Autonomous Vehicles:Technological changes and ethical challenges Case Solution
Cadillac – the luxury car division of General Motors was ranked among the oldest car brands around the world and was founded in the year 1902. But, the sales of Cadillac had represented a decline by 6.5 percent from the year 2013-2014. GM made an announcement regarding the allocation of around $12 billion for the growth of Cadillac and decided to launch around eight vehicles by the year 2020. The announcement regarding the availability of Super Cruise – a semi-autonomous technology was expected by the fall of 2016. In addition to semi-conductors autonomous, the Tesla’s Autopilot had saved lives through a significant reduction in the number of deaths related to automobile incidents.
Despite the importance of autonomous technology in life-saving and injury prevention, the concerns regarding the misuse of technology might lead to fatal consequence. There was also uncertainty about the legal and regulatory environment followed by the presence of a myriad of ethical consideration. Thus, the challenge was associated with finding a possible way for navigating the ambiguity and determination of Super Cruise future.
Porter Five Forces:
Despite the cultural inertia behind the growth of Cadillac, it had a high competition threat from German auto industry. The development of semi-autonomous technology by Tesla, Google, and other competitors like Ford, Volvo, Nissan, and Mercedes-Benztend to be advantageous for Cadillac allowing it to operate at the forefront of the market. Other players include the shift of ride-sharing firms like Uber and Lyft.
Threat of new entrant:
The reputation of existing companies like Tesla, GM, and Google are likely to be unaffected by the entrance of a new company built on reputation of innovation. Similarly, there is a requirement to make heavy investment in terms of building infrastructure and meet the demand of customers. The approach to develop strategic alliance resemble the global network of companies. (Barbacoa, 1992) The entrance of ride sharing companies like Uber and Lyft increases the threat of new entrant.
Threat of new substitute:
Because of an advanced technological approach, only a few has been focusing on launching the semi-autonomous vehicles in the market. Currently, the product features and the use of AI has not been well-defined which makes it difficult for other players to launch any substitute product.
Bargaining Power of supplier:
The autonomous vehicles are primarily designed by the developer that leads to the variation in technology. For this purpose, stock vehicle was used by each developer and retrofit it with wide-ranging sensors like radar, cameras, and often lidar. Thus, the bargaining power of supplier is low.
Bargaining Power of Buyer:
Super Cruise – being a luxury brand would definitely be high in price in comparison to other products based on the use of semi-autonomous technology. During the selection or purchase of an autonomous vehicle, the key concerns the capability to control the movements in traffic such as in Autopilot. Similarly, consumers lack understanding about driving an autonomous car. This represents high purchasing power of buyer depending on awareness, clear instructions about driving, and accountability.
Only a few states had laws regarding the use of autonomous technology on vehicles. However, there were no federal regulations or statues that governed the release of automated driving system. But, the car manufacturers were more found to be exposed to lawsuits in case of automobile collisions which involved the treatment of automated vehicles as a product liability case than an unavoidable accident. There was a variation in states laws; full deployment of autonomous vehicles s was allowed in Florida, whereas autonomous vehicles were only allowed to be operated for testing purpose in Nevada, Michigan, and California.
Autonomous vehicle technology was considered as an opportunity of economic growth and to capture the historically resided technological sector of California. The market size of autonomous vehicles was expected to be around $42 billion by the year 2020. The probability of high economic growth provides an opportunity to each leading player in the auto mobile industry to focus on autonomous technology to improve the driving experience of consumers.
Despite the importance of Baby Boomers for General Motors, around 80 percent of the sales of luxury cars was expected to be bought by Gen X and Gen Y. Thus, the introduction of semi-autonomous technology would boost the brand image among the Millennials i.e. the target customer segment………………….
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