Don’t use any resource

We will take as a given that the market for autonomous (self-driving) electric vehicles represents a strong growth opportunity.  With few exceptions, all of the major automobile manufacturers are working on both electric drive-trains and self-driving technologies; and new entrants like Tesla and Waymo (Google/Alphabet) are seeking to disrupt the market with their own technologies. 

It has long been rumored that Apple also was working on technology for a self-driving car.  In April of 2016 Motor Trend published an article that pieced together the available information to try and guess what an Apple Car might look like ( https://www.motortrend.com/news/apple-car-exclusive/ (Links to an external site.)Links to an external site. ).  At the time, the operating assumption was that Apple would do what it has always done and develop a vertically-integrated value chain where it controlled the design and production of both the hardware and the software.  However, critics pointed out that automobile manufacturing was a lot different than making computers or smartphones and suggested that Apple would be better able to make contributions in the areas of self-driving technologies (sensors and software) and user interface. 

However ambitious the original plan, Apple reduced the scale of the project in 2016, but continued development efforts on what has become to be known as project Titan.  Since then, Apple-watchers have tried to guess Apple’s overall strategy and exactly what Apple would introduce to the market and when a product introduction might occur. 

Assume that you are a corporate executive or board member advising Tim Cook, the Apple CEO.  What do you believe would be Apple’s best Corporate Diversification Strategy with respect to autonomous electric vehicles?  Should it pursue internal development and introduce its own Apple iCar?  Should it pursue concentric diversification by purchasing an existing automobile manufacturer who can supply manufacturing expertise and power-train technology into which Apple can integrate its self-driving and infotainment technology?  Or should Apple form an inter-organizational partnership (e.g. a Joint Venture or Alliance) with one or more existing automobile manufacturers to supply self-driving technology, much like it currently does with Apple CarPlay for automobile infotainment systems? 

As you think about this, bear in mind what core competencies and corporate resources (such as facilities and financing) Apple would bring to the effort, as well as its weaknesses and gaps in resources that would need to be addressed by whatever strategy is pursued.  You might also want to consider potential synergies or “relationship-specific assets” that could be generated through a partnership between Apple and other companies. 

To give you a bit more background, here is one person’s opinion:  https://www.bloomberg.com/gadfly/articles/2018-03-09/why-apple-should-buy-aston-martin (Links to an external site.)

ORDER NOW

Open chat