AUTOAUTO - LearnCIMA Forumforum.learncima.com/audio/2017/Aug/SCS/PDF/Nanaska SCS Aug 2017 … · 13/7/2017 · Analysis for AutoAuto ... an iPhone with their car’s infotainment

KNOW YOUR PRE-SEEN (KYP)

AUTOAUTO

AUGUST 2017 – STRATEGIC CASE STUDY

Selected slides for reference purpose only.

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AutoAuto - Mission

“Making Vehicles drive themselves”

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There are many companies who are trying to make a commercial self driven vehicle and enough success stories are there in the market. Read KYI for full examples.

There are many companies who are trying to make a commercial self driven vehicle and enough success stories are there in the market. Read KYI for full examples.


AutoAuto - Vision

“AutoAuto will be the industry leader in each of its product ranges, offering the latest technology, ease of use and value for money.

AutoAuto will be the industry leader in terms of innovation and product development”

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Evaluate this Vision statement, based on E3 theory. This doesn't’t seems to be a right Vision based on theory. Read real world Car company vision statements as well.



• Direct and main competitors for AutoAuto’s CruiseMaster is the cruise control system of Gretton Electronics and the satnav system of Primnav

CruiseMaster

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Importance of Product Profitability Analysis for AutoAuto

• There are 4 key products.

• Needs to calculate Product-wise profitability for each products. Overhead cost needs to be allocated based on Activity Based Costing.

• However, our dream (mission) is a single products that combined all our products hence we cannot disrespect any of the present products.

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Implications of founders leaving AutoAuto

• We need to know about different perspectives of our founders.

• They are the founders of AutoAuto (business skills), must have been the basis for the culture of our company (worked since inception – 15 years), present board members (powerful), technically capable (2 PHD’s so knowledge power), close friends hence must be together in most decisions (worked together before starting AutoAuto as well), must be rich (sold most shares at the flotation) and 25% shareholders at present (common interest and powerful).

• Therefore, their decisions will have significant impact to our business. 6



Implications of founders leaving AutoAuto

• They may sell the shares and continue to hold positions. Then they will be less powerful directors, as no backing from their shareholdings. New share holders can take a decisions about the CEO positon if they wish to.

• They may decide to resign from positions and keep the shares. Market might view this as a negative, as founders are leaving.

• Do both, sell sahres and resign from the positions. Negative impact to share price, challenges in looking for new people for positions.

• They might do this together as all three or only by one person. If it’s by one person, the imapct from other 2 can be critical.

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Similar Products in the market

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Best Satellite Navigation Systems in the world in 2016

01.Garmin nüviCam™ LMTHD Complete with a built-in dash cam, the Garmin nüviCam LMTHD offers an incredible overall user experience and comes with several features to help you drive a little safer. While the battery life is not great—it only lasts up to thirty minutes—the device comes with a magnetic windshield mount which automatically charges your navigation system. The built-in dash cam is a great feature, but is positioned too low for some car models. Pros Six-inch screen with high resolution Pinch-to-zoom technology Free maps for the device’s lifetime HD traffic updates every thirty seconds Voice commands for hands-free navigation Bluetooth capability for hands-free calling Cons View-obstructing camera position Poor battery life Hard to access video Lower video quality relative to screen size



Auto Auto’s Product range.

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Types of Cruise Control Systems

Adaptive cruise control What is it? Either a radar or laser-based system that can maintain speed, but reduces speed if the gap to the car in front falls below a preset distance. This constitutes Level One automation on the automated vehicle classification chart, as they driver is required to take control at any time. Found on: Assorted BMW, Fiat group, Ford, JLR, Lexus, Mercedes, VW Group models, and increasing in use by other makers. Advantages: Adjusts speed according to traffic, takes strain out of long drives, helps fuel efficiency. Disadvantages: Sensors can be 'blinded' in bad weather, electronics can be slow to react to sudden traffic slowing, distance to the car in front can be big enough to tempt other drivers to cut in front of you, sometime systems are jerky when changing speed.



Board of Directors • At present –

Chairman, CEO, 5 Directors (Engineering, R&D, Legal

Service, Finance and Business Development) and 2 NED’s.

• Few Points

1. Do we need a HR Director (AutoAuto has 250 Design Engineers)?

2. We need IT experts as future of car industry would be based on latest technology and who would add that value to the Board?

3. Do we need a separate Director of Quality which doesn't’t come under production?

4. Is our CM a NED?

5. What changes we need based on Corporate Governance ?

6. How the structure would change if we insource manufacturing, selling products to final customers direct ?

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Auto Tech Industry Map

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Auto Tech brands venturing towards driverless vehicle concept

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The Worlds Top 10 Most Innovative Automotive Companies in 2015

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Financials of AutoAuto Ratio 2017 2016

Gross Profit margin 57.36% 60.41%

Net Profit margin 25.16% 28.76%

Operating profit margin 35.76% 40.92%

Return on Capital Employed (excluding deferred tax) 45.05% 57.04%

Return on Assets 27.08% 33.50%

Return on Equity 61.67% 106.20%

Current Ratio 1.70 times 1.51 times

Quick Ratio 1.40 times 1.24 times

Gearing (D/D+E) (excluding deferred tax) 48.61% 62.26%

Interest Cover 11.58 times 11.45 times

Dividend Payout Ratio 54.06% N/A

Effective Tax Rate (Tax/PBT) 23.00% 23.00%

Effective Interest Rate(Interest/Loan) 8.00% 8.00%

Dividend paid U$ 282m N/A 14


The Worlds Top 10 Most Innovative Automotive Companies in 2015 cont..

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8. Apple - For CarPlay, which is turning the car into an

iPhone on wheels. Google isn’t the only software company muscling its

way into cars. Automakers including Audi and Volvo are partnering with Apple to install its CarPlay system, introduced in 2014. CarPlay allows users to integrate an iPhone with their car’s infotainment screen to access apps, make calls, and listen to music on their iTunes library. Many Apple iPhone functions will be available, including iMessage for sending and receiving text messages, satellite navigation, and Siri Eyes Free integration, which lets drivers state commands to send text messages or check the weather while keeping their eyes on the road. More than a dozen automakers, including highbrow niche sports-car maker Ferrari and mass-market General Motors, have signed up so far.


Google – Driverless Cars

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Google – Driverless cars cont… • Google's driverless car project is run under Google X, the "moonshot

lab" that's part of Google's parent company Alphabet

• Google first started testing its driverless technology using a Toyota Prius retrofitted with the tech in 2009, the year the Google self-driving car project was born.

• After completing 300,000 miles of testing, Google retrofitted Lexus SUVs to test its driverless tech in 2012. These cars have been tested on freeways and city streets

• Google built its first driverless car prototype dubbed the 'Koala car' in 2014. It has no steering wheel or pedals since it's fully autonomous.

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• Google has quite the driverless car fleet, with 34 of the Koala vehicles and 24 Lexus SUVs retrofitted with Google's driverless tech on the road

• Google's cars drive using something called LiDAR technology, which allows them to "see" the roads by using lasers to map out its surroundings

Google – Driverless cars cont…

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• The cars have been in a few minor accidents, only one of which could be argued to have been the Google car's fault

• But Google is constantly working on improvements to make its cars safer. It recently patented technology that will glue you to the hood of the car if it crashes into you

• A patent outlines putting an adhesive layer on the hood of the car that would be covered by something that isn't sticky. If the car were to hit someone, the outer layer would be removed to expose the glue

Google – Driverless cars cont…

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Audi – Piloted driving • January 2016 – Audi’s self- driving prototype, ‘Jack’, travelled

autonomously from Silicon Valley to Las Vegas and pushed the needle to 130 km/h on the German autobahn. “Jack” exhibits a driving style that is adaptive to the given situation, safe and especially interactive – a research car with social competence.

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• You can operate the new 7 Series' in-car system with simple hand gestures so you can keep your eyes on the road. You can take phone calls or decline them, or raise or lower the volume, with memorable hand gestures. You can also assign a fifth customized gesture, in case you want to do things quickly like summoning a map on the fly.

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Wild innovations in BMW’s latest 7 series Sedan cont…


• If you don't want to use manual inputs or hand gestures, you also can talk to your BMW 7 Series. The car's intelligent voice system recognizes everyday commands and phrases, so you can say, "Show me the next gas station on my way," and your car will know exactly what you're talking about, and direct you there.

• The new 7 Series comes with a new touchscreen display that lets you zoom in on your map for better orientation. You can also use it to dial phone numbers.

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Companies working on Autonomous driving vehicles

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02. Uber Uber released Ford Fusion cars modified with the company's self-driving tech as part of its Pittsburgh pilot in September 2016. A select few Uber users can hail the cars as part of the program. But the cars still have a safety driver as well as an engineer up front because they do fail from time to time. Uber and Volvo have also agreed to a $300 million alliance to develop driverless cars. Uber has made a play for the self-driving car space by poaching staff from Carnegie Mellon University's robotics department.


Autonomous vehicles cont..

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The National Highway Traffic Safety Administration (NHTSA)

in USA has created a classification for autonomous

vehicles. A level 0 classification means the driver is in

complete control of the vehicle all the time. At the opposite

end of the spectrum is level 4, where the car performs all functions end to end, the

driver is not expected to ever control the vehicle and it can even run unoccupied. This is

true self-driving.


• The car's front-facing window includes a new heads-up display that's 75% bigger than its predecessor, the 2014 BMW 7 Series, with newer and bigger graphics to show you more about your car at a glance.

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• The BMW 7 Series' Sky Lounge appears during night time driving. It has 15,000 tiny light patterns built into the glass to create an "exceptional interior light ambiance.

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Cars could come with different modes for relaxing and driving.

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What it is: Volvo released a concept car, Concept 26, with "relax," "drive," and "create" modes. In drive mode, the car minimizes distractions, while in relax mode, the seats recline to allow the driver to watch TV on a screen attached to the dashboard. The create mode is like a point in between relax and drive, allowing the seats to slightly recline. The company plans on rolling out some of the features included in the Concept 26 when its autonomous vehicles hit the market. What it means: Similar to the Mercedes-Benz concept car, Volvo's Concept 26 shows how car interiors will adapt to accommodate autonomous driving.


News about Auto Industry

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New product features to focus for AutoAuto

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Documents

AUTOAUTO - LearnCIMA Forumforum.learncima.com/audio/2017/Aug/SCS/PDF/Nanaska SCS Aug 2017 … · 13/7/2017 · Analysis for AutoAuto ... an iPhone with their car’s infotainment