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Name Kyle Mens
NetID kmen956
Group Number: 082
Website Link:
Tutorial Details
Tutor: Day: Time:
Kayur Ramson Monday 3pm
Time Spent on
11 hours Word Count: 1666

Automated Vehicles Concept
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
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)
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)


Threat of new
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
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.

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)

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
This is evidence that as the technology
becomes accepted, there will be a high level of
competition between automated car manufacturing
(Kane, S., 2011)
Overall Attractiveness of the industry: The industry isn’t 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 it’s targeted to everyone who can afford it as a valid driver’s 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)
3.4 The Product and Service
The use of automated cars offers many possibilities that aren’t possible with our current
manual operated cars. Speed limits will be able to be increased due to the fact that
automated cars don’t have the risk of human error causing an accident.
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 doesn’t need to be factored in.
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.

3.5 Suppliers and Partners
 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.
 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.



Inventory (parts) level
drops below adequate
Message sent to
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

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.


Investigate expected
upcoming sales
Inventory (cars)
checked if sufficient to
meet sales volume
Production approved
to meet volume
Distribute cars to
Management allocates
parts and workers to
New cars are

Inventory insufficient
Inventory sufficient

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
Processes Functionalities Specific
Making the
product or
Inventory order
 Ensures that inventory
levels are able to cope
with production
 Allows for changes if
expected sales volume is
higher/ lower than normal

Supply chain
 Frequent manufactures
provides opportunity to
improve and add
 Vehicles have recent
technologies that
differentiate the car from
its competitors.
Fuel alert


A differentiation strategy that is supported by the business processes and systems will allow
the business to reach its vision of simplifying everyday travel.
1. Yvkoff, L. (2012, April 28). Many car buyers show interest in autonomous car
tech. Retrieved May 24, 2014, from
2. Frost & Sullivan. (2014, March 26). Analysis of the Advanced Driving
Assistance System (ADAS) Market in North America. Retrieved May 24,
2014, from
3. Wikipedia (2014, May 16). Autonomous car. Retrieved May 24, 2014, from
4. Kane, S. (2011, October 27). 2012 Family Cars With Self-Parking
Technology. Retrieved May 24, 2014, from
5. Chron (2012, September 11). Get ready for automated cars. Retrieved May
24, 2014, from