Pre-Course Assignment: Automotive Industry M&A and Mobility Trends

This assignment analyzes the evolving landscape of the automotive industry, focusing on the impact of mergers and acquisitions (M&A) and the influence of the 4 ACES trends (self-directed drive, electrified motors, connected cars, and smart mobility). It explores how automotive OEMs, suppliers, and new entrants like tech companies and venture capitalists are forming strongholds within the developing mobility ecosystem, driven by digital transformation. The assignment examines the strategic moves of key players such as Uber, Tesla, Alphabet, Daimler, and GM. It discusses the importance of integrating electrical hardware, semiconductors, and software, with a focus on how companies are adapting to digitization and leveraging AI. The assignment highlights the role of digital transformation, the significance of strategic planning, and the importance of resource-based theory in M&A. It also touches upon the role of accelerators and incubators in fostering innovation within the industry, as well as the data challenges faced by companies like Tesla and Waymo in developing self-driving cars.

Running head: QUESTIONS 0
MERGER AND ACQUISITION
JULY 10, 2019
STUDENT DETAILS:

QUESTIONS 1
Question 1:
The automotive sector is shifting in a gear as the broad meaning of mobility takes
hold. Driven by 4 ACES trends—self-directed drive, electrified motors, connected cars, as
well as the smart mobility; automotive OEM, supplier, as well as new participantslike tech
members and venture capitalist are trying to form strongholdwithin developing mobility
ecosystem. Further, the digital transformation would permit the automotive sector to address
various tech-enabled characteristics in the automobiles, which would elevate the experience
of travellers and the driver to the complete new orbit. With automobile’s electrification and
digitization, the main elementsthat will come into play are the electrical hardware that would
operate the automobiles, the semiconductors would be the brain for the functions, and the
software that will render the ideaof operating the vehicles. The companies that are able to
integrate these into a single package (AI) can establish more of the edge over different
organisations.
Further, the key drivers that spring up are Uber, NIO, Google Waymo, Zip car and
Tesla Motors. Other important company are Ford, Toyota, VW, Daimler, Alphabet, and GM
that continue to render most of the cars on road. These organisations are taking agile way of
functioning toward the digital idea. However, it is yet to be required to test scale, and the
well-developed producers, who have provided international scale for decade have ace up
thecover. This is the case of focusedmerger of 2 with the step-by-step method to digitisation
with some initiatives. They make all-inclusive experience with artificial intelligence as well
as digital abilities, which may simply scale. The experience would carry agility for fulfilling
the demand of customer and establish modern revenue stream by replying to the challenges

QUESTIONS 2
and chances with speed. The people are reskilled to make sure that staff has a digital mind-set
to motivate the matters of doing work and drive innovations at ground level (McGee, 2019b).
Question 2:
The very important of digital transformation is the persevering buzz for a manager all
over the place, in almost all the sectors including automobile sectors. Around a period, the
association with GM and Daimler–Chrysler was declared for developing the hybrid structure
for completing with the producers off Japan. In the year 2005, the Prius’s success as well as
increasing fuel price agreed with formation of the combined brand Bluetec for the diesel
ignition engine motors collectively with GM and Daimler. This can be considered that in this
period, VW was still adopting the conventional products based on the inner combustion
engine. Because of the constancy of the existing automotive sector and the supremacy of a
inner combustion engine technique, this is anticipated that these incumbent companies as
well as the functions would have the critical part in the evolution. In recent period, GM has
scores the annual financial target. Further, Daimler is discovering the functions for the best
possible manufacturing shift to administer the high import duty. It may involve the assembly
of motors from reduced kit in China despite the fact that the decisions have been not taken
(McGee, 2019a).
Furthermore, the corporate planners take the operational information as well as
financial information, conduct forecast, as well as make long presentation with Chief
Executive Officer and top level manager regarding the upcoming directions related to
business. However, in end of the expensive and time-taking procedure, some of them said
that they are irritated by absence of influence over either the personal action or the strategic
directions for the corporations. This judgment of dissatisfaction was captured in the present
McKinsey Quarterly survey of about eight hundred executives. Some of them said that were

QUESTIONS 3
agreed with strategic-planning procedure. On the other hand, others stated that main strategic
decision was created in the confine. Therefore, the manager may well be attracted to get rid
of method of planning in total. As per the view of McKinsey, there are various logical
manners where the organisations may implement the new strategic perspectives. It is essential
to identify the main problems to make sure that managers do not waste the energy as well as
time on not as much of significant matters. The best strategy is to follow planning cycle to
requirements of business. It is required to apply the strategic-performances management
system. The human-resources system should be integrated in a strategic plan (Matthias,
Thibaut & Andreas, 2019).
Moreover, it is expected that new entrants to the industry will take the new capacity as
well as the wish to achieve the share in marketplace. As everyone in the race of fully
driverless cars, Tesla and Waymo are making attempts to take as well as process the
sufficient information to make the car, which may drive itself. They are handling the issues in
different manners. Tesla is taking advantages of various vehicles. It is taking information
that how these cars perform with Autopilot. On the other hand, Waymo has started work at
self-driving car project of Google (Holland-Letz, et. al, 2019).
Question 3:
There is the developing identification in the theory based on resources that merger &
acquisition has the significant role as the sources to transfer or else non-marketable abilities
as well as means (O’kane, 2019). For the purpose of R&D, the companies look for the
external means by the different partnership agreement such as R&D outsourcing, licensing as
well as the joint venture. In addition, this is well-established fact that all the companies
pursuit for the competitive market to extent the development of business. It is very important

QUESTIONS 4
to take approach of mergers and acquisition to reconfigure the industry (Massoudi &
Fontanella-Khan, 2019).
Additionally, in a mission for innovation, various organizations have presently started
the game by resources of accelerators as well as incubators. The accelerators as well as
incubators permit them to get involvement in earlier-stage start-up either over the
comparatively longer time of intensive business growth and by the short-term planned
program. In this relation, they vary from venture investment that makes focus on more older
start-up, and by the strategic partnership that facilitate quick beginning of new services and
goods leveraging mature technologies. Incubator enables the organizations for supporting and
collaborating with the handful of capable start-up for providing 3 years. On the other hand,
accelerators enable quick screening of the larger number of start-up made focus on the
specific technologies or regions (Jacques, et. al, 2019).

QUESTIONS 5
References
Holland-Letz, D., Kässer, M., Kloss, B., & Müller T. (2019). Start me up: Where mobility
investments are going?. In McKinsey & Company (May 2019).
Jacques B., Tanguy C., Martin H., and Paul W. (2019). Why digital strategies fail. Retrieved
from: https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/
why-digital-strategies-fail
Massoudi, A., & Fontanella-Khan, J. (2019). Fiat Chrysler in talks to forge extensive ties
with Renault – Carmakers seek to join forces in deal that could see FCA one day join
broader alliance. Financial Times
Matthias K, Thibaut, M., & Andreas, T. (2019). McKinsey Center for Future Mobility
“Analyzing Start-Up and Investment Trends in the Mobility Ecosystem”
McGee, P. (2019). BMW and Daimler to invest €1bn in mobility joint-venture. Financial
Times 22nd of February 2019, online
McGee, P. (2019). Daimler invests $100m in Californian battery start-up - German carmaker
announces move for 10 per cent stake as part of electric vehicles push. Financial
Times 16th of April 2019, online
O’kane S. (2019) How Tesla and Waymo are tackling a major problem for self-driving cars:
Data. Retrieved from:
https://www.theverge.com/transportation/2018/4/19/17204044/tesla-waymo-self-
driving-car-data-simulation

QUESTIONS 6