What Business is Rivian In?
(7 pages of text)
Case (Pub Mat)
By May 2020, Rivian Automotive (Rivian), a new electric vehicle (EV) battery manufacturer in the United States, had become a darling of the new battery electric vehicle (EV) market in North America. Rivian had not yet released any products, yet it had customers signed up and waiting in three distinctly different market segments. First 10,000 customers had deposited US$1,000 each for one of Rivian’s two electric adventure vehicles. Second, the Ford Motor Company, a Rivian shareholder, had made a commitment to purchase Rivian’s advanced electric skateboard powertrain, positioning Rivian as an EV component wholesaler. Finally Amazon.com Inc., also a Rivian shareholder, had pre-ordered 100,000 electric delivery vans. With three different markets, three different sets of customers, and three different commercialization challenges, had Rivian bitten off more than it could chew?
This case is intended for undergraduate- and graduate-level courses on strategic management and courses focused on understanding innovation and industry-wide innovation patterns. It also offers an excellent opportunity for courses that are focused on understanding disruptive innovation. The case provides an opportunity for students to understand an industry’s business model and to observe how key competitors conform to this model while attempting to differentiate themselves and their offerings. It also illustrates how the evolution of an industry’s core technology, the automobile power train in this case, can disrupt that business model and change the industry forever. After working through the case and assignment questions, students will be able to do the following:
- Describe the changing nature of the competitive landscape within the auto industry, driven by increased levels of competition and an overall decreased outlook in global demand.
- Define a disruptive business model, and explain how the mass adoption of electric-autonomous vehicles will disrupt the auto industry through a fundamental change to the industries profit model.
- Explain how new competitors like Rivian can position themselves for success in the context of a changing global landscape.
- Explain the importance of success as a focus for new competitors like Rivian.
- Describe the role that new technology like electric powertrains and autonomous driving software plays in reshaping the industry’s business and profit models.
Canada; United States; China; Europe, Large, 2020
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