As of September 2015, the following companies had invested
millions into self-driving automobile R&D development: Apple, Audi, Baidu
and BMW, Bosch, Daimler, Delphi, Ford, General Motors and SAIC Motors, Google,
Honda, Hyundai, Jaguar Land Rover, Mercedes-Benz, Mobileye, Nissan/Renault,
Scania, Tata Elixsi, Tesla, Toyota, Uber, Volkswagen, Volvo, Yutong.[1] With
this many supporters and developers of self-driving technology, this blue ocean
technology is growing and increasingly changing the automobile sector.
McKinsey has identified four strategies that automakers and
interested technology companies will explore in the coming years, as
development of driverless technology increases and the timeline to adoption
shrinks.[2]
These strategies include premium incumbents, attackers, fast followers, and
late entrants/nonadopters. The companies already listed in this post fall
mostly within the first two strategies, premium incumbents and attackers, while
some, like the less technologically advanced car companies, fall within the
fast followers category.
Differentiation and
Cost Competitiveness
Car and technology companies entering into the autonomous
vehicle market are betting on the long-term viability of technology advancement
in the area of interconnected vehicles as well as customer desire for
autonomous vehicles. As the market grows and companies begin to see these
technologies adopted in their portfolios, it may be the companies in the “fast
followers” strategy category that see particular growth. As non-frontrunners in
the race towards autonomous vehicles, these companies benefit from entering the
market potentially a little later, seeing what consumers value from the
technology, and potentially lowering prices in order to sell at a better value.
However, early adopters and those first in the market will see significant initial
gains, as the first options for these types of vehicles may be expensive, but
could have a significant differentiation component that makes consumers quick
to purchase.
System-wide
Approach
With this many entrants into the market, the blue ocean of
autonomous vehicles is nearly a given to be successful. The fact that the
technology already is proven and is now being tested on our roadways proves
that it is not necessarily a race to the finish line to see who completes
first. Rather, there is a system wide focus on this new technology and promises
dividends for all manufacturers and technology companies competing to design
these automobiles. This strategy may prolong adoption, since companies will
want to make sure their products will be able to compete in a new but soon to
be burgeoning business, but promises strong payback as the autonomous vehicle
changes the face of how people commute and use their cars.
It is clear that the blue ocean of autonomous vehicles is driving
innovation and development in the automobile and associated technology sectors.
Though breakthroughs are coming, its interesting that, similar to the Coca Cola
and Pepsi case, these companies seem to be progressing at similar speeds; maintaining
forward momentum, while continually defining their place in the market. Will
this industry destroy what we think of as historical automobile companies? Only
the next five to ten years can tell. Autonomous vehicle technology has the
possibility to disrupt the industry far more than nearly any other innovation
in recent automobile-history.
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