Chapter 18 The Role of Competitive Intelligence in the Global Automotive Supply Chain by Keith Fishwick Ashley Jacobs Jean-Philippe Ravart Alauna Wolfe Amanda Wesson

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Chapter 18The Role of Competitive Intelligence
in the Global Automotive Supply Chain by Keith
FishwickAshley JacobsJean-Philippe
RavartAlauna WolfeAmanda Wesson
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• The technology content in todays vehicles is
  increasing.
• This chapter addresses the impact of future
  technology on the automotive industry, evaluates
  current manufacturing strategies, and reviews how
  these differ on a global perspective.

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Future Technology Growth in the Automotive
Industry

• By 2010 one-third of vehicles on the road in the
  U.S. will have Auto PC technology and navigation.
  (Einstein,1999)
• Areas of strongest annual growth in automotive
  electronics systems are predicted to be adaptive
  airbags, adaptive cruise control, and smart card
  entry.

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Future Technologies in the Automotive Industry

• Best example of future automotive technology is
  OnStar from General Motors.
• Technology that allows OnStar to be presented to
  the consumer is telematics.
• Telematics will initially become a standard much
  like airbags.

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Competitive Technical IntelligenceCTI

• Increasingly important component of CI
• An intelligence tool kit that determines the
  strategic impact of technologies.
• Helps to anticipate future technological trends
  or changes.

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The Useful Techniques of CTI

• Technology Prospecting
• Technology Scouting
• Patent Analysis
• Bibliometrics
• Technology Forecasting
• Scenario Analysis
• S Curve Analysis

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CTI is Important

• Helps determine which players will be able to use
  technological developments to increase their
  bargaining power within an industry.
• Gives firms a window of opportunity to
  proactively manage the impact of strategic
  technologies before they develop into a
  deteriorating competitive position.

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Automotive manufacturers are confronted with the
use of non-core technology in their products
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Global technology consortiums

• Working together, two consortiums now represent
  over 80 of the automotive industry
• AMI - C Automotive Multimedia Interface
  Collaboration
• MOSTCO Media Oriented Systems Transport
  Cooperation
• Multi-linked community comprised of key founding
  automotive manufacturers and suppliers.
• 18 Manufacturers (GM, Ford, Nissan, VW.)
• 62 suppliers (Motorola, Siemens, Nokia,
  Philips)

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• By joining together and utilizing a common
  technology, automotive manufacturers regain some
  of the market power that they risked losing to
  their suppliers

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Intel and Microsoft, in the race to provide the
fastest and newest technology to the automotive
industry
Full penetration of the automotive industry by
these two leaders may be limited by the consortium
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Geographic differences in the Automotive Industry

• As of the year 2000, Europe has traditionally led
  the automotive industry in technological advances
• AMI-C association brought together the majority
  of the automotive manufacturers to create a
  universal telematics platform

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• European vehicles made by BMW, Jaguar, Audi,
  Volvo and Saab were the first to feature
  technology such as hands-free cellular phones,
  navigation tools, drive by wire, and different
  entertainment systems
• These companies were able to join forces with
  each other efficiently due to their small size

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• Japanese and U.S. automotive manufacturers are
  working toward a common worldwide standard
  through partnerships with AMI-C and MOSTCO
• Asian-Pacific region, however, is not accepting
  the new technology
• This is due to the fact there is a huge
  electronic industry in this region that does not
  have the infrastructure required to support many
  of the new technologies that are being developed.

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Global Trends in Automotive Outsourcing

• Many automotive manufacturers are using
  outsourcing as a way to improve efficiency in
  operations and reducing costs
• Precaution must be taking to ensure that core
  technology is given to suppliers when outsourcing
• The most powerful factor that limits the arrival
  of new automotive manufacturers is the high
  barriers to entry

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• Magna International is a Canadian Global
  automotive supplier that is newly entering the
  market in Europe
• Magna International changing the way outsourcing
  is being looked at
• Magna International currently manufactures for
  DaimlerChrysler Voyagers, Jeep Grand Cherokee and
  several Mercedes Benz models

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• Magna International market power is steadily
  increases due to more an more European
  manufactures are turning to them for their
  outsourcing needs
• In North America outsourcing is done at a low
  capacity in comparison to Europe
• The main module that North America is outsourcing
  is the instrument panel

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• Due to the amount information needed to assemble,
  diagnose and repair instrument panels, automotive
  manufactures will have to release more
  proprietary data to suppliers
• In the Japanese market, insourcing occurs more
  than outsourcing
• Because of flexible union contracts, Japan
  manufacturers are able to utilize contract labor
  within their facilities therefore eliminating
  transportation costs and the need of using a
  suppliers facility

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The Impact of Telematics on the Global Automotive
Mfg. Industry
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A Future Scenario for Technology in the Global
Automotive Manufacturing Industry

• 1. Suppliers will experience increased
  bargaining power as they develop superior core
  competencies in new technologies
• OR
• 2. Current auto manufacturers will reverse
  their past decisions to outsource and will invest
  resources in developing competencies in new
  technologies, thereby reversing the recent
  decline of their market power.

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• Technology in the automotive industry will
  continue to develop consumers will be able to
  plug and play other technologies
• Like the computer industry, the automotive
  industry will have interchangeable components and
  can use software programs
• Gain future competitive advantage by developing
  new technologies

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Automotive Manufacturing Industry

• Manufacturers need to develop new competencies to
  compete in the industry
• New suppliers will emerge
• Traditional suppliers will have to adapt or close
• Market power may shift away from traditional
  automotive manufacturers to technology suppliers
• General Motors / Bosch braking components

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Conclusion

• The future of the global automotive industry is
  risky and uncertain
• More uncertainty and risk increases the value of
  CI in identifying industry winners
• Greatest risk factor technological discontinuity

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• Telematics could possibly redefine the rules of
  competition and redistribute bargaining power
  among industry members
• Industry analysis is a core component of global
  CI
• Integration of CTI techniques is needed to
  increase the effectiveness of industry analysis