Preparing for the Next Big Wave of Disruption: A Case Study in Auto Industry

Problem The year 1886 is regarded the birth year of the modern automobile. Since then, there have been many innovations that have seen the surface and some that have had an influential effect in changing the paradigm itself. One of the major disruptions the world is talking about currently is in the transport industry, with ‘autonomous vehicles’ (often referred to as self- driving or driverless cars). The automobile industry has embarked upon a period of significant innovation and change. It is extremely important to understand what exactly this change means for the auto industry, the customers and the society and be prepared for this next big wave of a change. Purpose The main purpose of this paper is to increase the understanding of how the fundamental changes of driver replacement system has an effect on the auto industry (the auto business and customers) Research Question “How technological advances have led to business model changes in the auto industry” “How Advanced driver assistance system technology has an effect on the business model change in the auto industry” Research design/ methodology A multi qualitative method with inductive approach is used. To analyse the auto industry data is collected and supported by narrative inquiry strategy with in-depth interviews, and secondary document sources. Since the data is analysed over a period of time, a longitudinal time horizon is chosen. The philosophy governing this thesis is that of pragmatism with an awareness that interpretation is involved. Conclusion Since the 1970’s most of the innovations since then have been incremental. The beginning of technological diffusion from Information and Communications Technology industry from the 1990’s has resulted in some radical/ revolutionary technological innovations. There have been only two innovations, Internal Combustion Engines and Mass production that has had a significant change in the way business is seen and done. The other technological innovations have contributed to the change in either one side of the business model canvas or none. The current trend of Advanced Driver Assistance System technology is focused on replacing the driver and electric engines replacing Internal combustion engines , a pattern is that is seen from the history where horses were replaced by engines. The use of self-driving cars and electric engines would create a new paradigm in the auto industry. Research limitations implications The cause-effect relation between business model and technological change is not analysed. The research is analysed with the principle that a technological change would lead to a business model change. Non-technological innovations that has resulted in a business model change is not discussed. Contribution of technological innovations to change in revenue model is not discussed in detail