9-1 Project Submission: Organizational Structure and Culture
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Competencies
In this project, you will demonstrate your mastery of the following competency:
- Evaluate creative and innovative organizational structures
- Recommend alternative innovations to solve an internal or market need
- Implement creative and innovative processes within an organization
Scenario
You work as a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks.
The chief technology officer (CTO) of the company from the course scenario has been watching new technology developments that the company could integrate into its vehicles to enhance the usefulness of and access to the data acquired by the many digital sensors that have been integrated into vehicle subsystems over the past 20–30 years. The technology trend of particular interest is the internet of things (IoT)—the interconnection of embedded devices, such as sensors and computers, over the internet. By taking advantage of this trend, the CTO believes the company can seize an opportunity to provide better service and predictive maintenance to its customers, improving customer satisfaction and adding additional revenue streams.
Based on briefings by the CTO, senior management has decided to implement IoT in its product line. Your CTO has asked you to lead a cross-functional team to take this initiative forward. Your first task is to make a recommendation for how the company should approach this business problem. Do you recommend using incremental or discontinuous (that is, slow or fast) innovation? Specifically:
Should the company…
- Design a completely new product line, based on the new technology (discontinuous innovation)
or
- Add new technology features into one model and then incrementally into the broader product line (incremental innovation)
The recommendation you and your team make is an important first step in pursuing this new technology.
In Milestone One, you and your team defined what that innovation looked like: would it be disruptive (new product line) or incremental (new features in one existing product)?
In Milestone Two, you developed a strategy plan and a high-level business model. You’ve shared these with various stakeholders, and they are in agreement with your assessment of how best to get to market with this IoT innovation, which will allow the company to be competitive.
Now, the CTO has asked you to come up with a proposed organizational structure that will support the innovation implementation. In this way, you will be assisting in making the innovation sustainable for the company from the course scenario. Companies that are innovative must make sure they have structured the organization in a way that supports innovation, and a key component of innovation is keeping track of what their customers want in terms of products and services.
Directions
Complete each of the three parts of this project. Use your slides from Milestone One, your document from Milestone Two, and feedback on Milestone One and Milestone Two to complete the first two parts of your presentation. You can use the resources in the Supporting Materials section (below) for any other information you will need to complete your project.
Part One: 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.
Part Two: Strategic Plan
In this section, share your revised paper from Milestone Two, which provides an overview of your competitors’ position in the marketplace, the available and future marketplace, and a plan for how to address a change in business conditions. Ensure this section includes the following information.
- Analyze the competitors’ relative strengths in the marketplace. Use Power BI to create charts on the growth rates.
- What is the growth rate of each competitor?
- How much of the market does each competitor now own? Do you see a trend of gaining or losing market share?
- Determine each competitor’s market strength by looking at the financials for each competitor.
- Explain how your company’s market share compares to your competitors’. Use Power BI to create charts on your and your competitors’ market share.
- Is your company gaining or losing market share?
- What is your company’s growth potential in the industry?
- How do your company’s financials look compared to your competitors’?
- Identify future potential total available market (TAM) and growth for chosen product/service and technology.
- What is the TAM for cars and light trucks?
- What is the TAM for IoT-connected cars and light trucks?
- What is the projected compound annual growth rate (CAGR) for cars and light trucks?
- What is the CAGR for IoT-connected cars and light trucks?
- Identify ways to adjust if business conditions change.
- What can you do if your customers are slow to respond (buy) the innovation?
- What can you do if one competitor is overtaking all the others, including you?
- Describe the steps your company needs to take from concept outline to launch.
- What is the size of development that will be required?
- Will you require additional capital and personnel?
- How would you approach determining the timeline from the beginning of development until initial product launch?
Part Three: Organizational Structure and Culture Report
Based on your analysis of the organization’s structure and culture, share recommendations for changing its structure and culture to be more conducive to innovation.
- Describe the current organizational structure’s impact on innovation.
- How does your company’s organizational structure support innovation?
- How effective is the current structure in addressing changes in market demand?
- Recommend changes to the current organizational structure.
- How does the new structure support innovation?
- How will your recommended changes make the enterprise more responsive to market demand?
- Explain how organizational changes support a culture of innovation.
- In what ways does the current culture work against innovation?
- How does the new structure support a culture of innovation?
What to Submit
To complete this project, you must submit the following three items:
I. Innovation Approach Presentation
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.
II. Strategic Plan Report
Submit a Word document of 5–8 pages, devoting 1 page to each critical element described above in Part 2 along with an introduction and a short executive summary. Use the feedback you received on Milestone Two to revise your original report. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations.
III. Organizational Structure and Culture Report
Submit a 5- to 8-page Word document using 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations.
8
Milestone Two-Strategic Plan
Deyanira Diaz
Southern New Hampshire University
MBA 580: Innov/Strat High-Perfom Orgs
02/13/2022
Competitors’ Relative Strengths
The percentage change of a certain variable over time is referred to as growth rates (Chen, 2021). Using the factors of market share of IoT connected vehicles; we can determine our position and predict where we could be by 2030. According to current analyzed market share, the top three rivalries will likely maintain their percentage until 2030, with no major increase or decline. Our company, on the other hand, has seen a substantial drop in market share while retaining a nearly consistent market position in cars and trucks industry.
VW and Toyota have robust financial positions, with net income (NI) above $16 billion, compared to $6.1B for BMW and $0.9B for our firm. With $147.4B and $190.8B in equity, consistently, these two corporations have the most revenue. While we have more assets than BMW, we also have much more responsibilities, subsequent to us having the lowest equity of $39.9 billion related to BMW’s $72.5B.
· The four businesses’ combined market share for vehicles and trucks is 27 percent presently and 26.47 percent in 2030.
· Volkswagen and Toyota each have a market share of somewhat more than 8.50 percent, while our firm has 5.80 percent and BMW has 3.91 percent.
· From now through 2030, all four automakers keep the same core market share.
· The total market share of the four companies for autonomous cars and trucks is 34.50 percent now and 26.87 percent in 2030.
· Volkswagen now has the bulk of the market and will continue to have a significant piece of it in 2030.
· Until 2030, Toyota and BMW will retain a significant chunk of their market share.
· From now until 2030, our firm loses a large market share.
Company’s Market Share
The expectation is that we might lose a significant market share in the IoT-connected vehicles industry between now and 2030, while mostly upholding our position. IoT enabled vehicles extra safety features like car notifications to drivers on traffic, accidents, and other dangers because they have internet connections (autoconnectedcar.com, 2021). Safety, diagnostics, entertainment, and navigation utilities are all available in connected automobiles. We will remain to lose market share if our cars’ future stays unchanged while our rivals add more autonomous capabilities in their products.
Our current financial state puts us at a shortcoming since we have inadequate funds to capitalize in large-scale, discontinuous innovation. Toyota and Volkswagen are both fiscally proficient of making noteworthy investments in vehicle technology. We must however, work with what we have, as we only have $0.9 billion in net income, or risk trailing behind in market share. We will be capable of making persistent adjustments to the present fleet of automobiles while applying our in-house methodological skills with incremental innovative method. This method does not need a large upfront spending and allows us to sustain, if not grow, market share.
The cost of periodic upgrades to older models is already factored into the operational budget, so no additional funding is necessary to keep the vehicles technologically advanced. With vehicle developments based on customer desire, we also expect to increase sales and earnings in current models while maintaining our market position and maybe increasing market share. By implementing little but important vehicle adjustments, we reduce our overall risk as well as our financial and sustainability concerns (masschallenge.org, April 2021). With minor changes to current automobiles, we will be able to increase product diversity and allow customers to absorb new technologies more readily.
Potential Total Available Market
The total income obtainable for the product over the whole market, comprising of substitutes, is the theoretical total available market (TAM), presumptuous of a 100% market share (corporatefinanceinstitute.com, 2021). Cars and trucks have a global TAM of $3,227.70 billion, while IoT-connected automobiles have a TAM of $53.9 billion. Cars and truck revenues are expected to reach $4,810.0 billion in 2030, while technologically connected cars and trucks revenues are expected to reach $510.07 billion.
Revenues from automobiles are probable to rise by $1,582.30 billion, while revenues from IoT-connected vehicles are expected to rise by $456.17 billion. While IoT-connected vehicles have shown substantial growth over time, those without the technology continue to have the highest dollar sales growth.
The yearly gain or loss on an investment is evaluated using the compound annual growth rate (CAGR), which presents the average growth rate (learn.robinhood.com, 2021). The global CAGR for automobiles is expected to be 4.10 percent over the next ten years, while the CAGR for those connected with IoT is expected to be 25.20 percent.
When making comparisons based on to competitors’ data, VW is expected to grow at a rate that is 0.20 percent greater than global estimations, with a predicted CAGR of 4.30% for cars and trucks over the next ten years, which is 0.20 percent higher than global projections, and a CAGR of 23.20% for IoT, which is 2% lower than global projections. BMW has a marginally higher-than-expected projected CAGR of 25.50% for IoT connected vehicles, which is 0.30% higher than forecasts, and a slightly lower-than-expected projected CAGR of 3.70% for other automobiles, which is just 0.40 percent lower than forecasts worldwide. BMW has the fastest predicted increase based on current ranks, but having the lowest forecast ten-year revenue.
Business Conditions Change
New items on the market may elicit a sluggish response from consumers. Marketing, however, plays a vital role in assessing customer’s reaction to the new products. Practical limitations such as use, value, and risk exist, as well as psychological barriers such as tradition and image (Talwar et.al, 2020). Understanding the target market and channeling organization’s effort to the targeted segment is significant for the success of innovation.
Customers must be included and surveyed about their current insights about autonomous and semi-autonomous vehicles in order to know their doubts and the factors that are most noteworthy to them. Consumers are frequently concerned about the safety of technology change (Konig & Neumayr, 2017).
If we identify the element that customers desire and apply incremental innovation, we can successfully pivot current technology to meet consumer demand. By gradually introducing new features to the current fleet line, we have the opportunity to establish a well-known brand name that customers will trust to be secure. When semi-autonomous and autonomous vehicles become accessible, clients who have previously used IoT technology in their vehicles are more likely to accept them. R&D will be crucial in adjusting current designs to match customer demand, concentrating on what consumers want and are ready to buy, in addition to the marketing team.
In order to preserve or acquire market share, we must examine the competition, define consumer expectations, differentiate ourselves from competitors, increase marketing efforts, enhance customer service for present consumers, and target new customers (marketingdonut.co.uk, 2021). We also need to get our cutting-edge technologies to market quickly and ahead of the competition.
Current Outline to Launch
When introducing incremental technical developments into current fleet automobiles, the focus will be on new product concepts. Discontinuous innovations, as previously said, are rare events, yet they have the ability to change the speed and boundaries of innovation. The Stage-Gate approach will be used to screen creative technical concepts that will fit consumer demands based on pre-determined standards. We need to be adaptable and flexible, involving clients in the development process and continuously improving as necessary. The ideas will be submitted to concept testing after going through the first gate, which will decide whether the concept satisfies the customer’s wants and preferences. At this stage, we’ll decide whether to pursue the idea further, tweak or pivot, or start over. A business case will be built as we progress to define the project and offer a development approach. Customers will examine a prototype, and marketing testing will be conducted to verify market practicability. Once the product has cleared the first four gates and phases, it will be ready to launch. This will comprise presenting the product to the market, advertising it to increase visibility, and generating demand from customers.
The incremental innovations have already been funded, and no further funds are necessary to finish them. To work on novel concepts, cross-functional innovation teams comprising members from several departments will be formed. The formation of these autonomous teams sponsored and trusted by management will reduce the period from concept to deployment since the teams will be focused on bringing consumer-wanted improvements into fleet automobiles. Ideas should go through these phases and be ready to launch 6 to 12 months after they are functional.
References
Autoconnectedcar.com. (2021). Definition of a connected car – what is the connected car? Defined. Retrieved from https://www.autoconnectedcar.com/definition-of-connected-carwhat-is-the-connected-car-defined/
Chen, J. (July 10, 2021). Growth Rates. Retrieved from https://www.investopedia.com/terms/g/growthrates.asp#:~:text=Growth%20rates%20refer%20to%20the,within%20a%20specific%20time%20period.&text=Expected%20forward-looking%20or%20trailing,growth%20rates%20used%20for%20analysis
Corporatefinanceinstitute.com. (2021). Total Addressable Market (TAM). Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/strategy/total-addressablemarket-tam/
König, M., & Neumayr, L. (2017). Users’ resistance towards radical innovations: The case of the self-driving car. Transportation Research Part F: Psychology and Behaviour, 44, 42–52. https://doi-org.ezproxy.snhu.edu/10.1016/j.trf.2016.10.013
Learn.robinhood.com. (March 12, 2021). What is CAGR?. Retrieved from https://learn.robinhood.com/articles/7howbkVtNa0KyADL2mdXzS/what-is-cagr/
Marketingdonut.co.uk. (2021). Ten ways to keep ahead of the competition. Retrieved from https://www.marketingdonut.co.uk/marketing-strategy/ten-ways-to-keep-ahead-of-thecompetition
Masschallenge.org. (April 8, 2021). Incremental Innovations: What it is, Benefits and Best Practices. Retrieved from https://masschallenge.org/article/incremental-innovation
Talwar, S., Talwar, M., Kaur, P., & Dhir, A. (2020). Consumers’ resistance to digital innovations: A systematic review and framework development. Australasian Marketing Journal (AMJ), 28(4), 286-299.
Market share percentage for connected cars and trucks now
Annual Cars & Light Trucks Revenue in 2020 (billions) TAM
Global Your Company BMW Toyota VW 3227.7 187.1 126.1 275.39999999999998 282.89999999999998
Annual Cars & Light Trucks Revenue in 2020 (billions) TAM
Global Your Company BMW Toyota VW 3227.7 187.1 126.1 275.39999999999998 282.89999999999998
Market share percentage for connected cars and trucks now
Annual Cars & Light Trucks Revenue in 2020 (billions) TAM
Global Your Company BMW Toyota VW 3227.7 187.1 126.1 275.39999999999998 282.89999999999998
Module 1:
Deyanira Diaz
1/23/2022
Innovation
Innovation is necessary for organizations to compete in today’s VUCA world.
How can we compete?
We must decide on whether to utilize incremental or discontinuous innovation
Discontinuous vs Incremental Innovation
There are two types of innovation options for our company in order to stay competitive. Discontinuous is characterized by design competition and technological substitution. Incremental is when companies innovate by lowering costs and improving the functioning and performance of the dominant technological design.
2
Discontinuous Innovation
Risks
-Cost
This would be expensive, as much as $6 billion (Viswanathan, 2013.)
-Time
It may take us longer to get our vehicle out on the market
Benefits
-Position
Taking the leadership position and a huge advantage in the market
–Development
The first to develop a vehicle of its type and can add it developments to the entire product line and continue to innovate
With this option we would introduce a radical innovative design plan in the future for achieving a new autonomous driving vehicle
3
Incremental Innovation
Risks
-Market Change
Market can impact the customer demand
-Opportunities
We may be missing opportunities we do not control
benefits
-No changes required
This is how we do things now, which means we would continue improving vehicles as we do now and as competitors do as well
-Less room for error
We improve and build on what we know and have
We can continue to add sensors, computers, and IoT capabilities each model year just by upgrading modules until we reach our goal
4
Competitors
| BMW | Toyota | Volkswagen |
| 125 sensors/50 computers | 100 sensors/40 computers | 90 sensors/35 computers |
| vehicle control/safety, IFTTT-customized applications and IoT connectivity, LTE | vehicle control, social media, safety, entertainment, navigation, 5G | vehicle control, maintenance, in-car consumer experience |
Our competitors’ current products and services shown on these charts.
5
(continued)
| BMW | Toyota | Volkswagen |
| navigation, emergency services, smart house connectivity | navigation, emergency services, social media | navigation, emergency services, consumer orders, maintenance status |
| fully integrated information system, semi-autonomous driving, connection to traffic information systems, introduction of fully autonomous driving early 2030s | fully integrated information system; semi-autonomous driving; connection to traffic information systems, expanded social media, and communications; consumer services; maintenance; fully autonomous vehicle early 2030s | fully integrated information system; semi-autonomous driving; connection to traffic information systems; connectivity with smart home; fully autonomous vehicle early 2030s |
Our competitors’ current products and services shown on these charts. It is also showing the projected products and service their products will include by 2030
6
(continued)
Are your competitors expanding in the current market?
Competitors are projected to expand in the current market and offer automobiles with more features than we do which also puts them at an advantage to produce higher revenue and continue expanding
Company’s Capability
These are questions to ask ourselves in order to determine our company’s capabilities and how we may move forward. Currently we have competitors ahead of us both in revenue and technology. We want to be the leaders in our industry. The gaps are in our technology and ability to compete. We would need to close this gap researching and investing into advances our technology a lot faster in order to surpass competitors or take that chance and try radical innovation.
8
Technology
Where are we now?
How do we close these gaps?
Where do we want to be?
Where are the gaps?
(continued)
Does your company own the technology, or does it need to be purchased?
Our company has already implemented technology in our automobiles, which means we have the capability of the technology at our reach but not at competitors’ level.
How is the technology currently being used in today’s products and services?
Our company is marketing the same connected car capability as our competitors such as driver apps, keyless start, OnStar, accident and first responder connectivity.
What type of technology is available to purchase?
Car technology in sensors and chips. We have a lot of room to grow and therefore need to look at competitors and start to include more advanced technology into out product line.
Recommendation
Discontinuous Innovation
Discontinuous innovations “are not everyday events, but they have the capacity to redefine the space and the boundary conditions – they open up new opportunities but also challenge existing players to reframe what they are doing in the light of new conditions” (Tidd 2021).
Designing and making an automobile is not the same as designing and making a therapeutic drug, or a personal computer. We are dealing not with one technology, but with several technologies, each with its historical pattern of development, skill requirements and strategic implications…We distinguish five major technological trajectories, each with its distinctive nature and sources of innovation, and with its distinctive implications for technology strategy and innovation management” (Tidd 2021).
The potential discontinuous innovation for our company is introducing a radical innovative design plan in the future for achieving a new autonomous driving vehicle.
10
Resources
Automotive technology solutions and automotive industry solutions. Ibm.com. (2022). Retrieved 24 January 2022, from https://www.ibm.com/industries/automotive?utm_content=SRCWW&p1=Search&p4=437000682 24978234&p5=e&gclid=6ba94cb7861a12bbeb362d59c1eb26e5&gclsrc=3p.ds.
Computers in your car. (2018, January 24). AAMCO Colorado. https://www.aamcocolorado.com/computers-in- yourcar/#:%7E:text=Your%20Car’s%20Computer,controls%20to%20meet%20emissions%20standar
Gossett, S. (2019, August 13). IoT in vehicles: A brief overview. Built In. https://builtin.com/internetthings/iot-in-vehicle
Guide to Gap Analysis with Examples | Smartsheet. (2019). Smartsheet. https://www.smartsheet.com/gap-analysis-method- examples
Leconte, P. (2019, February 5). Conducting A Gap Analysis: A Four-Step Template. ClearPoint Strategy. https://www.clearpointstrategy.com/gap-analysis-template/
Meola, A. (2020, March 10). How 5G & IoT technologies are driving the connected smart vehicle industry. Business Insider. https://www.businessinsider.com/iot-connected-smartcars?international=true&r=US&IR=T
Tidd, J., Bessant, J. R., Kouzes, J. M., & Posner, B. Z. (2021). Innovation, Strategy, and High-Performance Organizations for Southern New Hampshire University. Wiley Global Education
Tyler, N. (2016, December 14). Demand for automotive sensors is booming. Newelectronics.Co.Uk. https://www.newelectronics.co.uk/electronics- technology/automotive-sensors-market-isbooming/149323/#:%7E:text=Currently%2C%20each%20vehicle%20has%20from,car%20based%
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