Essay On Auto Industry Value Chain

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The evolving value chain of the car industry The automotive industry is one of the most progressive and forward-thinking industries. It confronts a number of trends that create new challenges while also providing opportunities for growth. One of the major trends is the demands of operating in a “connected” world. For more than 100 years the automotive industry has created competitive advantage mainly through engineering excellence. Moving forward, this will no longer be sufficient. Automotive manufacturers need to decide how to respond strategically to digital disruption when new digital technologies affect their business (see exhibit 3 - Digital disruption challenges in the future). The auto industry is now on its way to change and alter these traditional market conditions. The changes will go mainly towards the digital revolution influencing the market at the moment, such as: big data and analytics, cloud computing, the socialization of business through mobile devices, and most importantly the Internet of Things (IoT). IoT is currently playing an important role in the car industry value chain, affecting the original equipment manufacturers (OEM) stage, the most critical link in the entire automotive industry value chain (see exhibit 4 - Car industry value chain). The Connected Cars – The poster child for IoT…show more content…
It enables automated links to other connected objects, such as: smartphones, navigation and tracking devices, other motor vehicles and even home devices. It is likely to become the poster child of the IoT revolution. It encompasses not only cars but also cities infrastructure, retail and many others things. It provides more technology options, such as: sensors, car diagnosis, analytics and cloud computing. It’s a disruptive technology that will change the traditional auto industry structures to get in new business structure, and will change the nature of the auto

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