AUTO TECH

Auto
2023

tech

Decision-Making
Modeling
 Auto Tech

eXECUTIVE SUMMARY

Auto Tech is considering diversification into the heavy machinery

manufacturing sector. As the manager of the sales department, it is my
responsibility to conduct preliminary research and recommend a new
business opportunity that will enable this diversification through a
unique sales department and higher sales.
In this presentation, we will analyze the current state of the U.S.
automotive industry, current automotive industry trends, new industry
trends, summary of the data visualized, analyze the three decision-
making models, and select the model best suited for making our
decision.
Current State of the U.S. • The U.S. automotive industry had a $688

Automotive Industry billion overall market value in 2021

• Employed around 8 million people.
• Several types of motors, including electric
and hybrid, have been trending in the
market, with electric vehicles (EVs) seeing
the highest increase.
• EV and hybrid vehicle sales are anticipated
to expand dramatically in the upcoming
years (Johnson, 2021).
• In 2021, a little more than 3% of all
vehicles sold in the U.S. were electric
vehicles. Gas vehicles still dominate the
market, but the trend toward electric and
hybrid vehicles is significant (IEA, n.d.).
Current Automotive Industry Trends

Customers are demanding cars with certain features, aesthetics, and colors. Larger cars, including trucks and SUVs, which provide
consumers with greater space and utility, are also becoming more popular (Munoz, 2022). The industry is also witnessing a transition
toward online sales channels as well as the deployment of autonomous and connected automobiles (Johnson, 2021).

CUSTOMIZED TRUCKS AND SUVs

Trends in Customer Demands 2023

Bigger Cars Luxury Technology

The preference for bigger automobiles, including SUVs and trucks, is another trend in the American automotive industry. These cars are
preferred by families and individuals who need greater cargo capacity since they provide more room and utility to customers. The demand
for these cars has also led to the creation of newer models and designs by automakers (KPMG International, 2021).
 2023

Trends in New Industry

The manufacture of construction equipment is the next industrial

potential that Auto Tech is examining. This business is very
lucrative overall due to rising expenditures in infrastructure
projects like roads, bridges, and airports (Davis, 2022).
Expected Growth Areas

Between 2021 and 2028, the heavy machinery manufacturing business is

anticipated to expand at a compound annual growth rate of 4.5%
(MarketsandMarkets, 2021).
Sales by Type of Products or Services
Offered

A move towards electric and hybrid equipment to save emissions and running
costs is one of the present market developments in the construction equipment
manufacturing sector (Johnson, 2021).
Trends in
Customer Demands

The desire for equipment with better safety features

and autonomous capabilities is another trend in the
construction equipment manufacturing sector. (RSM
Global, 2023)
Summary of Data Visualized
Opportunities and Challenges for Auto Tech

• The US automotive industry is worth $688 billion and employs around 8 million people
• EVs and hybrid vehicles are expected to increase in sales due to government subsidies and regulations
• Market trends include a preference for larger cars, online sales channels, and autonomous/connected cars
• Auto Tech considering diversifying into construction equipment manufacturing industry
• The construction equipment manufacturing industry is expected to grow rapidly in the next few years
(Johnson, 2021; Davis, 2022)
 • Construction equipment manufacturing
industry is moderately competitive with a few
dominating firms
• Bargaining power of suppliers is similar
across both industries
• Potential challenges for Auto Tech include

summary of Data heavy capital investment and different

regulations compared to the automotive
industry

Visualized • Current trends in the construction equipment

industry include a shift towards electrified and
autonomous equipment and an increasing
demand for better safety features and
Porter's Five Forces Analysis independent capabilities.

Rivarly among existing competitors

(see diagram)

(Johnson, 2021)
 Analyze the Three Decision-Making Models
Rational Model
The rational model involves a systematic approach to
decision-making, using logical reasoning and available
data to determine the best option.
Pros:
Uses logical reasoning and data to make informed
decisions
Helps eliminate bias and emotions in decision-
making
Provides a structured approach to problem-solving
Cons:
May be time-consuming and resource-intensive
Assumes perfect information is available
May not be effective in highly dynamic and
uncertain situations
Intuitive Model
The intuitive model relies on instincts and
experience to make decisions, rather than using
a formal process.
Pros:
• Quick and instinctive decision-making
• Useful in familiar and routine situations
• Can be effective in rapidly-changing
environments
Cons:
• May be prone to bias and errors
• May not consider all available information
• Can lead to overconfidence and
complacency
Recognition-Primed Model
The recognition primed model is a blend of the rational and
intuitive models, where past experiences are used to quickly
recognize patterns and make decisions in a fast-paced and
complex environment.
Pros:
• Uses past experiences to make fast and effective
decisions
• Can adapt to complex and dynamic environments
• Reduces cognitive load and decision-making time
Cons:
• May be limited by the scope and variety of past
experiences
• May be prone to biases and heuristics
• May not be effective in unfamiliar or novel situations
(Lumen Learning, n.d.)
Choosing the Right Decision-Making
Model

For the ultimate goal of creating a car that has revenue and can compete with
current technology, the rational decision-making model may be the most
effective approach. This is because it involves a systematic analysis of
available data and logical reasoning to determine the best option.
Conclusion
Effective decision-making is critical for success in both
personal and professional life. Understanding the
different decision-making models, their pros and cons,
and how to choose the right one can help individuals
and organizations make better decisions and achieve
their goals.
 References
• Davis, A. (2022, August 3). GM Future Roads and INRIX supporting Safer Roads with Safety View. Highways Today. https://highways.today/2022/08/03/gm-inrix-safety-view/

• IEA. (n.d.). Electric cars fend off supply challenges to more than double global sales – Analysis - IEA. https://www.iea.org/commentaries/electric-cars-fend-off-supply-challenges-to-

more-than-double-global-sales

• Johnson, M. J. (2021). The Current U.S. Automotive Industry: Trends and Insights. Business Insights: Global. https://bi-gale-com.ezproxy.snhu.edu/global/article/GEHCFH411272584

• KPMG International. (2021). Industry leaders foresee dramatic changes.Where the opportunities may lie. Retrieved from https://assets.kpmg.com/content/dam/kpmg/dk/pdf/dk-

2022/22nd-Annual-Global-Automotive-Executive-Survey-2021.pdf

• Lumen Learning. (n.d.). Rational Decision Making vs. Other Types of Decision Making | Principles of Management. https://courses.lumenlearning.com/wmopen-

principlesofmanagement/chapter/rational-decision-making-vs-other-types-of-decision-making/

• MarketsandMarkets. (2021). Construction Equipment Market by Type, Electric Equipment, Autonomous Equipment, Category, Application, Aftermarket, Rental Equipment And

Region - Global Forecast to 2028. https://www.marketsandmarkets.com/Market-Reports/construction-equipment-market-179948937.html

• Munoz, F., & Munoz, F. (2022, May 11). More SUVs, more trucks and less cars: the shift continues in the USA - JATO. JATO. https://www.jato.com/more-suvs-more-trucks-and-less-

cars-the-shift-continues-in-the-usa/

• Rikala, M., & Virtanen, S. (2021). Trends and drivers in the construction equipment industry. Procedia Manufacturing, 49, 389-396. https://doi.org/10.1016/j.promfg.2020.08.052

• RSM Global. (2023, January 18). 2023 outlook: Rising trends in the automotive industry. https://www.rsm.global/insights/2023-outlook-rising-trends-automotive-industry