Local Motors Case Study Analysis
Local Motors: Designed by the Crowd, Built by the Customer
Case Study Analysis
Table of conten
Table of content 2
Introduction 3
Local Motor’s business model vs. “typical” models 3
The CANVAS model 3
Customer Segments 3
Value propositions 3
Channels 4
Customer Relationships 4
Revenue Streams 4
Key Resources 4
Key Activities 5
Key Partnerships 5
Cost Structure 5
Evaluation of the business model 5
Customer involvement according to NIKE 6
“LM template” in the clothing industry 7
References 8
Introduction
The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the market. Consumer preferences shifted towards more fuel-efficient and smaller cars which were more inexpensive to maintain. The changing business environment made possible for several start-ups to outstand from the crowd and make their success in the car industry with offering innovative solutions for car purchasers. Local Motors (LM) in one of these new car-makers with a unique and novel business model. In the following an analysis of this business model will be presented based on the CANVAS model which will be followed by a discussion about other examples where a similar model could work.
Local Motor’s business model vs. “typical” models
Before going into detailed analysis of LM’s business model it must be pointed out in what key aspects does this model differ from those of traditional US carmakers. One of the most important concepts of LM’s model is an active community of car enthusiasts, designers and customers who take part in the design of future LM cars. The community allows LM to gather valuable, firsthand information about customer preferences and shape its offering accordingly. Traditional car makers usually do not have such a clear picture about what their customers want. Another key concept in the model is customers’
Case Study Analysis
Table of conten
Table of content 2
Introduction 3
Local Motor’s business model vs. “typical” models 3
The CANVAS model 3
Customer Segments 3
Value propositions 3
Channels 4
Customer Relationships 4
Revenue Streams 4
Key Resources 4
Key Activities 5
Key Partnerships 5
Cost Structure 5
Evaluation of the business model 5
Customer involvement according to NIKE 6
“LM template” in the clothing industry 7
References 8
Introduction
The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the market. Consumer preferences shifted towards more fuel-efficient and smaller cars which were more inexpensive to maintain. The changing business environment made possible for several start-ups to outstand from the crowd and make their success in the car industry with offering innovative solutions for car purchasers. Local Motors (LM) in one of these new car-makers with a unique and novel business model. In the following an analysis of this business model will be presented based on the CANVAS model which will be followed by a discussion about other examples where a similar model could work.
Local Motor’s business model vs. “typical” models
Before going into detailed analysis of LM’s business model it must be pointed out in what key aspects does this model differ from those of traditional US carmakers. One of the most important concepts of LM’s model is an active community of car enthusiasts, designers and customers who take part in the design of future LM cars. The community allows LM to gather valuable, firsthand information about customer preferences and shape its offering accordingly. Traditional car makers usually do not have such a clear picture about what their customers want. Another key concept in the model is customers’
References: Dencker, D., 2010. NIKE id – the first example of mass customization driving revenue? [online] Available at: http://www.crossroadinnovation.com/nike-id [Accessed 7 March 2014] Castells, M., 2000. The Rise of the Network Society - The Information Age: Economy, Society and Culture Vol. I. Cambridge, MA; Oxford, UK: Blackwell.