How IoT and Machine Learning Revolutionize the Predictive Maintenance
Gina Micek - Mobileye
1. 1
Gina Micek
St Catherine University
Mobile-Eye Case Questions
Question1: What are Mobileye’scompetitiveadvantages? Competitive vulnerabilities?
Mobile-Eye’scompetitive advantagesinclude asolidleadershipinthe twoentrepreneurs
runningthe company,Sashuaand Aviram. Aviramhasa solidbackgroundfrom MIT in artificial
intelligence,visual systemsandmachine learning. Sashuahaspreviousexperience runningacompany
where he learnedalotfromthe failure. He wasa financial andmanagerial geniusaccordingtohis
partner-- bothof themworkedsynergisticallytogether. Theywere “OrganizedtoCapture Value”from
the VRIOmodel.
The two leadershada keensense of future value andhadforeseenthe evolutionincarand
truck manufacturingthatwouldensue fromregulatorychangesrequiringincreasedsafetyfeatures.
Theyalsoknewthat researchwasalreadybeingconductedinautonomouscars. ThisledSashuato
begintheorizingona camerasystemthat wouldbothsolve safetyissuesaswell asplayarole inthe
designfeaturesof autonomouscars. The creationof Mobileye ledtoaValuable productforthe market
inthe VRIOmodel
Mobileye became CostlytoImitate inthe VRIOmodel whenthe twofoundersdevelopedall
theirappsin one unitanddesignedtheirownSystem-On-Chipmakingthe productsunique inthe
marketplace. These decisionscame fromkeyresponsesthese twomentooktocircumstances – being
approachedto combine appsandmisseddeadlinesbyasupplier –whichledthe companydowna path
of R&D whichimitatorswouldhave difficultyfollowing.Inaddition,due totime topenetrate OEM
accounts,and the highstandardsrequiredof the industry,Mobileye waspositionedcorrectlyhaving
alreadyconductedyearsof testingandrefinementbythe time ADAS systemswere beingmarketedto
the consumer.
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Mobileye maintainedaratherfocusedproductline unlikecompetitorswhichallowedthemto
concentrate resourcesindevelopingthe best andlowestcostproduct. Theywere firsttomarketwitha
single-cameraoptionformanyof theirkeyapplicationslike PedestrianCollisionWarning. This
positioningcreatedthe Rare inthe VRIOmodel.
Google focusedona more utopianideal underatightertimeline andMobileye hadamore
realisticvisionwhichallowedthemtoconsiderall the factorsinadoption. Nevertheless,Google wasa
largercompanywithmore available resourceswhichwasacompetitive vulnerabilityforMobileye.
Additional vulnerabilitieswere competitorswithradartechnologyusedinadaptivecruise control,multi-
camera systemswithbetterdepthperceptionandcar companiesthatdisagreedwithMobileye’sR&D
strategies. The threatthatthese manufacturersmightfindanothervendororattempttheirown
productexisted.
Question2: How shouldShashua and Aviram handle OEM demandsfor lowerprices? Shouldthey
maintain a “full” price strategy or discount for the low-endbundle?
Shashuaknewthere wasa marketfor stereocameras,howeversaw thatit was dwindlingdue to
the cost to add themto the cars eitheraftermarketor as a standard feature. The otheroptions,radar
and lidarwere alsomore expensive. The lasttwooptionsalsodidn’tcoverthe range of functionality
that a camera systemwould. The teampositionedthe cameraasthe primarysensingtechnology.
While Lidarwascost prohibitive exceptforexperimental purposes(Google Self-DrivingCars),
Radar had manyadvantagesandhad beencomingdowninprice. The big issue wasradarsabilityto
accuratelyrespondtostationaryobjectswhichledtofalse positivesandpreviousrecallsby
manufacturers. Thisfactalone,positionedMobileye’svision-basedsystemwell forOEMs. Where
possible –inthe high-endmarket–Mobileye createdapartnershipwithradarmanufacturer Delphi
whichcombinedthe bestof bothworlds.
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In orderto create Mobileye’sconnectiontoOEMs – Aviramlobbiedthe OEMstoplace Mobileye
specsintheirmanufacturingplans,whichtheyinturnrequiredof theirTier1supplieswhichwere the
actual customerof Mobileye. Theydidnotchoose todeal withOEMs directlydue tothe thinmargins
and huge supportcostsof the Tier1 suppliermodel. Workingasa Tier2 supplierallowedMobileye to
avoidthe directcost comparisonissue and constraintswhere theycouldn’tworkwiththe entire
industry.
As the marketgrows,itis clearthat while OEMswouldlike toplaythe “goodenough”game for
theirlower-endcars,Mobileye shouldnotcapitulate. Asthe foundersstipulateinthe case,these are
safetyfeatures–whenmarketedandpresentedthatway,“goodenough”wouldnotcut it. In fact, it
couldbe a costlymistake forOEMs shouldthe cheapersystemsfail. Positioningasa leaderinthe
marketwitha product that isreliable,backedupwithacompany that standsby theirpricingandR&D
continuestobe a keystrategygoingforward.
Question3: How should Shashua and Aviram approach Google? Shouldthey cooperate with Google
or keepthem at arm’s length?
Google intheirapproachpushesthe envelopeandactsas a leadexperimenter/inventor. They
have the resourcesat theirdisposal totrynew technologiesnomatterthe cost andconduct research
whichexpandsthe realmof possibilityonmanyfronts.Theirutopianidealsare visionarybutmaynotbe
realisticorevenmarketable. Intheirself-drivingcars,theywere able toaffordLidartechnologythat
mostOEMs wouldnotbe able to use for standardconsumervehiclesatthisstage of the game. Google
playedanimportantrole,however,because theirexperimental/inventorpositionallowedthemtobe a
role-model andinstigatorfornewtechnologysolutions. Infact,withoutGoogle startingthe discussion
on driverlesscars,itis possible thatacompanylike Mobileyewouldnotexist.
Mobileye’sadvantagewasthattheywere posedtocreate real-life solutionstoregulatory
demandandwere workingdirectlywiththe automotiveindustry. Mobileye’stechnological advances
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provide safetysolutionsforreal consumerswhowouldnodoubtdemandtheminthe next-gencars. In
addition,Mobileye alsohadproductsavailable in the after-marketarenaforthose consumerswho
desiredtoadapttheircars or truckfleets.
Google’seffortsprimedthe consumerovertime tobe opentothe ideaof autonomousand
driverlesscars. Infact,on a recenttripto CaliforniaIwasable tosee the driverlesscarsinactionand
hearfrom neighborswhowere gettingusedtothe idea – includingearlymetricsthattheydrove better
than real people! Nevertheless, costisa majorfactor of adoptionatthisstage of the game. Google is
not posedtoprovide adirect-to-consumersolution,while Mobileyealreadyhassuccessfullyenteredthe
marketplace. These driverassistance systemsare the firststepinthe future of autonomouscars.
Google’sresearchparadigmisalsodifferent –“store and align”versusMobileye’s“sense and
understand.”Asa resultof these seeminglydivergentstrategies,itisunclearthatGoogle wouldbe a
goodpartner withMobileye forany consumerpurpose.Infact,abetterstrategymightbe to partner
witha directto consumerorganizationsuchasTeslafor furtherinnovation. Iwouldn’tdiscountGoogle,
howeverentirely. There couldbe possibilitiesneitherorganizationcanimagine until theybegintowork
together. Nevertheless,atthispoint,the meetingwithGoogle shouldremainanexplorationuntil there
an obvioussynergy.
