You work as a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks. The chief technology officer (CTO) of the company from the course scenario has been researching new technology developments that the company could integrate into its vehicles to enhance their usefulness and access to sensor data. Such data is acquired by the many digital sensors that have been integrated into vehicle subsystems over the past 20–30 years. The technology trend of particular interest to the CTO is the internet of things (IoT), the interconnection of embedded devices such as sensors and computers over the internet to share data. For automobiles, the trend points to creating connected cars.
Senior management has decided to explore IoT for the company’s trucks and cars. Your task is to create an internal memo explaining that the company should integrate IoT into its product line using the RWW (real, win, worth it) screening tool from the Module One resources and the information from the
CTO Brief
,
Comparative Growth Data
,
Comparative Operating Statistics
, and
Comparative Product Plans
documents. Consider the following:
Discuss the feasibility of the product line (refer to RWW screening tool question number one: Is it real?).Is there a need or desire for the product?Is the size of the potential market adequate?Can the product actually be made?Will the final product satisfy the market?Discuss the ability of the company to win market share (refer to RWW screening tool question number two: Can we win?).Will your company’s products have a competitive advantage?How will your competitors respond?Can your company understand the market properly?Discuss the potential benefits to the company of producing this product (refer to RWW screening tool question number three: Is it worth doing?).Will the product be profitable at an acceptable risk?Does launching the product make strategic sense?Does the product fit your company’s overall growth strategy?Will your company’s senior management support this project?Based on the answers to the questions above, explain the reasons why IoT and connected cars are strategically important to the company.Consider the evolving customer needs and desires; how would they impact the company’s product plan?What do you think competitors will do (if anything) in response to changes in your company’s development plan?Do you think that accelerating development of connected cars will help grow the company? p. 1/8
Platinum Card®
Customer Care: 1-800-525-3355
TTY:
Use Relay 711
Website: americanexpress.com
YUSEF ROBINSON
Closing Date 05/17/24
Account Ending 0-42003
New Balance
Minimum Payment Due
$4,064.56
$135.66
Payment Due Date
06/12/24
Late Payment Warning: If we do not receive your Minimum Payment Due by
the Payment Due Date of 06/12/24, you may have to pay a late fee of up to
$40.00 and your Pay Over Time APR may be increased to the Penalty APR of
29.99%.
Minimum Payment Warning: If you have a Pay Over Time and/or Cash Advance
balance and you make only the minimum payment each period, you will pay more in
interest and it will take you longer to pay off your balance. For example:
If you make no additional
charges and each month
you pay…
You will pay off the balance
shown on this statement in
about…
And you will pay an
estimated total of…
Only the
Minimum Payment Due
15 years
$11,799
$169
3 years
$6,094
(Savings = $5,705)
If you would like information about credit counseling services, call 1-888-733-4139.
See page 2 for important information about your account.
Please refer to the IMPORTANT NOTICES section.
We will debit your bank account for your payment of $135.66 on
06/01/24. This date may not be the same date your bank will debit your
bank account. Any inquiry to American Express concerning this debit
should be made before 05/30/24. If your AutoPay payment is less than
your Minimum Payment Due, we must receive an additional payment
for at least the difference by 06/12/24.
Membership Rewards® Points
Available and Pending as of 04/30/24
61,684
For up to date point balance and full program
details, visit membershiprewards.com
Account Summary
Pay In Full
Previous Balance
Payments/Credits
New Charges
Fees
New Balance
$87.99
-$87.99
+$0.00
+$0.00
$0.00
=
Pay Over Time and/or Cash Advance
Previous Balance
$4,228.02
Payments/Credits
-$271.44
New Pay Over Time Charges
+$12.00
+$0.00
New Cash Advances
+$0.00
Fees
+$95.98
Interest Charged
$4,064.56
New Balance
=
$135.66
Minimum Due
Account Total
Previous Balance
Payments/Credits
New Charges
New Cash Advances
Fees
Interest Charged
$4,316.01
-$359.43
+$12.00
+$0.00
+$0.00
+$95.98
New Balance
Minimum Payment Due
$4,064.56
$135.66
Pay Over Time Limit
Available Pay Over Time Limit
$4,000.00
$0.00
Continued on page 3
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Pay by Phone
1-800-472-9297
Account Ending 0-42003
Enter 15 digit account # on all payments.
Make check payable to American Express.
YUSEF ROBINSON
2011 COMMERCE DR
APT 4205
HAMPTON VA 23666-4382
Payment Due Date
06/12/24
New Balance
$4,064.56
AutoPay Amount
$135.66
See reverse side for instructions
on how to update your address,
phone number, or email.
AMERICAN EXPRESS
P.O. BOX 1270
NEWARK NJ 07101-1270
*071011270704*
0000349992941771624 000406456000013566 14 Á
$
.
Amount Enclosed
YUSEF ROBINSON
p. 2/8
Account Ending 0-42003
Payments: Your payment must be sent to the payment address shown on
your statement and must be received by 5 p.m. local time at that address to
be credited as of the day it is received. Payments we receive after 5 p.m. will
not be credited to your Account until the next day. Payments must also: (1)
include the remittance coupon from your statement; (2) be made with a
single check drawn on a US bank and payable in US dollars, or with a
negotiable instrument payable in US dollars and clearable through the US
banking system; and (3) include your Account number. If your payment
does not meet all of the above requirements, crediting may be delayed and
you may incur late payment fees and additional interest charges. Electronic
payments must be made through an electronic payment method payable
in US dollars and clearable through the US banking system. Please do not
send post-dated checks as they will be deposited upon receipt. Any
restrictive language on a payment we accept will have no effect on us
without our express prior written approval. We will re-present to your
financial institution any payment that is returned unpaid.
Permission for Electronic Withdrawal: (1) When you send a check for
payment, you give us permission to electronically withdraw your payment
from your deposit or other asset account. We will process checks
electronically by transmitting the amount of the check, routing number,
account number and check serial number to your financial institution,
unless the check is not processable electronically or a less costly process is
available. When we process your check electronically, your payment may
be withdrawn from your deposit or other asset account as soon as the same
day we receive your check, and you will not receive that cancelled check
with your financial account statement. If we cannot collect the funds
electronically we may issue a draft against your deposit or other asset
account for the amount of the check. (2) By using Pay By Computer, Pay By
Phone or any other electronic payment service of ours, you give us
permission to electronically withdraw funds from the deposit or other asset
account you specify in the amount you request. Payments using such
services of ours received after 8:00 p.m. MST may not be credited until the
next day.
How We Calculate Your Balance: We use the Average Daily Balance (ADB)
method (including new transactions) to calculate the balance on which we
charge interest for Pay Over Time and/or Cash Advance balances on your
Account. Call the Customer Care number on page 3 for more information
about this balance computation method and how resulting interest
charges are determined. The method we use to figure the ADB and interest
results in daily compounding of interest.
Paying Interest: Your due date is at least 25 days after the close of each
billing period. If you have Pay Over Time, we will not charge you interest on
charges automatically added to a Pay Over Time balance if each month you
pay your Account Total New Balance on your billing statement (or, if you
have a Plan balance, your Adjusted Balance on your billing statement) by
the due date. If you have Cash Advance on your Account, we will begin
charging interest on cash advances on the transaction date. If you have Pay
Over Time Select: we will begin charging interest on purchases added to a
Pay Over Time Select balance at your request on the date that they are
added to your Pay Over Time Select balance.
Foreign Currency Charges: If you make a Charge in a foreign currency, we
will convert it into US dollars on the date we or our agents process it. We
will choose a conversion rate that is acceptable to us for that date, unless a
particular rate is required by law. The conversion rate we use is no more
than the highest official rate published by a government agency or the
highest interbank rate we identify from customary banking sources on the
conversion date or the prior business day. This rate may differ from rates in
effect on the date of your charge. Charges converted by establishments will
be billed at the rates such establishments use.
Credit Balance: A credit balance (designated CR) shown on this statement
represents money owed to you. If within the six-month period following
the date of the first statement indicating the credit balance you do not
request a refund or charge enough to use up the credit balance, we will
send you a check for the credit balance within 30 days if the amount is
$1.00 or more.
Credit Reporting: We may report information about your Account to credit
bureaus. Late payments, missed payments, or other defaults on your
Account may be reflected in your credit report.
What To Do If You Think You Find A Mistake On Your Statement
If you think there is an error on your statement, write to us at:
American Express, PO Box 981535, El Paso TX 79998-1535
You may also contact us on the Web: www.americanexpress.com
In your letter, give us the following information:
– Account information: Your name and account number.
– Dollar amount: The dollar amount of the suspected error.
– Description of Problem: If you think there is an error on your bill,
describe what you believe is wrong and why you believe it is a mistake.
You must contact us within 60 days after the error appeared on your
statement.
You must notify us of any potential errors in writing [or electronically]. You
may call us, but if you do we are not required to investigate any potential
errors and you may have to pay the amount in question.
While we investigate whether or not there has been an error, the following
are true:
– We cannot try to collect the amount in question, or report you as
delinquent on that amount.
– The charge in question may remain on your statement, and we may
continue to charge you interest on that amount. But, if we determine that
we made a mistake, you will not have to pay the amount in question or any
interest or other fees related to that amount.
– While you do not have to pay the amount in question, you are responsible
for the remainder of your balance.
– We can apply any unpaid amount against your credit limit.
Your Rights If You Are Dissatisfied With Your Credit Card Purchases
If you are dissatisfied with the goods or services that you have purchased
with your credit card, and you have tried in good faith to correct the
problem with the merchant, you may have the right not to pay the
remaining amount due on the purchase.
To use this right, all of the following must be true:
1. The purchase must have been made in your home state or within 100
miles of your current mailing address, and the purchase price must have
been more than $50. (Note: Neither of these is necessary if your purchase
was based on an advertisement we mailed to you, or if we own the
company that sold you the goods or services.)
2. You must have used your credit card for the purchase. Purchases made
with cash advances from an ATM or with a check that accesses your credit
card account do not qualify.
3. You must not yet have fully paid for the purchase.
If all of the criteria above are met and you are still dissatisfied with the
purchase, contact us in writing or electronically at:
American Express, PO Box 981535, El Paso TX 79998-1535
www.americanexpress.com
While we investigate, the same rules apply to the disputed amount as
discussed above. After we finish our investigation, we will tell you our
decision. At that point, if we think you owe an amount and you do not pay
we may report you as delinquent.
Pay Your Bill with AutoPay
Deduct your payment from your bank
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– Avoid late fees
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Change of Address, phone number, email
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– For name, company name, and foreign address or phone changes, please call Customer Care
Please do not add any written communication or address change on this stub
Visit americanexpress.com/autopay
today to enroll.
For information on how we protect your
privacy and to set your communication
and privacy choices, please visit
www.americanexpress.com/privacy.
Platinum Card®
p. 3/8
YUSEF ROBINSON
Closing Date 05/17/24
Account Ending 0-42003
Customer Care & Billing Inquiries
International Collect
Cash Advance at ATMs Inquiries
Large Print & Braille Statements
1-800-525-3355
1-954-473-2123
1-800-CASH-NOW
1-800-525-3355
Website: americanexpress.com
Customer Care
& Billing Inquiries
P.O. BOX 981535
EL PASO, TX
79998-1535
Hearing Impaired
Online chat at americanexpress.com or use Relay dial 711 and 1-800-525-3355
Payments
P.O. BOX 1270
NEWARK NJ 071011270
For more information on your Pay Over Time Limit and your purchasing
options, please refer to the Information on Pay Over Time and
Purchasing Options section.
Please note, your preset spending limit is $3,800.00. You have spent
$4,064.56.
American Express® High Yield Savings Account
No monthly fees. No minimum opening deposit. 24/7 customer support.
Help meet your savings goals with an American Express High Yield
Savings Account. Terms apply. Member FDIC. Learn more by visiting
americanexpress.com/save
Payments and Credits
Summary
Pay In Full
Pay Over Time /
Cash Advance ⧫
Total
Payments
-$87.99
-$271.44
Credits
$0.00
$0.00
$0.00
-$87.99
-$271.44
-$359.43
Total Payments and Credits
Detail
*Indicates posting date
Payments
05/02/24*
-$359.43
Amount
AUTOPAY PAYMENT RECEIVED – THANK YOU
Navy Federal Credit Union
-$359.43
New Charges
Summary
Pay In Full
Total New Charges
Pay Over Time ⧫
$0.00
Detail
$12.00
Total
$12.00
⧫ – denotes Pay Over Time and/or Cash Advance activity
YUSEF ROBINSON
Card Ending 0-42003
Amount
05/09/24
GOOGLE *DOMAINS
COMPUTER PROGRAMMING
G.CO/HELPPAY#
CA
$12.00 ⧫
Continued on reverse
YUSEF ROBINSON
Account Ending 0-42003
p. 4/8
Fees
Amount
Total Fees for this Period
$0.00
Interest Charged
Amount
05/17/24
Interest Charge on Pay Over Time Purchases
$95.98
Total Interest Charged for this Period
$95.98
About Trailing Interest
You may see interest on your next statement even if you pay the new balance in full and on time and make no new charges. This is called
“trailing interest”. Trailing interest is the interest charged when, for example, you didn’t pay your previous balance in full. When that
happens, we charge interest from the first day of the billing period until we receive your payment in full. You can avoid paying interest
on purchases by paying your balance in full (or if you have a Plan balance, by paying your Adjusted Balance on your billing statement) by
the due date each month. Please see the “When we charge interest” sub-section in your Cardmember Agreement for details.
2024 Fees and Interest Totals Year-to-Date
Total Fees in 2024
Amount
$145.00
Total Interest in 2024
$479.19
Days in Billing Period: 30
Interest Charge Calculation
Your Annual Percentage Rate (APR) is the annual interest rate on your account.
Variable APRs will not exceed 29.99%.
Transactions Dated
From
To
Annual
Percentage
Rate
Balance
Subject to
Interest Rate
Interest
Charge
28.24% (v)
$3.61
$0.08
Pay Over Time
05/06/2024
Pay Over Time
01/06/2024
05/05/2024
28.24% (v)
$199.02
$4.62
Pay Over Time
08/06/2023
01/05/2024
28.24% (v)
$418.66
$9.72
Pay Over Time
01/05/2022
08/05/2023
28.24% (v)
$3,512.50
$81.56
Cash Advances
01/05/2022
29.99% (v)
$0.00
Total
(v) Variable Rate
$0.00
$95.98
Platinum Card®
YUSEF ROBINSON
Closing Date 05/17/24
p. 5/8
Account Ending 0-42003
Information on Pay Over Time and Purchasing Options
Pay Over Time Limit: $4,000.00
The total of your Pay Over Time and/or Cash Advance balance and Plan balance cannot exceed your Pay Over Time Limit. No charge
will be added to a Pay Over Time balance if it would cause the total of your Pay Over Time, Cash Advance, and Plan balances to go over
your Pay Over Time Limit. This is not a spend limit. We may approve or decline a charge regardless of whether your Card account
balance exceeds or does not exceed your Pay Over Time Limit.
Available Pay Over Time Limit
Your Available Pay Over Time Limit is accurate as of your statement date. This Limit is the remaining amount that you can add to the
total of your Pay Over Time, Cash Advance, and/or Plan balances. Remember that you can continue to create plans for purchases that
are currently in your Pay Over Time balance even if you have reached your Pay Over Time Limit. Your total Cash Advance balance is
subject to your Cash Advance Limit, which you can find in your Cardmember Agreement. If you have a preset spending limit on your
account that is less than your Pay Over Time Limit, you may not be able use your Available Pay Over Time Limit.
YUSEF ROBINSON
Account Ending 0-42003
p. 6/8
p. 7/8
Closing Date 05/17/24
YUSEF ROBINSON
Account Ending 0-42003
IMPORTANT NOTICES
EFT Error Resolution Notice
In Case of Errors or Questions About Your Electronic Transfers Telephone us at 1-800-IPAY-AXP for Pay By
Phone questions, at 1-800-528-2122 for Pay By Computer questions, and at 1-800-528-4800 for AutoPay. You
may also write us at American Express, Electronic Funds Services, P.O. Box 981531, El Paso TX 79998-1531, or
contact online at www.americanexpress.com/inquirycenter as soon as you can, if you think your statement or
receipt is wrong or if you need more information about a transfer on the statement or receipt. We must hear from
you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared.
1. Tell us your name and account number (if any).
2. Describe the error or the transfer you are unsure about, and explain as clearly as you can why you
believe it is an error or why you need more information.
3. Tell us the dollar amount of the suspected error.
We will investigate your complaint and will correct any error promptly. If we take more than 10 business days to
do this, we will credit your account for the amount you think is in error, so that you will have the use of the money
during the time it takes us to complete our investigation.
Update to Your InCircle® Benefit
We are making changes to the InCircle benefit on this Account.
Effective August 15, 2024, Card Members will no longer be able to enroll in the InCircle benefit. Card Members
enrolled in the InCircle benefit by August 14, 2024 may continue to earn InCircle points and maintain InCircle
status through December 31, 2024. Note, InCircle points are awarded based on the date the order ships, which
may differ from the date the purchase was made. For example, if a purchase made on December 30, 2024 does
not ship until January 1, 2025 it will not earn InCircle points.
Effective January 1, 2025, InCircle will no longer be a benefit on this Account. Any InCircle Point Cards that
Card Members earn by December 31, 2024 will be distributed by Neiman Marcus before February 1, 2025.
Update to By Invitation Only®
Effective May 9, 2024, the benefit currently known as By Invitation Only® will be known as Premium Events
Collectionº.
Consumer, Business, and Corporate Platinum Card® and Centurion® Members are eligible for Premium Events
Collectionº experiences. Additional Platinum Cards on Consumer and Business Platinum accounts as well as
Additional Platinum and Centurion Members on Consumer and Business Centurion Accounts are also eligible for
Premium Events Collectionº. Payment must be made using an eligible Platinum Card or Centurion Card. To
purchase tickets, you must have an eligible Card and the Card Account must not be cancelled. Additional terms
and conditions apply; visit americanexpress.com/entertainment or call the number at the back of your Card for
more information.
Update to the access policy for Escape Lounges – The Centurion® Studio Partner
We want to inform you of a change to the access policy for the Escape Lounges available through the American
Express Global Lounge Collection.
Effective May 9, 2024, to access select Escape Lounge locations, eligible Platinum Card® Members will be
required to arrive at the lounge within 3 hours of their departing flight. During a layover the eligible Card Member
may use the Escape Lounge in the connecting airport at any time. Additional information on guest fee rates,
access policies and lounge terms and conditions can be found at escapelounges.com/us/access/.
Corrected Car Rental Loss and Damage Insurance Phone Numbers
The phone number for Car Rental Loss and Damage Insurance is 1-800-338-1670 (US) and 1-303-273-6497
(International). Please update your records.
Important Notices continued on next page.
p. 8/8
Closing Date 05/17/24
YUSEF ROBINSON
Account Ending 0-42003
IMPORTANT NOTICES continued
Membership Rewards® Program Updates
You can view a summary of updates to the Membership Rewards® program anytime, including information about
the availability of redemption options, by visiting americanexpress.com/mrupdates.
End of Important Notices.
Markets and
Competitors
Annual Cars & Light
Market share percentage
Trucks Revenue in 2020
for cars and trucks now
(billions) TAM
Projected CAGR over
the next 10 years
Global
$
3,227.70
100%
4.10%
Your Company
$
187.10
5.80%
3.10%
BMW
$
126.10
3.91%
3.70%
Toyota
$
275.40
8.53%
3.90%
VW
$
282.90
8.76%
4.30%
Note for student: Projected Global revenue for in-car connected services by 2030: $81.1 Billion
Projected revenues in
2030 (billions)
Market share percentage
Global Market for
Market share percentage
for cars and trucks in
Connected Cars & Light for connected cars and
2030
Trucks (billions) TAM
trucks now
$
4,810.0
100%
53.9
100%
$
254.2
5.28%
3.83
7.10%
$
181.5
3.77%
1.62
3.00%
$
404.5
8.41%
4.80
8.90%
$
433.1
9.00%
8.36
15.50%
Projected Conencted
CAGR over next 10
Car Revenues (billions)
years
in 2030
Market share
percentage for
connected cars and
trucks in 2030
25.20% $
510.07
100%
10.20% $
10.11
1.98%
25.50% $
15.67
3.07%
24.80% $
43.97
8.62%
23.20% $
67.30
13.19%
in billions USD
Your Company
VW
BMW
Revenue
Operating Income
Net Income
187.1
5.7
0.9
282.9
20.5
16.1
126.1
9
6.1
Assets
Liabilities
Equity
310
270.2
39.9
590.6
443.2
147.4
275.9
203.4
72.5
Number Employees
190,000
304,174
133,778
Notes:
1 Euro = 1.21 USD
1 Yen = 0.0094 USD
0.0092
references:
Full Speed Ahead To The Future. 2019 Annual Report”. Volkswagen Group. 17 March 2020. Retrieved 17 March 2020.
converstion rages via Morningstar
Annual Report 2019″ (PDF). BMW Group. Retrieved 19 March 2020.
Toyota Annual Report 2020″ (PDF). Toyota Motor Corporation. May 12, 2020.
Ford Motor Company 2019 Annual Report (Form 10-K)”(PDF). sec.gov. U.S. Securities and Exchange Commission.
January 2020. Note: numbers disguised by multiplying by 1.12 except for operating income multiplied
by 10 and net income multiplied by20
Toyota
0. Retrieved 17 March 2020.
Exchange Commission.
e multiplied
275.4
22.5
19.7
484.7
293.9
190.8
359,542
Company
Number of Sensors and
Computers by 2025
Your Company
65 sensors/30 computers
BMW
125 sensors/50 computers
Toyota
100 sensors/40 computers
VW
90 sensors/35 computers
References:
https://medium.com/@water.street/autonomous-vehicle-partnerships-how-tech-companies-and-automakers-are-collaborat
https://techcrunch.com/2019/07/04/bmw-and-daimler-partner-on-autonomous-driving-first-results-of-team-up-in-market-b
Functionality Emphasis
Current Connected
Services
5–10 Year Product Plans
vehicle control, systems
maintenance, entertainment,
navigation, 5G
fully integrated information
navigation,
system, assisted driving, expanded
emergency services,
service information, semiservice status
autonomous vehicle within 10
years
vehicle control/safety, IFTTTcustomized applications and IoT
connectivity, LTE
fully integrated information
navigation,
system, semi-autonomous driving,
emergency services,
connection to traffic information
smart house
systems, introduction of fully
connectivity
autonomous driving early 2030s
fully integrated information
system; semi-autonomous driving;
navigation,
connection to traffic information
vehicle control, social media, safety,
emergency services, systems, expanded social media,
entertainment, navigation, 5G
social media
and communications; consumer
services; maintenance; fully
autonomous vehicle early 2030s
fully integrated information
navigation,
system; semi-autonomous driving;
vehicle control, maintenance, in-car emergency services, connection to traffic information
consumer experience
consumer orders, systems; connectivity with smart
maintenance status home; fully autonomous vehicle
early 2030s
artnerships-how-tech-companies-and-automakers-are-collaborating-to-innovate-cf44bc9e85a
ner-on-autonomous-driving-first-results-of-team-up-in-market-by-2024/
Existing
Partnerships
Toyota, Waymo
Daimler
Microsoft, Ford
Microsoft
MBA 580 Chief Technology Officer (CTO) Brief
Over the past three decades, sensors have been increasingly integrated into automobiles. Currently, a
typical car has 50–100 sensors (Tyler, 2016), and this is expected to grow to as many as 200 over the
next few years. These sensors measure everything from oil levels to the distance from the car in front.
These sensors currently connect (Computers in Your Car, 2018). These computer systems can warn of a
collision or an engine problem and communicate the condition to the driver (e.g., turn on the check
engine light).
Increasingly, these computers are connected wirelessly via the internet to other computers, like the
user’s phone for things like remote starting, and to the manufacturer to help generate predictive
maintenance recommendations. The commercial term currently used for this is connected cars.
Technically, this is part of the internet of things (IoT) concept—where devices from refrigerators to door
locks are connected via the internet for convenient access by the user from phones, computers, and
personal automobiles.
Currently, and in the immediate future, connected cars will help the driver navigate, find the cheapest
gas station, locate the nearest Starbucks or parking lot with open spaces, and allow friends on social
media to know when their friend will arrive. As more semi-autonomous driving features are added over
the next few years, these wireless computers will also talk to other cars to help predict their next move
and communicate to road sensors to monitor conditions (Gossett, 2019). Eventually, enough
information will be provided to and from the connected car that autonomous driving will become
commonplace.
It is estimated that the market for IoT-connected cars will grow from $54 billion in 2019 to over $510
billion by 2030 at a 25% compound annual growth rate (CAGR) (Meola, 2020). This compares with an
overall industry growth of 4.1% (The Global Automotive Motors Market Size Is Projected to Grow from
USD 20,321 Million in 2020 to USD 25,719 Million by 2025, at a CAGR of 4.8%, 2020).
Our company is marketing some connected car capability—but we are not the leader. We need to
innovate so that our products can be competitive in the rapidly growing market. Our cars have sensors
and computers, and our technology expertise is competitive. We have some connectivity—driver apps
for keyless start and OnStar (The Benefits of OnStar | Keeping You Safe and Secure, n.d.) connectivity to
detect accidents and alert first responders. Our growth and ultimate health as an enterprise depends on
us taking the leadership or, at least, keeping up with the leaders. Furthermore, there is significant
opportunity to improve our customer satisfaction and increase our repair and parts revenue streams by
alerting customers to needed maintenance before an expensive breakdown occurs on the road.
With our current technology implementation plan, however, we expect to grow at 3.1%, about 1% less
than the industry. Our growth projection for connected cars is 10.2%—less than the industry at large.
We must speed up our innovation or risk losing market share.
Here is what we estimate our competitors are doing and how fast they are adding technology. The
leader among existing auto manufacturers is BMW. BMW cars have significant connectivity to
information services now. Some driver-assist functions, such as auto-parking and lane-keeping, have
been in BMW models for several years. Market research suggests that BMW will have a full suite of
information connectivity in their cars within several years and that the company will begin producing
fully autonomous driving machines within 12 years. Toyota has fully integrated social media in Japan
and expects to implement it in European and U.S. markets, subject to 5G wireless availability.
Volkswagen is about where we are—but has partnered with Microsoft to jump ahead.
Competitors from outside the traditional automobile manufacturers are also indicating that they intend
to enter the connected car market with disruptive technologies. Apple, for example, is aiming for a fully
autonomous delivery vehicle by the mid-2020s and an autonomous passenger car within a decade.
Our goal is to launch an autonomous vehicle following quickly after BMW, our main luxury competitor.
However, we have a long way to go. We are considering two ways to get there: A) Introducing a radical
innovative design in several years or B) Introducing incremental improvements faster than we have in
the past and improving our current models each year. Option A does not prevent us from continuing to
introduce incremental improvements in the interim.
Our approach will depend on your analysis of our capabilities to innovate. How can we get the
technology being researched in our lab ready—how can we develop it, produce it, and take it to market?
What technology do we already have, and what will we need to acquire? What are our competitors
doing, and are there weaknesses we can exploit?
The two paths we can take are discontinuous or radical innovation, or incremental innovation.
What do I mean by this?
Discontinuous or radical innovation. This would be more expensive—a completely new model is
expensive—as much as $6 billion (Viswanathan, 2013). A major redesign and recent technology
integration are also riskier to develop—we might fail—and it would take longer to get to market.
We might require enough of our existing resources that we could fall behind with our current
models, but it also might provide insight in incremental changes to current models while we
developed a major new product line. It is a lot to think about. That said, we could take the
leadership position ourselves in the growing market and better protect ourselves from
competitors. If we took this path, we would first introduce a new high-end model and, as we
brought costs down, rapidly deploy it across our whole product line, using this innovation
process to accelerate our ability to innovate.
Incremental innovation. The automobile is a mature technology—the modern automobile is
over a century old and it has been changing and adapting over that time. Our company does
incremental innovation as well as our major competitors and the costs are built into our way of
doing business. Given how we build automobiles today, we can continue to add sensors,
computers, and IoT capabilities each model year just by upgrading modules. There are risks,
though: 1) Could changes in the market impact what customers demand? A faster competitor or
a new entrant could produce a breakthrough in automobiles that makes everything else
obsolete. It has happened in other mature industries—could it happen here? 2) Are we missing
significant new opportunities (e.g., market growth overall or opportunities in integrated
maintenance, service revenues and parts, or a high-margin business) that we do not control
now?
References:
Tyler, N. (2016, December 14). Demand for automotive sensors is booming. Newelectronics.Co.Uk.
https://www.newelectronics.co.uk/electronics-technology/automotive-sensors-market-isbooming/149323/#:%7E:text=Currently%2C%20each%20vehicle%20has%20from,car%20based%
20on%20current%20trends
Computers in your car. (2018, January 24). AAMCO Colorado.
https://www.aamcocolorado.com/computers-in-yourcar/#:%7E:text=Your%20Car’s%20Computer,controls%20to%20meet%20emissions%20standard
s
Gossett, S. (2019, August 13). IoT in vehicles: A brief overview. Built In. https://builtin.com/internetthings/iot-in-vehicles
Meola, A. (2020, March 10). How 5G & IoT technologies are driving the connected smart vehicle industry.
Business Insider. https://www.businessinsider.com/iot-connected-smartcars?international=true&r=US&IR=T
The global automotive motors market size is projected to grow from USD 20,321 million in 2020 to USD
25,719 million by 2025, at a CAGR of 4.8%. (2020, August 17). PR Newswire.
https://www.prnewswire.com/news-releases/the-global-automotive-motors-market-size-isprojected-to-grow-from-usd-20-321-million-in-2020-to-usd-25-719-million-by-2025–at-a-cagrof-4-8-301113089.html#:%7E:text=%2F%3Futm_source%3DPRN,The%20global%20automotive%20motors%20market%20size%20is%20projected%20to%20gro
w,at%20a%20CAGR%20of%204.8%25.&text=The%20growing%20adoption%20of%20these,dem
and%20for%20safety%20and%20convenience
The benefits of OnStar | Keeping you safe and secure. (n.d.). OnStar.
https://www.onstar.com/us/en/why-onstar/
Viswanathan, B. (2013, May 7). Why are cars not getting cheap even with better economies of scale?
Forbes. https://www.forbes.com/sites/quora/2013/05/07/why-are-cars-not-getting-cheapeven-with-better-economies-of-scale/?sh=3ad2b1045ad9
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