How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 How AUDI AG Is Driving Toward the Sharing Economy AUDI AG has historically focused on producing and selling premium vehicles, but has begun to experiment with providing mobility services, built around car sharing. Its response to the so-called sharing economy addressed strategic and transformational challenges. Strategically, the company pursued additional sources of revenue from targeted, premium mobility services, rather than the unsegmented services provided by competitors such as BMW and Zipcar. AUDI AG also transformed its organizational structure, processes and architecture to balance autonomy for innovation and integration for competitiveness.

Background on AUDI and its Digitization Efforts How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Agenda Background on AUDI and its Digitization Efforts Mobility Services and Strategy Mobility Services and Digital Transformation Lessons for Incumbent Firms Entering the Sharing Economy Concluding Comments

Background on AUDI and its Digitization Efforts How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Background on AUDI and its Digitization Efforts By 2016, various digitization efforts were in full swing. For example, Audi was: Streamlining its manufacturing process with “smart” technologies, such as an electronic vehicle tracking card; Encouraging and facilitating employee collaboration through internal social computing platforms in its “Enterprise 2.0” initiative; Improving and personalizing the sales experience with the “Audi City” cyber-physical vehicle configurator; Incorporating digital services into cars through “Audi connect.” .

Background on AUDI and its Digitization Efforts How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Background on AUDI and its Digitization Efforts Table 1: Audi Performance Vs. Competitors, 2014 2014 BMW Daimler Audi Cars sold (million)—Audi, BMW and Mercedes-Benz brands only 1.8 1.6 1.7 Group sales (€ billion) 80.4 129.9 53.8 Profit after tax (€ billion) 5.8 7.3 4.4 Employees (thousand) 116 280 77 Return on sales (after tax) 7% 6% 8%

Mobility Services and Strategy How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Agenda Background on AUDI and its Digitization Efforts Mobility Services and Strategy Mobility Services and Digital Transformation Lessons for Incumbent Firms Entering the Sharing Economy Concluding Comments

Mobility Services and Strategy How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Mobility Services and Strategy Differentiating Through Premium Mobility Services; Differentiating Through Integration; Differentiating Through Segmenting the Sharing Users.

Mobility Services and Digital Transformation How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Agenda Background on AUDI and its Digitization Efforts Mobility Services and Strategy Mobility Services and Digital Transformation Lessons for Incumbent Firms Entering the Sharing Economy Concluding Comments

Mobility Services and Digital Transformation How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Mobility Services and Digital Transformation Transforming the Organizational Structure: Balancing Separation and Integration; Transforming the Development Process: Using Agile Methods; Transforming the Role of IT: Platforms and Architecting.

How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Figure 1: How ABI’s Architecture and Development Processes Help Foster Speed of Innovation and Synergies with AUDI

Lessons for Incumbent Firms Entering the Sharing Economy How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Agenda Background on AUDI and its Digitization Efforts Mobility Services and Strategy Mobility Services and Digital Transformation Lessons for Incumbent Firms Entering the Sharing Economy Concluding Comments

Lessons for Incumbent Firms Entering the Sharing Economy How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Lessons for Incumbent Firms Entering the Sharing Economy How Can You Compete In the Sharing Economy Who Are Your Competitors in the Sharing Economy What Is the Scope of Your Target Market for Sharing Economy Services How Can You Leverage Existing Capabilities to Gain Competitive Advantage How Will You Make Money in the Sharing Economy How Should You Transform in Response to the Sharing Economy Will the New Business(es) Be Integrated or Separated How Will You Manage Uncertainty What Are the Roles of IT and the CIO

Agenda Concluding Comments How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Agenda Background on AUDI and its Digitization Efforts Mobility Services and Strategy Mobility Services and Digital Transformation Lessons for Incumbent Firms Entering the Sharing Economy Concluding Comments

Concluding Comments Companies need to address two key questions: How AUDI AG Is Driving Toward the Sharing Economy Martin Mocker and Nils O. Fonstad – December 2017 Concluding Comments Companies need to address two key questions: How can you compete in the sharing economy, and How should you transform in response to the sharing economy. The lessons from the AUDI case will help companies answer these questions. Whatever the answers, IT will play a pivotal role in delivering sharing economy services. For those involved in IT, entering the sharing economy is arguably the most exciting chance since the dot.com boom (and bust!) to demonstrate the value of IT.