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Q4-2 How Can New Hardware Affect Competitive Strategies?

You’ll see more cost savings because a self-driving car will drive better than you. You’ll save on
fuel because it will drive more efficiently (less braking, revving the engine, and street racing!). You
will avoid costly traffic tickets, parking tickets, and DUI citations.
Your car insurance will drop dramatically. It may be so low that you won’t even need it any-
more. One of the largest insurers in the United States, Travelers, said, “Driverless cars or technolo-
gies that facilitate ride or home sharing, could disrupt the demand for our products from current
customers, create coverage issues or impact the frequency or severity of losses, and we may not be
able to respond effectively.” 13
They’re probably right. Self-driving cars will probably take a big chunk out of the $100B, paid
each year in car insurance premiums. And they should. Your future self-driving car will be safer
because its crash avoidance systems will apply the brakes before you’re even aware of a problem.
It will be able to know the exact locations, velocities, and routes of all cars within the vicinity.
Automobile accidents may become a thing of the past.

Self-driving Cars Will Make Things Safer

Yes, you read that right—safer. Currently, 90 percent of motor vehicle crashes are caused by human
14
error. Motor vehicle crashes are the leading cause of death for people ages 3 to 33. Spending time
driving may be the most dangerous thing you do all day.
Your car will be able to see better than you, react more quickly than you, and have better infor-
mation about your driving environment. It will be able to communicate with other cars around it,
dynamically analyze traffic patterns, avoid construction sites, and contact emergency services if
needed.
Self-driving cars will mean safer driving, fewer accidents, fewer drunk drivers, fewer road-rage
incidents, and fewer auto–pedestrian accidents. Cars will be able to go faster with fewer accidents.
In the future, manual driving may be a risky and expensive hobby.

Self-driving Cars Will Disrupt Businesses

Self-driving cars have the potential to disrupt well-established industries. Self-driving cars may mean
fewer cars on the road. Fewer cars on the road may mean fewer cars sold (transportation), fewer auto
loans written (finance), fewer automobile insurance policies underwritten (insurance), fewer auto
parts sold due to fewer accidents (manufacturing), and fewer parking lots (real estate). If they didn’t
have to drive, consumers might take more trips by car than by plane or train (transportation).
The production of self-driving cars will mean more jobs for engineers, programmers, and sys-
tems designers. There will be more computer hardware, sensors, and cameras in the vehicle. Cor-
porations may not completely see the far-reaching effects of self-driving cars on existing industries.
How will self-driving cars disrupt your personal life? Suppose you get married in a few years
and have a child. Will your child ever drive a car? Will driving a “manual” car be too costly? Your
potential offspring may never learn how to drive a car. But that may not be too strange. Do you
know how to ride a horse? Your ancestors did.

3D Printing

The third disruptive force that has the power to change businesses is 3D printing. As you learned
in Chapter 3, 3D printing will not only change the competitive landscape, but it may change the
nature of businesses themselves. Think back to the Falcon Security case at the start of this chapter.
The Falcon Security team chose not to make its own drones because doing so wasn’t going to save
the company enough money. It didn’t want to use 3D printing to become a drone manufacturer.
While manufacturing wasn’t right for Falcon, it is a viable option for some companies. Consider
how Nike has used 3D printing to improve the way it designs and creates shoes. It recently used a
3D printer to create the world’s first 3D-printed cleat plate for a shoe called the Nike Vapor Laser