Level 7 International Strategic Management Individual Assignment Brief June 2024

Background to Assignment

The planet is becoming more urban. By 2030, more than five billion people — about 60 percent of the world population — will live in cities.
We are also becoming more mobile and more connected. New technologies and business models are pushing aside the privately-owned automobile and other less efficient modes of transportation.

Whether from autonomous vehicles, the electrification of transportation, shared networks of cars, scooters and bicycles, or the advent of 5G wireless, the world of mobility is changing almost daily. Nowhere will that transformation be felt more acutely in the coming decades than in the world’s major cities where increased urban density and congestion make the tasks of creating and maintaining urban transport systems ever more complex.

This is why developing and improving urban mobility is a top priority of cities around the globe. If a city cannot move its people, goods and data efficiently, it is difficult to see how it thrives. Three broad technological trends will be primarily responsible for reshaping urban mobility in every city — digitization, automation and electrification. The sharing (or collaborative) economy, a fourth trend, has led to new business models in which the mobility service provided is more important than its ownership.

SEAT, S.A. is a Spanish automobile manufacturer with its head office in Martorell (near Barcelona), Spain. The firm has been a wholly-owned subsidiary of Volkswagen Group since 1986. The firm is strategically repositioning itself from a vehicle manufacturer to a provider of shared mobility services (i.e. where users pay for transportation only when they need it, rather than owning a personal vehicle that is not used most of the time), especially in increasingly crowded urban areas. As stated by Luca De Meo, the firm’s Chairman:

“We are convinced that vehicles will become the second largest connected platform after the mobile phone and we will have the chance to integrate them into a rich ecosystem. This transformation forces us to innovate and move beyond the scope of being just a carmaker, stretching our value chain towards new mobility services, platforms and data businesses”. As part of this repositioning, SEAT has identified ‘compact urban mobility’ (i.e. short commutes less than 10 kilometres within the city environment, using a small vehicle) as a core area for strategic development.
The firm unveiled its ‘Minimό’ concept vehicle at the 2019 Mobile World Congress to demonstrate.

SEAT’s vision of the ‘compact urban mobility’ of tomorrow. Integrating the fields of electrification, connectivity and shared mobility the ‘Minimό’ is a 2-passenger quadricycle primarily intended for business-to-consumer free-floating carsharing providers* that has been designed to:

 have a considerably smaller ecological footprint (3.1 square metres) than a normal car (7.2 square metres) while providing safe, agile travel and easy parking
 release zero emissions due to its all-electric powertrain
 reduce the operating costs of carsharing providers by 50%, as the integrated battery-swap system means the vehicle rarely needs to be taken to a recharging point
 provide a convenient and smooth digital user experience for users based on hyperconnectivity with built-in 5-G technology
 allow the vehicle – in the future and subject to further development of autonomous technologies - to pick up the user when requested, thereby solving one of the main carsharing user pain points.

Delayed due to the global pandemic and global semiconductor chip shortage, the ‘Minimό’ will now enter into production in February 2024, leaving the firm with only 12 months to decide which city from across the globe will be most attractive for the product launch.

SEAT’s international strategy team have already undertaken some initial desktop research and have identified London (UK) and Singapore as potentially attractive markets for the product launch of the ‘Minimό’.

As an external consultant, you have been commissioned by the team to evaluate which of these 2 potential city-level markets is more attractive to launch the ‘Minimό’ vehicle into and to then analyse the more attractive city-level market in greater detail.

Assignment Tasks

1. Comparative evaluation of 2 markets + identification of most attractive market to enter

2. 5-forces analysis of competition in the carsharing industry in your chosen city

3. Identification of the company’s most relevant internal value-adding activities to support entry into your chosen city

4. Evaluation of relevant modes of entry into your chosen city + recommendation of most suitable mode of entry for the company

5. Evaluation of the potential for the SEAT ‘Minimό’ vehicle to create Shared Value