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Part 4: Case StudiesC-44

CASE 3

Future of the Autonomous Automobile: A Strategy for BMW

By Olaf J. Groth, Ph.D., Eleonora Ferrero and Aleksey
Malyshev

Norbert Riedheim, the head of BMW?s Future Car group,
which is situated between BMW?s global strategy, mar-
keting and research and development (R&D) units, has
just been informed that three automakers have received
California permits to test an on-road autonomous auto-
mobile: Google testing on a Toyota car, Volkswagen?s
Audi, and Mercedes-Benz. BMW did not apply, because
the company was in the process of developing a rela-
tionship with Baidu, the Chinese Google-like Internet
company, to start testing in Shanghai and Beijing. At the
same time, Apple announced its electric-autonomous
iCar concept. However, BMW has been making signifi-
cant investments in the space of autonomous driving and
reconfirmed its intentions to lead in this space during its
recent shareholder meetings.

Reviewing BMW?s innovation legacy, the state of
the autonomous auto ecosystem, and a range of critical
uncertainties, Riedheim thinks about potential alterna-
tive futures for the evolution of the space. His reflections
are driven by a need to present a strategy to the Board of
BMW during an upcoming high stakes meeting. What
kind of business should BMW aim to be over the next
10 to 15 years? What are its aspirations? What strategy
should the company pursue and why?

Introduction1
Norbert Riedheim, the head of BMW?s Future Car
group in its global research and development (R&D)
division, has just been informed that three automakers
have received California permits to test an on-road
autonomous automobile: Google testing on a Toyota
car, Volkswagen?s Audi, and Mercedes-Benz. BMW
did not apply for the permit because the company was

in the process of developing a relationship with Baidu,
the Chinese Google-like Internet company, to start
testing similar automobiles in Shanghai and Beijing.
Given the rapidly changing scenarios, he wonders
what position BMW should aspire to, and what their
strategy should be.

Riedheim has been in Silicon Valley and knows
all those companies well, and enjoys friendly relations
with management and even selective partnerships with
Google. He knows that in the era of ?co-opetition? new
technologies and new alliances can change the chess-
board of innovation very quickly. In order for the com-
pany to remain relevant for the next 20 years, he and his
colleagues need to be vigilant and stay on top of the latest
developments in the ecosystem of autonomous driving.
BMW is focused and committed to developing auton-
omous vehicles, as evidenced by CEO Harald Krueger
revealing at a BMW?s recent shareholder meeting that
the company is gearing up to launch its first autonomous
vehicle by 2021: ?. . . the BMW iNEXT, our new innova-
tion driver, with autonomous driving, digital connectivity,
intelligent lightweight design, a totally new interior and ulti-
mately bringing the next generation of electro-mobility to
the road.?1

Riedheim is excited by this bold vision. He has been
at the company for a long time in different positions.
Having signed on with the automaker right after his
graduate studies in engineering, he spent 3 years as an
assistant to the general manager of a factory producing
the 3-series sedan, followed by shorter stints in supply
chain, marketing and finally product management for
the company?s i3-series, the company?s first foray into
electric mobility. Having witnessed the engineering and
marketing prowess of his employer, he is confident that
BMW will master the autonomous challenge as well. Yet,
Riedheim knows that the evolution of the autonomous
automobile is still in its very beginning stages. How will

1 Some names of certain persons and programs are being used for narrative purposes. They are either fictitious or have been altered. Narrative statements
on the part of these persons do not necessarily represent the official views or opinions of the companies mentioned in this case.

Professor Olaf Groth of Hult International Business School, with assistance from Eleonora Ferrero and Aleksey Malyshev (both Hult MBAs, 2014), devel-
oped this fictitious case based on discussions with various company officials and from published materials. It is not meant as an endorsement or critique of
any particular company, nor intended to be a source of primary data.

Acknowledgement 1 The authors wish to thank the helpful people of Quid.com for making their technology available for the illustrations which appear in
Figures 2 and 3 in this case and for their tireless counsel on its use and value.

COPYRIGHT ?2016 Hult International Business School. This publication may not be reproduced, digitized or photocopied without Hult?s permission.
To order copies or request permission, contact Hult Publishing at Hult International Business School at One Education Street, Cambridge, MA 02141 U.S.A.
or email [email?protected] Copies can be ordered though The Case Centre (www.casecentre.org).

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Case 3: Future of the Autonomous Automobile: A Strategy for BMW C-45

common feature in luxury and performance automobiles
of many brands.

Finally, on January 8th 2014 during the Consumer
Electronic Show in Las Vegas, BMW demonstrated its
first fully automated car prototypes based on its regular
car models.3 The car uses 360 degree radar technology,
as well as a set of other sensors including cameras and
ultrasound to accelerate, steer, and brake without driver
intervention. The company also demonstrated another
feature called ?Emergency Stop Assistant,? which will
pull the vehicle to the side of the road, stop, and acti-
vate an emergency call in case the driver experiences an
unexpected health condition, such as fainting, a heart
attack or a stroke.4 These advancements demonstrated
the ability of BMW to stay on top of the new technology.

A litany of prizes and awards recognized BMW?s
strengths:

? Brand reputation: BMW is acknowledged worldwide
as a successful carmaker. In 2012, Forbes elected BMW
as the most reputable business in the world, and in 2016
it became the second most valuable brand in the auto-
motive industry, with a market value of $26.4 billion.5

? Handling, engines and traction motors: BMW was
able to become a market leader in the production
of engines, which led the company to win several
?engine of the year? awards, in an industry where
technology is a top priority and competition is fierce.

? Information technology integration: BMW was
able to integrate technology innovation in its vehicles,
winning international prizes such as the Berthold
Leibinger Innovation award in 2014 for its laser-light
technology and the Autoblog?s 2014 Technology of
the Year award for the whole technology suite work-
ing together on the BMW i8.6

? Environmentally friendly vehicles: BMW researched
dual fuel engines, hydrogen-driven cars, and hybrid
electric cars. Furthermore, 80% of its automobiles are
made from recycled and recyclable materials.7 The
Brand won the World Green Car of the Year Award
in 2015 at the New York International Auto Show8
and at the 2014 Los Angeles Auto Show, BMW was
presented with the Green Car of the Year Award
from the Green Car Journal for the BMWi3.9

The Ecosystem of Autonomous
Driving Today
The idea of cars driving themselves has existed for a few
decades, since the early days of Tsukuba Lab in Japan
in 1977 and the European EUREKA Prometheus project

this new world evolve and how will BMW evolve its
position in it? What will he say about BMW?s emerg-
ing strategy in his upcoming briefing with an important
BMW board member?

He goes back to his desk, and reviews the facts
once more.

A Brief History of BMW
The automaker got its start as a manufacturer of aircraft
engines in Munich, Germany, in March 1916 and turned
into a motorcycle and automobile company in 1928.2
Since then, BMW has manufactured motorcycles and
cars. It is most well known for its high-quality cars in the
upper segment of the market. After WWII the company
had to restore its manufacture and reputation. The first
car that started a new era for BMW was the 501 model,
a famous classic today that quickly established the com-
pany as a producer of high-quality, technically advanced
cars. Most prominent among its superior engineering
capabilities are its engines, which many experts attribute
to its early legacy in aero-turbines (?turbine? still being
the nickname of its 6-cylinder car engines). In 1973 the
factory in Munich started building the BMW 2002 turbo
engine. This was the same year that the first oil crisis
hit the western world, which had become dependent on
cheap gas. Sales of gas-guzzling volume-produced per-
formance cars slumped and BMW started to develop a
strong skillset in more fuel-efficient turbo-diesel engines.

In 1990 the Bavarians, leveraging their competency
in making high-agility, precision steering, introduced a
new kind of rear axle that allows the rear wheels to turn
a few degrees in the same direction as the front wheel.
This improved car stability in turns at high speed, as well
as the fun of the driving experience by a BMW driver,
which is central to BMW?s value proposition. Since then,
few other manufacturers have managed to match this
active handling experience, which today is a hallmark of
the BMW brand.

In 2001 the company built another competency, this
time pioneering cutting edge electronics: a new kind
of ?head unit? (the control and entertainment console
that sits in the center of a dashboard). It was called
?iDrive? and it allowed operating the unit easily with a
joystick-like knob giving tactile feedback to the driver,
without having to take his or her eyes off the road.
iDrive had been developed in collaboration with BMW?s
Technology Office in Palo Alto, at the heart of Silicon
Valley. After an initial period of drivers? adjustment
to the new technology and user interface, the iDrive
and various iDrive-like derivatives quickly became a

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Part 4: Case StudiesC-46

in 1987. But only recently, with the advances in com-
puter technology, has it become a reality. The 2004,
2005, and 2007 Urban Challenges conducted by the
Defense Advanced Research Projects Agency (DARPA)
in the U.S. yielded significant advances, with cars
eventually completing a 132-mile course successfully
as exemplified by the winner of the 2005 DARAP
Urban Challenge: Stanford University?s VW Touareg
?Stanley.?

The domain of autonomous driving promises stun-
ning prospects as well as some key uncertainties. It is at
the intersection of large opportunity and the uncertainty
of a number of future trends that could affect the domain
to take a turn in one direction or another. According to
Navigant Research, annual sales of autonomous vehicles
could reach nearly 95 million by 2035.10 Morgan Stanley
analysts also believe that self-driving cars will change the
auto industry.11

At the core of the self-driving car is state-of-the-
art microprocessors, i.e., computer chips called Central
Processing Units (CPU) or Graphical Processing Units
(GPU). GPUs are CPUs that have special capabilities
related to processing imagery or graphics. Two major
players in the microprocessor technology market are
working on the hardware for self-driving cars?Intel,12
maker of CPUs and NVIDIA, maker of GPUs. Recently,
through cooperation with these Silicon Valley stars, car
manufacturers globally have obtained processing tech-
nology that powers critical components to allow them to
build self-driving cars. Several companies and research
centers13 are working on an even more powerful type
of processor?Quantum Computers that will be able
to handle massive computational tasks in parallel?a
quality essential for the artificial intelligence needed
for autonomous driving. With Google recently joining
the effort,14 the prospect of creating one (quantum com-
puter?) becomes more realistic.

There are different levels of self-driving, which means
?autonomous automobile? can mean different things to
different people. For BMW to craft a more nuanced
strategy, the company will need to draw the distinction
between the different modes of the car?s autonomous
assistance for the driver:

Self-parking: A car with this feature can park itself
without driver intervention. This is primarily a
convenience feature for most drivers, but can also
aid drivers that are physically impaired. It can help
avoiding fender-bender accidents that may increase
car insurance costs.

Lane control: Helps the driver to steer though curv-
ing highway roads. This is mainly a security feature
that helps drivers to avoid potentially dangerous
accidents like the car driving into oncoming traffic
or veering off the road.

Speed control in heavy traffic: This feature goes a
bit further by allowing the driver to let the car nav-
igation system accelerate and slow down the vehi-
cle when the car moves in a traffic jam. This adds
the driver some relief to an otherwise tiring journey
through tough traffic conditions.

Fully automated car: The highest level of automa-
tion is achieved when the car can drive itself in any
conditions, including driving through crossroads
and crosswalks with or through traffic lights, making
turns, changing lanes, keeping distance with other
vehicles, and responding to any kind of emergency
situations. In this case the driver inputs the desti-
nation into the navigation system and allows it to
drive. This feature has been widely discussed as the
future of mobility. Most drivers would spend their
time being entertained, being social, or being pro-
ductive in their cars.

Fully Automated Cars: The Competitive
Landscape
While BMW15 and Audi16 have already presented proto-
types of fully automated cars, other car manufacturers
are developing and testing partial autonomy approaches.
Toyota/Lexus are working on the concept of assisted
driving. Tesla recently announced that it is already
installing navigation hardware on its cars,17 although
its system is not intended to take full control either, but
rather provide assistance for the driver to improve safety.
GM first invested $500M in ride-hailing company Lyft
and then the two companies announced plans to test a
fleet of autonomous Chevrolet Bolt electric taxis on the
road within a year.18

Other players are more skeptical: Volvo?s head of
R&D, Peter Mertens, has been very direct in saying that
the prospect of a driver reading a newspaper or answer-
ing e-mails while driving ?is a very, very long term
vision.?19 The carmaker is concentrated on safety instead,
such as object avoidance and more traditional protection
such as material strength. Yet, in a surprising twist, that
same year, (which year?) Uber?s Founder and Co-CEO
Travis Kalanick, started to hire dozens of autonomous
auto experts at leading technical institutions, and it was

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Case 3: Future of the Autonomous Automobile: A Strategy for BMW C-47

approaches between car makers is only the beginning
of a complex picture: as a seasoned, technology-savvy
strategist, Norbert Riedheim knows that competition
may not only come from established players, but also
from new entrants into a given market: BMW needs
to anticipate.

One of these new entrants is Internet giant Google,
which demonstrated its self-driving car in the sum-
mer of 2014. The technological program at the heart
of the Google car is called Google Chauffeur.23 It is an
example of a truly driverless car that can move itself
in a targeted, pre-programmed fashion from point A
to point B using advanced sensors that collect and
interpret data from the environment. This is enabled
by multiple Google technologies, including its Maps
navigation technology. Google uses a Toyota-brand
vehicle for testing its autonomous driving system, but
it is not in a formal joint venture with the firm and
could still choose any other automaker as a partner.24
Being cash-rich, the company could also develop
its own car, as has been successfully demonstrated
by Tesla.

Alternatively, much like Tesla, Google could coop-
erate with an established carmaker (in Tesla?s case it was
a design collaboration with Lotus in the UK). Along
those lines, the company announced its new self-driving

Volvo with its well-established reputation of making
some of the safest automobiles on the road, that heeded
the call to partner.20

Along similar lines, Ford engineer Torsten Wey
opined that he does not believe cars will ever be fully
autonomous: ?I doubt we will ever get there,? he said.21
According to Wey there are situations when the car?s
autopilot is not intelligent enough to make decisions.
The human driver does not only consider behavior
of his own car, but also takes into account behaviors
of others. Experienced drivers can intuitively predict
what other cars on the road will do and act accord-
ingly, augmenting the measurable data of the moment
with their own experience. For instance, when a driver
sees a car in front of them slow down to turn into a
restaurant parking lot, the driver can judge that the
car will likely not stop right there in the middle of
the lane, based on subtle contextual clues and a life-
time of learning. A computerized system, however,
does not yet have that intuition and will not acquire
it for a long time. Yet earlier, Ford tripled its auton-
omous vehicle development fleet and accelerated its
on-road software and sensor testing.22

Clearly, automakers are in an uncomfortable
dance of cautioning expectations yet forging ahead
full steam. But this diversity of signals, views and

Figure 1 Select Carmaker Competitors Positioning for Autonomous Driving

The chart above represents projected year of availability of Autonomous Automobiles for some car manufacturers. The size of the
bubbles corresponds to the total car production by the company for the year 2013. The X axis shows the year in which car makers are
expected to go to market with their versions of autonomous cars. The Y axis shows the degree of autonomy, as described above.

D
e
g

re
e
o

f
A

u
to

m
a
ti

o
n

2014 2015 2016 2017 2018 2019

Tesla

BMW

Audi

VW

Toyota

33838_case03_ptg01.indd 47 4/3/19 5:49 PM

Part 4: Case StudiesC-48

technology development center in Novi, Michigan, in
May 2016 and one of the first projects at the new facility
will be the self-driving Chrysler Pacifica hybrid minivan,
developed in-house.25

But given its deep pockets, Google could conceiv-
ably also still buy an ailing carmaker, such as Saab, still
struggling to recover after its purchase by National
Electric Vehicles Sweden (NEVS), which is owned by
Hong Kong-based energy company National Modern
Energy Holdings. Or it could approach Volkswagen
to take over the Seat or Skoda subsidiary, which
seem to be duplicating each other?s offerings in the
VW brands family.

To further complicate things, it is not just in the
visible corners of the technology world that prominent
companies like Google are working on autonomous
automobiles and from which sudden advances could
emerge. In start-ups, universities, and R&D centers
around the world, leading technologists are work-
ing on pre-commercial solutions. In early 2013 there
were multiple reports about companies and individ-
uals who were working on an affordable self-driving
feature. One of them is Professor Paul Newman from
Oxford University who works on self-driving technol-
ogy that utilizes cheap sensors.26 Also, Intel awarded
the top prize in its Gordon E. Moore competition27 to
a Romanian teenager for using artificial intelligence to
create a viable model for a low-cost, self-driving car.
One company took it a step further and designed a
commercial self-driving accessory that can be installed
on selected models of compatible cars with sensors
mounted on the rooftop. It is a startup called Cruise,28
which emerged from a Silicon Valley incubator,
Y-Combinator, and started accepting pre-orders for
it assisted driving system in mid-2014. In March 2016,
Cruise was acquired by GM, which appears to be
interested in integrating the system into the design of
its own cars.

Another critical element of autonomous driving?
mapping and location services?is also flourishing glob-
ally, especially in Europe. Nokia Corporation?s former
mapping business, HERE?based in Berlin?provides
an open platform for cloud-based maps. HERE is not
only the main alternative to Google Maps, but also
the market leader in built-in car navigation systems.
According to Nokia?s website,29 four out of five cars in
North America and Europe feature HERE integrated
in-dash navigation. Not surprisingly, in August 2015
BMW, Audi, and Daimler announced their acquisition

of HERE.30 These 3 automobile companies will be
directly controlling an essential part of the autono-
mous automobiles? value chain?mapping and location
services?while securing the supply of critical geo-
location data in their automobiles.

It would be wrong to limit the ecosystem view to
traditional geographies, like Silicon Valley in the U.S.,
or other entrepreneurial hubs like Berlin in Europe
and R&D labs in Japan that have been strong in auto-
motive or IT innovation for decades. A look into the
future of the automobile has to take into account
developments in Asia. For instance, autonomous? taxi
startup?nuTonomy announced a pilot in Singapore that
it could become the first company to operate Level-4
driverless taxis commercially in a city.31 And, as men-
tioned, BMW selected Baidu as its partner in the Chinese
market when, in the Fall of 2014, it needed a high-
resolution GPS system to start testing in Shanghai and
Beijing, two of the most demanding, densely populated,
and vast automotive markets in the world. And now
Baidu claims it is developing its own automated car, but
unlike Google, it works on driver assistance and is not
a fully self-driving car.

The Chinese market is already the largest and the
fastest growing in the world, with 18 million cars sold
in 2013,32 a compound annual growth rate (CAGR)
between 2005 and 2012 of 18.1%, and an expected 6.3%
average year-over-year growth through 2020 making
it a tremendously important market for BMW.

Luckily, BMW made an early, courageous decision to
enter the Chinese market, benefiting from the excellent
relationships held by a former BMW board member and
former government executive in charge of the compa-
ny?s government relations. The effort bore fruit: in 2013
BMW sold 390,713 cars in China, up 20% from a year
earlier. This meant that China had officially overtaken
the U.S. (375,782 cars sold) as the group?s biggest market
and had outpaced the overall company?s market growth
of 13.9 percent.33

As Riedheim leans back in his sleek BMW carbon
fiber chair, he wonders how this ecosystem might evolve
and how should BMW position itself within it? What
are some plausible, alternative futures? Having stud-
ied disruptive innovation and strategy throughout the
years, Riedheim knows that big bets often don?t pay off
because too many variables in a market forecast change.
So, understanding these alternative futures first will help
him to craft a strategy that is robust against different
market states.

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Case 3: Future of the Autonomous Automobile: A Strategy for BMW C-49

Exploring the Future
Through his work with design consultancies over the
years, Riedheim has learned that this exploration first
requires a clear view of all the uncertainties that could
combine to pivot the market and ecosystem in one direc-
tion or another.

Key Uncertainties
Many uncertainties related to self-driving automobiles
will prompt both business executives and policy makers
to take action of one kind or another. In this complex
ecosystem issues emerge in six different areas:

? Social: Who will use self-driving cars? Autonomous
vehicles can be used to transport people who

cannot drive, either because they are elderly, too
young, physically or visually impaired. A car that
today is driven by a family member can become
an independent transportation vehicle for all fam-
ily members, even those under 18 and without a
driver?s permit. However, it is not clear if, or how,
this technology might be adopted by the consumer
majority. What will be their aspirations, concerns,
anxieties, and potential mistakes? Additionally, the
permissible behaviors allowed in the car itself will
depend on whether the vehicle is fully self-driving.
For instance, driver-passengers could be able to spend
their time in the car messaging, reading, or working.
Drinking alcohol might also be permissible, since the
fully autonomous car will not require any interven-
tion by the passenger . . . or will it? What if systems

Figure 2 Investments and Resources as Represented by Patent Growth in Key Technology Spaces Related to Autonomous
Automobiles (Graphic Developed Through Quid.com)

This image shows the vast expanse of the technology ecosystem that contributes intellectual property and capabilities to the
domain of autonomous automobiles. The volume of innovation is substantial and hints at the commercial promise that innova-
tors see in this area. In the last five years the following patents have been registered: 208 for Component Automatization, 168 for
Lighting Technology, 119 for Server Technology, 118 for Driving Mechanism Technology, 101 for Energy and Battery Technology,
94 for Heavy Machinery Technology, 87 for Internet Protocols & Communication, and finally 81 for Autonomous Driving & Driver
Assistance. Please see the Appendix for a list of the Most Frequent All Original Patent Assignees and Locations of Origin.

DRIVING MECHANISM TECHNOLOGY

COMPONENT AUTOMATIZATION

LIGHTING TECHNOLOGY

SERVER TECHNOLOGY

ENERGY & BATTERY TECHNOLOGY

AUTONOMOUS DRIVING & DRIVER ASSISTANCE

INTERNET PROTOCOLS & COMMUNICATION

HEAVY MACHINERY TECHNOLOGY

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Part 4: Case StudiesC-50

fail and driver-passengers are required to become
active drivers?

? Technological: Today self-driving cars are possible
because of the existing hardware and software tech-
nology. However, as described, there are both cars
with fully self-driving features pre-installed (such
as Google?s car), and systems like Cruise, which can
allow other cars to become self-driving. The devel-
opment cost of these technologies differs widely
and will influence pricing to consumers and hence
the adoption response by consumers: for instance,
a survey by JD Power and Associates found that
only 20% of Americans currently would ?definitely?
or ?probably? buy a self-driving car if the price was
only $30.000.34

? Economic: Firstly, there are of course various crises
in Asia, the U.S. and Europe that have depressed
consumer spending over the past two decades. Will
the global and regional economies recover suffi-
ciently to enable consumers to replace their vehicles
with new, unproven autonomous ones, or would
they resort to buying pre-owned vehicles that are
cheaper and use more established technologies?
Secondly, self-driving vehicles will impact different
market players. Insurance companies might change
their business models based on a lower rate of acci-
dents. Driverless vehicles may allow some com-
panies to save money on drivers (such as taxi or
bus companies). Also at the national level, research
from The University of Texas35 estimated that if just
10% of vehicles were self-driving, a country such
as the U.S. could save about $37 billion a year on
healthcare and environmental costs. For the same
reason, the U.K. government has announced its
commitment to spend ?10 million on a test-bed for
self-driving cars.36 Finally, the cost and purchasing
power in different regions will weigh into the mar-
ket economics in different ways, since self-driving
cars will change the current production process and
countries will facilitate autonomous automobile
adoption among consumers in different ways and
along different timelines.

? Environmental: Pollution regulations will change,
considering the new emissions generated by
self-driving cars, which may be lower than the
emissions generated by cars today. This assumption
is based on two main factors: first, autonomous

vehicles will be able to optimize their consumption
by themselves based on road conditions as well
as acceleration and breaking behavior, and sec-
ond, electric cars and smart charging infrastruc-
ture may at some point converge on autonomous
automobiles, such that gasoline could become
obsolete.

? Legal: Self-driving cars have to be explicitly legal
and encouraged by regulators, not just be toler-
ated as a dubious ?gray area.? Bad or lagging leg-
islation could slow down the investment required
and therefore the development of the technol-
ogy. Furthermore, authorities have to develop
new liability frameworks to answer the following
questions: who has what kind of influence over
autonomous cars ?misbehaving? and who will
therefore bear the legal and financial responsibil-
ity? Would it be the driver, the software or the IT
hardware provider, the data processing companies,
the telecom companies linking cars wirelessly, the
application providers for different functionalities
that may have little to do to with driving but could
interfere with behavior in the car, the car manu-
facturer, or the company responsible for the car?s
maintenance?

? Ethical: Two main aspects represent key uncertain-
ties in this area. The first issue concerns privacy:
what information will be collected by autonomous
automobiles, and who has access to it? The second
point regards safety. How can autonomous cars be
prevented from being hacked, getting virus-infected,
and being used for remote criminal activities such as
terrorist attack or drug delivery? How does society
address computer-savvy minors hacking into cars
and sending them on remote joy rides? Will physi-
cally or visually impaired passengers be at the mercy
of malfunctioning autonomous driving intelligence?

To get more information about these and many
other uncertainties and assumptions, both governments
and private companies have started to experiment. In
the U.S., California, Nevada, and Florida allow com-
panies to use self-driving cars on the road for testing
purposes.37 Meanwhile, BMW has tested its self-driving
car in Europe, and recently also got permission from
the Chinese government to test its cars in Shanghai and
Beijing.

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Case 3: Future of the Autonomous Automobile: A Strategy for BMW C-51

But Riedheim knows time is critical: the Board will
feel that BMW has to make the strategic investment,
partnering, and positioning decisions now, even absent
perfect information, if they are to be at the forefront.
Questions he?ll need to be ready to answer:

1. Strategic challenge/aspiration: Given the chang-
ing scenario, what kind of business should BMW
aim to be over the next 10 to 15 years? What are its
aspirations?

2. Objectives: What are the key metrics that would
indicate BMW met the challenge and achiev

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