Impact of digital transformation on business models in the automotive industry

Masterarbeit , 2023 , 274 Seiten , Note: 1,5

Ingenieurwissenschaften - Fahrzeugtechnik

Digital transformation and disruptive business models of new market players create unprecedented uncertainty in the automotive industry. One of the main reasons is the lack of understanding for the need of adapting business models to a changing business environment due to new technologies and shifting customer wants and needs. Even the automotive industry is not spared from digital Darwinism, according to which it is not the strongest or most intelligent of a species that survives, but rather the one that adapts best to change.

What opportunities do OEMs have to transform their business models? How can best practices be used to generate new value creation, and what influence does the transformation of the business model have on the ecosystem? What role will the dealer play in the future, and how can he still deliver added value to the OEM?

This paper provides an in-depth insight into the world of automotive sales, as well as a detailed analysis of the status quo. Best practices based on successful business model transformations of the top tier OEMs are the basis for a deeper understanding and serve other companies as foundation for developing digital business models.

The goal of this paper is to examine the impact of digital transformation on the dealer business model and how they can continue to deliver value to the OEM. For this purpose, guided expert interviews are conducted with 16 experts from various areas of the automotive industry. Subsequently, a qualitative content analysis according to Mayring will be used to assess the challenges and impacts of the agent business model and to develop improvement measures and key topics that offer added value for OEMs.

The results of this thesis support dealers in understanding their future role in the automotive industry and show design recommendations for a future-proof business model.

Table of Contents

Abstract

List of Abbreviation

List of Figures

List of Tables

1 Introduction
1.1 Subject of the Research
1.2 Purpose of the Research
1.3 Structure of the Research

2 Literature Review
2.1 Impact of Digital Transformation on the Business Model
2.2 Business Models in the Automotive Industry
2.2.1 Wholesale Model
2.2.2 Direct Sales Model
2.2.3 Agency Model
2.2.4 What’s about the Dealer?
2.3 Best Practices
2.3.1 Comparison of Business Model Approaches of successful OEMs
2.3.2 Key Takeaways for the Transformation of Business Models
2.3.3 Action Plan for the Implementation of an Agency Model
2.4 Effects on the Ecosystem

3 Method
3.1 Research Methodology
3.1.1 Quantitative Research
3.1.2 Qualitative Research
3.1.3 Quantitative vs. Qualitative Research
3.2 Data Gathering
3.2.1 Expert Interview
3.2.2 Different Types of Interviews
3.2.3 Guideline-based Expert Interview
3.3 Qualitative Data Analysis
3.3.1 Qualitative Content Analysis based on Mayring
3.3.2 Quality Criteria of the Qualitative Content Analysis

4 Findings
4.1 Challenges of Agents in the Agency Model
4.1.1 Limited Control over Pricing and Inventory
4.1.2 Digital Transformation
4.1.3 Change Management
4.2 Impacts on the Agents’ Business Model
4.2.1 Customer
4.2.2 Core Competencies
4.2.3 Sales and After Sales
4.2.4 Ecosystem
4.3 Measures for Improvement
4.3.1 Business Model
4.3.2 Location
4.3.3 Customer Experience
4.4 Added Value for OEMs
4.4.1 Customer Reach
4.4.2 Customer Experience
4.4.3 Local Market Knowledge
4.4.4 Customer Relationship

5 Discussion
5.1 Implications of the Results for the Automotive Retail
5.2 Design Recommendations for Agents for a future-proof Business Model
5.3 Limitations
5.4 Further Research

6 Conclusion

Reference List

List of Appendices

A Appendix A

A.1 Interview: Dr. Martin Rogalski – Daimler

A.2 Interview: Dr. Martin Rogalski – Volkswagen

A.3 Interview: Dr. Martin Rogalski – Tesla xxxix

A.4 Interview: Dr. Martin Rogalski – Polestar liii

B Appendix B:

B.1 Interview Guide

B.2 Category System

C Appendix C lxx

C.1 Interview Transcript A

C.2 Interview Transcript B

C.3 Interview Transcript C

C.4 Interview Transcript D

C.5 Interview Transcript E

C.6 Interview Transcript F

C.7 Interview Transcript G

C.8 Interview Transcript H

C.9 Interview Transcript I

C.10 Interview Transcript J

C.11 Interview Transcript K

C.12 Interview Transcript L

C.13 Interview Transcript M

C.14 Interview Transcript N

C.15 Interview Transcript O

List of Figures

Figure 1: Structure of the Thesis

Figure 2: Traditional Customer Journey in the Automotive Sales Industry

Figure 3: Landscape of a new Customer Journey-Approach in the Automotive Industry

Figure 4: Agency Sales Model vs. Traditional Sales Model

Figure 5: Detailed Overview of the current Business Models in the Automotive Industry

Figure 6: Generic Ecosystem of the Automotive Industry

Figure 7: Research Methodology

Figure 8: Process model of Qualitative Content Analysis

Figure 9: Themes and Sub-themes

List of Tables

Table 1: Generic Roles of the Actors in the Value Network of the Automotive Industry

Table 2: Comparison of Quantitative and Qualitative Research

Table 3: Category System with Main Categories (MC) and Sub Categories (SC)

1 Introduction

“Digital transformation is the process of using digital technologies to fundamentally change how an organization operates and delivers value to its customers” (Godden & Shadrin, 2022, para. 1). It is about embedding digital technologies into every aspect of a business, fundamentally transforming the company functions and providing value to its customers (Godden & Shadrin, 2022, para 1). However, in recent years, the concept has gained increasing attention as technology has evolved and become more integrated across different industries.

Digital transformation can apply to a wide range of technologies and have a significant impact on a variety of business functions, including marketing and sales, operations and customer service. Digital transformation can also have a major impact on the way companies interact with their stakeholders, including customers, employees, suppliers and regulators. It can enable organizations to innovate and create new business models as well as disrupt traditional industry players (Bühler & Maas, 2017).

The digitization of value chains and products (so-called smart products) creates new opportunities to meet customers' needs or address completely new customer segments. New technologies paired with existing products enable new functionalities and services - new forms of business models emerge. Digital transformation thus makes it possible to develop successful, customer-oriented business models that go beyond the mere sale of products (e.g., Tinder - Freemium). Instead, digital services are often offered which ensure long-term customer loyalty. Digital transformation is leading to an increase in sales across all industries and, at the same time, to falling costs and more efficient value chains.

However, digital transformation can also present challenges for organizations. It can require significant investment in technology and training, and can lead to disruption and change within the organization (Bradley et al., 2015). Companies should carefully assess their objectives and digital transformation strategies and establish a plan to address the associated risks and challenges. It is important to identify and recognize trends at an early stage and to develop new customer-oriented business models in order to remain competitive. Otherwise, even established companies can lose ground and, in the long term, lose their profitability.

1.1 Subject of the Research

Original equipment manufacturers continue to make significant investments despite the difficult economic and political climate of recent years and are looking for new strategies to set themselves apart from their rivals. Despite widespread spending on electric, autonomous and connected technology, the sales process has remained largely unchanged for decades. The digital "white space" left by OEMs is increasingly being occupied by new entrants capable of developing consumer-centric retail models free of legacy infrastructure and investment. OEMs are forced to compete on both products and business models - a problem they have never faced before (Walton, 2019, p. 1). Online retail is gaining more and more momentum (Busse, 2022) and new, digital business models are finding favor in the industry.

In addition, a paradigm shift in Porter’s 5 Forces can be observed. Industry boundaries are being broken down, new competitors are entering markets, and traditional operations in particular are being put under high pressure. Although the automotive industry has long resisted the idea, new competitors such as Tesla or Polestar have set new standards for established carmakers. A constant and conscious transformation of business models is therefore indispensable, especially in digital times.

The challenges in the automotive industry are becoming increasingly complex. In particular, electric and autonomous vehicles, the sharing economy, start-ups and non-traditional market players are creating disruptive market conditions. In addition, the expansion of new products and services enabled by digital business models creates uncertainty about the future and influences strategic decisions worldwide. OEMs and car dealers also have to deal with a more challenging economic and political environment (Walton, 2019, p. 2).

To address these challenges, many OEMs are converting their outdated business models to either an agency model or a direct sales model. This academic paper analyzes the impact of digital transformation and the adoption of alternative business models on the automotive industry.

1.2 Purpose of the Research

The goal of the thesis is to develop design recommendations for a future-proof business model of the agent within the agency model. For this purpose, general challenges of the agency model and digital transformation as well as the impact on aspects of the agent's business model are analyzed. Furthermore, improvement measures and the added value of the agent for the OEM will be identified.

Previous research has mainly focused on the impact of digital transformation on the manufacturer (Köstring et al., 2020; Schmidt et al., 2019; Walton, 2019). The impact on automotive dealers and their future role has rarely been considered (Ström et al., 2018).

Digital transformation has already disrupted numerous industries, causing many former big players to disappear from the landscape. The automotive industry is currently undergoing the most significant transformation in its history. The thesis deals with the future of the automotive retail and in particular with the following research questions:

1. What challenges do digital transformation and the introduction of the agency model pose for the agent?
2. What are the impacts on the agent's business model?
3. What are the opportunities for improvement for the agent?
4. How can the agent continue to add value for the OEM?
5. What design opportunities does the agent have?

The research questions will be analyzed and addressed using the methodological approach outlined inchapter 3.

1.3 Structure of the Research

At the beginning of the thesis, the theoretical framework for analyzing and evaluating the dealership's business model is reviewed. The basis for the theory is an in-depth literature review focusing on car manufacturers. The root causes of change in the automotive industry are explained. In addition, the different business models of the manufacturers and their advantages and disadvantages are analyzed. Based on this approach, it is found that the dealer is becoming less important and that a closer look at the development of dealers is necessary. Subsequently, best practices facilitate the understanding of the changes on the part of the manufacturers so far. The theoretical part concludes with a look at the entire automotive ecosystem.

Chapter 3presents the research methods used in this thesis. In a first step, leading experts of the automotive industry are interviewed. The transcribed interviews are then analyzed using qualitative content analysis according to Mayring. Finally, the expert interviews serve as the basis for answering the research questions outlined inchapter 1.2. The most important influencing factors are identified and their role explained. Subsequently, the results are summarized and discussed, and design recommendations for the dealers' future business model are explained. In the discussion, the limitations of this research are also clarified and an outlook on further research areas is given. Finally, a conclusion is drawn.

Figure 1 illustrates the basic structure of the master thesis.

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Figure 1: Structure of the Thesis (Own illustration)

2 Literature Review

The theoretical background provides an authoritative understanding of the current situation in the automotive retail industry as well as the future direction of OEMs. The drivers of the transformation, the change itself as well as the most talked about business models of the OEMs are explained and analyzed. In addition, the complete ecosystem of the industry is looked at. The deep understanding of the automotive industry provides the basis for the expert interviews conducted later.

2.1 Impact of Digital Transformation on the Business Model

Despite technology transforming the world, the automotive sales and distribution model has remained almost unchanged since the 1980s. Digital transformation has changed the way people use media, interact with others or shop for fast moving consumer goods but unlike other industries the automotive sector has not truly adapted to this shift.

Customers have long since become accustomed to online shopping, yet established OEMs sell their cars to dealers, who in turn sell them to the end customer through bricks and mortar retail sites. As a result of experiences in other industries, consumer expectations of the automotive industry are rising dramatically, making a change in the sales model and an adaptation to customer preferences inevitable (Schiller et al., 2020, p. 06; Walton, 2019, p. 2).

OEMs and their partners must put the consumer first by addressing their needs and wants. Using technology to radically modify their operating models and reshape how consumers interact with their brand are important steps to bring the industry up to the necessary standard (Walton, 2019, p. 2).

Although it provides a special challenge, ambitious OEMs need to develop and rebuild a sales process that hasn't altered in decades (Liuima, 2016; Walton, 2019, p. 2).

OEMs are looking for new strategies to distinguish themselves from their established and emerging competitors as overall demand declines and competition for consumer attention increases (Walton, 2019, p. 2). While OEMs are starting to ramp up investments in shared, autonomous, electric and connected mobility, spending on new technology alone is not necessarily enough. OEMs and all partners must embrace change if they want to thrive in a time when new competitors who are not reliant on established retail models are threatening the current status quo. Improving the overall buying experience by incorporating new technologies as well as rethinking the current business model are necessary to compete with emerging competitors (Walton, 2019, p. 2).

Changing customer expectations and technological trends are primarily responsible for the rapid transformation of the automotive retail industry as we know it. While customer preferences are changing, there are still significant pain points at all stages of the car buying journey (Figure 1). As of today, Customer’s still struggle with the online experience including a cumbersome configuration of a car, choosing the right add-ons and securing vehicle financing (Köstring et al., 2020, p. 7).

However, as expectations of the online experience increase, the industry as a whole is changing rapidly. While offline touchpoints are still important, online is becoming more relevant for the future and will be key for a successful transformation of automotive retail (Köstring et al., 2020, p. 11).

E-commerce in automotive retail fundamentally changes current purchasing behavior, allowing car buying “with just a click” and increased transparency on vehicle pricing and vehicle availability. If implemented well, customers can benefit from higher transparency and comparability as well as professionalized dealership organizations (Köstring et al., 2020, p. 20).

The ability to sell online allows OEMs to lower their distribution costs and to collect customer data which sets the basis for improving customer experience and selling more customer-oriented products. Fitting customer needs and wants enables a customer-centric approach (Hanelt et al., 2015; Köstring et al., 2020, p. 29).

The benefits for OEMs combined with consumer preferences will impact dealership volumes in the medium to long term (Köstring et al., 2020, p. 20). For dealers, developing their own online channels, working closely with OEMs and integrating their physical and online presence will become increasingly crucial. However, the dealer will continue to be important for offline touch points across the entire customer journey (Schiller et al., 2020, p. 34).

On the technological aspect, the existing automotive retail environment is significantly impacted by digital transformation and the so-called ACES trends - autonomous driving, connectivity, electrification, and shared mobility (Köstring et al., 2020, p. 7).

The automotive retail industry is deeply affected by the ongoing and growing trend towardsshared mobility. To not losing the edge, OEMs and dealers need to consider multi-purpose vehicles and shared mobility providers early on.

Today's customers already take advantage of a wide range of shared mobility services, which presents expanding business opportunities outside of traditional retail. In order to take into consideration, the disparities in mobility demand between rural and urban areas, tackling and actively embracing shared mobility also entails adopting a variety of offering strategies that vary not only by region but also by demographics (Schiller et al., 2020, p. 70).

Since the market is still in its infancy, OEMs must contend with a multitude of start-up businesses and a wide range of cutting-edge offering models. Achieving overall success will require maintaining a balance between internal products and local partnerships. Independent shared-mobility provider fleets will primarily be sourced from OEMs, which will have a detrimental impact on new-car sales at dealers. Additionally, shared mobility will have a damaging effect on the aftersales business of the dealers because mobility service providers have greater bargaining power and can move sizable quantities from one dealer to another, putting pressure on margins. Large dealer groups will need to transform into mobility service providers, either partnering with OEMs or creating their own alternative mobility offerings while doing business in rural, urban and global markets (Hoffmann et al., 2019; Köstring et al., 2020, p. 20).

Over the past few years, the need for a connected road network for automobiles and consumers’ desire forconnectivityhave both steadily increased. Owners of complete onboard infotainment systems already benefit from options like adaptive navigation systems and suggestions for local consumer facilities. New services may emerge as a result of an increasing proportion of automobiles becoming a part of a bigger communication infrastructure and reveal further advantages like an optimized route navigation or free parking spots.

A significant portion of newly sold vehicles have some form of connectivity. The majority of automakers, especially in the premium segment have already incorporated fully connected infotainment systems into all of their new models. To offer a high level of connection to mass-market vehicles, OEMs and telecom providers will need to work closer together. Depending on the level of connectivity, it can improve the customer experience and open up new opportunities for revenue generation, cost reduction, and passenger safety and security. The value chain is evolving into an ecosystem where there is still uncertainty among the respective players. A close collaboration between dealers and OEMs primarily generates benefits in terms of connected services revenues, additional information on driving behaviors, and enhanced transparency regarding maintenance requirements using connected car sensors (Bertoncello et al., 2019; Köstring et al., 2020, p. 21).

Connected cars are evolving into powerful information platforms that not only provide a better experience for drivers, but also open up new opportunities for companies to create value. The role of the car is shifting from a mere mode of transport to a multimedia environment where connectivity is at the center of a new customer experience (Bertoncello et al., 2019).

In addition, connectivity is accelerating the development ofautonomous driving, which has the potential to significantly change the global automotive industry. If new players manage to combine the technological edge with the knowledge of vehicle construction that can also be brought in by conventional manufacturers and suppliers in particular, they could be in a position to enter the market. The establishment of new players such as Google or Apple, which have expertise in creating new types of data-based business models and organizational cultures that can deal with disruptive conditions, poses a major threat to established companies. (Bardt, 2017, p. 177).

The supply chain is likely to shift and the automotive industry ecosystem will be disrupted by autonomous vehicles. Since driverless technologies require complex software, the auto industry will need to make significant investments. (Liuima, 2016, para 11-12).

Customers would see a significant change in the vehicles available. Uber-like services could be offered by autonomous vehicles, which would reduce the need for private ownership. According to research, private vehicles are inactive about 95% of the time; therefore, autonomous car-sharing services could be a desirable substitute for certain private owners. However, automakers could offset these losses with other sources of revenue, including the aforementioned carsharing services. (Liuima, 2016, para 8-10).

Due to the given technological progress and the tightening of CO2 regulations, the number ofelectric vehicleswill increase tremendously. Global sales of electric vehicles are poised to triple by 2025, making electrification a key issue for both automotive manufacturers and retailers in many countries worldwide (Bloomberg, 2022).

The rising significance of electric cars inevitably leads to increased competition between manufacturers, providing competitive prices for customers. Although EVs are unlikely to reach the same margin levels as ICEs in the short-term, OEMs will need to invest heavenly in electrification. As a result, OEMs are looking at all major cost areas for potential savings, including adjusting or revolutionizing their current distribution model.

As EVs have fewer moving components and generally require less maintenance aftersales revenue and profits will significantly decrease. For instance, oil changes, which are today a major source of profit for dealerships, will eventually disappear. Dealers will also have to cope with the difficulty and expense of managing sales and servicing for both EVs and ICEs in the medium term (Köstring et al., 2020, p. 21).

The technological progress of electromobility combined with autonomous vehicle technology enables new products that are not necessarily comparable with traditional vehicles. This leads to low market entry barriers for new competitors and opportunities for strategic repositioning for OEMs. Thus the integration of both technologies expands opportunities for newcomers, but also poses risks for established companies if digital transformation and its consequences are denied (Bardt, 2017, pp. 171-177).

These developments are all powerful in their own right, but in combination they have a profoundly disruptive effect (Schmidt et al., 2019, p. 4). The ACES trends, an increase in online sales and omnichannel purchasing will significantly alter the automotive retail environment as we know it today (Köstring et al., 2020, p. 19)..

2.2 Business Models in the Automotive Industry

The customer journey in the automotive industry includes multiple distinct touchpoints where customers have to weigh their alternatives or take actions. Yet the current distribution model may actually reduce interaction between the OEM and consumers (Walton, 2019, p. 3).

Although the sales and distribution methods used in the automotive sector are comparable, the model is ineffective at both ends of the value chain, negatively affecting both OEMs and customers. Buying a car from a dealer can often be a lengthy and difficult process. Especially if it is a trade-in, there is a lot of paperwork to be completed. Since the manufacturer has to produce the car to exact specifications, the actual purchase of a car is often delayed, so the customer has to go to the dealer a second time months later to pick it up (Walton, 2019, p. 4).

Customer expectations are changing drastically by the impact of other industry which embraced the digital transformation way sooner than the automotive industry. To meet those changes in customers’ needs and wants the automotive retail must adapt to a changing customer journey (Walton, 2019, p. 3).

The traditional and largely common customer journey of car ownership is shown inFigure 2.

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Figure 2: Traditional Customer Journey in the Automotive Sales Industry based on (Walton, 2019, p. 3)

Like in any other industry, the journey starts with a discovery, often called awareness phase, where the customer gets in touch with the brand and the products and services itself. Tailored marketing activities are used to draw specific customer’s attention to the company. Normally, the consumer would be assisted in choosing a car via complicated media, third-party websites, or complicated OEM webpages before letting dealerships take over.

In the education phase, customers are considering their options and try to find out, which product or service is best for them. The dealer would typically be the main informational resource and the only option for a test drive while deciding whether to buy a car. Customers then have to decide and commit to a specific car. The dealer would most often negotiate the purchase price, and the financing would be handled by either a captive or an external financial service provider. After purchasing and financing a car, there would then be a significant delay until delivery as the OEM manufactures the vehicle to the specifications agreed with the dealer.

If the car is finally ready, it would then be delivered to the dealer for pick-up and first introduction for the consumer. During the ownership and service phase the customer’s preference to take their car to an official service shop would limit the interaction with the OEM. In fact, a majority of customers only come back in touch with the brand when they are considering a repurchase and therefore re-enter the awareness phase, at the beginning of the customer journey (Walton, 2019, p. 3).

In the automotive sector, the conventional customer journey and sales model no longer satisfy customers’ needs and wants. For most customers, the status quo is no longer acceptable. Times of location, stock and relationship-based models where the consumers relied on local dealers are long gone. Although the sales model has undergone some minor changes in the past, such as the integration of an online car configurator or e-brochures, consumer expectations continue to surpass those of the retail delivery model.

There are still various dealers to choose from to get different pricing quotes, and the sales processes are still dealer-owned. Despite growing investment in digital, it has primarily gone toward advancing research.

In the recent past, the mutual influences between online and physical stores have come to light. While many customers shop across various channels car manufacturers understood the need of aligning retail with consumer preferences.

In a today’s omnichannel world the distinctions between channels are faded and customer choices determine the dynamics – fitting products and services are everywhere. Connected consumers engage in simultaneous physical and digital interaction – a so-called phygital experience. Online technologies have eliminated the need for haggling, making price transparency indispensable and integrating finance into the online sales process commonplace.

Industry leaders and other sectors are already working to develop a market-specific ecosystem of products and services, with dealers using networks and partners to offer the experiences consumers want (Walton, 2019, p. 7).

Changes in customer preferences and the presence of an omnichannel sales process also ensures the change of the complete customer journey. Nowadays, customer do not follow a linear path on their way purchasing a product or services. Rather it appears to be an undefined, individually different trail with no clear structure. Such a Customer Journey is shown inFigure 3.

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Figure 3: Landscape of a new Customer Journey-Approach in the Automotive Industry based on (van der KOOIJ & Fernando, 2015)

The customer journey shown here is an extended version which not only describes the various phases and the temporal use but the time a customer spends in the respective phase. This duration is represented by the size of the circles. The larger the circles, the longer the customer remains in a phase. Individual steps of a consumer are defined by the colored dots. Purple dots represent the steps before the purchase of a product or service is done whereas the red ones symbolize the customer journey after the purchase is completed.

At the beginning of the journey companies try to raise awareness of the audience to engage with brand, products and services. They provide potential customers with tailored information and use state-of-the-art marketing communication to selectively approach different target groups.

During the Inform & Select phase, customers should be guided to further information across all channels in a most excited and personalized way. Customer consultation accompanies the customer in configuring the car and arranging a test drive before finally a price will be negotiated and personalized offer created. In an omnichannel world, all these activities can take place multiple times and simultaneously across different channels. Customers decide when and how they are going to proceed with their journey.

After consumers are satisfied with a suitable offer, they purchase their customized car. From here, the customer will be informed when the car is ready for pick-up and handover, where ideally all product details are getting explained and remaining questions answered. The After Sales and In-Car Purchasing phase is still often underestimated or disregarded but will become more important in the future. Digital services open up further business opportunities for both dealers and OEMs and ensure customer satisfaction and company growth.

In practice, most phases do not consist of a single touchpoint or interaction with the customer but can be passed through several times until the customer is satisfied.

To meet the today’s customer needs and wants there are three major kind of business models in use. Some fit more than others and both the benefits and disadvantages will be discussed in the following chapter.

2.2.1 Wholesale Model

The current state of vehicle sales does not satisfy consumers anymore. Digital powerhouses like Amazon or Netflix are establishing new benchmarks for brand and purchasing experiences: Customers at Amazon may select from an almost limitless selection of products, make a single click purchase, and have the item delivered to their door within hours.

Customers on Netflix have a choice of three straightforward memberships that provide them access to millions of movies and series. If they decide to cancel their subscription, they may do so within a month. Industry-wide, consistent end-to-end experiences and seamless omni-channel retail are emerging as the new standard (Schmidt et al., 2019, p. 12).

According to a survey from Accenture (Schmidt et al., 2019, p. 13), 49 percent of consumers already conduct most or all of their pre-purchase research online. But in most cases, this entails browsing challenging OEM websites to find out more about the products and services. In the wholesale model, the car manufacturer builds a vehicle and sells it to a dealer whose taking care of all major sales and services activities. The traditional model does not meet customer expectations anymore and is nowadays associated with many inconveniences.

Since OEMs sell the majority or all of their vehicles through independent dealers, asking for a price quote can be challenging because customers need interact with the dealers directly to obtain a price quote. This usually requires a trip to a showroom on the edge of the city, which younger clients in particular find burdensome and perhaps intimidating. Once they arrive, consumers depend on sales-driven employees to walk them through the process of customizing their vehicle (Schmidt et al., 2019, p. 13). In addition, there are typically extensive talks to determine the final price. The consumer will then have to choose between several challenging financing choices when they eventually find out, the car won't be ready for another three to six months.

These processes reflect the outdated and rigid customer journey in the automotive industry which was mentioned inFigure 1. Customers are no longer willing to go through a complicated, fixed sequence of steps but demand the flexible, simple options that are exemplified in other industries. With the exception of online research, where customers can find out more about the car or specific services, all other activities in the have to be carried out in collaboration with the dealer. The wholesale model is far away from today’s standard of an omnichannel sales approach where customers decide when and where they engage with a brand or product or continue with a particular step in the customer journey. Customers perceive a complicated purchasing process and, in particular, the lack of online-offline integration as a serious flaw in the traditional sales model (Schmidt et al., 2019, p. 18). The article of Accenture also states, that “not surprisingly, 53 percent of customers rely heavily on third-party online portals for purchasing, and 58 percent use third-party online pricing services to compare offers and avoid exhausting negotiation processes” (Schmidt et al., 2019, p. 13).

Innovators, early adopters and especially the young generation, who are accustomed to the transparent and convenient sales experiences like Amazon, Disney or Netflix offer, negotiating prices and long delivery times seems obsolete (Schmidt et al., 2019, p. 13). Missing fixed prices confuses customers and encourages competition among brand-specific dealers and lowers their profit margin.

Additionally, OEMs in the wholesale business have little to no direct contact with private customers and limited capacity for data collection. The lack of consumer data is unacceptable especially in a world when business models are built on data-driven analytics (Schmidt et al., 2019, p. 18).

The innovation in car sales, however, does not stop with the availability of online shops. Younger, tech-savvy customers in particular want end-to-end online purchase options with fixed prices and home delivery. They also envision having access to virtual reality (VR) technologies in the near future to supplement or even replace the showroom experience at a dealer (Schmidt et al., 2019, p. 13).

The numerous ongoing initiatives and strategies to change the automotive retail sector highlight the profound uncertainty around what customers of today and future desire, as well as how various stakeholders are adjusting to the shifting retail environment. OEMs and their retail partners are at a crossroad and need to transform their business models to accommodate the future of automotive retail, which extends far beyond merely bringing their operations online (Köstring et al., 2020, p. 7).

2.2.2 Direct Sales Model

The Automotive Industry and the traditional wholesale model are changing drastically. Motivated by their experiences in other industries and the development of new technology, customers are looking for a new, contemporary sales experience in the automotive industry. Young customers in particular, are becoming more and more unsatisfied with how cars are currently being offered. The buying process has been changed by e-commerce behemoths like Amazon and sector leaders like Apple, making it much easier, convenient, and transparent.

Online retailers, platforms and electric vehicle start-ups recognized the shift in consumer preferences before many established automakers and dealers (Morris, 2022).

In response to the shifting market environment, new disruptors like Tesla, NIO, and Polestar are providing cutting-edge automobiles at competitive pricing. However, the most significant challenge they are posing to OEMs is their transformation of the customer's journey of purchasing a car into a straightforward and convenient experience. By connecting showrooms in urban areas with online stores, they provide a simple interface and a new, modern shopping experience (Schmidt et al., 2019, p. 21; Van Vliet, 2022).

In a direct sales model, OEMs sell their products and services directly to the customers via online platforms or own offline customer stores. As new players build their business models from scratch, they often have dispensed with a dealer network. To ensure the best user experience, they are using their offline stores as customer experience centers rather than just "stores”. By eliminating dealers, OEMs are able to interact directly with their customers, receiving and gathering customer data as well as having full control over the selling price. In addition, online sales enable OEMs to reduce the distribution costs and to better steer transaction prices end-to-end. Compared to the wholesale model, customer consultation is provided by product experts or OEM showrooms. And instead of picking up your car, customers are able to place an online order for home delivery or pick up at a preferred service location (Schmitz et al., 2020).

However, it is crucial to keep in mind that under this model, OEMs are forced to create their own supply chain and distribution network from scratch. There are also no dealers with whom to share operational risks (Balensi, et al., 2021).

Customers' present purchasing habits are fundamentally changed by a direct sales model, which allows buying a car with only “one click” and offers greater clarity regarding vehicle availability and pricing. The model also addresses key customer pain points like secure vehicle financing, selecting add-ons or negotiating a final price (Köstring et al., 2020, p. 20).

According to Simon Dixon, Founder and CEO of Rockstar, most customers want to shop online, but some still prefer a physical point of contact to perceive products in a positive environment. Test drives and dealership visits continue to be the main driver of customer choice today (Morris, 2022). Considering these facts, it is key “to combine all of these elements into one seamless customer journey and to find a balanced solution” (Schmidt et al., 2019, p. 12).

2.2.3 Agency Model

Consumers in all industries have become used to customer-centric business models and simple purchasing processes. An enhanced, convenient online-offline sales experience that matches customer expectations and service standards is more important than ever. The traditional sales strategy cannot adequately meet these customer demands (Tschödrich et al., 2020, p. 4).

Given the potential impact on dealers' already low margins, initial signals of online sales picking up speed in line with altering consumer preferences are keenly monitored throughout the whole automotive sales ecosystem. OEMs are also highly dependent on their current networks, which requires all participants to make deliberate and coordinated decisions to build the future today as maintaining the status quo becomes increasingly difficult (Köstring et al., 2020, p. 20).

Additionally, the inchapter 2.1explained ACES-trends are major challenges for the automotive industry. The introduction of electric or driverless vehicles, that considerably impact production costs requires new efficiencies along the value chain. New competitors such as Polestar, Geely or Tesla are already operating agency or direct sales model successfully. Traditional automotive OEMs are under pressure to give their customers comparable cross-industry experience (Tschödrich et al., 2020, p. 4). The need for a customer-centric and omnichannel sales approach that enables deep consumer insight throughout the customer journey and beyond is highlighted by the diversity of consumer preferences and behaviors (Köstring et al., 2020, p. 9).

Car manufacturers are pushing towards an agency model to take advantage of more tightly managed sales processes, direct customer access and their extensive network of independent dealers. In the agency model OEMs engage directly with customers while also being in charge of the sales transaction. The dealer on the other hand, operates as an agent remaining the customers’ physical point of contact without being the contractual partner anymore. Therefore, the agent is constrained by the distribution channels and prices set by the car manufacturer. Fixed prices enable OEMs to create truly competitive online offers which are completely integrated with the agents’ offline sales channels, allowing agents to better follow up on customer inquiries, finalize deals and shield themselves from competition (Missing, 2021; Trenka et al., 2021, para 8-11).

Figure 4shows the fundamental differences between the agency model and the traditional sales model at a glance. In the traditional sales model, the dealer serves as the bridge between the OEM and the customer. Dealers buy new cars directly from the OEM and then sell them to the consumer. Consultation, the purchase contract and the handover take place exclusively between the dealer and the customer.

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Figure 4: Agency Sales Model vs. Traditional Sales Model based on (Tschödrich et al., 2020, p. 4)

In the new sales model, on the other hand, the dealer only receives a commission from the OEM for arranging the sale of the cars to the consumer. The sales contract and the handover can take place at the agent but is always made between the automotive manufacturer and the customer. This means that it will also be possible to buy a car entirely online. Consultation on products and services, however, can take place both online at the OEM and on site at the agent.

The agency model enables OEMs to harness existing dealer recourses in order to create a long needed, superior omnichannel customer journey. With the agency model, automotive manufacturers establish a 360° view on their customers increasing up- and cross-selling potential and market transparency. Especially for tasks that require physical touchpoints, such as conducting test drives and coordinating service appointments, the agent still has a major impact. Agents also receive full access to the nation's car stock to better meet customer demands for short delivery terms while their financial risk is reduced (Trenka et al., 2021, para. 10).

Figure 5shows a more detailed view of the three current sales models in the automotive industry. The representation allows a comparison at a process level along the customer journey and show the differences between the sales models. In contrast to the illustration inFigure 3, a linear representation of the customer journey was chosen here to enable a clear, straightforward comparison of the models.

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Figure 5: Detailed Overview of the current Business Models in the Automotive Industry based on (Hasenberg et al., 2021, p. 4)

The overview clearly shows that in the traditional sales model, the dealer is responsible for the entire interaction with the customer. Only the online research can be carried out on the OEM's website, which is usually user-unfriendly and simply not state of the art. Otherwise, all other touchpoints of the customer journey take place offline and on site at the dealer. The lack of touch points between manufacturers and customers is one of the main reasons for OEMs to change their current business model.

One of the main characteristics of the outdated business model is the ability of the dealer to give discounts to their customer. Combined with no clear and transparent prices, this often led to price wars between competing dealers and nerve-wracking negotiations with customers.

The complete opposite can be seen in the direct business model, where there are no longer any dealers. New competitors in particular are avoiding the cumbersome process of building up a large distribution network and are relying mainly on online sales. Customers are able to obtain information online via OEM websites or product experts both online or offline at OEM showrooms. Unlike the traditional sales model, prices are set by the OEM with no room for negotiations. At the same time, increased transparency provides a “best price” guarantee for customers. For handover, customers do have the choice to place an online order for either home delivery or pick up at a service location. In aftersales, it depends on the type of service. For example, an over-the-air update or an in-car purchase can be upgraded or purchased conveniently from home. The drawback of the non-existent dealer structure are the long distances that customers sometimes have to cover for technical services. The disadvantage of long distances due to few customer centers is also demonstrated by the possibility of a test drive, where sometimes customers also need to drive hundreds of kilometers. Unlike the outdated traditional sales model, here the car manufacturer is able to collect all customer data, which provides a deeper understanding of the market and the ability to better meet the needs and wants of customers.

To combine the benefits of both business models, established OEMs developed the agency model. Customers can get information about products and services and consultation either from an OEM expert or directly on-site from an agent. The same applies to the car configuration, which can be performed both online and offline. Just as with the direct sales model, prices are set by the OEM, eliminating the need for price negotiation. The customer can also decide whether he wants to create his contract online or offline with the agent. Only in the case of a used car trade-in, the customer still has to visit an agent. The purchase of the vehicle can still take place at the agent, but the sales contract is concluded between the OEM and the customer. This also enables online purchasing, which is common in other industries. Depending on the manufacturers, customers are able to get the vehicle delivered to their home or they can pick up the car at a preferred agent. While in-car purchases can be done directly by the OEM, customers benefit from the large distribution network for technical services.

In fact, OEMs are trying to get the best out of the already existing business model by enabling online sales thus keeping their dealer network. While there are opportunities and risks for both OEM and agent the new model focuses on customer first, offering a seamlessly omnichannel experiences where customers decide when, where and how to purchase a product or service. The long overdue step of making the customer the starting point for all internal decisions, which other industries have exemplified with remarkable success, is the first leap towards customer centricity.

The agency model is the first revolutionary change in the distribution model by established car manufacturers since 1980 and therefore a huge challenge for all involved. Given the new agency sales model, there are certain opportunities, but they also come with several risks.

The importance of consumer data is perhaps the biggest benefit and the driving force behind the long overdue transformation in the automotive industry. Through the new business model, the manufacturer interacts directly with the customer and thus has the potential to collect all relevant data. Access to valuable customer data, currently available primarily to retailers, enables a premium customer experience that truly puts the customer first. Online and offline sales channels are combined to provide customers with a seamless omnichannel customer journey and a consistent end-to-end experience. As a result, clients can be given customer-specific advice on the spot while experienced and tech-savvy customers can conveniently buy online.

A 360° customer view – possible due to the data access -enables customized products and services that are adapted to customers’ needs and wants. Furthermore, the agency model facilitates a single price across all distribution channels, increasing price transparency and eliminating intra-brand competition. In the future, test drives and handovers are to be created as unique customer experiences to achieve a high level of customer loyalty and customer retention towards brand and dealerships.

At the same time, the switch to an agency model requires considerable effort on the part of the OEM. Although it appears simple on paper, there is a tremendous amount of work and complexity involved in changing a business model. New contracts between manufacturers and agents must be concluded, which can lead to legal disputes and compensatory payments. Additionally, the interconnection of centralized support systems, associated skill sets, and related operations increases organizational complexity (Hasenberg et al., 2021, p. 10).

Nevertheless, the agency model seems to be a promising business model and the first step to secure the future of the established OEMs. Despite the many hurdles and the enormous effort involved, OEMs must realize the urgency and necessity of change - just as Darwin once stated: adapt or die!

However, not only OEMs have to change their business models but also the dealers in particular need to adapt to the wants and needs of the customers to play a relevant role in the future and to participate successfully in the ecosystem.

2.2.4 What’s about the Dealer?

Dealers running independent businesses have traditionally been the backbone of the automotive industry. By purchasing vehicles directly from the OEM and reselling them to the end customer, they account for the majority of the OEM's new vehicle sales. The dealer is the single point of contact for the customer, not only selling products but also supporting the customer with a broad range of other services (e.g., administrative tasks and after sales). Dealers and customers often maintain a close relationship, which increases customer loyalty, benefiting both retailers and brands (Schmidt et al., 2019, p. 15).

The traditional role of dealers is changing due to new aspects of online sales. Value creation is shifting from the dealer to the original equipment manufacturer as a result of new customer journey elements (see Figure 4). The retail strategy and operating model must adapt to this paradigm shift (Hasenberg et al., 2021, p. 3). The agency model also entails certain advantages for the dealer. More transparent and predictable planning with lean cost structures ensures that the agent can focus on what he does best - personal consultation through appropriate customer orientation and premium services. Since the OEM is now accountable for capital needs of new vehicle sales – including responsibility for vehicle stock, carrying out strategic wholesale pushes, and balancing demand peaks - the agent has substantially less entrepreneurial risks (Köstring et al., 2020, p. 25). As OEMs are taking on the costs for inventory and showroom vehicles, agents benefit from leaner balance sheets and liquidity enhancement. Additionally, dealers have the chance to be more flexible, strengthens the relationship between the manufacturer and the retailer, and are expected to provide customers a much more flawless and integrated retail experience. In general, the transformation to an agency model leads to a significant reduction of the business model complexity on the retailer side (Schmidt et al., 2019, p. 24).

Although the dealer can clearly benefit from the agency model, the change in business model poses significant risks for the agent's future. The agency model and especially the access to customer data significantly increases the OEM’s leverage. Manufacturers are able to capture large portions of their day-to-day business. As OEMs strive to take over distribution completely and squeeze out the dealers' business, the agents will become obsolete. At the same time, OEMs' increased efforts and investments in online sales will intensify competition for dealers, leading to declines in sales and reduced turnover. Dealers also lose their independence and have to rely on the OEMs' ability to ensure smooth sales processes and operations (e.g., setting the right price), which can have a negative impact on their bottom line (Schmidt et al., 2019, p. 31).

Many publications and studies often neglect the disadvantages of the agency model for dealers and only focus on the possibilities and opportunities for OEMs. However, agents are facing radical changes and must adapt to the transformation of the OEMs’ business model and look for new ways to drive growth to keep their business alive.

This leads to a new way of looking into the digital transformation of the business model in the automotive industry, focusing on dealers and evaluating their opportunities for a future-proof business model.

Chapter 4takes an in-depth look at the question: How will aspects of the automotive dealer business model have to change in order to be able to deliver added value for the OEM in the future, despite the influence of digital transformation and the associated implementation of the agency model or direct sales model?

2.3 Best Practices

The automotive industry is facing drastic change: In the wake of digital transformation, challenges are emerging for the traditional business model of car manufacturers. On the one hand, the environment, social, and corporate governance requirements (ESG) are causing a boom in electric cars, with new competitors entering the market using digital business models - e.g., Tesla, Polestar, NIO (Gupta & Maurya, n.d.; Banks, 2020). On the other hand, changing customer needs and the digitalization of the value chain and the current customer journey are creating additional pressure for OEMs.

Compared to the agile and customer-oriented approaches of other industries and the new competitors, established OEMs are identifying innovative ideas late or implementing them insufficiently quickly. The core challenge is to break down the rigid structures and pair the changing customer needs with the advantages of the current business model, considering ESG requirements and the innovative ideas of new competitors.

The best practices discussed in this chapter show both the approach of established OEMs and that of disruptive OEMs.

2.3.1 Comparison of Business Model Approaches of successful OEMs

Based on successful car brands, key aspects in the implementation of the new business models are compared. The OEMs under consideration are Volkswagen, Daimler, Polestar, and Tesla. The content is derived from interviews conducted by Martin Rogalski together with various experts in the industry (see Appendix A).

First, the actual concept and the philosophy of the model is considered. Where do I want to go and what are important framework conditions for the new business model?

While the established OEMs such as Volkswagen and Daimler are basically aiming for an agency model, new competitors are mostly focusing on a direct sales model. The main reason hereby is the starting point of the transformation. While VW and Daimler want to build on and benefit from an existing dealer network, the new entrants are starting from scratch, without restrictions or rigid structures.

At Volkswagen the new model is a hybrid agency model, with traditional dealers still selling ICEs competing with agents selling only EVs. The ID collection is thereby positioned as a competitor product of Tesla. Unlike the genuine agency model at Daimler, there are no plans to convert ICEs to the agency model at a later date. However, with additional conversion from ICE to EV, the traditional dealers will be phased out (Volkswagen, 2020).

The main objectives for VW are the access to customer data as well as the control over prices and sales processes. Additionally, Volkswagen creates a pull effect with centralized and unformed marketing on EVs.

Since customers are already accustomed to direct sales in the electric car sector through competitors such as Tesla or Polestar, the introduction of the agency model for exclusively new (pull) vehicles is an advantage for VW. The rollout of the new model for EVs thus creates a high level of customer acceptance. In addition, other than the implementation of new, uniform prices, no further changes to the point of sale (PoS) are required.

The genuine agency model at Daimler links the physical and digital experience to create a seamless “phygital” omnichannel experience. In contrast to the VW model, not only EVs are handled by agents but the traditional dealers operate also as agents. Dealerships transform into a brand experience center and thus remain a physical touchpoint for customers (Daimler, 2021).

As with most established OEMs, the main reason for moving to an agency model is to gain access to customer data to expand marketing and improve the customer experience. Similar to VW, Daimler obtains control over pricing, which avoids intra-brand competition and reduces cost of retail. The new model also increases customer orientation and thus creates the basis for customer-centric business model (Damiler, 2021).

For a successful transition to the agency model, Daimler relies on a strong brand and stepwise implementation in selected pilot markets. Unlike VW, Daimler focuses on dealer involvement and empowerment to fully leverage the existing dealer network.

Polestar, on the other hand, is a new EV brand that serves as the first step in implementing a new sales concept and pilot project for the future of Volvo. Theoretically, the sales model follows Tesla’s pure direct sales model. Moreover, they use Volvo dealers, whose participation is voluntary, to provide additional local touchpoints (Banks, 2020).

Polestar's goals are primarily to address customers' online shopping habits and digital customer experiences that have long become commonplace in other industries. With EVs only they reach new target groups and open up new markets. By creating a physical retail presence quickly and cost-effectively, they are building consulting-only locations that provide local customer touchpoints.

Since there is no dealer structure yet, Polestar benefits from great freedom and few restrictions. In addition, they benefit from Volvo's support through, for example, an existing dealership network. This is an enormous advantage and a significant success factor, especially at the beginning.

Tesla, on the other side, focuses on pure online business and thus on the elimination of physical sales contacts (Gupta & Maurya, n.d.). The product is the strongest selling point, without the need to further convince customers (Lobo, 2020). By selling online only, Tesla is focusing on lowering costs and creating a new customer experience in the automotive industry. Without a dealer network, Tesla retains full control over the entire sales process as well as aftersales. Not having to invest in a distribution network also avoids margin sharing and enables rapid scaling. The first mover advantage enables Tesla to generate a strong pull effect. At the same time, visionary CEO Elon Musk helps building a strong brand image. All these elements are key factors for Tesla's success.

Due to the different background situations, all OEMs have chosen different ways to realign or develop their business models. Although all approaches consist of the direct sales model or a combination of the previous, traditional model and direct online sales, the models differ fundamentally in certain areas.

Nevertheless, certain learnings and key findings can be derived from the research results in order to successfully shape the long overdue change of the business model.

2.3.2 Key Takeaways for the Transformation of Business Models

Since each OEM chooses slightly different approaches, added value can be gained from each one. Based on the findings of the analysis, key takeaways for the transformation of business models for car manufacturers in the automotive industry are derived.

Daimler, for instance, is focused on delivering an exceptional customer experience in physical formats, such as customer experience action plans and showroom redesigns. The concept enables quick and adaptable stock availability and provides flexible trade-in opportunities due to centralized repurchase (Daimler, 2021).

Tesla, on the other hand, has developed an intuitive end-to-end online journey as other industries already have demonstrated. In addition, simplicity and speed in all processes as well as centralized sales skills at OEM level extremely reduced organizational complexity (Gupta & Maurya, n.d.).

Polestar introduced the new business model as a separate brand of Volvo. While IT was rebuilt from scratch with new tools and partners, Volvo's existing dealer network was integrated into the new sales model with clearly defined criteria (Banks, 2020).

Similar to Polestar, VW has introduced the new sales model only for the EV line, which allows for efficient implementation with almost no changes at the PoS. The hybrid sales model also ensures a high level of acceptance among consumers (Volkswagen, 2020; Autohaus, 2020).

Taking all experiences into account several important findings for transforming a business model in the automotive industry can be derived.

The main focus is on fully engaging agents and their retail expertise into the new model, thereby maximizing the benefits for established OEMs that have already built a dealer network. When integrating agents, it is important to distinguish between low and top performers to promote an optimal customer experience and ensure that top performers remain top performers. It is also essential to identify a savvy used-car solution that offers best-price guarantee to customers and allows agents to make profit. OEMs need to leverage access to customer data to drive customer loyalty through rewards programs, status levels or bonuses. While transforming the business car manufacturer need to implement best-in-class online generation by learning from other industries like telecommunications. In transforming the business, automakers must implement best-in-class online generation by learning from other industries such as telecommunications. It is also crucial to prioritize the stability of core functions in the IT landscape over the complete rollout to ensure a flawless process. For successful transformation OEMs need to set clear goals and timeline, practice genuinely transparent communication for all stakeholders and invest in social profiling to really understand the market and their customers. It is also beneficial to initially introduce direct sales for a specific product line or model in a few smaller countries in order to test the implementation. This should avoid the need for major changes at the PoS and ensure a high level of customer acceptance.

For a successful and sustainable implementation, it is generally important to create a superior "phytigal" experience where customers can experience a seamless customer journey.

2.3.3 Action Plan for the Implementation of an Agency Model

For established automotive manufacturers, changing wholesale structures that have been in place for decades is a huge challenge. Developing cutting-edge online platforms and embedded end-to-end systems for agents is expensive and much of the transformation demands a change in mindset, both internally and within the dealer network. In order to effectively transform the outdated business model into the agency model the company has to change fundamentally in different areas. A successful transformation journey, that lays the foundation for direct sales, can be managed best through three phases (Trenka et al., 2021, para. 33).

In theanalysis phase, the first step is a detailed analysis of the markets and models to identify a suitable environment and a basic framework for the agency model. Automotive manufacturers that have mastered the transformation have usually set up a task force for this purpose, comprising internal and external experts on a wide range of topics, such as sales, marketing, It and finance. As a first step, this team needs to define a target operating model by analyzing the as-is processes and to describe the to-be processes. For successful planning it is important to look at the state of the art both within the industry and beyond industry boundaries, to analyze best practices, and to work out quick wins and requirements. The IT architecture and landscape are frequently overlooked or not even thought about. But the importance of early IT involvement including an analysis of the current infrastructure and a definition of the target picture of the IT landscape cannot be overstated.

Furthermore, the traditional division of roles is deeply rooted in the minds of manufacturers and dealers. To foster a lasting change of the mindset, automakers should start with a small but meaningful pilot project instead of aiming for a comprehensive transition from the outset.

In addition, a business case can demonstrate the financial impact of direct sales and prove the potential profitability and feasibility of the model (Appendix A; Trenka et al., 2021, para. 34).

During thedesign and implementation phaseOEMs should divide the project into smaller work packages to better understand the difficulties of redesigning the entire sales process. This entails omnichannel online and offline sales, a completely new commission-based compensation model for agents, and a variety of new IT system, including CRM and pricing tools as well as online valuation of trade-in vehicles. The value of involving dealers early in the development and piloting phase has been demonstrated by prior examples such as Mercedes. To achieve the best possible customer experience, companies need to design a detailed agency model concept that focuses on synergies with the agent network by working closely with national sales companies (NSCs) and prospective agents. The key to successful transformation is always clear change management, defining communication measures and setting change plans. Most changes fail because of the organization itself. Management often forgets to involve its own employees, to justify and explain the change, and to adapt the corporate culture. However, the change must also be explained to close partnerships, e.g., the agents, by designing and conducting training to prepare them for their new role. Training so-called “transformation angels,” who can support dealers during the rollout and go-live stages as well as coach dealers in the new sales procedures and IT tools, is a proven strategy. Furthermore, a professional communications team can assist in establishing direct sales in the national sales companies (NSCs). When implementing the new model, it is important to develop a roadmap that allows for timely, decisive, and consistent implementation. Rollout design must encompass and coordinate dealer and agent related projects and topics to ensure seamless implementation (Appendix A; Trenka et al., 2021, para. 34).

During therollout and agile adaption phase, OEMs must closely monitor market feedback and adjust processes and systems on the fly to eliminate errors and obstacles immediately in order to be fast enough to manage day-to-day retail operations. Once the new sales model has been launched and tested in the pilot market effectively, the manufacturer can proceed scaling up the model to additional markets and regions. To drive change actively and sustainably, it is of great importance to set further milestones, define key performance indicators and appoint responsible persons (Trenka et al., 2021, para. 35).

Even though these are ultimately higher-level measures, they can lay the foundation for a successful transformation of the business model. The best chances of outperforming the competition and gaining an edge in the digital age are those who strive for innovation and see digital transformation as an opportunity rather than a threat (Trenka et al., 2021, para. 36).

[...]

• Hochschule: Hochschule Aalen
• Note: 1,5
• Autor: Robin Mayer (Autor:in)
• Erscheinungsjahr: 2023
• Seiten: 274
• Katalognummer: V1339502
• ISBN (PDF): 9783346888617
• ISBN (Buch): 9783346888624
• Sprache: Englisch
• Schlagworte: Digital Transformation, Automotive Industry, Business Model, Agency Model, Direct Sales Model, OEM, Best Practices, Ecosystem, Challenges, Impacts, Implications, Dealership, Design Recommendations, Key Takeaways, Action plan, Research Methodology, Mayring, Qualitative Data Analysis