Following CarPlay are both making plays for the automotive

Topic: BusinessSteve Jobs
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Last updated: August 11, 2019

Following the 2008–09 financial crisis, the auto industry hasbeen thriving for the last coupleyears, however it is facing new and pressing challenges. Globalization,individualizations, digitalization and increasing competition. In addition,increasing safety requirements and voluntary environmental commitments by theautomotive industry have also contributed to the changes ahead autonomousvehicles (AVs). This emerging connected car market invite companies outside thetraditional automotive market like Intel, Cisco and Nokia’s HERE to invest multimillion-dollar funds forconnected car technologies. Furthermore, Google with its Android Auto and Applewith its CarPlay are both making plays for the automotive market withdriverless cars.Because of this, the industry will undergo a substantial restructuringwhich will force most automakers to redefine themselves, enhance thecapabilities of their workforces and the skills of their dealerships. Thus, thetask of strategic analysis and planning in the automotive businesses has becomea necessity.

Some of the most trusted and widely recognized companies like Honda,Toyota and Ford don’t make the exception to these challenges. Therefore, thesethree companies will have to navigate through a number of difficult challenges,and figure out how to take advantage of a few surprising opportunities.In the case of Honda, they are ahead of the game by investing more inResearch & Development (R&D) and restructuring their strategy. Thenewly appointed CEO Hachigo has already set up a strategy “Prioritize qualityover quantity”. Hachigo spent years setting up the structure under hispredecessor, Takanobu Ito, before taking over last June.

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He said that the rapid expansion put too muchstrain on R&D resources in Japan and needed clearer lines of control.”We have come to see some issues in the front lines of our development andproduction facilities,” Hachigo said. “This could seriously harm theengine behind Honda’s creativity.”To steer the next phase, Hachigo replaced nearly a third ofthe board and promoted younger executives for new blood. He appointed newpeople to key roles in charge of R&D, North America and automotive operations.The changes clear the top ranks of some prominent, older-generation executivesunder Ito.Hachigo said electrification will play a big role inHonda’s new aura.

By 2030, he wants two-thirds of Honda’s global sales to comefrom green cars such as hybrids, plug-ins, fuel cell vehicles and pure electricvehicles. That’s up from just 5 percent today.”We need to realize renovation of Honda’smanufacturing,” Hachigo said. “Management, including myself, mustlead in changing our mindset, and every associate needs to change theirperception and the way they work.”Toyota is also following the footsteps oftheir Japanese counterpart by implementing new strategy and focusing more onR&D. On their website it says “In the near future, cars are expected to connectwith people and communities and take on new roles as part of the socialinfrastructure. New areas, such as AI, automated driving, robotics, andconnected cars, are becoming especially important, and it is no longer enoughto focus just on developing excellent cars and technologies or to carry onsales and service in the same old ways.

To take on a new breed of initiatives, wetherefore felt it crucial to form a new team, rather than use previousframeworks. Accordingly, in January 2016, we established Toyota ResearchInstitute, Inc. (TRI), and welcoming Dr. Gill Pratt as its CEO.”When it comes to the fifth biggest automobile manufacturer in theworld, Ford are still struggling to come up with a clear strategy how they aregoing to compete in this new market.Ford Motor Company’s newly appointed CEO,Jim Hackett, delivered in a presentation his strategy for the future of thecompany which outlined five principles:·        We will prepare for disruption by becoming fit.

·        We will be in the vehicle business — moving both people andgoods.·        Our vehicles will be smart and connected.·        These smart vehicles will thrive in a new transportationoperating system.·        We will evolve to capitalize on new business opportunitieswithin this transportation operating system.His strategy was initially met with someskepticism due to the lack of specific details and a vague grand-schemestrategy for a rapidly evolving automotive industry.In conclusion, Strategic planning is crucialfor all the organizations in all the major industries. In the automotiveindustry, it is clear that not all the current competitors will survive but onlythose companies that plan strategies and implement them effectively willprosper.

By bringing on board experts in cloud and connected services, bigdata, and digital content and investing and partnering with technologycompanies will help them establish a coherent connected product strategy andtherefore design and build AVs. 

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