An explorative Analysis of how Autonomous Driving Technology impacts the Business Model of the Automotive Premium Segment: A Case Study of the BMW Group.

Kahlert, Alexander (2020) An explorative Analysis of how Autonomous Driving Technology impacts the Business Model of the Automotive Premium Segment: A Case Study of the BMW Group. Masters thesis, Griffith College..

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Abstract

The subject matter of this thesis is strategic innovation management. In particular, it analyses how business model innovation can help an incumbent firm to achieve long-term viability in times of disruptive technologies. The research was focused on one specific case: The BMW Group. With 133,778 employees and an overall revenue of approximately 104 billion euros it is one of the key companies of the German economy. Within the Group, the eponymous BMW brand of cars dominates the annual sales volume at 86%. This case study focuses on one disruptive technology development scenario: the achievement of high-end autonomous driving. The overall objective of this research was to outline the business model innovation implications of autonomous driving for BMW today and in the future. In order to achieve this objective and to structure the research the following lead questions were proposed: (A) Does the BMW Group face the typical Innovator’s Dilemma in regard of autonomous driving technology? (B) How could Business Model Innovation help BMW to solve the Innovator’s Dilemma in the future? (C) Which organisational conditions need to be stablished today to enable this kind of Business Model Innovation and the development of the autonomous driving technology? This explorative case study was based on semi structured interviews with a relevant expert panel of ten experts with heterogeneous backgrounds. Expert input was analysed through both deductive and inductive thematic analysis. This research contributes to existing innovation management literature by proposing new conceptual models in one framework. Firstly, a disruptive innovation needs to be sensed and evaluated. Secondly, the new arising opportunity is seized by analysing the business model innovation implications of it. Lastly, organisational conditions to enhance this exploration of business model innovation have to be established. The research strongly suggests that BMW will face the typical Innovator’s Dilemma since the internal structure of it is not aligned with the significant technology push and market pull triggered by autonomous driving. Only a significant shift of its business model towards a digital enhanced premium mobility service can ensure longterm viability for BMW. A far-reaching programme of business model innovation should be launched today, beginning with organisational exploration. The case study suggests enabling conditions of organisational exploration in three interrelated dimensions.

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