Assignment Task
Background
The planet is becoming more urban. By 2030, more than five billion people about 60 percent of the world population will live in cities.
We are also becoming more mobile and more connected. New technologies and business models are pushing aside the privately-owned automobile and other less efficient modes of transportation.
Whether from autonomous vehicles, the electrification of transportation, shared networks of cars, scooters and bicycles, or the advent of 5G wireless, the world of mobility is changing almost daily.
Nowhere will that transformation be felt more acutely in the coming decades than in the world’s major cities where increased urban density and congestion make the tasks of creating and maintaining urban transport systems ever more complex.
This is why developing and improving urban mobility is a top priority of cities around the globe. If a city cannot move its people, goods and data efficiently, it is difficult to see how it thrives.
Three broad technological trends will be primarily responsible for reshaping urban mobility in every city digitization, automation and electrification. The sharing (or collaborative) economy, a fourth trend, has led to new business models in which the mobility service provided is more important than its ownership
The firm is strategically repositioning itself from a vehicle manufacturer to a provider of shared mobility services (i.e. where users pay for transportation only when they need it, rather than owning a personal vehicle that is not used most of the time), especially in increasingly crowded urban areas. As stated by Luca De Meo, the firm’s Chairman: “We are convinced that vehicles will become the second largest connected platform after the mobile phone and we will have the chance to integrate them into a rich ecosystem.
This transformation forces us to innovate and move beyond the scope of being just a carmaker, stretching our value chain towards new mobility services, platforms and data businesses”. As part of this repositioning, SEAT has identified ‘compact urban mobility’ (i.e. short commutes less than 10 kilometres within the city environment, using a small vehicle) as a core area for strategic development. The firm unveiled its ‘Minimό’ concept vehicle at the 2019 Mobile World Congress to demonstrate SEAT’s vision of the ‘compact urban mobility’ of tomorrow.
Integrating the fields of electrification, connectivity and shared mobility the ‘Minimό’ is a 2-passenger quadricycle primarily intended for business-to-consumer free-floating carsharing providers* that has been designed to:
- Have a considerably smaller ecological footprint (3.1 square metres) than a normal car (7.2 square metres) while providing safe, agile travel and easy parking · release zero emissions due to its all-electric powertrain
- Reduce the operating costs of carsharing providers by 50%, as the integrated battery-swap system means the vehicle rarely needs to be taken to a recharging point
- Provide a convenient and smooth digital user experience for users based on hyperconnectivity with built-in 5-G technology
- Allow the vehicle – in the future and subject to further development of autonomous technologies to pick up the user when requested, thereby solving one of the main carsharing user pain points.
Task
1. In order to identify which city is the most potentially attractive destination for the launch of the SEAT ‘Minimό’, you are required to undertake a comparative evaluation of what you believe to be the most relevant country-level (i.e. macro-environmental) factors and city-level (i.e. socio-economic and urban mobility readiness) factors for Stockholm (Sweden) and Dubai (United Arab Emirates).
2. Apply the 5-Forces model to critically analyse the competitive environment of the carsharing industry in your chosen city.
3. Using the Value Chain model as a point of reference, identify and discuss which of SEAT’s internal value-adding activities will be most relevant in supporting SEAT to launch the ‘Minimό’ into your chosen city.
4. Critically evaluate the various modes of entry that are relevant to SEAT and recommend – with justification – the most suitable mode of entry that will enable the product launch of the ‘Minimό’ into your chosen city to be a success for the company.
5. Evaluate the extent to which you believe the SEAT ‘Minimό’ vehicle has the potential to create Shared Value; support your answer with reference to relevant Shared Value concepts.
Aims
1. To provide contemporary insights into the wider context of international strategy and the macro- environment of international business.
2. To develop the ability to evaluate the attractiveness of one or more potential foreign markets.
3. To develop the ability to undertake strategic analysis of the industrial and internal value-adding environments of firms.
4. To develop the ability to critically evaluate different modes of entry to expand into new foreign markets.
5. To develop a critical awareness of the potential for firms to create shared value as part of their international strategy.
