Reply to these two other posts with at least 3-4 sentences of constructive feedback and new information/ideas.
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Electric car poses a legitimate disruptive threat to companies making gasoline-powered automobiles. There is an opportunity for profitable growth. To begin to answer this and other questions one must realize that at present electric cars cannot be used or marketed in the same way as gasoline powered cars because they don’t satisfy the basic performance requirements of the market. The second the thing to realize is that you can’t predict just by research what the market for electric cars will be. One must be willing to go into this to first learn more about the electric car and how people will use it. You must watch carefully what customers do, not simply listen to what they say because as they drive and get familiar with the electric cars they may discover new uses for them. Observing how people use the product in their natural environment is the only effective way to gain insight on use and what people find most attractive about the product.
Electronic cars can’t be used in mainstream markets, as stated before they don’t have the basic performance requirements of the market. Christensen meant by the statement “they (electric cars) offer a set of attributes that is orthogonal to those that command attention in the gasoline-powered value network” that there are too many variables in the research of electric cars and the mainstream doesn’t think it’s worth a lot of attention. Christensen would not follow the lead of other automakers in search for customers because they would go to the mainstream and he knows that is not the market for the electric car. You should not hold back and wait for break through technologies because this has seldom worked and early entrants into disruptive technology markets develop capabilities that constitute strong advantages over later entrants. No one can learn from market research what the early market(s) for electric vehicles will be because that market has yet to be identified.
Christensen’s business plan will be a plan for learning, not one for executing a preconceived strategy. He guesses at a market for parents with teenage kids. Disruptive technologies and new distribution channels frequently go hand-in-hand because of economics. This should lead to a spin off organization that is dedicated to electric cars. This is the best way to be efficient and to commercialize electric vehicle technology.
Some technologies have an immediate, and sometime exponential, disruptive impact and some technologies are impact in unexpected ways, at a pace that can be overlooked by established firms. I believe that electric vehicles are a tortoise disruptive technology. There are modest improvements, although, the most important development will be a battery that meet the demands of today’s market that will allow a vehicle to increase in speed quickly with desired modern features. However, the disadvantages concerning the electric vehicle should not be viewed as detrimental to its advancement.
As Christensen stated, the vehicle is a technology that will reveal that one should be “careful to keep asking the right question…” The drawbacks of the vehicles are likely to demonstrate their overall performance is what propels it into an increasing disruptive technology. As noted, the “initial value network” is not the final analysis on electrical vehicles because the weaknesses of the vehicle “will be seen as strengths.” When I read the author’s reasoning, I immediately agreed that I would have preferred to have purchased an electric vehicle for my teens that would have slowed them down. During the first year my son started driving, he received a ticket for doing eighty miles per hours on U.S. 19 (in a fifty-five mile per hour zone). He discovered that his FOP “courtesy card” could not get him out of the ticket; however, this could have been avoided, more than likely, if he had been slowed down earlier. At the time, I drove a Ford Escape (which has an incredible pick up with the EcoBoost feature). In fact, my son told me, “It’s your fault because you let me drive your car.” Of course, he was kidding about who bore responsibility but he did make a statement that supports Christensen’s belief parents would consider the vehicle for its “weaknesses.” One of the reasons that I would not purchase the vehicle is due to its unreasonable price tag, especially for a young person. Most average parents do not spend unreasonable funds on first-time vehicles for their teens because they are likely to have more accidents (as evidenced by their higher insurance premiums.)
Certainly, electric cars can be used in mainstream markets. It appears that it is referred to as “orthogonal” due to the car being able to produce transformative results while appearing to have zero value. Instead, there are many viable markets or an electric vehicle, particularly in areas where fast recharging does not require the same demand as in the United States. As more green communities become a reality, electric vehicles are the predominant mode of transportation. This is evidence in states such as Arizona, California, and Florida. According to the Commonwealth of Massachusetts:
“Participation in the Program has grown steadily since the first group of 35 municipalities achieved designation status in July of 2010 to include more than half of the diverse cities and towns of the Commonwealth and nearly two-thirds of the population (Becoming a Designated Green Community, 2018).”
Despite many regulations being lifted by the current administration, many people concerned about the environment will continue to embrace the electric vehicle. I believe this is because it satisfies the need to be a good steward of the Earth, a personal responsibility, over comfort, feature, and convenience (the typical factors one can view on the likelihood of a disruptive technology impacting existing firms significantly).
Christensen believes no one can make an educated guess, at this time, about the market that will emerge successfully as the target group. He has a certain belief it is not the “established automobile market segment.” He believes their assertions and assumptions are “trained on the wrong target.” He believes electric vehicles will have a later-entrant market. to move the “disruptive technology upmarket, toward the mainstream.” He believes the weaknesses of electric vehicles will be the positive attributes that actually propels them in their “emerging value network.” Christensen believes that the focus should be on “uncovering somewhere a group of busters who have an undiscovered need for a vehicle that accelerates relatively slowly and can’t be driven farther than 100 miles.” This goes back to my belief that teenagers are a great segment of the market for such a vehicle because a parent can limit the speed and distance that their new driver can travel in the car. Also, retirement communities are being established by meeting all the needs within the community. The retirees won’t need to travel far or fast. As George Burns said, “If I have to run, I don’t go (George Burns, 2018).”
Both new distribution channels and disruptive technologies are similar based on “economic(s)” according to Christensen. He believes that they both tend to have “very clear formulas for making money” either by “selling low volumes of big-ticket products at high-margins or selling large volume at razor-thin margins hat cover minimal operating overheads.”
Overall, I believe there is an emerging market for electric vehicles and it is approaching at the rate of the tortoise. Like dandelions, the electric vehicle will emerge and established automakers will realize they are like the homeowner who missed catching on at the sight of the first dandelion. Too often businesses, approach the market like the hare in the story about Aesop’s Fables, “The Tortoise and the Hare.” Lessons learned early in life still have great, ageless value and wisdom!