The Role of Innovation on Marketplace Survival in the Global Automotive Industry: A Case Study of BMW AG and Tesla Inc.

Pernille Fausko & Mikkel Skullerud Christensen

Student thesis: Master thesis

Abstract

Competition has evolved in recent years, especially in global industries, as a consequence of globalization and how The Internet has penetrated our society. The speed of evolution has increased as a consequence, and we have seen improvements in different markets; developed, developing and emerging markets. Consequently, marketplaces are changing together with the global economy, where industries are transforming their innovations to satisfy expectations. This has also lead to a fundamental shift in innovation and practices in the automotive industry.
With competitive pressures comes the race for competitive advantage. Due to the dynamic nature of the automotive industry, firms engage in an ongoing race to develop innovations that meet the expectations of the consumer, society and the industry. In order to address the role of innovation on marketplace survival in the automotive industry, the authors have applied a qualitative and exploratory research approach. A combination of Grounded Theory and case study research have been utilized in order to provide a means of researching and understanding the characteristics of a sustainable innovation process.
The results suggest that the most prominent drivers of innovation are consumer preferences, government involvements, industry dynamics and competitive pressures. In order to survive in the industry, automotive manufacturers have to acknowledge the power of these drivers. The analysis of the chosen case study companies concluded that competitive advantages, obtained through innovation efforts, and sustainable innovation strategies are key to marketplace survival in the hypercompetitive automotive industry. Innovation strategy is becoming one of the most important areas of company attention today, and with good reason; the automotive industry is moving into a disruptive transformation that are forcing car manufacturers to perform a tough balancing act. The industry is now facing an extensive innovation agenda, including a variety of drivetrain technologies that are forcing extensive efforts and high research and development expenditures. The successful integration of this transformation will decide the difference between leading and lagging behind competitors.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages133