. It is likely take time before people to prefer the automated car to the current modern car. J.D Power and Associates conducted a survey in 2012 where they surveyed 17,000 drivers and found that only 37% would be interested in purchasing an automated vehicle. This however decreased to 20% when the drivers were informed that the technology would cost an additional $3,000. (Yvkoff, L. 2012) [1] Supplier Power Low It is likely that supplier power will be low due to the fact that the market for producing Advanced Driving Assistance Systems (ADAS) will become very competitive as the technology progresses and the vehicles begin to get manufactured. Many firms will differentiate based on cost and functions. Due to this, the vehicle manufactures hold more revenue potential than the original equipment manufacturers(Frost & Sullivan, 2014) [2]
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Threat of new entrant High Many of the existing car manufacturing companies will be looking to enter the industry for automated driverless vehicles as the market grows and then becomes more demanded. Audi, Nissan, Toyota, Tesla and many other existing companies are predicted to begin to offer automated features into their vehicles in the upcoming few years. [3]
Threat of substitutes High The driverless car will always have the substitute of the modern manually operated car. As the driverless car is expected to be more expensive that modern car, it is fair to expect there will be a portion of the customers that will always go for the cheaper option. The manually operated vehicle however is likely to be the only substitute in the market for some time. (Frost & Sullivan, 2014) [2]
Rivalry among existing competitors High Many car companies have begun to implement driver assisting technologies such as automatic parking. Between 2003-2010, Toyota, Ford, Lexus and BMW all adding parking assistance features to some of their vehicles. [4] This is evidence that as the technology becomes accepted, there will be a high level of competition between automated car manufacturing companies. (Kane, S., 2011) Overall Attractiveness of the industry: The industry isnt attractive overall due to the fact all of the Porters five forces are high, with the exception of supplier power. 3.3 Customers and their needs The automated vehicles producers will broadly target all vehicle owners. This is because the automated car is a replacement for the modern, manually operated vehicle. By extension, the automated vehicle its targeted to everyone who can afford it as a valid drivers license is not required. The need to travel by car is basically universal so the market is broad. The needs of the customer that will be met are that they are able to reach their destination in a timely and safe matter and that the car will be able to pick up owners who are far from where they parked. With automatic driving systems installed, vehicles will be able to drastically decrease travel times and accident probability. (Chron, 2012) [5] 3.4 The Product and Service The use of automated cars offers many possibilities that arent possible with our current manual operated cars. Speed limits will be able to be increased due to the fact that automated cars dont have the risk of human error causing an accident. [3] As the cars will be able to communicate with each other, stopping distances/gaps may be reduced by a significant amount as human reaction time doesnt need to be factored in. [3] This all results in car journeys being much faster and reducing the inconvenience of traffic and traffic jams. The automated car can be called upon to pick up the owner via cell phone. 4
3.5 Suppliers and Partners Suppliers: Autoliv is a supplier the offers radar systems that improve safety HELLA is a supplier that also sales parts that can be used in an automated car. Partners: Partnering with an existing car company such as Nissan who are also attempting to implement driverless technologies would increase market share
3.6 Strategy: Differentiation The automated car is a replacement for the modern manually controlled car and so the target market is all those who can require a personal vehicle. As a specific group is not being marketed to, the automated car is being sold to a broad market. It will be expensive to install the equipment and the systems required to make a car automatic so the automated car will be priced relatively higher than the substitute manually operated car. This makes the cost strategy a high cost strategy. The overall strategy is therefore differentiation. 3.7 Value Chain Activity The most important value chain activity for the business is making the product or service. As the market for the automated car will be competitive will many firms offering similar features in their vehicle, the most important value chain activity will be to make a product that is different to the others, offering more in terms of functionally. In order meet the vision of the business, the automated car must simplify the experience of driving and offer unique, innovative functions that make the world more accessible to its owner. 3.8 Business Processes Inventory order process: In order to be able to make the self driving vehicles, adequate inventory for production must available or the business will be unable to deliver its differentiated product to the market. A computer cataloguing system records the level of inventory (car parts) in the warehouse. If the level is insufficient, a message is sent to the warehouse supervisor who then decides the volume to be purchases. After getting a quote or the parts, the supervisor sends the quote to manger for approval. If approved, the order is placed and the parts are received and paid for.
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Inventory (parts) level drops below adequate levels Message sent to supervisor Supervisor access volume required Supervisor gets quote for purchase Quote is send to finance department Order placed Parts received Payment made New parts recorded in system End Approved Rejected 6
Vehicle Manufacture process: In order to remain and compete in the competitive market, it is important to have processes in place that make sure that sufficient cars have been made and are available to meet demand. As the technology improves for the automated driving cars, it is important that cars are produced often to include any new improvement to the cars systems that differentiate the car from the rest in the market.
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Investigate expected upcoming sales volume Inventory (cars) checked if sufficient to meet sales volume Production approved to meet volume needed Distribute cars to dealerships Management allocates parts and workers to production New cars are produced End
Inventory insufficient Inventory sufficient 7
3.9 Functionalities Inventory order process: Ensures that inventory levels are able to cope with production Allows for changes if expected sales volume is higher/ lower than normal Vehicles manufacture process: Frequent manufactures provides opportunity to improve and add features Vehicles have recent technologies that differentiate the car from its competitors. 3.10 Systems Fuel alert system: The automated vehicles will alert the owner when the vehicle is low on fuel by sending a message to their phone. The owner is informed of the cost and is asked for permission for the car to drive itself to a fuel station and fill up. This system will be put into the cars during the manufacturing process to simplify the task of managing their vehicle and ensures that the owner will also have use of the vehicle. This could also be a differentiating factor of the car to similar competitors. Vehicle assembly system: A system will be in place during the manufacturing process in the factory which assembles the constituent parts of the vehicle to form the finished product. This will mean that the factory will be able to produce the required amounts vehicles in order to cope with sales. Inventory oversight system: An oversight system will be in place which will keep track of the parts and cars that are in storage. This system is used in the inventory order process and has the functionally as helping management ensure that inventory (parts) levels are able to meet the production requirements. This helps ensure customers will always be able to purchase an automated vehicle. 3.11 Value chain to systems Value chain activity Processes Functionalities Specific information systems Broad information systems Making the product or service Inventory order process Ensures that inventory levels are able to cope with production Allows for changes if expected sales volume is higher/ lower than normal
Inventory oversight system Decision support systems Supply chain management systems Vehicle manufacture process Frequent manufactures provides opportunity to improve and add features Vehicles have recent technologies that differentiate the car from its competitors. Fuel alert system Vehicle assembly system Enterprise resource planning
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Conclusion: A differentiation strategy that is supported by the business processes and systems will allow the business to reach its vision of simplifying everyday travel. References 1. Yvkoff, L. (2012, April 28). Many car buyers show interest in autonomous car tech. Retrieved May 24, 2014, from http://www.cnet.com/au/news/many-car- buyers-show-interest-in-autonomous-car-tech/ 2. Frost & Sullivan. (2014, March 26). Analysis of the Advanced Driving Assistance System (ADAS) Market in North America. Retrieved May 24, 2014, from http://www.prnewswire.com/news-releases/analysis-of-the- advanced-driving-assistance-system-adas-market-in-north-america- 252512051.htm 3. Wikipedia (2014, May 16). Autonomous car. Retrieved May 24, 2014, from http://en.wikipedia.org/wiki/Autonomous_car 4. Kane, S. (2011, October 27). 2012 Family Cars With Self-Parking Technology. Retrieved May 24, 2014, from http://www.thecarconnection.com/news/1067819_2012-family-cars-with-self- parking-technology 5. Chron (2012, September 11). Get ready for automated cars. Retrieved May 24, 2014, from http://www.chron.com/opinion/editorials/article/Get-ready-for- automated-cars-3857472.php