Wirelesscar Company Case Study

WirelessCar Company, owned by Volvo Group, is a telematics service provider to leading automotive

manufacturers. It connects over two million vehicles in over fifty countries to provide services such as

remote user commands, intelligent route guidance, emergency call, breakdown call, stolen vehicle

tracking, remote diagnostics, and remote lock/unlock etc. Its top customers include Volvo, Rolls-Royce,

BMW, Daimler, Audi, and Nissan and earns some $50 million in annual revenue.

The business model innovation -

With the available technologies like 4G LTE, Embedded systems, and back office server services, it is able

to provide safety, productivity and entertainment values to the end consumers.

The Industry-

The company operates in a connected car industry. The estimated global revenue of connected

car industry is $52.5 billion in 2017, and is expected to grow at an annual rate of 24.3% to reach

an estimated $155.9 billion in 2022. Automakers see BRIC nations as markets with great potential

for sales of connected cars, but they still won’t outgrow the value potential of the EU & US. The

connected car value potential of EU & US in 2017 is about 70.8%, which will decrease slightly to

66.5% in 2022. In the case of the BRIC nations, the value potential of connected cars increases

from 23.5% in 2017 to only 27.3% in 2022.

Five Forces Analysis-

 New Entrants (High) - Telematics is the future of vehicular transportation, and is in its nascent

stage globally. There are already many telematics service providers vying for market share in

the industry, and as telematics becomes the norm in every car over the coming years, we

expect more entrants into the market. The WirelessCar brand equity will help it keep a good

portion of the market share especially after SBD, an independent, technical market research

consultancy has rated them the number 1 telematics service provider in the world.

 Substitutes (Moderate)–

o The biggest substitute of such connected car services is a mobile phone in the car.

Customers are now able to get some of the most useful features like navigation, hands

free calling, in vehicle WiFi, music and entertainment connectivity via Bluetooth using

such mobile phone integration. However, distracted driving while using a mobile phone

is emerging as the next big cause of auto accidents.

o Mobile phone based automotive projection mode features like CarPlay of Apple and

Android Auto by Google are the next set of substitutes that provide comparable but

limited features in a safer on-dash human interface.

o However, the biggest alternative to a connected car for the time being is customers

choosing to buy a car without the telematics technology. Additional initial cost, loss of

privacy, threats of hacking are the main reasons for customers selecting to cars without

telematics packages. Adoption of electric cars, and advent of autonomous cars are

expected to reduce the initial cost of telematics enable vehicles and increase the

adoption rate of the services.

 Bargaining power of customers (High) - WirelessCar’s business model being B2B, and its

customers being automobile manufacturers means a higher bargaining power for customers in

this industry. There are other equally qualified telematics service providers vying for the

business of a handful of automobile manufacturers.

 Bargaining power of suppliers (Low) – Cellular wireless service providers like AT&T and Sprint,

and cloud service providers like Amazon cloud and Microsoft azure are the main suppliers.

Other suppliers include embedded hardware and software suppliers