Brattle Academic Advisor Joshua Gans recently authored an article published in the Harvard Business Review discussing Ford Motor Company’s approach to addressing disruptive technology in the auto industry. These technologies include electric batteries, autonomous vehicles, and the mobile phone.
In the article, Professor Gans explains that carmakers have all approached these disruptive technologies differently; however, Ford has taken the most interesting route to address all three by launching a spinoff company, Ford Smart Mobility, LLC. In this approach, companies create a separate division that meets competition while ensuring that new innovations are as minimally disruptive to the core business.
Professor Gans argues that Ford should be moving in the direction of integrating both a car and mobility business, not separating them. He explains that these disruptive technologies are supply-side architectural innovations, which represent a different way of putting cars and the car business together.
“Companies need to see these disruptors as supply-side disruptors, and make a difficult choice as to whether they can meet that challenge,” notes Professor Gans. “But, if they decide that they can meet the challenge, they should bet everything on that new world vision.”
The full article, “If Ford Wants to Beat Tesla, It Needs to Go All In,” can be viewed on the Harvard Business Review website.