Wednesday, October 30, 2019
Sunday, October 20, 2019
We all are Earthlings.
#originalideas
We all are earthlings. We are interrelated in many ways. First is Earth, which unites us physically. Second is Air, which we can not see but definitely is same and unites us when we breathe. Water is third thing, which through oceans unites us . All the rivers passing through different countries finally merged into oceans. Fourth thing is sun, which is responsible for the life on this planet. Its intensity might be different for earthlings but light is common for all. Fifth thing is Sky/Space, which fills our earth sphere and protects us through different layers. So irrespective of our Nationality, Race, Caste, and Creed, we all are one. This oneness is fundamental concept of being earthling.
We all are earthlings. We are interrelated in many ways. First is Earth, which unites us physically. Second is Air, which we can not see but definitely is same and unites us when we breathe. Water is third thing, which through oceans unites us . All the rivers passing through different countries finally merged into oceans. Fourth thing is sun, which is responsible for the life on this planet. Its intensity might be different for earthlings but light is common for all. Fifth thing is Sky/Space, which fills our earth sphere and protects us through different layers. So irrespective of our Nationality, Race, Caste, and Creed, we all are one. This oneness is fundamental concept of being earthling.
Friday, September 20, 2019
Three way to Develop Competitive Advantage in New Age.
In
nutshell, Strategy is all about gaining sustainable competitive advantage. This
competitive advantage is what creates value for the organisation to maintain
its sustainable profits year on year basis. Normally this competitive advantage
is gained over the competitors who are offering similar product in same
competitive market. But creating the Competitive advantage is not easy as all
the players have similar assessment of external market/ environment which is
based upon 3rd party independent market research . So when all the players have
similar findings of " What Customer wants" then competitive advantage
is more about the harnessing the "Internal Environment" and less
about "External Environment". Aim is to maximize the fit of my
internal Environment/ Capabilities to harness the External Environment (
Opportunity). Following
are the three ways of developing Competitive Advantage or ways to maximize my
"Internal Environment".
Think differentiation not in product but in business
model - At times too much focus on adding additional feature for creating
differentiation is lost battle. Often, we stuck into small items and misses out at the unexplored options in the Business Model itself such as Revenue Generation Mechanism, Product/ Service Offering, Peace of Mind of customer, and added advantage of owning the brand. For this Innovation workshop to be crafted to
identify opportunities to create differentiation for which buyer would be ready to
pay. This innovation can be in product, Customer service, user interface,
convenience , Supply Chain, Manufacturing or out of the box design. All areas
are to be explored. Google's competitive advantage over Microsoft is of business model not of product/ Service.
Focus on Strategic Human Resource: This is the most
trickiest part of creating competitive advantage. Competitive advantage is
created first in mind of employee before it comes on paper and finally in the
learning systems of organisation. Identify these critical resources, Nurturing
them and providing them resources ( Environment) is one of the major function
of Top Management. These Strategic Human resources are pillar of Innovative
organisation, as they are from different fields such as researcher, Designer,
Engineering, Business Strategy, Marketing, Sales and Service. Here decisive
action is identifying the motivating factor of these employees, which is very
unique to each individual. This unique addressal of aspirations of these
Strategic Human Resources is quint essential for the innovative Organisation. Apple's competitive advantage is out of the sheer passion of few individuals.
Diversify the risk: Often focus on creating competitive advantage channelize organisation's energy/ resources on profit generating products/ services. This leads to unpreparedness for unnoticed changes happening in consumer preferences, regulation and other market forces. So Diversify the competitive advantage , distinct from the previous in unexplored territory and completely unique. This might be in exploratory/ research phase or less profitable generating phase. This diversification is very critical competitive advantage. End of KODAK is good example of inability to de-risk the business from digital photography.
These three items are very essential to develop true competitive advantage , in turn preparing successful strategy for the organisation.
Monday, September 16, 2019
2 Reasons Why we could not see the Slow Down
Recent ongoing slow down in economy is because of reasons, some are structural while others are cyclical.But following two reasons are distinct and profound and gives insight into why we could not gauge the Current Economic slow down.
1. Minimization is not always optimization: Increased length of Value chain: To reduce the cost, manufacturers are sourcing the sub components from far off places. Distributional channels are spread across geographies. The last nod of value chain is delivery , which is only focused about delivering the product at doorstep of the customers. This value chain has become so long that any feedback from the customer to manufacturer, reaches very late. and by the time we know we have produced surplus, which feels like knee jerk reaction to the sales team.
2. Face Less Business- Diminishing interactions with Customers Interaction between the supply side and demand side is becoming near to NIL. Thanks to AI/ Digital world/ Whatsapp/ Online purchase. Here technology is tracking everything about the transaction but it is not noticing anything about interaction. It went to what part but could not track why part. Technology was not meant for interactions so it just did what it was suppose to do- The tracking. This is the reason dealers/ retailers could read the mind of the customer as purchases were happening online and there was no mechanism to understand the customer's mind, his anxieties, his fear, and above all his sentiments of purchase.
Summary and way forward
These are two important reasons, which should not be ignored. We must reflect upon our business models to streamline the feedback mechanism in "Large Value Chains" and "Increase the personal interaction between the retailers and customers". Digitization and Technology must support the purchase but not replace the human interaction.
Sunday, September 8, 2019
3 Important Perspective before Defining your Business
Entrepreneurship is often result of sheer passion of an Individual or group of Individuals. It starts with an idea which takes the form of business with Individual's immense energy, focus and true spirit of making difference in the world. The journey starts with problem finding and ends with finding the solution for that problem. Identifying the problem is easier part while solution in the form of Business Model is difficult part because this solution must be innovative, cost effective and sustainable.
Business Model has many aspects to it ,At the nascent stage of Business Model Formulation, if following three perspectives ( 3P Framework) are taken it would definitely help in building right capabilities and Scaling up the business in the long run/ future.
Periphery: What business we are ?
Often this is described narrowly in terms of Solution to some problem. Many firms which were very successful initially are not able to achieve the height of greatness mainly because of the non clarity of the purpose. It is very Important we focus on the bigger picture of the firms's existence. Car Business is too narrow as compare to MOBILITY Solutions. Similarly Mobile Business should be replaced with Communication Business and Movie making business should be replaced with Entertainment business. So this purpose define the focus point which has potential for the expansion in future.
Process: How you are doing ?
Business Model is mainly about this process of creating sustainable Value for the firm. How you are meeting the purpose should be clearly communicated in terms of Value creation, whether it will be done as Manufacturer, Trader, Product aggregator, Platform provider or combination of these. This process of value creation can be Soft ( Design/ Ideas/ Innovation/ Strategy/ Planning) or hard ( Manufacturer/ Trader/ SCM etc.) or even combination of the two. This understanding of the process or Value chain entities where firm is operating is critical because other planning and processes are dependent Upon it. It also determines the vulnerability of the business as risk taking entity.
Performance :What is the Social impact/ Outcome ?
True Business outcome does not lies in balance Sheets. True outcomes gets imprint in the minds of the customers, which in its totality is reflected in terms of Social impact. For an exmaple- Invention of Bulb, its Social Impact is far beyond the narrow measure of Quarterly financial results of the Bulb making firm. Focus should be on how Humans are getting impacted by it. The foremost measure the Business Outcome is judged by Which of customer's need / latent desire is getting fulfilled ?
Summary
Even before starting the business, this 3P Framework can truly form the foundation of "Concept of the Business". This framework is about the Human connect of the Business, where it finds purpose in the Mind of Customer as problem, and firm adopts an approach to address the problem , the result of which can be measured by Performance in terms of the Social impact firm is making in terms of Happiness Quotient of Customers.
Saturday, August 3, 2019
5 Easy to Understand Reasons of Slow down in Indian Economy.
Continuous slow down of Indian Economy is evident from various macroeconomic factors. Understanding these factors and making complete sense out of this scenario is not only difficult but cumbersome too. Lets understand it from layman's point of view. Five major reasons are following.
1. People are not able to take Loans as easily as before:
Other than big famous banks such as ICICI, SBI, HDFC, AXIS etc. bigger chunk of GDP is financed by NBFC ( Non banking Finance Corporations). These institutions forms strong foundation for growth of Indian Economy in the areas of rural projects, riskier businesses and meeting the financing needs of marginalized population which are not supported / touched by structural banking process.
These institutions are not structured in terms of their client profile check, IT intervention in the financial transactions and 100% transparency of the dealings. To improve the situation, Government / RBI has given instruction that by Sep'18 ,all their processes are to made transparent and digitized. because of such major interventions NBFC's have withhold their unbridled Loans to the masses. It has reduced the Consumption appetite and major reason for fall in demand.
2. Agriculture Sector is in really bad shape:
70% of Indian population is dependent upon Agriculture sector. Low inflation ( Price index of basic items) is good sign from the middle class consumer's point of view but it is also vital sign of deprived farmers who are getting less for their output. Farmer's distress is because of several fundamental reasons such as Inefficient Value chain, several intermediaries and unpredictable/ unfavorable Weather conditions. Off late this low income of farmers has resulted into less purchasing power and muted demand of basic items such as white goods, bikes, tractors etc.
3. GST/ Demonetization/ Stringent Tax collection mechanism:
Good things come at the cost. Initiative taken by NDA government have been really phenomenal and will benefit economy in longer run,but in shorter run it has created nervousness in the mind of Small businesses, Service providers and Black money market operators that their business models are going to fall apart. This has resulted into stalling the businesses out of fear/ anxiety till the time they find the alternative business models. Further government's actions to catch hold of tax evaders percolated the fear/ anxiety/ nervousness among them after GST/ Demonetization. This fear is quiet palpable now in terms of India Inc. business sentiment.
4. Too much of commotion in Automotive Industry:
Automotive Sector contributes to majority of Manufacturing Sector, which is 30% of total Indian GDP. This sector is critical not only from the point of view of its GDP contribution but also because of vastness of its value chain. It starts from Steel Industry, Plastic Industry, Technology firms, Rubber Industry and huge supplier base of auto component Industry. Further it intrudes into service sector such as Dealerships, Insurance Industry, Financing Industry and Peripheral Transport Industry.
This multi faced Industry is affected by three major knee jerks trends.
A. Government Regulations : BSVI ( Stricter fuel Efficiency), CAFE Norms ( More Mileage per liter) and Electric Vehicles ( Reduce Carbon footprints/ Pollution Control) , these have created more confusion in the minds of consumers and Uncertainty in the minds of business houses as these changes require major investments in Technologies, Clear govt Policy ,Supportive public Infrastructure and adoption by the masses to make hem cost effective.
B. Increased Fuel Prices/ Insurance Costs: In last 7-8 Years, fuel prices have risen(>50%) so much that personal vehicle ownership has become dearer. further it has been aggravated by rising Insurance costs ( 30% rise). These two factors are critical from the owners point of view. Recent survey by JDPOWAR reflects the same trend among millennial who are questioning the purpose of Car ownership. They are preferring car sharing o meet their commutation requirements.
C.Erratic Competitive Market : The rising costs of vehicle ownership have given rise to intrusion of Technological companies in the territory of Automotive OEMs. This is the reason for the parallel Business models such as OLA/ UBER/ Shared mobility and New entrants such as KIA and several Chinese giants have made the competitive markets quite erratic.
Emergence of Electric Car would be the biggest change after 1920s in the auto sector, where value chain will change drastically. Further autonomous Cars , High R&D Costs, Fierce competitive market has created commotion in fundamental Industry which drives the economy in a big way. The spillover effect is evident in Economic slow down as well.
5. Global Unrest ( Trade/ Social/ Environmental)
It is not only India, which is getting feelers of Slow down. UK, China , US , Japan all major markets are witnessing the signs of weak Economy. This has further been dampened by Rising Crude Oil prices, US- China Trade war, US sanctions on Iran Support Countries, US-Russia Cold war, Trump's random comments on major events and rise of terrorism & War/ Strife in Syria, rising concerns over Global warming, Natural disasters ( Sultry Europe, Flood in US, China, Brazil) because of erratic weather patterns. These Global events had spill over effect on Indian subcontinent because of which consumer has either delayed or withhold its purchasing decisions among global uncertainty.
Summary & Ray of hope
These five factors are major reasons for the slowing down of Indian Economy. This situation would persist for how long is not easy to predict, but I am sure this is going to change partially from April 2020 given that Govt take positive actions to create clarity of its policies and efforts to build foundation for growth , simultaneously Business houses need to adopt Innovative Partnership based business Models to cater this VUCA world.
1. People are not able to take Loans as easily as before:
Other than big famous banks such as ICICI, SBI, HDFC, AXIS etc. bigger chunk of GDP is financed by NBFC ( Non banking Finance Corporations). These institutions forms strong foundation for growth of Indian Economy in the areas of rural projects, riskier businesses and meeting the financing needs of marginalized population which are not supported / touched by structural banking process.
These institutions are not structured in terms of their client profile check, IT intervention in the financial transactions and 100% transparency of the dealings. To improve the situation, Government / RBI has given instruction that by Sep'18 ,all their processes are to made transparent and digitized. because of such major interventions NBFC's have withhold their unbridled Loans to the masses. It has reduced the Consumption appetite and major reason for fall in demand.
2. Agriculture Sector is in really bad shape:
70% of Indian population is dependent upon Agriculture sector. Low inflation ( Price index of basic items) is good sign from the middle class consumer's point of view but it is also vital sign of deprived farmers who are getting less for their output. Farmer's distress is because of several fundamental reasons such as Inefficient Value chain, several intermediaries and unpredictable/ unfavorable Weather conditions. Off late this low income of farmers has resulted into less purchasing power and muted demand of basic items such as white goods, bikes, tractors etc.
3. GST/ Demonetization/ Stringent Tax collection mechanism:
Good things come at the cost. Initiative taken by NDA government have been really phenomenal and will benefit economy in longer run,but in shorter run it has created nervousness in the mind of Small businesses, Service providers and Black money market operators that their business models are going to fall apart. This has resulted into stalling the businesses out of fear/ anxiety till the time they find the alternative business models. Further government's actions to catch hold of tax evaders percolated the fear/ anxiety/ nervousness among them after GST/ Demonetization. This fear is quiet palpable now in terms of India Inc. business sentiment.
4. Too much of commotion in Automotive Industry:
Automotive Sector contributes to majority of Manufacturing Sector, which is 30% of total Indian GDP. This sector is critical not only from the point of view of its GDP contribution but also because of vastness of its value chain. It starts from Steel Industry, Plastic Industry, Technology firms, Rubber Industry and huge supplier base of auto component Industry. Further it intrudes into service sector such as Dealerships, Insurance Industry, Financing Industry and Peripheral Transport Industry.
This multi faced Industry is affected by three major knee jerks trends.
A. Government Regulations : BSVI ( Stricter fuel Efficiency), CAFE Norms ( More Mileage per liter) and Electric Vehicles ( Reduce Carbon footprints/ Pollution Control) , these have created more confusion in the minds of consumers and Uncertainty in the minds of business houses as these changes require major investments in Technologies, Clear govt Policy ,Supportive public Infrastructure and adoption by the masses to make hem cost effective.
B. Increased Fuel Prices/ Insurance Costs: In last 7-8 Years, fuel prices have risen(>50%) so much that personal vehicle ownership has become dearer. further it has been aggravated by rising Insurance costs ( 30% rise). These two factors are critical from the owners point of view. Recent survey by JDPOWAR reflects the same trend among millennial who are questioning the purpose of Car ownership. They are preferring car sharing o meet their commutation requirements.
C.Erratic Competitive Market : The rising costs of vehicle ownership have given rise to intrusion of Technological companies in the territory of Automotive OEMs. This is the reason for the parallel Business models such as OLA/ UBER/ Shared mobility and New entrants such as KIA and several Chinese giants have made the competitive markets quite erratic.
Emergence of Electric Car would be the biggest change after 1920s in the auto sector, where value chain will change drastically. Further autonomous Cars , High R&D Costs, Fierce competitive market has created commotion in fundamental Industry which drives the economy in a big way. The spillover effect is evident in Economic slow down as well.
5. Global Unrest ( Trade/ Social/ Environmental)
It is not only India, which is getting feelers of Slow down. UK, China , US , Japan all major markets are witnessing the signs of weak Economy. This has further been dampened by Rising Crude Oil prices, US- China Trade war, US sanctions on Iran Support Countries, US-Russia Cold war, Trump's random comments on major events and rise of terrorism & War/ Strife in Syria, rising concerns over Global warming, Natural disasters ( Sultry Europe, Flood in US, China, Brazil) because of erratic weather patterns. These Global events had spill over effect on Indian subcontinent because of which consumer has either delayed or withhold its purchasing decisions among global uncertainty.
Summary & Ray of hope
These five factors are major reasons for the slowing down of Indian Economy. This situation would persist for how long is not easy to predict, but I am sure this is going to change partially from April 2020 given that Govt take positive actions to create clarity of its policies and efforts to build foundation for growth , simultaneously Business houses need to adopt Innovative Partnership based business Models to cater this VUCA world.
Friday, July 5, 2019
Decoding Budget 2019- My Takeaways for Automotive Sector- Electric Mobility
This budget has been in continuation of the intention of
Government to go full throttle for Electric Vehicles Manufacturing and
Ecosystem Development in the country. Madam FM clearly said that Government is
aiming to make India a global hub of electric vehicle manufacturing.
Three major initiatives taken in this direction are
following
1. Entry of New players
A new scheme has been proposed to invite global companies through a transparent
competitive bidding process to set up mega manufacturing plants in sunrise and
advanced technology areas including lithium storage batteries, and charging
infrastructure.
2. Incentive for the Buyers:
Income Tax benefit of Rs 1.5 Lac on the Interest paid on
Purchase of EV as private buyers, who were earlier not considered for a subsidy
through FAME 2 will be encouraged for Electric Vehicle purchase.
3. Support for Manufacturing ( EVs and EV components)
A.
Decision on supporting EV manufacturing by
extending benefits under Section 35AD(1).
B.
Proposed GST Reduction on EV Manufacturing from
12% to 5%
C.
Duty Reduction of Lithium Iron batteries from 5%
to Zero
D.
Extension of FAME 2 Benefits , 10,000 Crore
for Hybrid and Electric Vehicle promotion till
2022. ( Limited to Advanced Batteries and Registered Vehicles). It is aimed to support 10 Lakh
two-wheeler, 5 Lakh three-wheeler, 55K four-wheeler, and 7K buses that operate
on lithium-ion batteries or other electric power-trains.
Conclusion
In India, EV Penetration is just 0.06% while it is among top
3 Largest importer of Crude Oil in the world, So move towards adopting and promoting
Electric Mobility is urgent need of hour. This budget has paved firm ground for
the long journey of Electric Mobility in India by addressing multiple challenges
lying ahead in the time of stagnant automotive Industry.
Saturday, June 22, 2019
5 Ideas for Truly Lean and Agile Organisation in this VUCA World
Business world is witnessing a state of flux. Every business entity is going through sudden and abrupt change. It has made business world fiercely competitive. Though Agile and Lean seems oxymoron but these two in unison are the only way to manage the Business Risk in this VUCA World.
Following 5 Original ideas are to be included by every organisation in their thinking Process.
1. Always believe that impossible will happen
It always seems impossible until its done. As Organisation it must always believe that Impossible will happen. So explore, think, explore and draw impossible Scenarios in your planning Stage. 180 Degree Change in Business Model, Customer requirement, Technology, Govt. Regulation, Competition needs possible way.
2. Act on Future Now
When change is fast you have to change faster. Capturing the change and ways to addressing it is prerequisite to develop adequate capabilities. Developing the think tanks in the Organisation is first step to act on future. This is entirely different BALL GAME than Working on Cost Reduction, Process Improvements and Efficiency Improvements.
When change is fast you have to change faster. Capturing the change and ways to addressing it is prerequisite to develop adequate capabilities. Developing the think tanks in the Organisation is first step to act on future. This is entirely different BALL GAME than Working on Cost Reduction, Process Improvements and Efficiency Improvements.
3. Aim is to address Aspirations not Requirements
There are some attributes which customer knows that he wants and then there are some which even customer doesn't know that he wants . Aim is to offer all these attributes in your product with elements of Genuineness, Surprise and personal Human touch. This task would require extensive collaborative efforts of all functions of organisation.
4. Develop Distinct Capabilities fast
If you will Tread same path, you will reach same destination. Organisations needs to develop distinct Capabilities quickly to achieve sustainable Competitive Advantage. There should not be one or two capabilities as a pillar but there should be options of capabilities depending upon various thought off business scenarios. To develop distinct Capabilities organisations need to explore not only Organic options but also partnerships/ collaboration with organisations, Incubation Centers, Start Ups, Universities and Freelancers.
5. Humans vs Humans
At the End it is Customer vs Employees. These are two clear ends of the Business but both are equally important for Organisation. While Customers are in Uncontrolled environment, Employees are together in Controlled Environment. Goal of Agile and Lean Organisation is to exceed customer aspirations by fostering abilities and attitude of employees to win this game.
Conclusion
Adaptive Learning Organisation is the need of hour. It can only be achieved by leveraging True Human Potential. When Each Employee will fight for the cause of Sustainable Existence of Organisation to make this Society better place to live, We will see Better world around us. Ideas can be further discussed with Author on one to one Basis by reaching him on ajaysingh290881@gmail.com
Sunday, June 9, 2019
Automotive Industry is in state of FLUX
First Stationary Gasoline Engine was Patented by Carl Benz in 1879. After 140 Years , this Engine is seeing potential extinction as Electric Cars are taking small but firm steps ahead.
In these 140 years, Automotive Industry has been pioneer in leading the Industrial Progress across the globe. This Industry has not only been source to biggest Technical Innovations but also to Best Management Practices such as Assembly Line, Time & Motion Study, Productivity Enhancement, Shop Floor Management, JIT, TQM, Cost Management etc.
With Assembly Lines in 1915-1935, Ford brought Economy of Scale in Model T, when Wages of Labor increased 5 fold and First Motor Revolution took place. General Motors Lead the Industry from 1935-1960s when it mixed the Economies of Scale with Economies of Scope to give the differentiation to the products. 1960s saw the Age of Japanese Manufacturers who brought Fuel Efficiency and impeccable Reliability to their products. Toyota, Honda, Nissan were the New Emerging Leaders along with VW - the German Power House of Innovation. This pack of American, German and Japanese Manufacturer ruled the World Economy in a big way. It was 2008 when Elon Musk changed the Landscape of Industry by Introducing Electric Cars to US. Since then this Industry is not the same because It was not more Japanese vs American Vs Germans, but it was ELECTRIC vs GASOLINE Engine.
Emergence of Electric Cars
Since 2008, There has been reluctance that whether it would be commercially viable to run the Electric Cars, as this Project was once Crushed by US governments when all the electric Cars of GM were scrapped in a big blow to this technology in early 2000. Whether It was political or Economical Matter, that I would not comment upon, but Yes It was POWER Game of Lobbyists as OIL was at the center of all and Whole world was seeking Oil Reserves and Cartel of Arab countries was posing greater threat to the World Economies.
2008 on wards, Global Warming, Environmental Impacts of Vehicle Pollution and health Hazard was the first reason because of which Emissions Norms were made even more stringent, . Second Reason was Trade Imbalance because of Oil imports , which were impacting Emerging Economies badly. These Two factors were major reasons for the Big push of Electric Vehicles.
Breakthrough Innovations in Mobile Technologies
In these last 10 Years another Parallel wave has been witnessed by consumers in the Field of Mobile Technologies. Internet brought things too near to consumers. with 4G/ 5G Connectivity become the part and parcel of Consumer's life, Data consumption and Consumer Pattern completely changed towards Technology usage. This pattern further percolated to Automobiles too. Customer Expectation became too high and they expect the same form the Vehicles too.
Shared Mobility- Threat from "Non- Manufactures"
Another very important factor in Mobility Market is Shared Mobility Business. Uber / OLA / DIDI and other Technology firms are giving the OEMs nightmare of their Life. With Cost of Ride sharing at nearly same level as of Car owning, the preposition of Vehicle OWNERSHIP is really a great question Mark for the Consumer.
Impact of Above on Auto Manufactures
With Above Market Forces and Changes Automotive Industry by now has become very competitive. As Quality/ Reliability has becomes Standard norm across Industry, Competitive Advantage of the OEMs is getting lost. This trend resulted into reduced Profit Margins of Big Auto players to bring out as requirement of the Market is to bring competitive products on affordable prices. On the one hand there is Huge cost of bringing New technologies ( Connected Cars, AI, Autonomous Cars, Stringent Emission Norms), while on the other Hand prices can not be further increased because of competitive Market Forces such as Shared Mobility.
Way Forward
With No choice left with OEMs, Collaboration/ Partnerships/ Mergers/ Acquisitions seems the only choice they are left with. This Collaboration Model may bring some relief by sharing the cost of Product Development, Technology Development and to invest in Future R&D ( To develop Electric Cars ). This would definitely give some breathing space to OEMs to challenge the Shared Mobility Providers and explore new Business models.
But 2020- 2030 - Indian Automotive Industry is in Flux.
This is one of the most challenging yet exciting decade in the History of Automotive Industry. This flux is mainly because of following reasons.
1. Mobility Technologies are not yet fixed. Gasoline, Mild Hybrids, Plug in Hybrid, Full Hybrid, Full Electric, Hydrogen Based Fuel Cells,.
2. Driving Technologies are evolving- Driver/ Driver Less
3. Safety Technologies are becoming Norm- Sensots/ Radars, ABS, Driver Assists, LAN Assist etc.
4. Business Models are Evolving- Car Manufacturer / Mobility Solution Provider/ Technology Provider
5. Stringent Govt Regulation- Emission Norms, Safety Norms, Electric Cars Norms, Crude Oil prices
6. Erratic Consumer Behavior- OWN vs RENT, Personalized Mobility, High Level of Customer Service and 5G Level of connectivity, Millennial with Great Purchasing Power
7. Balance of Global Power- US- CHINA- RUSSIA- INDIA- ASEAN
This is big Flux in which OEMs have to find the way out to make the future Strategies to build a Sustainable and Profitable Business Case for the Future.
Next Article- New Emerging Supply Chain.
In these 140 years, Automotive Industry has been pioneer in leading the Industrial Progress across the globe. This Industry has not only been source to biggest Technical Innovations but also to Best Management Practices such as Assembly Line, Time & Motion Study, Productivity Enhancement, Shop Floor Management, JIT, TQM, Cost Management etc.
With Assembly Lines in 1915-1935, Ford brought Economy of Scale in Model T, when Wages of Labor increased 5 fold and First Motor Revolution took place. General Motors Lead the Industry from 1935-1960s when it mixed the Economies of Scale with Economies of Scope to give the differentiation to the products. 1960s saw the Age of Japanese Manufacturers who brought Fuel Efficiency and impeccable Reliability to their products. Toyota, Honda, Nissan were the New Emerging Leaders along with VW - the German Power House of Innovation. This pack of American, German and Japanese Manufacturer ruled the World Economy in a big way. It was 2008 when Elon Musk changed the Landscape of Industry by Introducing Electric Cars to US. Since then this Industry is not the same because It was not more Japanese vs American Vs Germans, but it was ELECTRIC vs GASOLINE Engine.
Emergence of Electric Cars
Since 2008, There has been reluctance that whether it would be commercially viable to run the Electric Cars, as this Project was once Crushed by US governments when all the electric Cars of GM were scrapped in a big blow to this technology in early 2000. Whether It was political or Economical Matter, that I would not comment upon, but Yes It was POWER Game of Lobbyists as OIL was at the center of all and Whole world was seeking Oil Reserves and Cartel of Arab countries was posing greater threat to the World Economies.
2008 on wards, Global Warming, Environmental Impacts of Vehicle Pollution and health Hazard was the first reason because of which Emissions Norms were made even more stringent, . Second Reason was Trade Imbalance because of Oil imports , which were impacting Emerging Economies badly. These Two factors were major reasons for the Big push of Electric Vehicles.
Breakthrough Innovations in Mobile Technologies
In these last 10 Years another Parallel wave has been witnessed by consumers in the Field of Mobile Technologies. Internet brought things too near to consumers. with 4G/ 5G Connectivity become the part and parcel of Consumer's life, Data consumption and Consumer Pattern completely changed towards Technology usage. This pattern further percolated to Automobiles too. Customer Expectation became too high and they expect the same form the Vehicles too.
Shared Mobility- Threat from "Non- Manufactures"
Another very important factor in Mobility Market is Shared Mobility Business. Uber / OLA / DIDI and other Technology firms are giving the OEMs nightmare of their Life. With Cost of Ride sharing at nearly same level as of Car owning, the preposition of Vehicle OWNERSHIP is really a great question Mark for the Consumer.
Impact of Above on Auto Manufactures
With Above Market Forces and Changes Automotive Industry by now has become very competitive. As Quality/ Reliability has becomes Standard norm across Industry, Competitive Advantage of the OEMs is getting lost. This trend resulted into reduced Profit Margins of Big Auto players to bring out as requirement of the Market is to bring competitive products on affordable prices. On the one hand there is Huge cost of bringing New technologies ( Connected Cars, AI, Autonomous Cars, Stringent Emission Norms), while on the other Hand prices can not be further increased because of competitive Market Forces such as Shared Mobility.
Way Forward
With No choice left with OEMs, Collaboration/ Partnerships/ Mergers/ Acquisitions seems the only choice they are left with. This Collaboration Model may bring some relief by sharing the cost of Product Development, Technology Development and to invest in Future R&D ( To develop Electric Cars ). This would definitely give some breathing space to OEMs to challenge the Shared Mobility Providers and explore new Business models.
But 2020- 2030 - Indian Automotive Industry is in Flux.
This is one of the most challenging yet exciting decade in the History of Automotive Industry. This flux is mainly because of following reasons.
1. Mobility Technologies are not yet fixed. Gasoline, Mild Hybrids, Plug in Hybrid, Full Hybrid, Full Electric, Hydrogen Based Fuel Cells,.
2. Driving Technologies are evolving- Driver/ Driver Less
3. Safety Technologies are becoming Norm- Sensots/ Radars, ABS, Driver Assists, LAN Assist etc.
4. Business Models are Evolving- Car Manufacturer / Mobility Solution Provider/ Technology Provider
5. Stringent Govt Regulation- Emission Norms, Safety Norms, Electric Cars Norms, Crude Oil prices
6. Erratic Consumer Behavior- OWN vs RENT, Personalized Mobility, High Level of Customer Service and 5G Level of connectivity, Millennial with Great Purchasing Power
7. Balance of Global Power- US- CHINA- RUSSIA- INDIA- ASEAN
This is big Flux in which OEMs have to find the way out to make the future Strategies to build a Sustainable and Profitable Business Case for the Future.
Next Article- New Emerging Supply Chain.
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