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Business Model Innovation in the Swedish Carsharing Market a Qualitative Study

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Business Model Innovation in the Swedish Carsharing Market a Qualitative Study Business model innovation in the Swedish carsharing market A qualitative study Master’s Thesis in the Master’s Program Management and Economics of Innovation FILIP HÖGLUND VICTOR PERSSON Department of Technology Management and Economics Division of Entrepreneurship and Strategy CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2019 Report No. E 2019:050 2 MASTER’S THESIS E 2019:050 Business model innovation in the Swedish carsharing market A qualitative study FILIP HÖGLUND VICTOR PERSSON Tutor, Chalmers: Giada Baldessarelli Tutor, Volvo: Burcu Hillerström Department of Technology Management and Economics Division of Entrepreneurship and Strategy CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2019 3 Business model innovation in the Swedish carsharing market Subtitle FILIP HÖGLUND VICTOR PERSSON © FILIP HÖGLUND. VICTOR PERSSON, 2019. Master’s Thesis E 2019:050 Department of Technology Management and Economics Division of Entrepreneurship and Strategy Chalmers University of Technology SE-412 96 Gothenburg, Sweden Telephone: + 46 (0)31-772 1000 Chalmers digitaltryck Gothenburg, Sweden 2019 4 Abstract The concept of mobility is entering a new era. This is exemplified by changing customer preferences, new modes of mobility and new business models. This paradigmatic shift has forced OEMs to transform beyond car manufacturers into the role of mobility providers where carsharing is a concept with high predicted future growth. Therefore, this thesis aims to answer how an OEM can innovate its station-based carsharing business model in order to improve its business-to-consumer offering in the Swedish carsharing market. The theoretical framework focuses on literature covering the concept of business models as well as business model innovation. More specifically, the concept of how business model innovation is defined, how it is conducted and why it is relevant is described and elaborated on from the perspective of multiple scholars. The study has applied a qualitative research strategy with the use of both primary and secondary data. The primary data consisted of semi- structured interviews where customers, non-customers, researchers and market players were interviewed. The interviews were coded and clustered into distinct themes which served as the main categories in the empirical findings. Moreover, the main secondary data consisted of information from website in order to map the current market players and their business model characteristics. The empirical findings highlighted four categories of customer pains in relation to the current offerings, namely lack of flexibility, trips resulting in paying for non-usage, poor fit for multi- modality and a market structured in silos. In combination with the mapping of the market player, it could be determined that these pains constituted a void area in the market where no current market player offered a high pick-up and drop-off flexibility. Moreover, seeing as the majority of pains were related to station-based carsharing, a potential for addressing these pains were found to be to offer one-way trips within such a concept. Furthermore, four main areas of challenges that might arise if these customer pains were to be addressed were found. These were associated with the risk of asymmetric flows, the increased cost with car relocation, critical mass of customers, and sustainability aspects. By using the insights gathered from the empirical finds in conjunction with theory on business model innovation, several business model patterns suited to address both the customer pains and the challenges that might arise from addressing those pains were found. More specifically, by employing the do more to address the job and the solution provider pattern, a basis for a new value proposition for was created characterized by extending station-based carsharing to include one-way trips. Moreover, by employing the self-service and the freemium pattern, the challenges of such a value proposition could be addressed. Thus, this study finds that if an OEM with a station-based carsharing offering would adopt these four business model patterns, this has the possibility to improve its business-to-consumer carsharing offering as well as constitute business model innovation as described in theory. 5 6 Table of contents 1 Introduction ................................................................................................................ 1 1.1 Background .............................................................................................................................................................. 1 1.2 Aim ........................................................................................................................................................................ 3 1.3 Research question ..................................................................................................................................................... 3 1.4 Delimitations ........................................................................................................................................................... 4 1.5 Limitations .............................................................................................................................................................. 4 2 Theoretical framework ................................................................................................. 5 2.1 The current state of the business model research ............................................................................................................ 5 2.2 The business model as a theoretical concept .................................................................................................................. 6 2.3 Business model canvas .............................................................................................................................................. 8 2.4 The value proposition canvas ................................................................................................................................... 11 2.5 Business model innovation ....................................................................................................................................... 12 2.5.1 What it is .............................................................................................................................................. 12 2.5.2 Why it is relevant .................................................................................................................................. 13 2.5.3 How it is done ...................................................................................................................................... 14 2.5.4 Business model patterns ....................................................................................................................... 16 2.5.5 Business model innovation in the automotive industry ........................................................................ 17 2.5.6 Challenges associated with business model innovation ........................................................................ 18 2.6 Customer needs as a trigger for business model innovation ............................................................................................ 18 2.7 Overview of carsharing and car-rental ....................................................................................................................... 19 2.7.1 Carsharing ............................................................................................................................................ 19 2.7.2 Car-rental ............................................................................................................................................. 21 2.8 Research learnings about customer mobility needs ....................................................................................................... 21 2.8.1 Learnings from the UbiGo field trial ................................................................................................... 22 2.8.2 Different travel needs call for different vehicle attributes .................................................................... 24 3 Methodology ............................................................................................................... 25 3.1 Research process description ..................................................................................................................................... 25 3.2 Research strategy .................................................................................................................................................... 27 3.2 Literature study ...................................................................................................................................................... 27 3.4 Data collection ....................................................................................................................................................... 27 3.4.1 Primary data ......................................................................................................................................... 28 3.4.2 Secondary data ..................................................................................................................................... 31 3.5 Data analysis ......................................................................................................................................................... 31 3.5.1
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