• About
  • Contact
  • The blogger

A STABLE MATCH

A STABLE MATCH

Category Archives: Electric Vehicles

Why Audi is slimming down

27 Wednesday Nov 2019

Posted by tjungbau in Electric Vehicles, Self-Driving Cars, Strategy

≈ Leave a comment

Tags

Audi

The car industry and personal mobility is currently subject to more change than it has been over the last century. While the technology underlying cars has constantly evolved, the concept of ownership, fuel and the human’s control over the machine did not. As was true a 100 years ago, a car is till mainly a privately owned vehicle steered by a human being and powered by fossil fuel. We are at the brink of a period, however, that puts the status quo across all these three dimension in question at the same time. Alternative fuel, ride sharing and autonomous vehicles, despite at different stages in their respective development, challenge the very nature of the car industry.

Successfully navigating strategic change requires a firm to deeply understand not only market forces, but above all its own competitive advantage and how its resources and capabilities differ from its current as well as potential future competitors. It is its current strengths that will determine the firm’s optimal strategy when responding to disruptive market events. And this, in fact, is what Audi is attempting to do. If the predominant ownership model changes in response to ride-sharing and results in a relative increase in corporate ownership, Audi is not well-positioned to satisfy the likely nature of such a demand. Neither are they  efficient enough nor is their scale of operations sufficient.

On the other hand, Audi is well known for its craftsmanship and the power of its engines. The company has been a frontrunner in the world of motor sports and when it comes to new trends, be it about style or technology. Its corporate slogan “Vorsprung durch Technik” translates as “Being ahead by means of technology” (and embodies the company’s culture much better than its alternative used in the US until 2016 “Truth in engineering.”) Audi has to focus on next generation’s upscale car customer as opposed to the masses. These customers are likely to demand an electric car that combines an elegant interior with the engine power and overall product quality the company is known for.

This is where employees enter the equation. In order to be a benefit leader focusing on an upscale niche market segment, especially in times of increased automation, does not necessarily require many but the right employees. In a fundamentally changing car industry that quite likely may lead to less car sales for Audi in general, and struggling to keep up with their rivals BMW and Mercedes, it is of utmost importance for Audi to gain market share in this segment by developing the car for tomorrow’s upscale customer. Audi needs engineers that are trained in automation and electrically powered engines and a lean company to be able to offer exceptional cars at competitive prices.

Firing up to 10,000 employees, however, clearly leaves a bad taste, especially in Audi’s home country, Germany, a market that is enormously important for the company, not only in terms of direct sales but also as an indicator or accelerator for other markets. Overall, there is no question that this move represents a gamble for Audi as a company. It appears to be a bet, however, that Audi needs to take. From a loyalty viewpoint one can question the move of firing 10,000 employees while hiring 3,000 new ones and whether employee (re-)training would have been an alternative viable option.

Recent Posts

  • George Santos and the ambiguous effects of resume padding: the costs and benefits of lying and misrepresentation in the job market
  • South-Korea’s new regulation on in-app purchases
  • Online Advertising, Data Sharing, and Consumer Control
  • The Strategic Decentralization of Recruiting
  • Branding Vertical Product Line Extensions

Recent Comments

tjungbau on The Trump effect and European…
napagi on Democracy or not?
John on The Trump effect and European…
Efficiency vs. distr… on Applying to multiple specialti…

Archives

  • December 2022
  • September 2021
  • August 2021
  • January 2021
  • December 2020
  • June 2020
  • March 2020
  • November 2019
  • November 2018
  • August 2018
  • July 2018
  • April 2018
  • December 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • August 2016
  • June 2016
  • April 2016
  • March 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015

Categories

  • Academic Organizations
  • Academic Research
  • Antitrust
  • Auction
  • Austria
  • Cartel
  • Corporate Social Responsibility
  • Democracy
  • Digital Economics
  • Economic Growth
  • Economics Laureates
  • Education
  • Electric Vehicles
  • Health
  • Inequality
  • Innovation
  • MBA
  • National Resident Matching Program
  • Oil
  • Online Advertising
  • Organization
  • Politics
  • Probability
  • Self-Driving Cars
  • Signaling
  • Social Dilemma
  • Statistics
  • Strategy
  • Terrorism
  • UBER
  • Voting

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.com

Recent Posts

  • George Santos and the ambiguous effects of resume padding: the costs and benefits of lying and misrepresentation in the job market
  • South-Korea’s new regulation on in-app purchases
  • Online Advertising, Data Sharing, and Consumer Control
  • The Strategic Decentralization of Recruiting
  • Branding Vertical Product Line Extensions

Recent Comments

tjungbau on The Trump effect and European…
napagi on Democracy or not?
John on The Trump effect and European…
Efficiency vs. distr… on Applying to multiple specialti…

Archives

  • December 2022
  • September 2021
  • August 2021
  • January 2021
  • December 2020
  • June 2020
  • March 2020
  • November 2019
  • November 2018
  • August 2018
  • July 2018
  • April 2018
  • December 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • August 2016
  • June 2016
  • April 2016
  • March 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015

Categories

  • Academic Organizations
  • Academic Research
  • Antitrust
  • Auction
  • Austria
  • Cartel
  • Corporate Social Responsibility
  • Democracy
  • Digital Economics
  • Economic Growth
  • Economics Laureates
  • Education
  • Electric Vehicles
  • Health
  • Inequality
  • Innovation
  • MBA
  • National Resident Matching Program
  • Oil
  • Online Advertising
  • Organization
  • Politics
  • Probability
  • Self-Driving Cars
  • Signaling
  • Social Dilemma
  • Statistics
  • Strategy
  • Terrorism
  • UBER
  • Voting

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.com

Create a free website or blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
  • Follow Following
    • A STABLE MATCH
    • Already have a WordPress.com account? Log in now.
    • A STABLE MATCH
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar