Htt Supercar Case Study

HTT Supercar

Question 1: Is an IT-based system important for HTT? Why or why not?

Initially, the company’s individual employees were responsible for their own data storage and IT assets. This was a sensible move on the part of CEO, Sebastian Forest, as this was a very complicated and time sensitive part of the company’s evolution. Along with the small team, and minimal inventory, IT governance and its implications could be ignored for now. Their focus now was to move from design to production, generate sales interest and marketing of the new supercar and an official IT system development would take vast resources and time. With due diligence and careful attention to detail the absence of a concrete IT system should not have hindered the progress of the firm’s growth.

Moving forward however, the need for an IT system will grow and its advantages cannot be avoided, and the absence of one will inevitably pose large risks and can cost the company greatly. All the moving parts in the automobile industry necessitate the need for a formal system that can organize and store a large number of changing data. From inventory management of custom made parts to order tracking to quality control of production to deliveries, all these aspects need to be carefully recorded and updated. Any mishaps in this value chain can lead to major problems, especially because the parts used in the vehicle are outsourced to different production companies. Hand-made production requires that all the separate pieces have been accounted for and are ready in the correct workstations, the extraordinarily high inventory holding costs adds to this need. A new firm in the automobile industry must build credibility for customers, especially when the price tag in close to 1 million dollars, inefficient supply chain management and late deliveries can deter future customers in this initial stage.

Question 2: What are the competitive forces facing HTT? What role can IT play in this competitive landscape?

A few of the famous 5 forces come to mind in this case, some less important than others. Threat of new entrants is minimal as the supercar market is one that is very sophisticated in that it is very well established with car companies that have been around since the birth of modern vehicles. HTT is already making a pretty bold move targeting solely a market that is heavily focused on brand recognition and prestige. Being a new company in the supercar segment is very tough because it requires tremendous amounts of capital used for R&D, production and supply chain initiatives. Requiring years of prep work, any new company planning to enter would have already been noticed. The threat of established firms in the less revered ‘luxury market’, entering is still a possibility. Firms like Mercedes and BMW have the required means of brand power and capital to design a flagship to enter the supercar market, but little information on that is known. The use of IT can help HTT get a foot in the door of the international market and gain the brand recognition that is needed through extensive social media marketing and a strong online presence.

Automobiles in general face large consumer bargaining power because of the huge number of substitutes of different companies and vehicle variants. At the end of the day they are a form of transportation and have large substitutability, giving consumers a lot of power in their hands. But, a supercar is not just a car. Cars of this caliber are not to be driven mindlessly to drop ones child to school, they are works of art with their own individual characteristics and identities. People look for status and prestige in these masterpieces and are not worried about saving a couple bucks when spending $1 million dollars for a ‘mode of transportation’. Supercar purchasers cannot threaten/bargain with a supercar company because the company knows they’re selling something that the consumer wants that cannot be offered by any other company. A level of respect and customer service is already expected in this realm of car and a consumer should not be able to exercise any power because every detail of satisfaction should already be taken care of.

High quality cars require high quality parts, especially in the case of HTT where the parts are outsourced and put together in house, this gives qualified suppliers excessive bargaining power. In the early stages of HTT where only a handful of cars are made, suppliers can charge exorbitant prices for their parts because of the low economies a low number of orders. The suppliers he is looking at have good track records and have been around for a while, HTT on the other hand is entrant into a new playing field and must play by the rules rather than make them. These factors together give suppliers authority in the transaction and HTT can