Managing and Controlling the principles of E-Business in Automotive Industry

Introduction

The report is based on the concept of controlling and managing the principles of E-Business or E-commerce in the automotive industry. The Automotive Industry comprises of companies and activities that are involved in manufacturing or producing automobiles like vehicles, along with its components or parts like engines and the bodies of the vehicles. But, components like tires, fuel, and batteries are not a part of the Automotive Industry. In automotive industries vehicles like trucks, sports vehicles, cars, motorbikes, and pick-up vans are the essential and principal products. On the other hand, commercial products like heavy delivery trucks and tempos, and huge transport trucks called semis are secondarily important for the industry. In this report, a discussion on the impact of e-commerce and other digital business models that falls on the industry will be reflected, and changing in forms of customers’ engagement along with the organizational cultures of the industry will also be provided. Finally, digital technologies like Cloud, IoT, Big Data, and Artificial Intelligence will be described briefly along with their impact.

Impact of e-commerce and other digital business models on Automotive Industry

E-commerce has several positive as well as negative impacts on the Automotive industry. The companies in the automotive industry identify and understand that their customers and other players in the market chain, choose to buy and sell through the median of online channels or online distribution channel. Moreover, the automotive industry also enjoys several positive impacts via E-commerce and other business models. E-commerce helps automotive companies to identify and understand the taste and preferences of their customers (Kumar et al. 2017). It has also made the activities used for understanding the nature and habits of the customers easier to practice. E-commerce helps the automotive industry to gain targeted profits by cutting and reducing the costs of the automotive goods that help the companies to maintain and control their brand names (Becker, Joachim, Koldewey, Reinhold & Dumitrescu, 2020). The main impact that has affected the Automotive Industry positively is that it assists the automotive companies to reduce or avoid the number of intermediaries and their roles which in turn helps the companies to boost or uplift their market share. According to the automotive industry, e-commerce and other business model had to struggle hard in the initial years. But, gradually with time passing by, e-commerce and other business models have become a vital aspect or median through which the companies can gain maximum profit and boost their market share by supplying goods via online channels. In the case of marketing automotive goods, the first and prime element was known as the aftermarket. Presently, automotive companies are gaining maximumly targeted profits by supplying the accessories and parts of automotive vehicles. E-commerce and other business models have also helped the automotive companies by amplifying the supply of automotive goods as well as reducing complicated and complex portfolios. Business models of E-commerce that throws both positive and negative impacts on the Automotive Industry are Business to Business (B2B), Business to Customer (B2C), Customer to Business (C2B), Customer to Customer (C2C).

Impact of digital technologies on Automotive Industry

Digital technologies are completely taking over the Automotive Industry and without applying the digital technologies the automotive companies will rattle around and there will be a breach between the industry and the market. Digital technologies like Cloud, IoT, Big Data, and Artificial Intelligence have different impacts on the Automotive companies as well as on the Automotive industry as a whole. Each technology and their impacts are discussed below:

Cloud: The impact of cloud computing on the Automotive industry is that it positively helps the companies by processing the data and making the storage system function quicker and faster so that the processed data can be stored rapidly into the system. It also helps the company to make sure that the data that are processed are stored safely so that no hacking can take place. Therefore, it reduces the risks of losing the processed data during the time of handing the cost economy to the users ("Infographic: Cloud Computing in the Automotive Industry", 2020).

IoT and Big Data: IoT and Big Data have several impacts on the Automotive industry. It can be stated that the Automotive industry was facing various issues like depletion of non-renewable energy and an increase in global warming. Due to global warming issues related to connectivity, safety, accessibility, and globalization occurred. IoT and Big Data not only provides services to automotive goods like vehicles but also provides safety and security to automotive devices like mobile phones ("Infographic: Cloud Computing in the Automotive Industry", 2020). IoT and Big Data have improvised the channel and the quality of communication between the vehicles. Both the digital technologies provided several major safety features that helped to improve and implement a high-speed network for pursuing the process of communication.

Artificial Intelligence (AI): According to the analysis provided by Future Bridge, it can be stated that presently, Artificial Intelligence (AI) has become the backbone of automotive vehicles like self-driving cars and digitally connected cars. As per the estimation provided by the market, it can be observed that by 2030, 85% of cars and other vehicles will become Autonomous ("Artificial Intelligence Reshaping the Automotive Industry - FutureBridge", 2020). Artificial Intelligence (AI) has several positive impacts on the automotive industry as it helped in improvising and maintaining the connectivity of the automotive vehicles and by assuring the safety of the vehicles. `

Customer Engagement changes in Automotive Industry

Customer Engagement (CE) is the procedure through which the customers engage and interact with the company. The initiation is provided by the company and the customers and the provided interaction or engagement is chosen by the customers. Customer Engagement helps the company to set several objectives and goals that are needed to be achieved by the companies of every industry to increase its profitability. Customer Engagement also helps the company to maintain and improvise its brands' name according to which they can rely on the profits that are needed to be achieved.

In the case of the Automotive industry, several Customer Engagement changes have been evaluated and determined currently. The changes in customer engagement and interaction with the automotive companies helped the companies to understand the preferences, habits, and nature of the customers. Customer Engagement changes like- change in purchase frequency of the customers, customer loyalty, repeat purchase rate of the products by the customers helped the companies to understand the needs of the customers. This also helped the companies to maintain the brand names along with their loyalty to the customers. Moreover, Customer Engagement Changes also made the automotive companies active as the companies could create products according to the preferences of the customers. To maintain the purchase frequency, the automotive companies had to introduce products frequently by selecting a proper distribution channel (both online and offline). Furthermore, Customer Engagement changes were also responsible for the increase in the profitability of the Automotive Industry as the daily increase in globalization and the increase in technologies along with e-business models have made every customer feel the need for automotive devices and automotive vehicles, due to which the customers tend to buy more automotive goods. That means the demand for automotive goods rises and the Automotive Industry starts making the desired profitability. This also changes the level of customer loyalty as it is supposed the companies provide the desired amount of products according to the preferences of the customer at an affordable price. This will make the customers loyal to the company which in turn will also increase the purchase frequency rate. Finally, it can be stated that the Automotive Industry has faced several Customer Engagement changes that have increased the profitability level of the Automotive companies.

Organizational Cultures changes in Automotive Industry

Changes in the organizational culture can be both positive or negative. Organizational Cultures are the most vital component that is important for pursuing proper leadership skills. The organizational cultures help to implement and execute the proper process of communications, controlling the performances, attitudes, and goals of the companies. The Automotive Industry has been following two types of organizational cultures which are Adhocracy and Hierarchy since E-commerce, business models, and other digital technologies are introduced by the companies for maintaining the sales and profitability of the companies. The Automotive Industry has been focusing on the flexibility of the companies and that’s why the industry selected Adhocracy as one of the important organizational cultures that will help the companies to maintain the standard internally and also helps in the process of integration (Abdi et al. 2018). On the other hand, the Automotive industry also evaluated the culture of Hierarchy into the system of the organization. Therefore, the combination of two Organizational cultures has helped the automotive companies to evolve with several new creative ideas and improvise the process of communications. Organizational Cultures are used to measure the behavior of the employees while working in the company. Moreover, it also helps to measure the changes in the behavior and communication skills of the employees according to which the employees are chosen for team development. Organizational Cultures evaluated by the Automotive industry brought some severe changes in the cultures and behavior of the employees in the companies (Chanias & Hess, 2016). Moreover, it also amplified the overall flow of the work and relationship among the team members that increased the level of productivity and the companies started gaining profits in the companies. Therefore, it can be stated that the organizational cultures chose by the Automotive Industry help the companies to control and maintain the behavior of their employees so that the overall workflow can be improvised and proper processes of decision-making and problem-solving can be pursued (Rotjanakorn, Sadangharn & Na-Nan, 2020). So, it can be stated that the changes in organizational cultures of the automotive companies have increased the profitability of the companies.

Conclusion

In conclusion, it can be stated that digital technologies like Cloud, IoT, Big Data, and Artificial Intelligence (AI) have helped the Automotive industry in several ways due to which there are several positive impacts mentioned in the report. It can also be stated that E-commerce and business models have made the automotive industry one of the fastest and largest growing industries because of several technologies and methodologies that are provided by business models and E-commerce benefited the industry in several ways. Therefore, it can be stated that digital technologies and business models have introduced several changes in the customer engagement process as well as changes in the case of organizational cultures in the Automotive Industry which in turn has improvised the process of communication, and safety of the launched goods by automotive companies.

References

Abdi, K., Mardani, A., Senin, A. A., Tupenaite, L., Naimaviciene, J., Kanapeckiene, L., & Kutut, V. (2018). The effect of knowledge management, organizational culture and organizational learning on innovation in automotive industry. Journal of Business Economics and Management, 19(1), 1-19.

Becker, J., Joachim, K., Koldewey, C., Reinhold, J., & Dumitrescu, R. (2020). Scaling Digital Business Models: A Case from the Automotive Industry. In ISPIM Conference Proceedings (pp. 1-15). The International Society for Professional Innovation Management (ISPIM).

Chanias, S., & Hess, T. (2016, June). Understanding Digital Transformation Strategy formation: Insights from Europe's Automotive Industry. In PACIS (p. 296).

Kumar, A., Luthra, S., Khandelwal, D. K., Mehta, R., Chaudhary, N., & Bhatia, S. (2017). Measuring and improving customer retention at authorised automobile workshops after free services. Journal of Retailing and Consumer Services, 39, 93-102.

Rotjanakorn, A., Sadangharn, P., & Na-Nan, K. (2020). Development of Dynamic Capabilities for Automotive Industry Performance under Disruptive Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 97.