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CMR 495- Cap Stone
Mini Case Submission Requirements
Each case is worth 100 points
Student is to complete the analysis of the assigned case. The analysis must include the
1. Introduction of the case
2. Thesis statements
c. Purposed Solutions
3. Conclusions & closing remarks about the case
The completed Mini-Case analysis can be summarized using PowerPoint or Word
(equivalent software is fine)
Please email me the final summary prior to class time
It is acceptable to work as a team on each case study, BUT each case study
should reflect the work of the individual student, not the team
Mini-Case Response – Mini-Case #18
This mini-case response is concerned with Mini-Case #18: “Standards Battle: Which
Automotive Technology Will Win?” as described on page 478 in the Rothaermel 3e text.
The relevant text chapter is Chapter 7. The material presented within the mini-case briefly
describes efforts by several major automobile manufacturers and newer-entry
manufacturers to address the issue of replacing the internal combustion engine as a
primary source of power for personal automobiles. The mini-case explains that there is
currently no consensus among the manufacturers regarding how to proceed and that the
pathway forward is not necessarily clear-cut.
Key problems/issues identifiable within the mini-case include:
• Is the impending demise of the internal combustion engine a foregone conclusion
and, thus, the alternative power projects by the manufacturers a necessity or is this
work more exploratory in nature?
• Assuming that the internal combustion engine does have only a short remaining
lifespan, is there a solid understanding of what criteria any new power source would
need to meet?
• Is it possible to determine which company and/or technology is likely to be
successful, under this scenario – or is too little known at present?
Thesis statement: Based on an analysis of the available mini-case materials and the
relevant literature, it is likely that routine alternatives to the internal combustion engine will
be needed within a relatively short timeframe. It is equally likely that multiple alternatives
will be under exploration and offer legitimate benefits for consumers in the future with a
lengthy period of technology optimization involved before a clear “winner” emerges.
To help place this mini-case into perspective, it is useful to step back briefly from the
materials presented to examine the factors that have caused the automobile industry to
reach the crossroads described in the scenario in the text.
The internal combustion engine has been the “gold standard” for self-propelled vehicles for
more than 100 years. Automobile manufacturers have consistently improved their offerings,
resulting in higher levels of power, greater reliability, and length of service; and also, greater
efficiency with less environmental pollution. These efforts have effectively extended the
lifespan of the internal combustion engine beyond what might have been predictable 30-40
years ago, but they have not permanently addressed three issues that continue to signal an
impending need for change.
First, using an internal combustion engine requires the simultaneous use of complementary
products such as oil and gasoline or diesel. These fossil fuels are in diminishing supply, are
subject to political and geographic constraints, and have a price structure that is both
unpredictable and generally upward trending. The supply is not limitless, even if there is no
widespread concern of running out within a few years.
Second, environmental factors are continuously increasing in importance with the pollution
of even the cleanest burning internal combustion engine a subject of great concern
worldwide. Global warming is perhaps the most visible symptom of this issue now that
pollution controls have largely decreased visible smog in many heavily populated areas.
This situation places extra pressure on the internal combustion engine as an out-of-date
Third, alternative propulsion systems are rapidly gaining ground in terms of the underlying
technology, reliability, price of entry, and availability. There is a great deal of money to be
made in reducing these new technologies to practice and even more money to be made if
one specific technology becomes dominant.
Concurrently, personal vehicle consumers continue to become more sophisticated in their
expectations regarding transportation. New propulsion technologies are popular topics of
discussion even if not yet broadly in use. For example, the majority of consumers willing to
explore alternative sources of propulsion today would be termed innovators or early
adopters – a small fraction of the total number of individuals purchasing new cars
(Rothaermel, 2017, p. 227, 231). For any new propulsion system to take hold; the
technology, marketing and financial “bugs” would need to be largely worked out of the
With the long-standing successful history of the internal combustion engine, consumers will
also be wary until the performance/reliability equation of any new system has been fully
solved. This is largely the issue of value in the consumers’ eyes as they look for vehicles
that represent daily transportation and not something “exotic” for weekend use only. None
of the new technologies available today, with the possible exception of the gas/electric
hybrid models have come close to securing the stamp of approval by consumers needed for
Again, with the possible exception of the gas/electric hybrids, new propulsion technologies
have not yet established a reputation for convenience with consumers. Full electric models
lack driving range and require frequent recharging. As counterpoint to this statement,
however, a study on real versus perceived lack of range in electric vehicles showed that to
many consumers, their apprehensiveness about not being able to quickly recharge their
electric cars when needed overshadowed any real issues related to recharging due to the
actual lengths of the trips customarily taken under most driving conditions (Franke,
Neumann, Buhler, Cocron, & Krems, 2012). Hydrogen fuel cell models have no readily
available way to replenish fuel at all, except under very carefully controlled conditions and
locations. By contrast, the internal combustion engine enjoys the “get in, turn the key and
go” freedom that consumers favor and have become accustomed to in personal
Looking at the new propulsion technologies described in the mini-case, they can be
classified according to the degree of innovation present within their development and
knowing this classification up front helps to understand how they may be perceived. For
example, gas/electric hybrids are classified as an “incremental innovation” because they
build on existing technologies and largely serve existing markets (Rothaermel, 2017, p.
232). All-electrics and hydrogen fuel cell vehicles represent “radical innovation” since they
involve entirely new technologies and/or combine existing knowledge with entirely new
ways of thinking (Rothaermel, 2017, p. 232-233).
The material presented in the mini-case write-up does an excellent job of identifying the
current new technologies competing to take the market share away from the internal
combustion engine, but it is much less successful in providing details regarding which
alternative technology is likely to succeed in the long run. Potential alternatives are
discussed in terms of the name of the automobile manufacturer(s) best known for their
development at the present time. Three possibilities exist, each of which may be developed
into a detailed alternative to the internal combustion engine:
1. The all-electric alternative – this is the technology most frequently associated with
Nissan and Tesla, although Chevrolet (GM) and others have viable entries in this
market as well. With this alternative, drivers would not rely on fossil fuels at all. All
electric cars are efficient, smooth, and can be very reliable. However, they are
expensive to purchase and the operating range is severely limited. Work currently
underway to create a network of rapid charging stations sounds promising, but
consumers rightfully question if these stations will be confined to metropolitan areas
(Franke, Neumann, Buhler, Cocron, & Krems, 2012). How long will it be before
charging stations are available in less-populated regions of the country?
2. The gas/electric alternative – this is the technology most frequently associated with
Toyota, but Ford and several other manufacturers have viable products in the
marketplace as well. With this alternative, drivers are not forced to rely solely on
electricity since small, efficient internal combustion engines are still present to a)
charge the batteries in the vehicle and b) provide direct power to the wheels if/when
the use of electric motors is not optimum. These vehicles are also expensive to
purchase as compared to conventional internal combustion engine vehicles, but they
do not suffer from some of the worries associated with the all electrics since it is very
highly unlikely that drivers would ever be stranded with no way to operate their
vehicles as long as standard gas stations still exist (Sadek, 2012).
3. The hydrogen fuel cell alternative – this is the technology most frequently associated
with Honda and BMW and is not nearly as well-developed as the two alternatives
above. Rooted in the rocket industry, hydrogen fuel cells are powerful, safe to
operate, and very reliable; but they are also extremely exotic for everyday
transportation and there is virtually no network set up for servicing vehicles with
hydrogen fuel cells or even replenishing their fuel. Hydrogen fuel cell vehicles also
carry a potential safety stigma with consumers who may not understand the
technology and this will require consumer education to overcome these fears along
with all of the other hurdles of the new technology (Jiang & Xie, 2014).
It is not possible to reject any of the possible alternatives out of hand, since given enough
time and capital for development any of the three alternatives is likely to present a viable
alternative to vehicles powered solely by internal combustion engines. However, if one
differentiates between long-term solutions and relatively short-term solutions, alternatives
#1 and #3 begin to look less viable. The reason for this probably has more to do with the
lack of infrastructure to support large numbers of vehicles using these technologies day-in
and day-out than it does with the technologies themselves. This lack of infrastructure
complicates these alternatives because automobile manufacturers are not positioned to
create such infrastructure (their core competencies are far from what is needed) and
diverting resources to bring about such infrastructure would slow development of the
technologies themselves. Not to overstate the infrastructure difficulties, however,
researchers have shown that all-electric servicing systems can be well-integrated with
existing gasoline service facilities, at least, in theory (Jiang & Xie, 2014).
Stated in slightly different terms, it is important to be clear that large-scale conversion to all
electric or hydrogen fuel cell vehicles may be feasible, just not at this time. This is a very
different scenario than ruling out these alternatives on a permanent basis. Sadek, for
example, observes that moving directly to all-electric technologies may be exactly the right
thing to do for urban areas where distances traveled are shorter and infrastructure needs
may be easier to meet (Sadek, 2012). Thus, while the development curve may be steeper
or longer than for gas/electric hybrids, this is not to say that the other alternatives will not
catch up or even surpass gas/electric hybrids at some point in the future.
At the present time, the most specific and realistic solution to the issues plaguing the
internal combustion engine is to encourage and support the development of gas/electric
hybrid vehicles on a broader scale, largely following the already-successful work of Toyota,
Ford, and others that have seen this technology as a viable technology. This proposed
solution is specific because it focuses resources toward one technology so that maximum
forward progress can be made in a relatively short period of time. This proposed solution is
realistic because the technology is already proven with hundreds of thousands of vehicles
on the road today.
This solution was chosen because it has the shortest pathway to reach a demonstrable
improvement in self-propulsion for personal vehicles. A number of factors support this
decision, not the least of which is the aforementioned large number of vehicles already on
the road using this technology. The infrastructure to support daily use of these vehicles is
already in place and public acceptance is high. Thus, there is relatively little resistance to
be encountered as this technology moves forward. The fact that several companies are
already heavily invested in the technology increases the probability that it will continue to
evolve with time.
Reviews of the gas/electric vehicle concept and available executions have been largely
favorable and reliability issues have been largely addressed. For consumers, the comfort
zone of still having the proven internal combustion engine “on board” adds an additional
level of peace of mind. Moving ahead to capture the purchases of the early majority will
also stimulate the success of this proposed solution.
Any of the proposed solutions would rely on essentially the same strategy for
implementation. These approaches could directly benefit the chosen solution in the shorter
run, but also benefit the other alternative solutions over a longer time frame. Two specific
strategic action steps are suggested.
1. Invest in R&D – none of the technologies discussed here are considered to be
mature at present. The gas/electric hybrid is considerably further along the
development track, but is still not fully optimized. Thus, investment in both upstream
R&D on the basic technologies involved and in downstream R&D (otherwise known
as product development) to engineer consumer-preferred final product versions is an
important first step. Firms that fail to invest at this point will likely lag behind and
could lose any hope of establishing a competitive position in the marketplace.
Government assistance through R&D tax breaks could help with this step in the
strategy (Sadek, 2012).
2. Form Strategic Partnerships or Alliances – not all firms will be able to “go it alone”
with expensive new technologies, but this does not mean that they should drop out
of the race. By forming partnerships or alliances, these firms should be able to
leverage their own core competencies and rely on others to fill in important gaps.
Examples might include partnering with raw material or component suppliers. Other
alternatives might be to look for alliances or partnerships with firms who could help
build the infrastructure for maintaining and servicing vehicles with the new
technology over the expected consumer life of these products. Rothaermel terms
this approach as “open innovation” since it tends to blur the boundaries of
organizations and allows them to benefit from both internal and external ideas
(Rothaermel, 2017, p. 238).
The automobile industry at large should be encouraged to address the issues posed here.
Singling out one firm or even a small set of firms is not likely to be effective as the ultimate
technology replacement(s) for the internal combustion engine will have a profound influence
on the ability of all firms within the industry to do business.
This mini-case has presented an intriguing situation for analysis since none of the available
scenarios/solutions is likely to result in a “bad” outcome. The preferred alternative, moving
ahead quickly with more gas/electric hybrid technology, offers a faster solution and is likely
to bring substantial reductions in the use of fossil fuels via internal combustion, plus help
address the environmental concerns. The other alternatives, however, could result in even
greater gains at the cost of extended development time and should not be shelved even if
they are temporarily relegated to a lower priority status.
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