12 Sep Innovation Approach In this section, share your revised slides from Milestone One and make your rec
Innovation Approach
In this section, share your revised slides from Milestone One and make your recommendation for the innovation approach you think the company should pursue. Ensure this section includes the following information:
- Explain potential risks and benefits for options A and B.
- Overview (1 slide): Present the business problem and options A and B.
- Option A (1–2 slides): Explain at least two potential risks and benefits for option A.
- Option B (1–2 slides): Explain at least two potential risks and benefits for option B.
- Compare your competition’s products and services.
- Competitors: (3–4 slides): Evaluate the competitors’ current products and services.
- What are your competitors' current products and services?
- Are your competitors expanding in the current market? Explain how this impacts their market strength.
- Competitors: (3–4 slides): Evaluate the competitors’ current products and services.
- Analyze your company’s capability to pursue the innovation.
- Complete a partial gap analysis (2 slides):
- Does the company own the technology, or does it need to be purchased?
- How is the technology currently being used in today’s products and services?
- What type of technology is available to purchase?
- Complete a partial gap analysis (2 slides):
- Recommend the innovation approach your company should pursue.
- Innovation Approach (2 slides): Explain which innovation approach you are recommending and why.
- Consider the different stakeholders (research and development [R&D], marketing, finance) while communicating your recommendations.
- Include a description of the incremental or discontinuous product that you are recommending for R&D.
- Include the sales forecasts for marketing.
- Include a financial snapshot for finance.
Submit a 10- to 13-slide PowerPoint presentation with detailed speaker notes that highlight the important points you want to emphasize to senior management on your recommendation for an innovation approach. Use the feedback you received on Milestone One to revise your original presentation. If you include references, they should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations.
MBA 580 Chief Technology Officer (CTO) Brief
Over the past three decades, sensors have been increasingly integrated into automobiles. Currently, a
typical car has 50–100 sensors (Tyler, 2016), and this is expected to grow to as many as 200 over the
next few years. These sensors measure everything from oil levels to the distance from the car in front.
These sensors currently connect (Computers in Your Car, 2018). These computer systems can warn of a
collision or an engine problem and communicate the condition to the driver (e.g., turn on the check
engine light).
Increasingly, these computers are connected wirelessly via the internet to other computers, like the
user’s phone for things like remote starting, and to the manufacturer to help generate predictive
maintenance recommendations. The commercial term currently used for this is connected cars.
Technically, this is part of the internet of things (IoT) concept—where devices from refrigerators to door
locks are connected via the internet for convenient access by the user from phones, computers, and
personal automobiles.
Currently, and in the immediate future, connected cars will help the driver navigate, find the cheapest
gas station, locate the nearest Starbucks or parking lot with open spaces, and allow friends on social
media to know when their friend will arrive. As more semi-autonomous driving features are added over
the next few years, these wireless computers will also talk to other cars to help predict their next move
and communicate to road sensors to monitor conditions (Gossett, 2019). Eventually, enough
information will be provided to and from the connected car that autonomous driving will become
commonplace.
It is estimated that the market for IoT-connected cars will grow from $54 billion in 2019 to over $510
billion by 2030 at a 25% compound annual growth rate (CAGR) (Meola, 2020). This compares with an
overall industry growth of 4.1% (The Global Automotive Motors Market Size Is Projected to Grow from
USD 20,321 Million in 2020 to USD 25,719 Million by 2025, at a CAGR of 4.8%, 2020).
Our company is marketing some connected car capability—but we are not the leader. We need to
innovate so that our products can be competitive in the rapidly growing market. Our cars have sensors
and computers, and our technology expertise is competitive. We have some connectivity—driver apps
for keyless start and OnStar (The Benefits of OnStar | Keeping You Safe and Secure, n.d.) connectivity to
detect accidents and alert first responders. Our growth and ultimate health as an enterprise depends on
us taking the leadership or, at least, keeping up with the leaders. Furthermore, there is significant
opportunity to improve our customer satisfaction and increase our repair and parts revenue streams by
alerting customers to needed maintenance before an expensive breakdown occurs on the road.
With our current technology implementation plan, however, we expect to grow at 3.1%, about 1% less
than the industry. Our growth projection for connected cars is 10.2%—less than the industry at large.
We must speed up our innovation or risk losing market share.
Here is what we estimate our competitors are doing and how fast they are adding technology. The
leader among existing auto manufacturers is BMW. BMW cars have significant connectivity to
information services now. Some driver-assist functions, such as auto-parking and lane-keeping, have
been in BMW models for several years. Market research suggests that BMW will have a full suite of
information connectivity in their cars within several years and that the company will begin producing
fully autonomous driving machines within 12 years. Toyota has fully integrated social media in Japan
and expects to implement it in European and U.S. markets, subject to 5G wireless availability.
Volkswagen is about where we are—but has partnered with Microsoft to jump ahead.
Competitors from outside the traditional automobile manufacturers are also indicating that they intend
to enter the connected car market with disruptive technologies. Apple, for example, is aiming for a fully
autonomous delivery vehicle by the mid-2020s and an autonomous passenger car within a decade.
Our goal is to launch an autonomous vehicle following quickly after BMW, our main luxury competitor.
However, we have a long way to go. We are considering two ways to get there: A) Introducing
incremental improvements faster than we have in the past and improving our current models each year
or B) introducing a radical innovative design in several years. Option B does not forestall us from
continuing to introduce incremental improvements in the interim.
Our approach will depend on your analysis of our capabilities to innovate. How can we get the
technology being researched in our lab ready—how can we develop it, produce it, and take it to market?
What technology do we already have, and what will we need to acquire? What are our competitors
doing, and are there weaknesses we can exploit?
The two paths we can take are incremental innovation, or discontinuous or radical innovation.
What do I mean by this?
Incremental innovation. The automobile is a mature technology—the modern automobile is
over a century old and it has been changing and adapting over that time. Our company does
incremental innovation as well as our major competitors and the costs are built into our way of
doing business. Given how we build automobiles today, we can continue to add sensors,
computers, and IoT capabilities each model year just by upgrading modules. There are risks,
though: 1) Could changes in the market impact what customers demand? A faster competitor or
a new entrant could produce a breakthrough in automobiles that makes everything else
obsolete. It has happened in other mature industries—could it happen here? 2) Are we missing
significant new opportunities (e.g., market growth overall or opportunities in integrated
maintenance, service revenues and parts, or a high-margin business) that we do not control
now?
Discontinuous or radical innovation. This would be more expensive—a completely new model is
expensive—as much as $6 billion (Viswanathan, 2013). A major redesign and recent technology
integration are also riskier to develop—we might fail—and it would take longer to get to market.
We might require enough of our existing resources that we could fall behind with our current
models, but it also might provide insight in incremental changes to current models while we
developed a major new product line. It is a lot to think about. That said, we could take the
leadership position ourselves in the growing market and better protect ourselves from
competitors. If we took this path, we would first introduce a new high-end model and, as we
brought costs down, rapidly deploy it across our whole product line, using this innovation
process to accelerate our ability to innovate.
References:
Tyler, N. (2016, December 14). Demand for automotive sensors is booming. Newelectronics.Co.Uk. https://www.newelectronics.co.uk/electronics-technology/automotive-sensors-market-is- booming/149323/#:%7E:text=Currently%2C%20each%20vehicle%20has%20from,car%20based% 20on%20current%20trends
Computers in your car. (2018, January 24). AAMCO Colorado. https://www.aamcocolorado.com/computers-in-your- car/#:%7E:text=Your%20Car’s%20Computer,controls%20to%20meet%20emissions%20standard s
Gossett, S. (2019, August 13). IoT in vehicles: A brief overview. Built In. https://builtin.com/internet- things/iot-in-vehicles
Meola, A. (2020, March 10). How 5G & IoT technologies are driving the connected smart vehicle industry. Business Insider. https://www.businessinsider.com/iot-connected-smart- cars?international=true&r=US&IR=T
The global automotive motors market size is projected to grow from USD 20,321 million in 2020 to USD 25,719 million by 2025, at a CAGR of 4.8%. (2020, August 17). PR Newswire. https://www.prnewswire.com/news-releases/the-global-automotive-motors-market-size-is- projected-to-grow-from-usd-20-321-million-in-2020-to-usd-25-719-million-by-2025–at-a-cagr- of-4-8-301113089.html#:%7E:text=%2F%3Futm_source%3DPRN- ,The%20global%20automotive%20motors%20market%20size%20is%20projected%20to%20gro w,at%20a%20CAGR%20of%204.8%25.&text=The%20growing%20adoption%20of%20these,dem and%20for%20safety%20and%20convenience
The benefits of OnStar | Keeping you safe and secure. (n.d.). OnStar. https://www.onstar.com/us/en/why-onstar/
Viswanathan, B. (2013, May 7). Why are cars not getting cheap even with better economies of scale? Forbes. https://www.forbes.com/sites/quora/2013/05/07/why-are-cars-not-getting-cheap- even-with-better-economies-of-scale/?sh=3ad2b1045ad9
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TECHNOLOGICAL INNOVATIONS
ANALYZING INNOVATIONS
Nipa Patel
1
Types of Innovation
Component Level
Improvements on the technology of components
Existing systems with new components.
Performance improvement of components wiitha dvanced material
System Level
New versions of motorcar, aeroplane, tv.
New generation devices e.g Mp3 and download vs cd.
Bio-technology, team power,and ICT ‘revolution’,
2
The main reason as to bring innovation is to help the company to offer the right product to the market and also help the market to gain its market share. There is need to innovate so that our products can be competitive in the rapidly growing market. Our cars have sensors and computers, and our technology expertise is competitive. We have some connectivity—driver appsfor keyless start and OnStar connectivity to detect accidents and alert first responders. This innovations are both at the component level and the system level (Nambisan et al 2017).
2
POTENTIAL Incremental innovations
Improvements on the technology of components
New versions of motor car, aeroplane, tv.
This are incremental innovations because they are designed to improve the services that are currently offered.
Incremental innovations are innovations that are specifically designed to be added to the plan to change the services offered, in this case it will include improving the technological components of the car and introducing new versions. These is a significant opportunity to introduce technology that will improve our customer satisfaction and increase our repair and parts revenue streams by alerting customers to needed maintenance before an expensive breakdown occurs on the road.
3
POTENTIAL discontinuous innovations
Embracing new generation Mp3 and getting rid of the old generation.
Getting rid of old ways of powering up and embracing the new ways.
This are regarded as discontinuous because they involve getting rid of other ways by embracing new ones.
These have to do with the practices and services that are currently offered but need to scraped off so as to allow new innovations to come in. In these case, the car components have to be replaced with new technological ones. By taking the leadership position ourselves in the growing market and better protect ourselves from competitors. If we took this path, we would first introduce a new high-end model and, as we brought costs down, rapidly deploy it across our whole product line, using this innovation process to accelerate our ability to innovate (Singh & Gaur, 2018).
4
Potential Path of The Organization
Information Intensive Technological Trajectory which entails:
Publishing.
Travel.
Finance
Retailing.
The suppliers of software and systems departs are the mainsource of technology.
5
This is basically the strategy of implementation that we can take to achieve our goal and the informational intensive technological trajectory is best suited as it covers the financial, retailing, publishing and the travel aspects.
5
Cont. Potential Path of The Organization
Innovation strategies are tasked with:
Position: Offer new products and services.
Paths: Design and operation of complex information processing systems.
Process: Matching user needs with IT-opportunities
6
In these trajectory there are three main tasks that are involved that is, the position which is to offer new products and services, the path, that is the design and the operation of complex information processing systems and the process, to enable match IT-related opportunities with the needs of the user (Korableva et al 2017, September).
6
References
7
Nambisan, S., Lyytinen, K., Majchrzak, A., & Song, M. (2017). Digital Innovation Management: Reinventing innovation management research in a digital world. Mis Quarterly, 41(1).
Singh, S. K., & Gaur, S. S. (2018). Entrepreneurship and innovation management in emerging economies. Management Decision.
Korableva, O. N., Gorelov, N. A., & Shulha, M. V. (2017, September). Risk component of innovation management strategy. In European Conference on Innovation and Entrepreneurship (pp. 837-843). Academic Conferences International Limited.
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Thank You
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IoT Technology in Automotive Industry
Nipa Patel
Alyssa Dassa
MBA-580-R5034
8/15/2021
Introduction
Internet of Things (IoT) devices in automobiles evaluate engine performance, air temperature and measure physical health indicators.
IoT not only transforms the car sector, but it also sparks a power struggle between automakers as incumbent players on the one hand and software developers on the other.
Predictive maintenance is based on the use of IoT connection technologies that gather data on the performance of various parts, send it to the cloud in real time, and assess the risks of a car's hardware or software malfunctioning.
Automatic updates for connected automobiles can help with IoT traffic management by improving navigation accuracy using real-time traffic data. Millions of drivers will benefit from flexible map updates, 3D mapping, and a slew of other advanced driving aid capabilities.
Overview
The automobile market is dominated by several number of carmakers.
The market is unique as business action of one car manufacturer significantly influences the operation of other players. Manufacturers use marketing and advertising as crucial tools for competition, but it is critical to keep up with current technology to stay in or get ahead in the marketplace (Koch, & Windsperger, 2017).
Option A: Discontinuous innovation (A new product is introduced that is completely different from the old one, resulting in a substantial shift in consumer behavior.)
Option B: Incremental Innovation (Is a set of minor enhancements or updates to a company's existing goods, services, processes, or techniques).
Option A: Discontinuous innovation
Benefits:
Widens organization’s product mix
Creates new markets for the products
Build on new information, resources, and skills, and necessitate institutional reform to keep up with market demands
Risk:
Uncertainty of the demand for innovative goods and services
Resistance to change.
Lengthy development times
Not enough customer insight
Excessive perceived economic risks
Option B: Incremental Innovation
Benefits:
Modifies the functionality of existing products and services,
Protects current business models
Increase product diversification, reduce risk and sell into existing markets. .
Risks:
Time risk,
Uncertainty of the demand for innovative goods and services.
Averse culture
Ineffective marketing and communication
Inability to adequately measure performance
Competitors
BMW
BMW has significant connectivity of cars to information services
The functionality include driver-assist functions, such as auto-parking, and lane-keeping.
BMW will have a full suite of connectivity within 12 years.
Toyota
Toyota is subject to 5G wireless availability
Navigation and emergency services provided by the devices
Volkswagen
VW partnered with Microsoft with emphasis on vehicle control, maintenance and in-care consumer experience.
Competitors Expansion
BMW, Toyota and VW has expanded by entering and operating in emerging markets around the globe.
The emerging markets include China, India and Brazil (Fortune Business Insight, 2021)
The market for automobiles has grown with companies complying to it with highest standards of vehicles and the evolving market demand.
Automobile manufacturers' attention has switched from fuel economy, performance, driver safety, and vehicle stability to extra features like vehicle networking and electrification of functions (Bentley, 2017).
Company’s Capability to Pursue the Innovation
The company can pursue IoT technology as it has a set of coherent, mutually reinforced behaviors at achieving competitive goals.
The company will set strategies that promote alignment among diverse groups in the industry.
With clarified objectives and priorities , he company’s effort specify marketing, operations, finance and Research and development useful for pursuing the innovation.
Partial Gap Analysis
The company does not have the technology
Currently, the company has a small market share but with innovated products it will compete in the rapidly growing market (Fortune Business Insight, 2021).
The company has sensors and computers with apps that detect accidents and alert first responders.
Its growth depends on leadership to foster customer satisfaction and increase repair and parts revenue streams by alerting them when they need maintenance before an expensive breakdown (Bentley, 2017).
Available Technology
Real-time vehicle telematics
Vehicle telematics technology allows monitoring of movement, location, status and behavior of a vehicle within a fleet.
Connecting the telematics devices with IoT devices for the company’s vehicles will provide real-time insights on vehicle state, driver health and optimization of transportation (Koch, & Windsperger, 2017).
Recommendation
The company will use an incremental innovation approach.
The company already has technology applied to its products. The use of incremental innovation approach is because it will save costs and differentiate itself from competitors.
The approach as well, will base on research done is about customer demands hence will help in improving their market position and build a bigger audience that gravitates to the new and improved product features.
Recommendation Cont’d
The company automotive customer are well tuned to global markets and products and will expect improved quality of products.
Customers may readily move from one brand to another due to the large number of models and variants available, as well as the lack of difference among items within the same price range. As a result, the company's main priority is maintaining client loyalty (Bentley, 2017).
Electric vehicles, connected automobiles, mobility fleet sharing, onboard sensors, new business models, and always-on connectivity are all part of the automotive industry's race to a new world, driven by sustainability and changing customer behavior.
The global automotive industry is undergoing revolutionary change and adoption of technology changes the market dynamics.
For instance, the market size are expected to improve despite the decline from $87.40 Billion in 2019 to $90.21 Billion in 2020 (Fortune Business Insights, 2021)
References
Fortune Business Insights. (2021). Automotive Finance Market Size, Trends | Industry Report [2028]. Fortunebusinessinsights.com. https://www.fortunebusinessinsights.com/industry-reports/automotive-finance-market-100122
Bentley, G. (2017). The automotive industry: change and challenge for the RDAs. In Regional Development Agencies and Business Change (pp. 145-170). Routledge.
Koch, T., & Windsperger, J. (2017). Seeing through the network: Competitive advantage in the digital economy. Journal of Organization Design, 6(1), 1-30.
Thank You!!!
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