Student: Robert Pimentel, Martha Rodriguez, Joe Bryan
Instructor: Dr. Carlos Esteva
Course: MCIS 6307
Purpose: In-class exercise #2 (Case Study 2-1)
1) What is the strategic advantage afforded to Lear from virtual reality? How
does this technology help it compete?
It allows Lear to complete the development process more quickly than any other competitors, 1? years as opposed to 3 years. Additionally, the methodology it uses
helps reduce the actual costs associated with the development. Lastly, it facilitates a
greater level of collaboration across traditional physical boundaries.
In short, this technology helps Lear to compete because competitors are currently unable to match these advantages (E.g. speed of development, flexibility), as
evidenced by the lucrative contract awarded to them by General Motors (as per the
In addition to using the new technology, Lear also acquired smaller auto parts companies, which allowed them to provide GM with a single vendor offering.
2) How long is Lear’s window of opportunity for the strategic advantage given
by the virtual reality system? That is, do you think competitors will follow
suit and implement a similar system? If yes, when?
If history is any indicator, then competitors will follow suit and attempt to use the same approach, or a revised approach, which they hope will provide them with a
competitive advantage over Lear. I expect the process would occur sooner, rather than
For example, Lear’s competitors would likely purchase the same virtual reality
package from Alias/Wavefront and Silicon Graphics. In spite of this, Lear would hold
its advantage until these competitors are able to fully integrate the new technology
into their development process, or develop new processes altogether.
3) Do you think the CAD system offers Lear strategic advantages? Explain.
Yes. CAD offers Lear a strategic advantage primarily because it was the first
company to leverage the technology and establish a new, more efficient development
process. It should be noted that this strategic advantage will be short-lived. CAD,
along with the virtual reality solution is not a scarce resource…any competitor can
4) Apply the value chain to demonstrate how the virtual reality system adds
value for Lear and for General Motors.
Primary value chain activities: Lear General Motors
Inbound Logistics: the receiving Converting customer’s ideas into Converting ideas into reality and warehousing of raw reality specifically for product(s) allows automaker to deliver materials, and their distribution when and how it’s desired. product to customer quickly –
to manufacturing as they are leading to better projection for required. production delivery dates. Operations: the processes of VR reduces development time; transforming inputs into increases productivity and reduces finished products and services. cost.
- Environment that fosters - Manufacturing start-up dates of
collaboration such as the design product excelled
studio stereoscopic “cave” to be
able to simulate being in a car.
- Vehicle design schedule initial - Reducing development time by
concept and product-ready cut to digitizing much of the design
1-1/2 years. process; less iterations to review
- Creating a virtual workplace that before approval
allows people to work together
from all around the world.
- Communication enhanced by - Communication enhanced
extending Internet in its work between supplier and customer
Outbound Logistics: the Can go from concept to product Efficiency in prototype warehousing and distribution of and then quickly to contract to development from supplier finished goods. product within a year; prototype in would improve increase the
30 days number of new products to
manufacture (timing of market
entry) Marketing & Sales: the Allows a better way to satisfy Allows a better way to satisfy identification of customer needs customer needs; analysis of customer needs sooner before and the generation of sales. customer needs can lead to new competitors
product development Service: the support of Shortens customer’s waiting time Allows better service for target customers after the products and to receive prototype; changes to market services are sold to them. original prototype would be easier
Support value change activities: Lear General Motors
Organization (infrastructure) VR can provide data to help VR can provide data to help
Lear plan on trends in its supplier plan on trends in its
target market target market
Human Resource Management Designers/developers Manufacturing resources
collaboration via the Net (personnel) may need to be
would reduce expenses in increased depending on
travel and increase response number of new products
time and accessibility. ready for production.
Technology Development VR can provide data for Lear can provide information
market research to assist GM in market
Purchasing Lear could retain and capture GM could gain a big share of
new customers with digitizing the market share due -
process reduction in product
5) What other types of competitive advantages might Lear executives seek from
IS in general?
IS competitive advantages:
Lear could capture the value of knowledge created (E.g. sharing processes
and creating organizational memory) by employees to reduce the impact of
mobile employees leaving with knowledge.
Lear could also provide intellectual property protection, such as patents,
trade secrets, and trademarks. A trademark offers a way to capture the brand
equity of a company or a product.
Finally, Lear should consider using a Customer Relationship Management
(CRM) system in co-operation with GM, in order to better understand the needs
of the customers they both serve.
6) What hardware, software applications are involved?
The CAD system and virtual reality system. The hardware was purchased from
Alias/Wavefront, a subsidiary of Silicon Graphics. The internet was used to
exchange information between GM and Lear.
7) What is the business need and impact?
The business need was to shorten the timeline of concept to product delivery of auto
interiors. It allowed them to do product development iterations quicker. They needed
to have a significant impact to the industry.
8) What data is manipulated?
CAD drawings and VR videos. All design documents and specifications.
9) What procedures?
New procedures and processes had to be totally re-developed to move from designing auto interiors by clay to designing by CAD and VR. Procedures for safety guidelines should also be developed.
10) What people are involved?
Designers, sculptors, graphic artists, IT support personnel, network support personnel, executives, essentially every employee.