As businesses work through their response to the disruption ahead, they will need to understand which assets and capabilities are going to be valuable in the future, how to repurpose potential ‘legacy’ assets, and how to mitigate the risk of obsolescence in future investments.
Each stage of disruption represents a step on the journey to growth where there is an opportunity for organisations to take a lead. Click through each of these sections below to understand more.
Many players view the evolving mobility landscape through the lens of their existing assets. A key theme for these organisations will be how to ‘un-strand’ legacy assets and position themselves to access emerging opportunities.
Consider the example of a city-centre car park. In a world of autonomous taxis, vehicles may no longer need to stay put once they reach their destination. Instead, these robo-taxis could move directly on to the next job, return to a depot or even circle the streets.
However, these assets could be repurposed. The car park, for example, could become a logistics hub for last-mile urban autonomous deliveries. Owner of such assets may have foreseen this and built in ‘pivot-potential,’ with the legal and physical infrastructure in place to execute a quick change. They may also have realised the benefit of bringing in a partner who can provide complementary capabilities, providing an advantage over competitors and increasing speed to market.
Key questions you may ask:
Consider diversifying your business model across different segments, product categories or even sectors to mitigate the impact of disruption. It may be important to consider clustered, second-order and supply chain impacts. For example, the rise of electric vehicles are expected to impact demand for specific parts used in those vehicles, as opposed to traditional internal combustion engine vehicles, which will affect tier 1 and 2 suppliers. Related industries, such as rental and leasing, and auto retail, are also set to be impacted.
Invest in a parallel ‘future newco’ to test and grow a new business model, whilst continuing core business activity. This can help to manage the potential clash of cultures and capabilities from different types of organisation. For example, a digitally-enabled start-up vs a scaled group with rigorous risk controls. Ensuring continued strategic alignment and sharing of resources at the top level is key to the success of this approach.
Identify adjacent market entry opportunities, such as new geographies. For example, a number of Asian car makers are expected to enter European auto markets, particularly where their EV capabilities can fill a market gap.
Build flexibility into your assets, for example, by using relatively short-term, revolving leases (which give you the ability to exit) or securing the ability to repurpose potentially valuable assets in the long run (e.g. freeholds for city centre real estate).
Partner to share risk and assets, for example by sharing investment and production costs and benefits. We’ve seen a number of OEM alliances emerge to jointly develop and produce electric vehicles or mobility services, as well as autonomous vehicle development tie-ups with technology companies.
Platforms & partnerships