Essay about Automobile Industry and Verganti

Submitted By yvesjack23
Words: 3850
Pages: 16


This portfolio offers a collection of analysis regarding the car manufacturing sector. Specifically, it will give an insight into what might happen in the future. To this end, scenarios were developed to understand what might practically happen. These were created by taking into consideration not only the issue, but also the opportunities. Thus, the focal question developed was “What does the future hold for the automotive industry with concerns of oil shortages?”. Moreover, the time horizon chosen was 2030.

Having developed the scenarios, a business model was created to effectively respond to the most probable of the scenarios. Currently, introducing cars with alternative fuel would need radical changes in the market. The main reason behind this is because it does not require incremental change, but significant changes in all aspects of the marketing and production of cars. In fact, current marketing and production techniques are mainly based around conventional cars which run on petrol. However, by introducing cars which are electric, this will require consumers to be persuaded to switch. As a result, car manufacturers will have to re-brand themselves in an effort to intercept the market trend of new value for money cars. At the same time, new suppliers will be introduced in the market as manufacturers will need a new variety of parts to use in the production of EVs. This means also creating a new market.

Using the Verganti model to assess the driving factors of the technology, design and market needs, it could be seen that the main driving factor would be a market pull. One main reason for this is because market conditions enable the practical marketability of new technologies. In fact, changing market conditions stimulate new technological innovations in order to satisfy market demand. In this sense, the need to replace oil as a source of fuel because of soaring prices enables new technologies to be implemented. In fact, as it will be shown in the evaluation of the business model, various factors contribute towards the ability to market new alternative fuel solutions.

As previously said, the business model was created with reference to one of the three scenarios that were developed. These were developed by using a PEST analysis to incorporate a wider range of factors that could influence the scenarios themselves. Having done this, the diverse factors were then inserted within a cross-impact matrix as it can be seen below. Out of these, the decline in oil production and considering alternative fuel supplies were the main focus point of the scenarios as having the highest uncertainty and impact.

- Policies to cut CO2 emissions.
- Use of alternative natural resources to build cars and make them lighter / fuel efficient (e.g. duralumin, fiberglass, carbon fiber, and carbon nanotubes).

- Oil runs out.
- Nuclear energy alternative.
- New solutions to CO2 emissions with hybrid vehicles, battery electric vehicles, and fuel-cell vehicles.
- Rise in income levels in developing markets increases fuel consumption.

- Regulation of number of vehicles owned per person / shared vehicles.
- Green pressure groups affecting consumption of oil.

- Reduction of car sales to alternative products (e.g. bicycles).

Having looked that resulting from the VIEW psychometric report, it is possible to denote some correlations between the development of the business model and the results. In fact, when it came to my score in orientation to change, I achieved a score of 59. this went below the mean of 72 which meant that I had more of an explorer style. Practically, this meant that I tended to propose more ideas whilst other group members developed them further. In addition to this, when it came to the manner of processing, my score of 30 was again below the mean of 32. this score meant that I used more of an internal style towards group cooperation which meant