Generation of Digital Revenue Streams in an Automobile Firm

Abstract

There are several underlying trends in society that are affecting the automobile industry. Some authors claim that OEMs are unable to transform and adapt their business models to encompass digital revenue-generating practices. This observation, paired with practitioners expressing a need for their organizations to further develop digital revenue streams is the main motivation and originality of this thesis. Therefore, the purpose is to study how digital revenue streams are generated and monetized in an automobile firm. Only direct sources of digital revenue streams were studied, meaning that only exchanges of value for a digital product or service were considered. Indirect sources such as digital product, process, or reputational improvements which could increase traditional sales of cars are not considered. The thesis is a case study that studied a company associated with the automobile industry. Non-probability sampling was used, and 20 people were interviewed within four divisions related to 1) business, 2) procurement, 3) R&D, and 4) regulation. In parallel, a literature review was conducted where 95 articles were analyzed. The empirical data from the interviews was then compared to the reviewed literature on the topic. Three main areas of direct digital revenue streams were identified from the literature review. The main revenue stream areas are 1) in-car commerce, 2) data monetization, and 3) autonomous drive. In-car commerce is a term which the company uses and relates to the academic area of m-commerce. Hence, in-car commerce is defined broadly as transactions taking place through a mobile network. Data monetization can be broadly defined as exchanging data for something of value. Finally, the autonomous drive is a software-based service that allows limited human interaction while driving a vehicle. From a managerial perspective, the findings of the thesis are important since it identifies use cases associated with digital revenue streams in an automobile firm. Furthermore, from a policy perspective, it highlights the importance of privacy and the increasing use of consumer data in an automobile firm. Finally, from an academic perspective, the thesis contributes with in-depth knowledge to how digital revenue streams can be generated in an automobile firm and provide areas to further research. Some of areas to further research are 1) increasing quality of products, 2) retention of customers, and 3) technical requirements.