Mobileye Case Competition Presentation All Materials PDF_WC
1. The State University of New York at Binghamton
Global Strategic Management
Fall 2015
MOBILEYE: THE FUTURE
OF DRIVERLESS CARS
Case Analysis Presentation
Wyatt A. Chartrand
Justin Wong
Mengyao Li
Yingli Sun
2. “Our vision. Your safety.”
Mobileye:
The Future of Driverless Cars
Case Analysis Presentation
Global Strategic Management, Section 5
The State University of New York at Binghamton
3. Wyatt A. Chartrand,
A.S.
Business
Administration,
concentrating in
Finance and
Consulting &
Leadership
Justin Wong
Business
Administration,
concentrating in
Management
Information Systems
and Marketing
Yingli Sun
Accounting,
Concentrating in
Management
Information Systems
Mengyao Li
Accounting
The LogiConsultants Team
4. Objective: Throughout this presentation, we will determine Mobileye’s
strategic path for the short-term, mid-term, and long-term future,
particularly in regards to the end goal of the development of a
fully automated, driverless vehicle. We will do this using a
variety of strategic analyses and relevant information, including:
• Background and History
• Internal Analysis
• External Analysis
• Alternatives
• Recommendations
• Implementations
• Concluding Analysis
• Question and Answer Session
• Supporting Materials
Executive Summary and Agenda
5. Founded in
1999 by
Ammon
Shashua and
Ziv Aviram.
Products
adopted by
BMW,
GM, and
Volvo in
2007.
Invested in by
Goldman Sachs
in 2007 at a
$500 million
valuation.
Background and History
Largest U.S.
IPO by an
Israeli company
in 2014.
Posted first
profit in 2013
with net
income of $20
million.
Future
development
of driverless
cars
6. Strengths
• First mover.
• Large head start in the market,
especially technically.
• High margins to date.
• Unique, crucial data.
• Strong portfolio of patents.
• Little of the overhead associated
with its tier 1 counterparts.
• Focused product offering.
Weaknesses
• Lack of profitability to date.
• Projected losses or low projected
profit in the future.
• Uncertainty regarding future
profitability.
• Issues with the accuracy and
materiality of their financial
reporting.
• Some debt.
Internal Analysis
7. External Analysis
Opportunities
• Increased demand for and
adoption of mobileye’s products
by the original equipment
manufacturers (OEMs).
• Positioned to sell to most of the
industry, boosting market share
further.
• Government mandating of safety
technology.
Threats
• Cheaper aftermarket competitors
• Alternative technologies such as
RADAR, LIDAR, and “fusion
systems.”
• Some OEMs such as Toyota
operate as competitors by
developing in-house solutions.
• Likely government regulation of
completely autonomous vehicles.
9. • Strategically partner with Tesla instead of Google but retain
customer relations with Google, as Tesla’s goals, timetables, and
position in the market suit Mobileye better than Google’s current
position.
Strategic Partnership
• Retain premium pricing and do no discounting in order to avoid
price erosion and maintain image as a premium, safe product.
OEM Pricing
Strategy
• Keep high-end products and diversify into lower ends by
introducing a $200+ product of slightly lower quality to capture a
larger portion of the broader market, boosting sales and revenue.
Aftermarket Product
Strategy
Recommendations
10. Arenas
Staging
Differentiators
VehiclesEconomic
Logic
• OEM and aftermarket products
and distribution channels.
• High end for OEMs, domination
of entire market for aftermarket
products.
• Largely concentrated in North
America, but ultimately globally
• Proprietary software technology.
• End goal of driverless
vehicles to be achieved
by partnership with
Tesla.
• Investment in marketing
• Increases in R&D and
strategic hiring.
• Cutting edge product quality
and correspondingly premium
price points.
• Image positioning through
strategic marketing efforts.
• Staging to take place in
one-, three-, five-, and ten-
year increments.
• End goal of driverless
vehicles to be achieved at
the end of the staging
process.
• Premium prices due to
quality, which will lead
to higher margins than
competitors.
• Proprietary software and
unique data support
premium pricing,
increasing revenue.
11. Retention of premium pricing will keep revenues steady in accordance
with Mobileye’s 2012 to 2013 growth rate of an 18.34 multiplier,
according to Exhibit 6a of the case study. Even a growth of half that
($300 million) would be substantial
Financial results regarding the new, less expensive aftermarket product
will be determined by the new price point multiplied by units sold.
Regarding Mobileye’s recommended alliance with Tesla, no short-term
financial profits are likely as a direct result of the partnership, but long-
term results could be large. Current number not projectable based on
the nature of the recommendation and the available data.
Expected Financial Results
$600
Million in
Revenue
$200+ X
Units
?
12. Implementations
1 Year Goal
Enter the low end of the
aftermarket and retain
the high end, increasing
sales in both.
3 Year Goal
Develop strategic
partnership with
Tesla.
5 Year Goal
Work with Tesla to begin
development of
increasingly autonomous
driving systems.
10 Year Goal
Bring driverless car
to the market
alongside Tesla.
13. 1.
• Formulate and begin development of a slightly lower quality $200+
aftermarket product.
2.
• Increase the marketing budget over 2013’s budget specifically for this new
product.
3.
• Hire new talent to support these implementations, especially marketing
MBAs.
4.
• Enter the lower-end aftermarket with the introduction of this $200+
product.
5.
• Grab market share quickly with an aggressive, fast entry strategy for this
end of the market.
Year 1 Implementations
14. Partnership with Tesla
Poach talent from rival
technology firms for software
engineers and data analysts
from Wall Street firms.
Strategically utilize Tesla’s
resources to synergistically
work towards the goal of a
driverless car.
Year 3 Implementations
20. Supplementary Slide 3
Google’s premature position
on driverless cars to date:
• 2009: Tested self-driving
technology with the Toyota
Prius on freeways in California.
• 2012: Tested with Lexus
RX450h; Completed over
300,000 miles of testing on
freeways.
• 2014: unveiled an early
construction of their new
prototype vehicle.
22. Chartrand, Wong, Mengyao, and Li 1
Works Cited
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<http://www.researchinchina.com/Htmls/News/201409/36482.html>.
"Google Self-Driving Car Project." Google. Google, n.d. Web. 19 Nov. 2015.
<https://www.google.com/selfdrivingcar/>.
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"Quarterly Results." Mobileye. Mobileye, 2014. Web. 19 Nov. 2015.
<http://ir.mobileye.com/investor-relations/financial-information/quarterly-
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23. Chartrand, Wong, Mengyao, and Li 2
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