Why is Google investing in self-driving cars?
Google- Ana Rodriguez
I will answer this question as a product strategy question:
Step 1- Clarify the question:
1) When we say investing, do you mean manufacturing cars or building technologies or investing in companies that are involved with building self driven cars?
2) Are we looking at a specific timeline (1 yr, 2 yrs etc.)to evaluate this strategy
3) Do we need to consider any specific competitor while evaluating this strategy?
4) Are we looking at a specific region to focus while evaluating this strategy?
Step 2- Describe the company:
Google’s mission is to organize worlds information and make it universally accessible and useful.
Beyond traditional search services, Google has extended its reach into video, home management products and cloud services which are in some way are an extension of their search infrastructure. Google is one the largest corporations in the world in terms of market cap with industry defining trends and products. Google considers Microsoft as its main competitor in the search business with other organizations like facebook, amazon, apple as competitors in advertising, mobile engagement and data mining area.
Step 3: Google’s strategic goals
1) Keep a tab over data business, data drives all other industries. The company with the data can control the overall business
2) Reduce dependencies on advertisements to engagement driven sales– move into Amazon’s turf
3) Expand avenues of customer touchpoints outside search and video consumption business
Step 4: Strategic imperatives for driverless cars for Google
1) Invest into driverless cars with any objective not to manufacture car but to license technologies to car manufacturers e.g. development of android platform
2) Use driverless car technology as a means to capture metrics on commutation and then sell the metrics to music, food companies and advertising corporations
3) Use driverless car technologies as an avenue to sell associated services e.g. cloud infra, cloud services, car operating systems etc.
4) Use driverless technologies to expand into associated industries e.g. Telecom, broadband , 5G infrastructure
5) Use driverless technologies to set up a company like Uber where cars may or may not be supplied by Google still the underlying infrastructure is managed by it
6) Get into a new business altogether like Hyperloop and using driverless cars as a feeder to hyperloop
Step 5: Evaluate strategic imperatives
| Strategy | Revenue | Growth | Competitiveness |
| Invest into driverless cars with any objective not to manufacture car but to license technologies to car manufacturers e.g. development of android platform | High | High | High |
| Use driverless car technology as a means to capture metrics on commutation and then sell the metrics to music, food companies and advertising corporations | Medium | Medium-High | Medium-High(there are other avenues to collect this data e.g. mobile tracking etc.) |
| Use driverless car technologies as an avenue to sell associated services e.g. cloud infra, cloud services, car operating systems etc. | Medium | Medium-High | Medium(since Google is not a big player in cloud) |
| Use driverless technologies to expand into associated industries e.g. Telecom, broadband , 5G infrastructure | Medium-Low | Medium | Medium(since there are many telecom contenders already in this space) |
| Use driverless technologies to set up a company like Uber where cars may or may not be supplied by Google still the underlying infrastructure is managed by it | Medium-Low | Medium-Low | Medium-Low(Uber is not profitable since last 10 years) |
| Get into a new business altogether like Hyperloop and using driverless cars as a feeder to hyperloop | Medium | Medium- High | Medium (Too far fetched in terms of revenue oppurtunities) |
Step 6: Recommendations
Based on the analysis above, Google is getting into driverless cars to ‘license technologies to car manufacturers e.g. development of android platform’