Brief description of Elio Engineering Essay

Elio Engineering is a company founded by Paul Elio and Hari Sankara for development and creative activity of late 1990s-era auto seats. Paul? s place was portion of a particular category of automotive seats in the industry called all-belts-to-seat ( ABTS ) . and it was named NC place ( NC for No Compromise ) . Paul design place called NC – “No Compromise” since this place would revolutionise the automotive industry doing public presentation. weight and costs better than the competition.

Soon due to its high cost. ABTS was used largely in luxury and high terminal vehicles but with the design and thought of Paul. this engineering becomes cheaper and can be implemented across all vehicle types for increased safety and comfort. A typical conventional front place is priced around $ 500. lower cost compared with the ABTS place that is like $ 750. One complete system costs an norm of $ 2500. The place mechanism. dwelling of reclining chair and paths. constitutes the technological nucleus of the place system.

• An ABTS integrates the place belt straight into the place that is potentially safer because it “hugs” the resident in the event of rear hit. • Ease of usage. higher comfort degree. more attractive visual aspect and manoeuvrability of removable seats. In order to establish their merchandise. and cognizing that Bostrom was looking for and ABTS. Elio achieved an understanding with the house. so they could utilize their site and their installations ( the computing machines and electronic equipment to justify the quality of the place. run into FMVSS and NHTSA criterions ) to develop the merchandise. otherwise Elio wouldn?

Ts have adequate resources to bring forth and put up the place. Bostrom planned to unveil the NC Seat at an one-year trade show in March of 1999 in Louisville. Kentucky. The size of the US truck Market in that twelvemonth was expected to be around the 500. 000 units. with the company commanding a market portion of 50 % . the European Market was about the same size. but Bostrom had no presence at that place. Elio expected to be able to acquire 2 to 5 % royalties on gross revenues in the truck industry. However. Paul had concerns if Bostrom is the right spouse in this venture where the ABTS place has the possible to salvage 1000000s of lives.

Potential Market Size for Elio ABTS Seat Technology Elio’s ABTS place system with its new engineering. lighter weight. lesser constituents. higher safety and decreased costs has the possible to revolutionise the automotive industry and go the engineering of pick for OEMs. The market potency in Northern America is 17 million units and up to 53 million units worldwide. As mentioned in the bluish ocean scheme of six waies analysis. Elio can besides look at alternate industries like heavy trucks. aircraft and rider trains for its ABTS place systems ( Kim & A ; Mauborgne. 2006 ) .

Partnership with OEMs While the ultimate users of automotive engineering are the clients who buy the autos. it is the OEM’s who make the determination on the place system that needs to be selected for their vehicles. The OEM’s expect the place system non merely to suit the organic structure of a peculiar auto theoretical account but for it to go a portion of the entire interior design. The three biggest OEM participants in the US market are GM. Ford and Diamler Chrysler with 29 % . 25 % and 16 % of the market portion.

These OEMs usage composite and sophisticated market cleavage technics based on demographics and life styles to plan auto insides and place systems. These OEMs wield adequate power to order to the providers their demands at really little operating borders of 2 to 5 % ( Burgelman. Christensen. & A ; Wheelwright. 2008 ) . Besides. it is peculiarly pertinent in technology driven companies that assume developing new advanced merchandises would bring forth fabulous success. which is non the instance. The merchandise might be successful. nevertheless the pioneer might non.

Sing the aforesaid points. it is of import for Elio non to unwrap their exact costs to OEMs and besides do non trust wholly on the invention of their new ABTS place system for continued success without a complimentary auto insides option ( Kim & A ; Mauborgne. 2006 ) . As a consequence. it is non recommended for Elio to straight near the OEMs with their ABTS concern proposition. Partnership with Competitors Elio Engineering began their initial coaction with Bostrom Seating. a entirely owned subordinate of Johnstown America Industries. Inc.

( JAII ) for prototyping and proving their design of ABTS for FMVSS and NHTSA criterions attachment. While their consequences were successful and the partnership appeared moneymaking. JAII’s capablenesss in footings of OEM relationships. planetary presence. acquisition capableness. bing confederations. JIT stock list. comfort technology. CAD/CAM/CAE. benchmarking. research & A ; development. merchandise development procedure. interior systems capablenesss. entire plan direction. perpendicular integrating. buying. in-house design. system flat testing and fiscal growing were either weak or non-existent ( Burgelman. Christensen. & A ; Wheelwright. 2008 ) .

In this respects. for Elio Engineering. JAII can be seen as early adoptive parents ( Moore. 2002 ) . but for Elio to travel towards dramatic growing. they will necessitate an early bulk ( Moore. 2002 ) . In Northern America. Johnson Controls ( JCI ) . Lear Corp. And Magna are the large tier-one participants. They have about 60 % of the market portion. JCI is a planetary diversified engineering and industrial leader in automotive seating. overhead systems and interior electronics ( JohnsonControls. 2010 ) .

JCI has a strong to adequate places in OEM relationships. planetary presence. acquisition capableness. bing confederations. JIT stock list. comfort technology. CAD/CAM/CAE. benchmarking. research & A ; development. merchandise development procedure. interior systems capablenesss. entire plan direction. perpendicular integrating. buying. in-house design. system flat testing and fiscal growing. Lear Corp. is weaker than JCI in technology and fabrication abilities but compensated on systems integrating and tier-two relationships. Magna did non stand out in any peculiar country but it had equal capablenesss in most countries.

Additionally. JCI and Lear Corp. have a strong planetary presence excessively with 27 % and 25 % severally in Europe. All the three tier-one companies have the research & A ; development and fabrication capablenesss to reassign know-how to develop commercially feasible merchandises ( Burgelman. Christensen. & A ; Wheelwright. 2008 ; White & A ; Bruton. 2007 ) . For Elio Engineering. partnering with a tier-one operator is the practical option due to the undermentioned grounds: • Easy entree to extensive fabrication capablenesss. • Access to planetary markets. • Access to sophisticated research and development installations.

• Strong relationships with OEMs. • JIT Inventory and efficient supply concatenation direction. • Good tier-two relationships. For Elio Engineering. partnering with Lear Corp. would be the better than JCI for the undermentioned grounds: • JCI has strong R & A ; D set-up and they would hold their in-house development for ABTS engineering. Hence. Elio will hold less dickering power with JCI and possible struggle from JCI’s in-house squad. However. Lear Corp’s R & A ; D is weak and they would choose for the ABTS engineering from Elio to be able to break compete with JCI.

This will enable Elio to hold the better manus in dialogues. • Lear Corp has the 2nd largest market portion in both Northern America and Europe after JCI. Lear Corp will be able to take advantage of Elio’s ABTS solution to increase their market portion. • Earlier efforts to tie in with JCI were non successful for Paul. The above points indicate that with Lear Corp. Elio will be able to prosecute in equal footings and be in a “win-win” state of affairs more than with JCI.

Mentions Burgelman. R. . Christensen. C. & A ; Wheelwright. S. ( 2008 ) . Strategic direction of engineering and invention ( 5th ed. ) . New York: McGraw-Hill Irwin. Johnstown Controls. ( 2010 ) . Company and Businesses. Retrieved from hypertext transfer protocol: //www. johnsoncontrols. com/ Kim. W. C. & A ; Mauborgne. R. ( 2005 ) . Blue ocean scheme: How to make uncontested market infinite and do the competition irrelevant. Boston: Harvard Business School Press. Moore. G. ( 2002 ) . Traversing the chasm ( Rev. erectile dysfunction. ) . New York: HarperCollins Publishers. White. M. . & A ; Bruton. G. ( 2007 ) . The direction of engineering and invention: A strategic attack. Mason. Ohio: Thompson South-Western.