MBA PROPOSAL

BUS 895: PROJECT PROPOSAL


DRIVE THE FUTURE: A FEASIBILITY ANALYSIS FOR AN A HYBRID AUTOMAKER.


Selecting a Research Project
• Industry: Automotive
• Market: United States and California
• Niche: hybrids and socially responsible consumers
• Focus: entrepreneurship

Research Problem or Question
• Why are consumers buying hybrids?
• Why are there $1 trillion worth of back-ordered hybrids?
• Why are hybrids the fastest growing market segment?
• Why are hybrids popular, hot, selling so fast, fashionable, practical?
• Why do consumers buy hybrids? What kind do they want?
• Lack of primary consumer data

Research Methodology
• Literature review
• Secondary research: J.D. Power and Associates surveys
• Primary research: 10 interviews with industry insiders, 100+ car dealer surveys & 100 online consumer surveys

Report Content and Organization
• Feasibility analysis: industry, market, product, team, finance, value chain analyses
• Forecast: analyze historical data, add primary data, model a sales forecast
• Feasibility report: present findings in the form of a feasibility plan

Project proposal adapted from Nickerson, R. (2005)

BUS 895: PROJECT PROPOSAL PITCH

Business Concept
Hydrive Motor Company will manufacture innovative and efficient vehicles for socially responsible consumers. Through worldwide partnerships, we’ll help our customers build their own unique cars and trucks. By bringing together transportation technologies from China, Japan and America, our customers will experience custom performance and convenience. Hydrive will build our brand through all forms of socially responsible media and deliver our product directly to the customer from our US based assembly and warehouse operations and service our products door to door through the established network of existing dealers.


Macro-factors
President Bush (2004) recently initiated over $8 billion in grants and tax incentives, lasting through 2009, spurring clean technologies including hybrid and fuel-cell vehicles. Presidential candidate John Kerry proposed $10 billion in grant monies to build green auto-making factories to stimulate American jobs. California Governor Arnold Schwarzenegger just signed a bill to allow solo driven hybrids in commuter lanes and a few months earlier debuted the Hydrogen Highway project to make California first in zero emission infrastructure and. Following an oil war clean energy vehicles are very strong political drivers of macro business initiatives.

Market Snapshot
Today, over 700 million vehicles drive around Earth. Toyota’s CEO Hiroshi Okuda (2003) projects 1 billion by 2010. Of the six major manufacturers two are American. Populations and markets are projected to continue growing in the US where Okuda (2003) projected an 18-20 million unit market by 2010. Hakim (2004) wrote that according to R.L. Polk, the No.1 American market segment for hybrids is Los Angeles. “Californians, who buy about 20 percent of the nation's automobiles, account for 28 percent of hybrid purchases nationwide.” JD Power projected that the upper limit of the hybrid market segment at 3% while other more optimistic analysts foresee 10% (Hakim, 2003). Gordon Wangers of Automotive Marketing Consultants is one of the optimists that forecasted the California hybrid market at 10% of all new-car sales by 2006 (Motor Trend, 2004).

Based on these projections, the overall US market for hybrids alone is projected at 600,000 to 2,000,000 units over the next five years. At an assumed 25% at $20,000 each, the CA market segment could spend over $3-10 trillion on new hybrids by 2010.

Opportunity
The preliminary research shows that there is a growing un-served niche in hybrid vehicle technology. Toyota is the segment leader with over 100,000 hybrids sold and $1 trillion in hybrids back ordered through 2006. The leader is scrambling to make vehicles to fill orders. Ford was forced to license Toyota’s hybrid technology to put the first American hybrid SUV on the road. As of this proposal, there are no other players on the playing field with billions sunk into research and development focused on the quantum leap to fuel cell vehicles.

Hybrids are the tip of the iceberg. The author has identified a niche in a growing multi-trillion dollar market up and down the value chain in advanced transportation technologies. From scooters to snowmobiles to cars and trucks to airplanes an evolution has started that the author believes will last 100 years, as long as the Internal Combustion Engine (ICE) survived. From suppliers to manufactures to dealers and consumers and from non-profit organizations to for-profit ventures, there is a socially responsible vacuum for clean hi tech solutions.

Sources
Hakim, D. (2004). Hybrid vehicles hit the heartland...barely. The New York Times. Retrieved September 17, 2004, from http://0-web.lexis-nexis.com.opac.sfsu.edu/universe/document?_m=c450fb7234187d3952d93a7dbd7d1e80&_docnum=8&wchp=dGLbVlz-zSkVA&_md5=1850351add749fd3ce4e2a34461c9fb0.

Motor Trend (2004, September 16). Ford’ first hybrid SUV delivered. The San Diego Union-Tribune - September 16, 2004. Retrieved September 27, 2004, from http://motortrend.com/features/news/112_news60/index.html

Nickerson,R. (2005, Spring). Research project in information systems BUS 895: research project in business course syllabus. Retrieved September 27, 2004, from http://online.sfsu.edu/~rnick/b895s05s.doc

Okuda, H. (2003). Speeches. North American Press Room. Remarks. Washington, D.C. U.S. Chamber of Commerce. Retrieved September 14, 2004, from http://pressroom.toyota.com/photo_library/display_release.html?id=sp20030910.

The White House: President George Bush (2004). Fact sheet: key bush environmental accomplishments. Retrieved September 24, 2004, from http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html.