Mobileye: The Future of Driverless Cars Harvard Case Solution & Analysis

Mobileye: The Future of Driverless Cars  Case Solution

1.      What is the history and background of Mobileye Driverless cars?

Mobileye was established in 1999 and it was a leading Israeli company situated in the Netherlands,which is considered as the Tier 2 supplier in the automobile industry worldwide. A decade before Google imagined producing a self-driving car, the founders of Mobileye, Amnon Shashua and Ziv Aviram decided to make a revolution ary autonomous car for the next generation.

Mobileye is apioneer and leader in Advanced Driver Assistance System (ADAS) and it has one of the world’s largest artificial vision in research and development (R&D). Mobileye’s major investor was Goldman Sachs with 500 valuations in 2007; other investors include various; insurance companies and private investors.

In order to finance the company’s growth, Mobileye was involved in the initial public offering (IPO) in 2014, which was the largest United States (US) IPO by an Israeli company. Moreover in 2007, the major products of the company were adopted by three major vehicle manufacturers, which include BMW, GM, and Volvo in order to produce and deliver high-quality cars atreasonable rates.

After many efforts to become a leader in the market and huge investments in the advertisements, the company earned itsfirst profit in 2013 after bearing losses for many years in the past, which generated $ 20 million net income. The founders of the company had the dream to develop the driverless cars for future development.Therefore, the company involved itself in IPO in 2014 for increasing the growth opportunities.

2.      Develop the Internal and external analysis by using SWOT Analysis.

Internal analysis can be made through strengths and weaknesses of the company and management is required to maintain the strengths along with some some reasonable steps to reduce the weaknesses.

Strengths:

Mobileye has the first driving force advantage because it is considered as a large head starter in the market when it comes to using innovative technology. Along with this, the company has high margins for delivering high-quality products that led it to increasing its profits.

It includes robust patent portfolio, as it gets all its innovations patented in order to secure its inventions since it takes the time to launch a new product. The company has reduced its overhead capacity due to OEMs tend to work with the subsets of tier 1. The company has a crucial and unique data that enables the company to focus on the line of product offerings.

Weaknesses:

The biggest weakness of the company is that the company has a lack of net income and profitability up to date. It is also estimated that the company projected losses and also projected low profit in the coming time period. Therefore, the company is generating uncertainty in its future profitability.

 Another reason for low profits may be that the company has no accuracy and materiality in its financial reporting due to lack of finance knowledge and expertise. Along with this, the company has some debt outstanding; the company issued debt because of lack of profits,it was unable to bear the expense along with some fixed and overhead costs.

External analysis of the Mobileye can be made by evaluating opportunities and threats.

Opportunities:

The Mobileye created the opportunity to increase the demand for adoption of the company’s products by its original equipment manufacturers (OEMs).This will increase its customer base through positioning its unique high quality products that will further increase its market share. Along with this, the regulatory and government body has mandated the implementation of safe driving for new technological vehicles.

Threats:

The aftermarket competition is cheaper, so for this purpose, the company had to reduce the price in order to attract the customers so that they do not switch to other competitors, especially those customers who are price sensitive. The alternative technology such as; Radar, Lidar, and fusion system were used in order to produce the self-driving car, but it was a very expensive sensing technology....................

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