International Strategic Management

The word count for the report is 2000 words (+ / – 10%); NB Task 1 is not included in the word count.
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    Abstracts / executive summaries are not required and will not be marked if included.

BACKGROUND

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 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’ (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 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.

The ‘Minimό’ will go into production in 2021, leaving the firm with only 18 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.

Referring to the ‘C40 cities’ (94 of the world’s greatest cities whose mayors are committed to driving meaningful and sustainable action on climate change, including in the area of urban mobility), they have decided to focus on London (UK) and Sydney (Australia) as potentially attractive cities for the product launch of the ‘Minimό’.

As an external consultant, you have been commissioned by the team to research and evaluate these 2 cities and their wider macroenvironments in greater detail.

  • Two of the main types of business-to-consumer car-sharing models are:
    Station-based carsharing (e.g. Zipcar, Communauto, Maven) – the user only has a choice between a round trip (picking the car up at Station A and returning it to Station A), or a tightly-monitored one-way trip (picking the car up at Station A and returning it to Station B). Those who plan trips ahead of time or are looking for a car at a specific time would benefit from these services.
    Free-floating carsharing (e.g. car2go, Gig or DriveNow) – the user can see which cars are available within a set operating area on a mobile app and choose the one closest to them. Once the user is finished using the car, they can drop off the car at any location within the set operating area, saving time and avoiding unnecessary trips. Those who are spontaneous and decide last-minute that they need a car would benefit from these services.
    NB the difference between carsharing and ridesharing: Carsharing = ‘I rent a car to drive now and park it when I’m finished; someone else will rent the same car later and drive it’; Ridesharing = ‘where several people with compatible destinations/routes go together in the same car (instead of travelling individually in their own personal car or in a carshare vehicle).
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