Local Motors: Designed by the Crowd, Built by the Customer Harvard Case Solution & Analysis

Local Motors: Designed by the Crowd, Built by the Customer Case Solution

Introduction of Local Motors

Local Motors was established by Jay Rogers in 2006. It has received investment and then developed the partnership with Factory Five. Furthermore, cars designed by the crowd were had a great success among customers and customers purchase them. It has also developed online crowd sourcing. For the purpose of online crowd sourcing, the software engineer was employed. Through the online services of Local Motors, customers were able to design and customize the structure of the vehicles. This was an innovative step that Local Motors have deployed and got an increase in its customers utilizing its online channel.

How would you characterize the state of the automotive industry in late 2008/early 2009 on the potential for launching and marketing an innovative car company?

The US market is considered as the most competitive market in the world as many global players are operating in the market with having significant market share and customers base. The economic downturn and financial crisis affect the US industry greatly, and the event of 9/11 also affects the global economy and US economy adversary. It also affects the US auto industry as well because it is expected that this economic downturn and financial crisis affects the GDP per capita of US residents which lowers their disposable income and spending power. The decrease in sales of cars and trucks are evident of that factor that this economic downturn affects the US auto industry by decreasing the spending and purchasing power of the US residents.

As this financial crisis affects many large automotive companies such as General Motors, Ford and Chrysler and many companies face bankruptcy, however, many companies also survive in this financial crisis by maintaining the growth and market share, and it is expected that economic conditions are becoming favorable gradually such as emergence of GM from bankruptcy shows that there is a potential in the market and economic conditions are also becoming favorable.

In that situation in which many large and global players are operating in the market with having significant market share, it would be difficult for a new company to enter into such competitive market. Beside of the fact of competition, it is also expected that US consumers are more sophisticated now, and economic conditions are also becoming favorable, hence launching an innovative car company could be a worthwhile option as there is a significant potential in the US automotive market.

Strengths and Weaknesses of Local Motors

Strengths of Local Motors

Local Motors has developed its market through designing of its vehicles using creative ideas of the designers. The designers used to deploy their ideas for the purpose of vehicle manufacturing. Thus, innovation of the vehicles was beneficial for the Local motors. Furthermore, it has a large contribution to promote its products through web portal. It was the reason that it was a well-known brand among people especially youngsters.

Weaknesses of Local Motors

Wrong Market Segmentation of Local Motors

Actual Customers

Above is the buying behavior of the actual customers. The actual are the ones who are intended to buy the automobiles of Local Motors. These are the persons who need car or other kind of vehicle for the daily use or for the purpose of the business.

Designers of the Vehicles

Designers of the vehicles were the youngsters who need to show their creativity through online portal of Local Motors. There were some actual customers too who intended to design their vehicles according to the purchase. However, majority of the people were not the buyer of automobiles. Their interest was to deploy their creativity.....................

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