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ICLA - Session 10 Group7
ICLA - Session 10 Group7
The Context / Background of the case: In 2010, Google had developed technology for
driverless cars and even though it wasn’t a manufacturer of automobiles, Google had invested
millions of dollars in its self-driving cars by 2014. Industry observers speculated that Google
was in a good position to develop automated vehicle technology and the various other
offerings of Google, such as Google Maps and Google Calendar, provided it with an edge
over its competitors. But there were certain hurdles in the way of Google, which it needed to
clear to achieve its objective.
The Problem(s) / Key issues in the case:
● Legal Barriers: Google had to lobby the state governments to allow the testing and use of
driverless cars. In 2013, NHTSA issued guidelines for self-driving cars, there were still
several problems which were yet to be resolved.
● Lack of Public Acceptance: The public was skeptical regarding the safety in driverless
cars. They felt that there was a lot of computer technology in cars already and even these
existing technologies used to fail some times.
● Privacy Issues: In March 2013, Google was issued a $7 million dollars fine for violating
privacy laws after its Street View mapping team collected passwords, e-mail addresses, and
other private information from unencrypted networks as its vehicles captured images of
streets and buildings. There was also the problem of maintaining privacy because of the fact
that these self-driving cars would have an “always-on” wireless connection, which would
make their locations traceable.
● Competition: Google was not the only one developing driverless cars, Companies like
General Motors, Tesla, Volkswagen and Audi also started investing in R&D for driverless
cars.
Frameworks / Theories used for analysis:
Porter’s 5 Forces
SWOT
PESTEL
Analysis:
Porter’s 5 Forces Model:
Industry: Automation vehicles
Industry Rivalry: High
All major automobile companies have built internal capabilities or collaborated with
major universities to implement self-driving technologies at various levels
Some of the important technologies being worked on include cruise automation,
ConnectedDrive Connect (CDC), adaptive cruise control, vehicle-to-vehicle
networking.
Hence no single company has a significant monopoly over any technology that is
crucial feature for implementing self-driving cars.
Bargaining power of buyers: Low
The self-driving car technology is still in the nascent stage and drivers still prefer to
have manual controls
There are only few players with minimal implementation of autonomy and that too
available in only select variants.
Bargaining power of Suppliers: Moderate
Most technologies implemented as a part of self-driving vehicles are developed
internally by the companies and hence is independent of any supplier influence
The influence that can be exerted by is from sensor manufacturers especially lidar
sensor
Threat of Substitutes: High
Public transit remains the major substitute for automation vehicle, the influence of
which depends on the growth of infrastructure in comparison to the accessibility of
automated vehicles.
Threat of new entrants: Low
Direct entry as a manufacturer of automobile requires high capital in addition to the
resources spent on building crucial technology
Companies also need to build a reliable distribution and service network
PESTEL Analysis:
Political:
Due to minimal margin of error requirement in the product in addition by its impact
on privacy, public safety and employment, the product success is contingent to
political forces which will determine the necessary permissions in will require to test
and launch vehicle
Economic:
Currently most automated cars has high costs due to the technology underneath
(Google cars required $ 150,000 worth of equipment the success of the product
depends on the growth of economy and increased per capita income
The cost reduction is also possible on the various duties that can be imposed on the
sensors manufactured in foreign countries
Social:
There is a significant concern over the privacy issues with respect to technologies
enabling self-driving vehicle
Google was issued a $7 million fine for violating privacy laws after its Street View
mapping team was found to be collecting passwords, email-addresses, and other
private information from unencrypted networks.
Successful implementation of the technology could reduce the number of automobile
accidents which currently is about 1.2 million annually, however failure would result
into high fatality
Technology:
Self-driving vehicular technology began as a part of DARPA challenge and has
resulted into pioneering of technologies like Lidar
Competition in the industry would result into improvement of sensor technologies
as well as development of better predictive algorithms
Legal:
Need to lobby various state government and legislative bodies for permission to
test vehicles
Concerns are present regarding the responsibility in case of a crash
Privacy issues concerning the data collection needed for implementation of
technologies has resulted into multiple trials
SWOT analysis
Strengths:
Leader For Current Car Segment
Domestic market
Monetary buffer Availability
High Loyalty In Existing Customers
Weaknesses:
Excessive Reliance On Technology
Target Market Restricted geographically
Opportunity:
Big Data Availability And Data Integration for product Optimization
Diversification In To The Other Car Segments
Untapped Market
Business Diversification
Threats:
Safety Since The Technology Is Relatively New.
Potential Impact On Other Car Segments In Case Of Failure
3. Future of Google:
Google’s mission statement: “To organize the world’s information and make it
universally accessible and useful”. Google through its Search View initiative
is collecting a huge amount of data through the sensors attached to each of its
car. This in addition to its Google Maps data is used to create 3D maps
required to navigate cars in traffic. In a way Google is organizing data to make
driving safer. Hence the Google Car initiative fits in Google’s traditional
business
Google has evolved its stance regarding autonomous vehicle from wanting to
make driving safer to being able to create a fully autonomous vehicle without
the need of a driver. This shows the company’s intent to be a player in the
industry. This is further validated by its huge investment in Uber.
Currently Google has two models, one in which it build and supply its own
cars or it operates as a Software/Hardware-as-a-Service provider. In the first
approach, it can leverage its hold on the Uber by introducing Google Car as a
part of Uber fleet. However we would suggest it to build an Open platforms
which other manufacturers can subscribe to. This would be similar to what it
did with Android and enable it to penetrate into larger number of vehicles.
The regulatory and public perception is still to evolve in the segment, but
Google has significant edge in terms of finance and technological capabilities
to sustain this period of evolution