From manufacturer to mobility provider : BMW’s response to the disruption in the automotive industry

The dissertation is written in a teaching case format to illustrate how established companies balance out addressing the need of established consumers as well as reacting on current consumer trends. Changing market environments tempt manufacturers to offer access services as an alternative consumption mode to ownership. Companies need to understand the impact of those business model innovations on the parent brand and its current customers. The selected company is BMW, which is confronted with digitization, resulting new technologies and emerging competitors disrupting the traditional business. By concentrating on meeting customers’ needs rather than focusing too much on selling products, the company has taken the right path in becoming a mobility provider. The introduction of an own car sharing service paves the way to address new targets and is a positive communication tool. This study analyzes the impact of car sharing on purchase behavior of consumers. By consulting secondary research and collecting quantitative data via an online survey can be concluded that both, owners and non-owners of the brand, positively evaluate the mobility service. Additionally, the received responses indicate that car sharing usage cannot fully substitute car ownership and that DriveNow usage influences consumers purchase preferences for a BMW.A dissertação foi escrita acompanhada por um caso para ilustrar como as empresas poderão se equilibrar, atendendo às necessidades dos consumidores estabelecidos e reagindo às tendências atuais. Mercados voláteis fazem com que os fabricantes ofereçam serviços de acesso como um modo de consumo alternativo ao de titulo de propriedade. As empresas beneficiariam de saber o impacto dessas inovações nos modelos de negócios da marca original e nos seus clientes atuais. A empresa selecionada é a BMW, que é confrontada com a digitalização, resultando em novas tecnologias e distintos concorrentes que mudaram os negócios tradicionais. Ao se concentrar em atender às necessidades dos clientes em vez de se focar em demasia na venda de produtos, a empresa tomou o caminho certo ao se tornar um fornecedor de mobilidade. A introdução de um serviço próprio de partilha de carros abre caminho para novos alvos e é uma ferramenta de comunicação positiva. Este estudo analisa o impacto da partilha de carros nos padrões de compra dos consumidores. Ao consultar a pesquisa secundária e dados quantitativos através de uma pesquisa online, pode-se concluir que os proprietários e não-proprietários da marca avaliam positivamente o serviço de mobilidade. Além disso, as respostas recebidas indicam que o uso do serviço não pode substituir totalmente a posse de um carro e que o uso do DriveNow influencia as preferências de compra do consumidor para um BMW

How can premium automotive brands maintain their status, while sharing technology with their respective auto groups? - the case of Audi and the Volkswagen automotive group

Automotive groups with large portfolios face growing branding challenges in the premium market. Currently, premium brands need to pursue digital innovation to maintain their status, but technology by itself does not lead to a higher positioning: other attributes like comfort, safety, material quality, and design are still valued. Based on the study of Audi and the Volkswagen Automotive Group, this Work Project demonstrates that autonomous driving, integrated smartphone connectivity, and media consumption applications are likely to increasingly act as differentiators in the future. Also, the identity of premium brands needs to remain strong to justify the consumers’ personal brand preferences

Exploring the Growing Fluidity of Organizational Boundaries with a Value-Creating Perspective

In the era of sharing economy, to get great economic and business value from cloud services, including cost avoidance, cost savings, rapid deployment, scalability, management simplicity, better security and resiliency, the organization transformational flexibility is becoming the core business strategies. As an organization responds to the emergence of digitalization, this study presents four sharing economy models by comparing the sharing economy platforms, then examined a few notable papers that have helped set the stage for current conceptualization, especially concerning the impact of innovative sharing technologies on the organizational boundaries and business value chain system. Finally, the results reconstructed traditional value chains with three stages, including redeploying slack resources, inter collaboration, and value-creating acquisitions. And the finding is that structures digitalization processes through the lens of organizational with cloud service and edge computing. The objective of this article is to advance our understanding of the impact of innovative sharing technologies on the organizational boundaries and business value chain system

Re-alignment of German car producers in times of profound changes

This research analyzes and assesses emerging macro-environmental trends in the automotive industry and their evolutionary effect on the competitive advantage of major premium car manufacturers in Germany. To answer this question, the historical key drivers for the success of the German car makers are explored. Furthermore, the probable core competencies and the resulting competitive advantage of the future are examined in order to propose new business strategies for OEMs. Also, the impact of COVID-19 on the companies within the scope of this thesis represents a research object. In order to anser these questions appropriately, in-depth interviews are conducted with five top-level managers from German OEMs and are subjected to a content-analysis. In addition to that, academic literature and business reports are supplemented to critically reflect both sources of knowledge and to get a holistic view on the topic. Also, in order to clarify current industry and market trends, Porter’s five forces and the PESTEL analysis were applied. Building upon the outcome of these frameworks, a TOWS anlysis and Confrontation matrix are conducted to be able to propose new strategies for the underlying companies. OEMs should strive for a stronger customer focus and a faster subsequent adaptability for changing customer needs which they make possible through a even higher innovative power than they had in the past. This enables OEMs to stay ahead of the stiff competition from Asia and China and help them to win the race of sustainability. To create these core competencies, OEMs are urged to engage cross-industry collaborations to avoid the threat of new entrants, increasing the innovative power and ensure sustained competitive advantage. The strong political, social, legal and environmental pressure to decrease CO2 emissions needs to be adressed quickly through the production of electric cars, further optimization of internal combustion engines and the use of lightweight materials.Esta investigação analisa e avalia as tendências macro-ambientais emergentes na indústria automóvel e o seu efeito evolutivo sobre a vantagem competitiva dos principais fabricantes de automóveis premium na Alemanha. Para responder a esta pergunta, são explorados os factores históricos fundamentais para o sucesso dos fabricantes alemães de automóveis. Além disso, são examinadas as prováveis competências nucleares e a vantagem competitiva resultante do futuro, a fim de propor novas estratégias de negócio para OEMs. Além disso, o impacto da COVID-19 sobre as empresas no âmbito desta tese representa um objecto de investigação. A fim de responder adequadamente a estas questões, são realizadas entrevistas aprofundadas com cinco gestores de topo de OEMs alemães e são submetidos a uma análise de conteúdo. Além disso, a literatura académica e os relatórios empresariais são complementados para reflectir criticamente ambas as fontes de conhecimento e para obter uma visão holística sobre o tema. Também, a fim de clarificar as tendências actuais da indústria e do mercado, foram aplicadas as cinco forças de Porter e a análise PESTEL. Com base no resultado destes quadros, é realizada uma matriz de análise e de confrontação TOWS para se poder propor novas estratégias para as empresas subjacentes. Os OEM devem esforçar-se por uma maior concentração no cliente e uma adaptabilidade subsequente mais rápida para a mudança das necessidades do cliente, que tornam possível através de um poder inovador ainda maior do que no passado. Isto permite aos OEM manterem-se à frente da dura concorrência da Ásia e da China e ajudá-los a vencer a corrida da sustentabilidade. Para criar estas competências centrais, os OEM são instados a envolverem-se em colaborações intersectoriais para evitar a ameaça de novos participantes, aumentando o poder inovador e assegurando uma vantagem competitiva sustentada. A forte pressão política, social, legal e ambiental para diminuir as emissões de CO2 precisa de ser rapidamente abordada através da produção de carros eléctricos, de uma maior optimização dos motores de combustão interna e da utilização de materiais leves

A German lawyer in the far east: Investing and doing business in China

Shortly after the end of the Cultural Revolution, some four decades ago, there were no passenger cars in China when Volkswagen AG started its negotiations inthis country. The country was poor and underdeveloped. Today, the GDP of China reached USD 17.6 billion compared to the US’ 17.4 billion USD. Car production in China is now more than 18 million cars per year, more than in the USA. Today, China is still a socialist country and its economic system is called ‘socialist market economy’ but there are about 50 million private companies, 400 million people are belonging to the middle class and there are about 800 super rich having more than 100 million USD on average. In this ‘sino-marxist’ country, there are even 130 multi billionaires in USD. No wonder that under these circumstances, joint ventures and wholly foreign-owned enterprises, especially also in the automotive industry, are welcome. Volkswagen started its negotiations with its Chinese partner, STAC (Shanghai Tractor and Automobile Investment Corporation), BoC (Bank of China) and CNAIC (China National Automotive Industry Corporation) in 1979. These negotiations ended in 1984 by setting up the ‘Shanghai-Volkswagen’ joint venture which started the production of the Santana in 1985. Some years later, in 1988, Volkswagen started the negotiations with FAW (First Automobile Work) in Changchun. These negotiations lasted much shorter and the second VW joint venture, ‘FAWVW’, started with the production of Jetta and Audi 100, 100, 000 cars per year in 1991.In 2004, the ‘Volkswagen Group China’ (VGC), a wholly VW-owned holding company was set up in Beijing in order to coordinate the VWparticipations, the sales and marketing of its joint ventures, the purchasing, personnel and governmental relations as well as finance. Today, VGC has, including its 16 subsidiaries, 95,000 employees, has built 30 million cars at 30 Chinese production sites and sold them by 5,000 dealers (with 330,000 employees). In 2016, VGC has built about 4 million cars

Strategic business models: opportunities for business model innovation in the automotive industry - evaluation of car subscription models and development of recommendations

Digitization and changing customer preferences have an impact on the determinants of sales and ownership in the automotive industry. In this context it is crucial to understand the new, disruptive business models and their potential for market players. The purpose of this report is to evaluate different business models that exist in the automotive industry in Germany and develop recommendations for improving key components of the recently emerged business model of car subscriptions, wherein a customer gains access to a car in return for a flat rate in the medium-term without the transfer of legal ownershi

From gas to electricity : institutional innovation in the German automotive industry

The shift of the German automotive industry toward electric mobility is a multi-faceted transition. This research aims to uncover the shift’s triggers by examining actors, field- configuring events and exogenous jolts of the past decade through the lens of institutional theory, empirically building upon expert interviews and grey literature. Because the industry comprises deeply entrenched institutions, these present obstacles to change and underscored the slow shift among German manufacturers. Their worldwide renowned expertise in internal combustion engines and economic success bound them within a golden cage. Germany's economic dependence on industry allowed them political influence. Findings revealed that a combination of political, economic and social factors acted as triggers. Foremost, fleet emission regulations pushed manufacturers toward electric vehicles, specifically as the diesel scandal dismantled the diesel engine's institutional dominance. Simultaneously, the threat of losing the Chinese market and increasing competition put pressure on the manufacturers. Consumer adoption grew and amplified awareness of climate change due to a social movement, financial incentives, advancing technology, increasing car models, and improved charging infrastructure. The occurring institutional innovation was not spurred by radical innovation but by an interplay of sudden, as well as incremental developments. It is reshaping institutionalized practices and has introduced opportunities for novel business models, reflecting the evolving landscape of mobility.A transição da indústria automobilística alemã para a mobilidade elétrica é multifacetada. Esta pesquisa tem como objetivo descobrir os desencadeadores dessa mudança, examinando os atores, eventos de configuração do setor e choques exógenos da última década sob a ótica da teoria institucional, construindo empiricamente com base em entrevistas de especialistas e literatura cinzenta. Com as instituições profundamente enraizadas na indústria, estas representam obstáculos à mudança e destacam a lenta transição entre os fabricantes alemães. A sua especialidade mundialmente reconhecida em motores de combustão interna e sucesso econômico os prendeu-os numa "gaiola de ouro". A dependência económica da Alemanha em relação à indústria permitiu-lhes ter influência política. As descobertas revelaram que uma combinação de fatores políticos, económicos e sociais atuou como desencadeador. Primeiramente, regulamentações de emissões da frota levaram os fabricantes a voltarem-se para veículos elétricos, especificamente à medida que o escândalo do diesel desmantelou a dominância institucional do motor a diesel. Simultaneamente, a ameaça de perder o mercado chinês e o aumento da concorrência pressionaram os fabricantes. A adoção pelos consumidores cresceu rapidamente e amplificou a conscientização sobre as mudanças climáticas devido a um movimento social, incentivos financeiros, avanços tecnológicos, aumento dos modelos de carros e melhoria da infraestrutura de carregamento. A inovação institucional ocorrente não foi impulsionada por uma inovação radical, mas por uma interação de desenvolvimentos súbitos e incrementais. Isso está a reformular práticas institucionalizadas e a introduzir oportunidades para novos modelos de negócios, refletindo a paisagem em evolução da mobilidade

Challenging the Status Quo : car ownership and the Generation Y : an analysis of the German Market

Purpose – This work aims to identify how people of the Generation Y in Germany see the future of mobility with a special focus on car ownership. Furthermore, determinants influencing car ownership are analyzed and implications for the automotive industry are drawn. Design/Methodology – The research relies on primary data collected through an online survey among 20 – 27 years old people in Germany. In order to draw valid conclusions, the data was analyzed carrying out logistic regressions. Findings – Two main factors that influence the likelihood if people own a car were identified. Living in rural areas and being employed are positively associated with car possession, while no significant relationship between environmental attitude and car ownership could be identified. Research limitations – The older part of the Generation Y, those above 27 years, was not covered by the data, therefore no general conclusions on the behavior of the whole generation and international differences can be drawn. Practical implications – This research can help corporations in the automotive and mobility industries to further understand and differentiate their target segment. People of the Generation Y cannot be seen as one homogenous group but need to be identified as fragmented subgroups with entirely different needs and desires. Originality – To the knowledge of the author, this is the first study that combines the topics of Generation Y and sharing economy with the trends in the automotive industry to identify peoples’ perception of mobility.Proposta – O objetivo deste trabalho é identificar como a geração Y alemã vê o futuro da mobilidade com especial atenção na compra de automóveis. Além disso, os fatores que influenciam a compra de carro privado são analisados assim como o impacto que causam na indústria automóvel. Metodologia – A pesquisa é baseada em dados primários que foram recolhidos através de um questionário online. A população alvo são alemães entre os 20-27 anos. Com o objetivo de obter conclusões válidas, a data foi analisada através de regressões logísticas. Resultados – Os dois fatores que influenciam a probabilidade de as pessoas comprarem carro privado foram identificadas. Viver em áreas rurais e ter um emprego estão associadas positivamente à posse de carro, no entanto não existe uma relação significativa entre atitude ambiental e ter carro. Limitações de Pesquisa – A parte mais velha da geração Y, ou seja, acima dos 27 não foi usada para a data, o que significa que não é possível tirar conclusões gerais no comportamento completo da geração Y e pode haver diferenças internacionais. Implicações práticas – Esta pesquisa pode ajudar empresas na indústria automóvel e de mobilidade a perceberem melhor e diferenciar o seu segmento objetivo. A população da geração Y não pode ser vista como um grupo homogéneo, tem que ser identificado como um grupo fragmentado com diferentes necessidades e objetivos. Originalidade – Para conhecimento do autor, esta pesquisa é o primeiro estudo que combina tópicos sobre a geração Y e economia da partilha com as tendências da indústria automóvel para identificar a perceção que as pessoas tem sobre mobilidade

Corporate governance, innovation, and economic performance: a case study on Volkswagen

"In the debate on globalisation of the financial markets and its effect on corporate governance it is often claimed that the pressure for higher rates of return exerted by institutional investors in the name of shareholder value, has led to a fundamental change of company policy among listed companies. Due to short-term profit orientation and increased dividend pay-outs to investors, the critiques argue, long-term development of the innovation potential of these companies will suffer, and this ultimately will have negative consequences on employment and growth. Since in the 1990s almost all major German companies listed on the stock exchange have declared their commitment to the principles of shareholder value. Hitherto there is little empirical evidence of the consequences of such an orientation on company-internal structures and processes. The present case study on the Volkswagen AG helps to close this gap. Central questions in this study are the following: To what extent have the distinct characteristics of Volkswagen's corporate governance systems changes in response to shareholder value demands? What is the role of the stock market for the company? Have the incentive systems and the systems of target setting and controlling changed to better correspond with shareholder expectations, and what are the effects on investment/ disinvestments decisions and thus on the long-term innovation potential of the firm? And finally, what are the effects on the economic and the financial performance of the company?" (author's abstract)"In der Diskussion über die Globalisierung der Finanzmärkte und der Veränderungen der Corporate Governance wird häufig die These vertreten, dass der von institutionellen Investoren ausgehende, verschärfte Renditedruck und die Verbreitung des Shareholder-Value-Konzepts zu einer stärker kapitalmarktorientierten Unternehmensführung bei den börsennotierten Aktiengesellschaften führen. Damit ist auch die Befürchtung verbunden, eine kurzfristige Gewinnorientierung und vermehrte Gewinnausschüttungen an Investoren könnten zu Lasten der langfristigen Entwicklung von Innovationspotentialen in den Unternehmen gehen und damit letztlich negative Auswirkungen auf Wachstum und Beschäftigung haben. Seit den 1990er Jahren proklamieren auch in Deutschland die großen börsennotierten Unternehmen fast durchgängig die Einführung einer 'wertorientierten Unternehmensführung', d.h. eine stärkere Orientierung am Kapitalmarkt. Bisher existieren noch kaum empirische Studien zu den Auswirkungen einer solchen Orientierung auf unternehmensinterne Strukturen und Prozesse. Die vorliegende Fallstudie zur Volkswagen AG hilft, diese Lücke zu schließen. Zentrale Fragen der Studie sind, welche Rolle das Verhältnis zum Kapitalmarkt für VW spielt und in der Vergangenheit gespielt hat, inwieweit eine Veränderung der Corporate Governance als Resultat der von den Investoren ausgehenden Anforderungen feststellbar ist und wie sich diese ggf. auf die Ziel- und Controllingsysteme sowie die Anreizsysteme für das Management auswirken und welche Folgen dies wiederum auf Investitions- bzw. Desinvestitionsentscheidungen und die Entwicklung der langfristigen Investitionspotentiale des Unternehmens hat." (Autorenreferat

The automotive industri and the Dieselgate case

In the last few years, environmental pollution and especially vehicle pollution has been the subject of numerous debates all over the world. Following the scandal on the handling of emissions from diesel vehicles through the installation of defeat device systems by the Volkswagen Group, the attention on Diesel engines and especially on the severity of the emissions produced by diesel fuel has become more and more remarkable. The aim of this thesis is to explain the differences between the various types of engines on the market, the consequences caused by the polluting substances emitted by the vehicle exhaust pipe and the events that led to the detection of the fraud implemented by the Volkswagen Group. Furthermore, a survey was carried out on with the aim to try to understand consumers' perception of vehicular pollution, propensity to use engines powered by alternative energy sources instead of diesel engines and the grade of awareness regarding the Volkswagen case. Finally, in order to try to get answers on the future of the automotive market and especially on the future of diesel vehicles, an analysis was made of the forecasts and statistics made by automotive industry analysts