Company Factors

NIO is a leader in the premium electric vehicle market in China. Marketing managers at NIO need to make an assessment of the internal weaknesses and strengths of the organization before making any marketing decisions. According to Kang, Ren, Feinberg, & Papalambros (2016), every organization in the automotive industry has different needs including internal capabilities and resources suited to different niche and broad markets. Company factors such as culture, the human resource function, financial position, and the research and development (R&D) capabilities are important elements in determining the welfare of NIO in its bid to acquire a larger market share of the EV sector. The culture at NIO is presented by Jiang, Wei, Guan, & Yang (2021) to be strong, in accordance to the Chinese strengths of process and product innovations. For example, NIO has made a name for itself by being the first EV automaker to have the capacity to switch batteries to reduce the time required for charging. The human resource (HR) function is also important for the organization. A quality HR function creates and manages effective campaigns, including the attraction and retention of top talent in the industry to improve the skills level of the workforce.

Due to its success under a relatively short period, the company has received a lot of backing from other domestic giants such as Baidu and Tencent (Jia, Kenney, Mattila, & Seppala, 2018). It is now a leader in the EV market in China. Jiang, Wei, Guan, and Yang (2021) note that the 2nd half of 2020 saw the company’s stock price skyrocket making it the 5th largest automaker globally by market capitalization. The company employs innovative solutions unique to the Chinese market as its main motivation. By dominating the Chinese EV market, the company intends to take over the world, occupying a large market share that has predominantly been available to global giants such as Tesla. Currently, NIO is focused on entering every major car category including sedans, station wagons, SUV, and basic to premium vehicles. It is also focused on being more environmental conscious through other processes such as manufacturing and raw materials acquisition, a move that the company hopes will add to its portfolio.

NIO’s financial position as well as an availability of marketing resources improves its internal strengths. With a strong financial position, Przychodzen, Leyva‐de la Hiz, & Przychodzen (2020) found that companies are able to utilize opportunities in the overall industry as well as working internally to reduce weaknesses and expand the strengths. NIO uses its position to make meaningful partnerships with other industry leaders with an aim of creating a seamless customer experience. It is able to spend significant amounts on the launch of new products and venture into new projects with relative ease. The same applies for its R&D spending. Relative to its financial position, NIO spends huge amounts of its resources on being the next innovative leader in process optimization, building a stable IT network, product design, and marketing strategies that support the organizational objectives.

Collaborator Factors

NIO has several external stakeholders who have interests in the company and team up in mutually beneficial partnerships. Collaborators are an essential part of the success of a company. Collaborators may include supply chain partnerships both in the downstream and upstream in the value chain (Huang, Han, Macbeth, 2020). For NIO, collaborators help the company to figure out factors including its bargaining power against the collaborators, what suppliers offer to the company, agility and flexibility of the supply chain, and the sharing of revenue. For example, domestic giants such as Baidu and Tencent. Other agencies, distributors, business partners, and suppliers regarded as collaborators include Mobileye (NIO Inc., 2019). The partnerships that NIO hopes to get out of collaborators include better ways of conducting business, ability to penetrate other markets, and a desire to provide solution in more industries than one. For example, the partnership with Mobileye is set to offer better levels of autonomous driving vehicles. The consumers in China and elsewhere in the world are the main targets as the company collaborates with other brands. The capabilities, performance, and issues of collaborators are important for NIO as it seeks to attain competitive advantage in every possible field.

Some of the key collaborator factors that NIO considers include the risk to patents and intellectual property rights, the number and ability of the suppliers, management of delivery services in a timely manner, position and bargaining power, and the flexibility of the supply chain. Research by Huang, Han, & Macbeth (2020) found collaborators to add a significant risk to an organization. For example, they may expose NIO to theft of intellectual property in overseas operations leading to negative consequences. Additionally, the number of suppliers that NIO partners with and their abilities determine how the company performs in the long term. Delivery services are also important because they may add to the supply chain and logistical risks. All these issues combined add to the loss or gain of the position of the company and its bargaining power in the value chain because a high bargaining power against the collaborators means more sustainable margins and the vice versa is also true.

References

Huang, Y., Han, W., & Macbeth, D. K. (2020). The complexity of collaboration in supply chain networks. Supply Chain Management: An International Journal. http://orca.cf.ac.uk/123996/1/SCM%20Han%20et%20al%202019.pdf

Kang, N., Ren, Y., Feinberg, F. M., & Papalambros, P. Y. (2016). Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study. Design Science, 2.

Jia, K., Kenney, M., Mattila, J., & Seppala, T. (2018). The application of artificial intelligence at Chinese digital platform giants: Baidu, Alibaba and Tencent. ETLA reports, (81). https://www.econstor.eu/bitstream/10419/201363/1/ETLA-Reports-81.pdf

Jiang, Q., Wei, W., Guan, X., & Yang, D. (2021). What Increases Consumers’ Purchase Intention of Battery Electric Vehicles from Chinese Electric Vehicle Start-Ups? Taking NIO as an Example. World Electric Vehicle Journal, 12(2), 71. https://www.mdpi.com/2032-6653/12/2/71/pdf

NIO Inc. (November 5, 2019). NIO Inc. Announces Strategic Collaboration with Mobileye to Bring Level 4 Autonomous Driving Vehicles to Consumers in China and Beyond. Available at https://www.nio.com/news/nio-inc-announces-strategic-collaboration-mobileye-bring-level-4-autonomous-driving-vehicles

Przychodzen, W., Leyva‐de la Hiz, D. I., & Przychodzen, J. (2020). First‐mover advantages in green innovation—Opportunities and threats for financial performance: A longitudinal analysis. Corporate Social Responsibility and Environmental Management, 27(1), 339-357.