TY - JOUR
T1 - Strategic flexibility in shifting to electrification
T2 - A real options reasoning perspective on Toyota and Nissan
AU - Mokudai, Takefumi
N1 - Funding Information:
This work was supported by JSPS KAKENHI Grant Number JP17K03933. I am grateful to the special issue editor and two anonymous reviewers for their insightful comments. I would also like to thank Editage for English language editing.
PY - 2020
Y1 - 2020
N2 - This paper addresses commitment versus flexibility in the face of uncertainties about the electrification of vehicle powertrain technologies. A real options reasoning perspective is employed to analyse the potential option structures and underlying logic behind the strategies of Toyota and Nissan. The case analyses indicate that the Japanese carmakers have (compound) options to expand their electrified powertrain portfolios and switch battery sources. The findings also suggest that the stability of powertrain design rules serves as a foundation of real options and that carmakers' approaches to balancing the commitment to, and flexibility for, particular strategic actions are influenced by the nature of the uncertainties. Further, firms' perceptional and behavioural biases over uncertainties will affect the execution or abandonment of the options.
AB - This paper addresses commitment versus flexibility in the face of uncertainties about the electrification of vehicle powertrain technologies. A real options reasoning perspective is employed to analyse the potential option structures and underlying logic behind the strategies of Toyota and Nissan. The case analyses indicate that the Japanese carmakers have (compound) options to expand their electrified powertrain portfolios and switch battery sources. The findings also suggest that the stability of powertrain design rules serves as a foundation of real options and that carmakers' approaches to balancing the commitment to, and flexibility for, particular strategic actions are influenced by the nature of the uncertainties. Further, firms' perceptional and behavioural biases over uncertainties will affect the execution or abandonment of the options.
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M3 - Article
AN - SCOPUS:85091938889
VL - 20
SP - 137
EP - 155
JO - International Journal of Automotive Technology and Management
JF - International Journal of Automotive Technology and Management
SN - 1470-9511
IS - 2
ER -