Autonomous Vehicles: A Comparison of Google and Volvo and Their Use of Internal Resources in a Dynamic Environment

Abstract

The car has since the invention of the assembly line developed into one of the most used forms of transportations in the world of today. Every day, millions of people get in their car to drive from one point to another. This is often a very time-consuming task, especially when commuting to and from workplaces as it often results in traffic jams and congestions. At the same time, hundreds of people are killed each day because of traffic accidents, while even more might be killed by the emission from the use of the cars. While the car industry has been adapting cars to be more modern through including more technology to ensure the safety of passengers and less emission, the idea of the car has not changed much since Ford introduced the first mass produced kind. It is still a human-driven transportation device. However, with the rise of computing power and machine learning, new opportunities have been sensed, by both traditional and untraditional players on the market. Nearly all big traditional car manufacturers are currently working on an autonomous car, which will remove the human-driven aspect of a car. This trend was started by an unexpected entry to the market in 2009 when Google publicized its Google Car project. The intention of the autonomous cars currently in development is to reduce the time, accident-rate and emission of cars, by letting the car drive itself. This is done by using and analyzing live footage from radars, sensors, etc. to predict the car’s next move. Applying qualitative research methods, this paper collects secondary data from the Internet to analyze two business cases in the emerging market of autonomous cars. The business cases of Google and Volvo are analyzed using the theories of resource-based view and dynamic capabilities in order to indicate if any one of them has obtained competitive advantage in the new market. The analysis shows that both business cases have obtained temporary competitive advantage, but are currently not able to obtain sustained competitive advantage. This is highly due to the inability of holding rare resources and seizing opportunities. Google has been good at sensing new opportunities, while Volvo has been better at seizing them.