Where to play in the new mobility ecosystem?
Decisions made now are likely to determine the future for many companies, with some positioned for success, and others facing a fight for survival.
As incumbents, new entrants and start-ups compete for a share of the mobility market, each should consider where to play and how to win. Companies only have a small window of opportunity to get ahead and position themselves to shape the future ecosystem. This means being a fast mover, by securing beneficial partnerships, acquisition targets and structuring internal financial, business and operating models.
In this disruptive context, organisational leaders may well feel overwhelmed and uncertain of the steps they need to take. And while the shape of the future mobility ecosystem remains unclear, it is already in the process of transformation.
Through our extensive work with existing and new mobility players, we observe a consistent set of disruptive themes. The following framework is designed to help players develop appropriate strategies to overcome these challenges.
disruption Fighting for
the customer Un-stranding
Understand the nature, timing and potential exposure of disruption.
Fighting for the customer
Understand the future customer and decide your relationship with them.
Repurpose or pivot your current business model and assets.
Use and handle the increasing volume of mobility data to drive effective decision making.
Searching for scale
Scaling proven ideas and constructing an operating model for the new world.
The first challenge for many businesses is to understand the nature of disruption: the likelihood, and scale and timing of potential impacts. In some cases, uncertainty and lack of tangible, proven options may cause ‘action paralysis’, as organisations wait for others to make the first move. In other cases, a few enlightened individuals may struggle to convey a sense of urgency across their organisations.
Whilst these delays may represent a significant risk, there are ways to accelerate change. Organisations could distil the key leading indicator(s) of disruption (for instance, for a fuel forecourt business this may be national EV adoption rates), and monitor for when corrective action needs to be taken. This may take the form of a ‘playbook’, with clearly defined trigger points and associated actions. A more proactive approach (seen in the rise of corporate venture capital in the mobility sector) is to devote resources to small-scale pilots or ventures, to test new ideas and provide potential platforms for future growth. New governance may be needed to enable a swift reaction to market changes.
Find out more on (Stage one of mobility disruption: Decoding disruption.
With emerging value chains, breakdown of sector boundaries and the rise of aggregator business models, there should be increasing competition for consumer ownership. At the same time, shifts in consumer preferences are placing further pressures on incumbents, who may not have the agility to quickly launch new products, due to the legacy of older manufacturing plants and IT systems. For instance, as consumers move away from personal vehicle ownership towards on-demand mobility services, their direct relationship may shift from the car brand to a vehicle-agnostic platform such as Uber or Lyft. At the same time, technology giants loom large over the sector; these players have both the brand and the customer journey to significantly disrupt the industry.
In response, some players are creating joint propositions across different parts of the value chain to improve customer convenience and capture share. Examples include the bundling of insurance and servicing into a flexible vehicle subscription, or combining home energy with roaming EV charging. In both cases, the ability to develop cross-sector partnerships and alliances quickly is key to securing capabilities, suppliers and channels.
Highly specialised companies could also aim to dominate non-customer facing segments of new value chains. However, they should be wary of becoming commoditised, and work with future customer ‘owners’ to ensure they deliver real value.
Find out more on (Stage two of mobility disruption: Fighting for the customer.
Many players view the evolving mobility landscape through the lens of their existing assets. They need to ‘un-strand’ these assets and position themselves to access emerging opportunities.
Consider a parking lot in a city centre. In a world of AV taxis, vehicles may no longer require long and expensive stays. Instead robo-taxis, powered by algorithms, will either be constantly on the move or stored in out-of-town depots. But this opens up opportunities to re-use the land – perhaps as a logistics hub for last-mile urban AV deliveries. Far-sighted owners may even have put in place the legal and physical infrastructure to quickly execute such a change. And they may also have realised the benefit of bringing in a partner to provide complementary capabilities, bringing competitive advantage and increasing speed to market.
Find out more on (Stage three of mobility disruption: un-stranding assets.
Given its immense potential value, data is often referred to as ‘the new oil’. In future, more data will be captured than ever before, through connectivity, sensor technology and the needs of AV, with consumers increasingly willing to share personal information in exchange for an appropriate return.
Making best use of and monetising this data is likely to drive two trends:
- The continued use of data to better understand customers, and drive value through better targeting of individuals and organisations.
- The rise of data aggregation and processing platforms that share pooled data from disparate sources for mutual benefit. For example, EV charger usage data could be fed to chargepoint operators, power utilities, consumers, OEMs and city planners to create the most efficient network.
Find out more on (Stage four of mobility disruption: Monetising data.
Once the nature of the potential disruption is understood, and an appropriate response designed, the next step is to scale the new proposition. This may involve rolling out a successful pilot of a new mobility business model (e.g. MaaS aggregator platform), or developing a leading-edge technology (e.g. solid state battery).
In the new mobility landscape, the ability to scale and commercialise quicker than your competitors could be critical; platform models, data-driven AI, manufacturing supply chains and brands all benefit from scale economies. Organisations should therefore consider how they grow across multiple markets and segments, and how their supporting operating model is structured. Financing growth is another important issue; funds will need to be diverted from other projects, sourced from the market, or spread across partnerships or other innovative mechanisms.
A successful strategy calls for alignment of financial, business and operating models – something that can be often neglected.
Find out more on (Stage five of mobility disruption: Searching for scale.
Collaborate or commiserate: Working together to build a new mobility ecosystem
We would like to offer one final observation: successful examples of collaboration in disrupted industries suggest that no single company or sector can drive change.
A unique combination of cross-sectoral capabilities is required to build enduring solutions to move people and goods. In short: collaboration is not an option, but a necessity. This may take the form of mergers, acquisitions, partnerships or strategic alliances, to address considerations such as speed to market, scalability, flexibility, risk appetite, long-term vision and Intellectual Property (Strategic alliances: a real alternative to M&A?, KPMG International, November 2017).
There are many examples of technology companies and OEMs collaborating (e.g. Daimler-Uber, Hyundai-Cisco, VW-Nvidia), combining deep automotive experience with new, disruptive technologies. Some collaborations may be long-term, others transitory to meet immediate capability gaps. But speed is imperative to stay ahead.
We are at the beginning of a truly transformational journey. The strength of consumer demand and regulatory pressure, and the rate of change of technological development for vehicle electrification and automation, are increasing exponentially. This disruption is likely to be significant and bring great opportunities and risks.
We believe we have offered some thought-provoking insight into the impact of disruption and the potential responses. The Mobility 2030 journey has begun, and one thing is for sure – there will be no going back.