The Electric Car Company
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The “Re-THINK-ing THINK”: The Electric Car Company is a company that assembles and manufactures cars that uses electricity, i.e. electric cars. These cars are said to be travelling at a speed of one hundred miles with standard rechargeable battery per hour. The company has a plan of launching its THINK city battery-operated electric vehicle in North America. The think North America is a joint business between the Norwegian electric vehicle maker Think Global and the United States venture firms Rockport Capitals and Kleiner Perkins. The idea to venture into the U.S market has rested on Elkhart, Indiana as the location for U.S’s first electric car manufacturing industry. Meanwhile the company has decided to maintain its headquarters at Oslo Norway. The investment package into the new market in U.S is said to be worth $43.5 million and it’s expected to create employment opportunities to more than four hundred Americans by the year 2013.
The THINK city project of manufacturing electric cars is based on marketing the THINK city to be in form of a fun, clean, economic, environmentally and sound second vehicles for individual persons. Contrary to the previous market that the major customers were the fleet buyers for the company vehicles who includes the governmental bodies, companies that had valued the association with “green” transport as well as the rental agencies. The company is currently eyeing for a long-term customers from individual persons in the THINK city. This includes the municipalities and cities, early adopter pilot programs, utility companies and corporations committed to sustainability as a strategic focus. It’s planning to produce more technologically conscious baby boomers that are sufficient two-seater and environmentally friendly for women who want a car for local shopping that could also carry a child as well as for young urban professionals who may need cool cards for individual purposes.
This is an effective long term strategy for the company as the population in the Indiana City is large enough to support the company to manufacture and sell at least twenty thousand cars per year from the year 2011. Besides that the majority of the target customers are economically bits stable to enable them have some extra dollars to spend in such model of cars.
The THINK city plan will be effectively situated since the Indian state authority and the Elkhart council incentives are very much encouraging to the new industry to establish itself in North America. The pumping in of three million dollars to the company by the state authority as an incentive to boost the industry to establish itself in Elkhart can assist the company to lower the prices of the first cars in 2010 to around $30000 which is expected to lower even further to $20000 in the next coming years. This will also act as an incentive to the individual buyers in North America too to purchase extra cars since their prices will be manageable. In turn the company will be encouraged to produce even more cars so as to satisfy the market demand and in the essence it will be making more profits.
The new American government’s motive of cooperating and assisting financially the worldwide automotive industry again makes the THINK city the most favorable place for the company to establish its business. The U.S government’s current program that involves reorganization of the automotive industry by the extension of loans to boost their operation can assist the company to find immediate solutions to its short and long term financial constraints. The massive extension of $25 billion by the U.S to the Advanced Technology Vehicle Manufacturing loan program can help the industry to finance its installation of machinery and the commencement of the activities. This is another incentive to the company that will make it to lower its prices so as to attract more buyers which will translate to more profits. Necessary to note again is the existence of other vehicle manufacturing industries in the city like the Tesla motors which has made sure that there is an efficient, knowledgeable and experienced flow of manpower in the city to help the new company run its operations. The company will be relived with the task of extensively training its labor as majority of those hired from the city are already knowledgeable. Thus the city is the best choice for the company and that is why they chose it
Company’s Core values proposition;
The company has a core value proposition of assembling and manufacturing electric vehicles especially cars that are of different models to suit each individual’s lifestyle. The individual lifestyles in the city range from women going for shopping to young professionals who may need automotives for individual purposes. The electric cars the company will produce will also be environmentally friendly to the city. The company can resonate with its selected group of customers by designing a car that aptly suits each group’s lifestyle.
For instance for the mother of one who may wish to have the second or third car to do shopping with together with the child, the company has modeled a two-seater car to accommodate the two and for young professionals and trendsetters too who may wish to enjoy life or have a change in the world with cool cars, the company has designed a mdel for them. For organizations such as the municipalities and local governments which may wish to have vehicles of low operating costs and partially complies with the tailpipe-emission regulations, the company is capable of producing environmentally friendly vehicles. Thus the company can ensure that its core values in the market are met and the customers’ desires are met.
The company’s strategy in Europe;
The THINK’s plan for Europe involves the production of cars that addresses the immediate problems, satisfied the needs of both the urban and the suburban dwellers who wanted the practical city cars. In within these cars plan for the city dwellers in Europe, THINK has managed to solve the congestion charges and parking difficulties at low costs that were limitations to city driving in Europe. This criterion has made the THINK city successful in Europe.
Unlike in Europe where the success criteria is based on addressing the immediate problems the people in the urban and suburban areas have such as the congestion difficulties and the parking difficulties, in U.S the strategy employed is totally different. This strategy includes the manufacturing of the automobiles that suits the lifestyles of the city dwellers such as the women with one or two children who may wish to do shopping with them and the young professional who may wish to have a change in their world.
Three strategic partners in U.S;
To drive adoption in US, Canny has proposed that there should be three strong American allies and strategic partners. This partner should have political and financial strength together with good imagination and creativity of the highest order. These partners include; Ken Baker; he is the former program manager for General Motors, GM Research department. Ken will bring to THINKs a unique and highly required experience in the commercialization of the volume production electric vehicles to think. This is the much needed experience in THINKs that Ken has gained over several years while working in the automotive and electric vehicle sectors in U.S.
The next person will be Charles Gassenheimer. He has been the chairman and the C.E.O of Enerl Inc. from the year 2006. He has a good experience in automotive lithium-ion production and with his coming he will help in guiding the partnership between THINK and the EnerlDel Company for the supply of EV power-train. The final person is Ulrich Thum who is also the former president and C.E.O of Flat Group, and managing director of BMW China. He has an extensive sales and marketing experience across the globe which he will help THINK to market its automotive in U.S.
THINK’S minimum objectives in five years time;
The THINK Car Company has the following minimum objectives in the next five years; first to make sure that the company at least manufactures 20000 vehicles a year in the THINK city. To expand its business in the whole of Europe and around the world; and to lower their prices as well to the minimum level in order to capture more customers in united states of America. To establish itself fully in Indiana and stop depending on the loans advances from the Advanced Technology Vehicle manufacturing loan program and finally the company should project at providing job opportunities to more than four hundred Americans.
Critical strategic factors that will affect THINK’s U.S rollout;
THINK’s us rollout is strategically planned but the strategy has an external factor that will affect its performance in us. THINK was expecting a financial pack-up from the Advanced Technology Vehicle Manufacturing loan program in U.S but it has proved itself challenging. Funding such a project requires an incentive from the Indiana state and the Elkhart County. But much more is needed from the Department of Energy’s advanced technology vehicle manufacturing loan program in which now almost everybody is applying for including the local companies. So there is no guarantee of getting the loan.
The other factor is the existence of other competing companies manufacturing the same automotive that uses electricity from outside United States. Companies from Asia manufacturing the same cars that use electricity dispose them at cheaper price which is much lower than that of the THINK. This will affect THINK’s plan to rollout the market in United States. But the company can mitigate the risks associated with this factor by first partnering with the Americans who are strong financially and politically ready to offer their hand in the company in terms of finance and operations. Such person includes Charles Gassenheimer, the chairman and the C.E.O of Enerl Inc. The company can as well try as much as possible in future to manufacture and sell electric automotives at lower prices as lower as $20000. This will enable it to counter the competitions from the other external companies especially from Asia.
Internal strength the company needs in both short and long term;
THINK needs to develop some internal strength to enable it succeed in the North America market and in Europe too. Such kinds of strength include building a very strong financial base that will be independent of loaning of any kind . A very strong financial base can build customer loyalty and at the same time the company can be in a position to meet the market demand of at least 200000 vehicles per year.
Apart from that but also the company need to build a very strong management base that is composed of experienced partners from Indiana and other locations such as Charles Gassenheimer, Ulrich Thum among others. These are people of reputable knowledge and experience that will enable the company in management matters both in short and long term. Other like Charles Gassenheimer is a C.E.O of company that can mingle with the \THINK company in order to benefit from the supplies of primary materials like the automotive lithium-ion battery.
The THINK electric cars company should not attempt to pursue the market in the United States alone. The company needs to look for an already strong established company in the country and partner with it in order to realize its dream and objective of manufacturing 20000 electric vehicles a year. To begin its foundation in Indiana does not mean that it has covered the whole of North America. North America is big and to realize the dream of covering almost all of its states will take ages to come for the THINK Company. The company needs companies’ like the GM motors that had long established itself in the continent to partner with. In this partnership, THINK can utilize and benefit from the already established machineries and other facilities for the GM motor assembly in various states. It can thus expand its manufacturing base to not only Indiana states but also to other states whereby there is still ready market for electric automotive.
By partnering with the already existing motor vehicle companies such as the GM motors, the company can be able to benefit from financial assistance in establishing its operation program. THINK company besides the fact that it has recovered from the financial bankruptcy that had hit it, it still has some financial constraints that makes it not to stand on its own in the new venture. That is why we can see the company seeking financial incentives from the state of Indiana and the Elkhart council in order to enable it establishes its manufacturing base. Besides that but also the THINK Company is also applying for a loan from the Advanced Vehicle Manufacturing loan program. This is a clear proof that the company is still undergoing a financial crisis which needs to be addressed by a partnership company which is already established in the field. Had it that the company is strong financially; it could not have gone through what is undergoing. The partnership company can support it financially to establish and expand its motor product to other states in North America.
The THINK electric car company is new in Indian and North America in particular. Their customers are few since very few people have heard about their cars in the market. Despite the advertisements the company has done over the media, it may not be enough for it to sell a good portion of its cars to sustain it in the market where there are still other competing companies with almost similar cars. Thus, THINK Company needs to partner with another company in the market that has already existing customers from whom THINK may sell their cars to too.
This is because of customer loyalty in which the existing company might have gained in market. Thus when their customers see that their company is associated with THINK, they tend to imagine that the new electric cars from THINK cars are also as good as that of their existing company and in the process they will make a purchase. THINK will benefit so much from the introduction of the first customers who will enable it to contain the pressure from their competitors and move on to next level of production.
Not only that but also the company can benefit from joint advertisement with the existing company products in the market. When two companies join hands together in joint advertisings, less is paid unlike when each company is doing it alone. Similarly, THINK will benefit from the existing company customers whom may come to the company to purchase vehicles. In the process of the negotiations the customers may be taken through the THINK product or they may spot the THINK electric cars in their company premises. Thus they will learn about the new cars from THINK Company through their existing company.
The THINK electric car has no option than to partner with the already existing companies in market of automotives. This will enable it to utilize the existing experienced management and man power without poaching the management at a very high price from such existing companies like it is doing. The company is very new in North America. It knows nobody in Indiana to work with than those prominent managers and partners from existing vehicle companies whom it has to depend on but they are very expensive to acquire them. Thus to regulate such expenses the THINK cars company should partner with one of these existing companies in order for it to benefit from management techniques of these manpower at a cheaper pay.
The success of THINK electric cars will depend on how fast it will move into the market and counter the effects of the already developed competitors. Joining one of the competitors will provide the company with one stone to kill two birds at the same time and this will facilitate the realization of its dreams and objectives in the world of automotives. Thus I recommend the association of the company with other companies that are already established such as the GM motors.