Module 8 Team Project
Volkswagen: Autonomous Vehicle
Strategy
MBA_551_SP23_028
Patrick Backowski, Celine Chew, Bailey Felts, Asif
Merchant, Christine Moore
Contents
•
•
•
•
•
•
•
Company & Technology Overview
Industry & Competitive Landscape
Key Technology & Manufacturing Players
Strategic Challenge
Potential Solutions
Recommendation
Closing
Strategic Innovation Team MBA_551_SP23_028
2
Company & Technology Overview
Autonomous vehicle (AV) technology
•
Volkswagen (VW) : Major German automobile
manufacturer (since 1937)
•
Headquarters in Wolfsburg, Germany
•
Transitioning focus to Battery-Electric vehicles (BEV)
Operates
without
human
involvement;
senses
and
interprets
the
environment - can be driven anywhere
Require a combination of sensors,
high-performance hardware,
software, and high-definition mapping
Production of self-driving systems
possible now due to breakthroughs
in AI and computing technology
In 2022, VW increased its sales of BEV by 26%
Strategic Innovation Team MBA_551_SP23_028
3
Industry & Competitive Landscape
Industry Highlights
Projected Autonomous Industry
Growth
Expected
40% CAGR
$2.1 Trillion
in 2030
•
North America is largest market; Asia-Pacific is fastest
growing market
•
1% of current industry profits earned from autonomous
vehicles
•
In the United States, 80% of new vehicles marketed in 2023
are expected to have autonomous driving features
•
30,000,000 cars on the road globally feature levels of
automation
•
Development and rollout of levels 4 and 5 are at a standstill
due to State
and Federal Automation
regulation
Levels
of Driving
$76 Billion
in 2020
Strategic Innovation Team MBA_551_SP23_028
4
Key Players – Technology
Most advanced
with extensive
testing and
development
Has a fleet of AV
tested on public
roads
Strategic Innovation Team MBA_551_SP23_028
Major supplier
of AI hardware
and software
used in AV
Apollo platform
in China Market
Israeli firm
specialize in
ADAS
Acquired by
Amazon Target
Robo-Taxi
market
5
Key Players – Manufacturers
Autopilot System
Most Advanced on
the Market
GM Cruise
targeting ride
sharing services
Partner
with Argo
AI, $7B
investment
Owned by VW,
developing its
own self-driving
brand
Daimler Truck &
Waymo
Partnership
The booming China OEM
Market
Strategic Innovation Team MBA_551_SP23_028
6
Key Strategic Challenge
How can Volkswagen pursue a fully-autonomous vehicle strategy and effectively bring it to
market?
Strategy
Challenges
Determine the best strategy for
Volkswagen to enter the fully
autonomous market:
• Safety concerns among the public and
regulations
• Build internally
• Partner
• Acquire
• Technological developments
• Creating a new business model to shift
focus from combustion engines to
software support
Volkswagen intends to have fully autonomous cars on the road by
2030
To meet this goal, Volkswagen must have a clear strategy and
understand the most effective way to create fully autonomous
vehicles.
Strategic Innovation Team MBA_551_SP23_028
7
Potential Solutions
No.
1.
2.
3.
Potential Solution
Outsourcing technology and
design
Vertically integrate
Build Alliances and Coalitions
Benefits
Challenges
•
Ability to focus on other strategic
priorities
•
Ability to be agile with evolving
market changes
•
Vendor control
•
Cost control
•
Greater control on production
inputs
•
May shift focus from critical R&D
and partnerships
•
Cost control
•
Potentially hinders open
innovation
•
Mutually beneficial partnerships
•
Risk of ineffective partnerships
•
Continuously adapt
•
Significant effort while
maintaining core business
Our Recommendation:
Build coalition for uniform safety standards, build strategic partnerships for end-to-end development,
and leverage its existing direct-to-consumer efforts to effectively respond to consumer needs
Strategic Innovation Team MBA_551_SP23_028
8
Collaborating for Uniform Standards and Regulations
Advocacy
Plans
Year on Year increase of state legislation related to
autonomous vehicles
•
2011: First state introduce legislation to authorize
operation of autonomous vehicle
•
2017: NHTSA released new federal guidelines for ADS
Require federal and state regulation support for AV; Promote
adoption of safer automation regulations
NHTSA : National Highway and Transportation Safety Administration
ADS: Automated Driving Systems
Strategic Innovation Team MBA_551_SP23_028
9
Building Strategic Partnerships in Technology
Sensor
Mapping &
Localization
DRIVE
Hyperion
DRIVE Orin
DRIVE Thor
DRIVE Chauffeur
Artificial
Intelligence
Strategic Innovation Team MBA_551_SP23_028
Cybersecurit
y
10
Building an Ecosystem
Volkswagen Manufacturing
Engage Marketing and
Service Partners
Build Virtual Sales, Service
and Community Platform
Consumers
Strategic Innovation Team MBA_551_SP23_028
• Increased focus on direct-to-consumer sales
• Engagement with leading marketing firm to
control and enhance brand image and
perception of VW autonomous vehicles
• Strategic alliance with tech-centric brick and
mortar to provide in-person tech and software
assistance
• Create a multi-sided sales, service and
community platform
• VW can capture and sustain value by
developing a virtual sales, service, and
community platform encompassing all
consumer facing needs
11
In Conclusion
• Volkswagen should pursue a fully-autonomous
vehicle strategy focused on
• Uniform standards and regulations
• Building an ecosystem via strategic
alliances
• Creating strategic partnerships in
technology
• Recommendation: Six-step framework to drive
innovation centered on
• Identifying needs
• Researching potential partners
• Developing partnerships
• Building trust to foster collaboration
• Investing
• Monitoring and pivoting, as needed
Strategic Innovation Team MBA_551_SP23_028
1
Identify Needs
6
2
Monitor &
Pivot as needed
Research Potential
Partners
Drive
Innovatio
n
5
3
Invest
(resource, financial)
Develop
Partnership
4
Build Trust
Foster Collaboration
12