Professional Documents
Culture Documents
Background
y Elio engineering,Inc is a private company categorized under engineering services and manufactured automotives bodies vehicle bodies and trailers, automotive chassis, product and material trailers. y Elio engineering is a company that designs the new technology of the seat in the automobiles which is called No compromise or NC y NC seat is a part of All-Belt-To-Seat(ABTS) y The firm was founded by Pual Elio and Hari Sankara.
Timeline
y 1996, Pual Elio designed a revolutional bike which got a patent. y 1998,Pual met Hari Sankara who was his mentor in Structural design and Analysis department of Johnson Controls,Inc. y July 1998 , Pual invited Hari to join his idea about the NC seat and they founded Elio Engineering y Nov 1998,They went to present the NC seat to Bostrom Seating, the seat supplier for heavy truck and bus industry, that was looking to develop the ABTS.
Timeline
y Early1999,Bob Glaspie joined in as the 3rd member of the team. y Feb1999,Bostrom made a licensing deal with Elio. y Mar1999Bostrom planned to unveil the NC seat at an annual trade show in Kentucky
Elio s Technology
y A new seat which progress on cost,weight and
performance called No Compromise or NC which was a part of special class of automotive seats in the industry called All-Belt-To-Seat (ABTS)
Weakness
Strength
break, fracture or buckle after the force impact that reached it s failure level. y Often resulting in fatal injuries to passengers.
materials are inexpensive and light weight. y Ease to manufacture and assemble
All-Belt-To-Seat (ABTS)
integrates the seat belt directly into the seat.
y Weakness y Cost y Strength y Easy to use,Comfort y Higher comfort level y More attractive
Differences
ABTS
y The shoulder belt and lap belt originate from the auto body. y Is very heavy and expensive. y Is installed only in luxury and high-end sport automobiles.
NC
y Originate from the seat. y Light weight, low cost and strong
failure y A special new load level recliner mechanism ensure that the seat doesn t fracture at the failure level
y When the force diminishes, the seat structure is still fully functional.
and Urethane
y Large capital requirement y Seat styling also become talent
2.Materials Science
-often found by trail and error -provide from aboard -outsource specialists -ensure quality
Manufacturing Issues
y ABTS seats are base on existing technology y Independent entrant were that manufacturing was
not its core competence. y Fairy large capital requirements of building a new plant.
Customers
The ultimate user is the buyer of a new car. OEM customers of seat system supplies make the buy decisions. The seat system is part of the total interior design of the car.
Market Share
y The Big Three U.S. auto manufacturers,Ford,
GM,and Daimler Chrysler,each has so much power that it has been able to squeeze the operating margin of major U.S. seat system suppliers down to about 2 to 5 percent.
Benefit of NC Seat
Competitors
y Many competitor already had an ABTS seat in their
product portfolio or were currently working on the technology. y The designs currently available on the market were not cost-effective solutions. y Industry experts who had the opportunity to see Elio s design acknowledged that the Elio mechanism was a breakthrough innovation. It was expected to have cost and functionality advantage over competing technologies.
Competitors
y The North America
automotive seating market was also highly concentrated. y Two tier-one player,Johnson Controls Inc.(JCI) and Lear Corp.
JCI had excellent seat system and total car interior engineering capabilities and strong expertise in concurrent engineering and software tools. JCI was strong at effectively integrating strategic acquisitions into its organizational structure.
Lear was inclined to outsource more of the design and manufacturing work and merely act as a seat system integrator.
this provided tem with a significantly lower cost position and a shorter time to market.
to compete with the existing manufacturing. y In the design and development part of the value chain entry barrier were lower. y Increasingly, sophisticated software applications facilitated the development process.
How to entry?
The first was to enter the market as a tier-three or tier-two suppliers of seat mechanism or seat structure.
Advantages The new entrant could supply its technology to all tier suppliers. The new entrant could keep greater control over its core ABTS technology. Disadvantages The new entrant was likely to receive a relatively small piece of the final products total valueadded compared to a tier-one supplier who insourced ABTS technology. The lack of manufacturing and marketing experts increased the technological and market risk.