1. Local Motors
Group 1 AALTO EE – LEADING SERVICE BUSINESS
Group members:
Budi Silaban
Danardono S.A.
Iwan Krisnanto
Jermia
Zilva Boaz
2. Problem: unsustainable business model
Group 1 AALTO EE - LEADING SERVICE BUSINESS
Local Motors
Designers
Design
Reward
Competence
Concerns:
- Enthusiast with buying capability
is there somewhere, however
- No connection to LM's current
business model.
LM was struggling to find the buyers
for the innovative car designs
Buyers
There's only Competence, no Benefit to Others, the system is not complete.
Because after the design is chosen, what's next? How to sell?
3. Recommendation: a sustainable model
Group 1 AALTO EE - LEADING SERVICE BUSINESS
Local Motors
Designers
M
arketable design
Reward/royalty only if
the car is produced.
Buyers
LM
's service
to
build
the
car.
Com
m
itm
ent to
buy
above
econom
ic of scale
Market Information (what
buyers want, what design is
available)
- Involve the Designers as co-marketer (i.e. designers include marketability into the design), because the
reward/royalty system is tied in with the market (winning designer only get royalty if the car can be sold).
- Local Motors will only produce the car which meets the predetermined economic of scale. This will drive
the buyers to also be a promoter for their voted design; They also become a co-marketer.
Competence Benefit to others
4. Challenges & solutions made possible with the adjusted business
model.
Challenges Reasons Solutions
1. Selling the design. The designers doesn't consider
marketability into their car design.
Move from design competition
prize to royalty system. Facilitate
communication between potential
buyers and designers.
2. Market information. No facilitate for information
exchange between designers and
buyers.
Develop a place within the existing
website to facilitate their
communication.
3. Getting enough enthusiast with
buying capability.
No driving factor for enthusiast
with buying capability to connect
to LM.
Recruit early adopters/endorser
(i.e. community leader).
4. Financing the microfactory. High cost. Unpredictable sales
volume makes it difficult to get
financing.
• Threshold to produce (produce
only if the commitment to buy is
large enough).
• Buying customer’s commitment,
e.g. down payment.
Group 1 AALTO EE - LEADING SERVICE BUSINESS
