Adam Gregg
Mgmt 4970
October 2, 2012
Automotive Technology Case
1. Which factors do you think will be most critical in setting the next industry standard for technology in car propulsion?
I think the factors most critical to success are what will be most convenient to the customer, in particular, the accessibility of recharging stations. Customer already consider the frequency of refueling when purchasing a new/used car, so customer won’t buy-in if the frequency of recharging is almost doubled, especially when the infrastructure is non-existent because there aren’t recharging stations or battery swap stations anywhere. If an infrastructure of battery swap or recharging stations is built up, the alternative fuel type (AFT) industry will take off.
Initial purchase cost and cost of ownership are key factors in determining how large or small, or even whether a market will exist with the AFT industry. Right now it’s extremely expensive to do research and develop technologies for hybrids and hydrogen fuels, so all of these expenses may be reflected in the prices of the vehicles, especially towards the beginning of adoption, if companies aren’t expecting to lose money.
Reliability and safety are other factors that are important and that consumers consider very important when purchasing a car. The industry won’t take off if the AFT cars are perceived as more expensive or less safe than regular gasoline cars of today.
Current costs of wind, solar, and nuclear power are also key factors in determining whether the industry succeeds. Many companies can’t afford to take the route of trying to develop AFT cars and this is definitely a barrier to entry. More key players will evolve if the costs of these technologies would ever lower.
Size, design, and brand are also factors to consider because these are considered very important to consumers. Customers tend to like larger vehicles of their particularly favored brand name, and they’ll like it the better it...