8-2 Benchmark Study: Skunk Works Assignment

 

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Overview

In Milestone Two, you recommended a strategic plan to the organization from the course scenario for the IoT innovation project. Now that senior management of this company has approved your recommendation, your task is to recommend ways the organization can better support innovation. Remember that your perspective is still that of a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks.

In this assignment, you will read a case study and write a report that compares the course scenario organization’s structure and innovation culture with those of Skunk Works. This report may help you identify ways to improve your organizational structure and culture in an effort to better support innovation.

Prompt

Using the information about the company in the

Organization Overview

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document and referring to the Skunk Works case study in this module’s resources, compare the organization from the course scenario with Skunk Works and identify differences in organizational structure and culture related to innovation. Your comparison should include the following points:

  • Organizational Structure : Compare the organization’s structure with that of the Skunk Works innovation team at Lockheed. Identify the points of similarity and difference and discuss their implications for an organization’s overall ability to innovate.
  • Shared Vision : Compare the shared vision of the organization and that of the Skunk Works innovation team. Identify the points of similarity and difference and discuss their implications for an organization’s overall ability to innovate.
  • Creative Climate : Compare the creative climate of the organization and that of the Skunk Works innovation team. Identify the points of similarity and difference and discuss their implications for an organization’s overall ability to innovate.
  • Effectiveness of Teamwork : Compare the effectiveness of teamwork in the organization and the Skunk Works innovation team. Identify the points of similarity and difference and discuss their implications for an organization’s overall ability to innovate.

Guidelines for Submission

Submit a 1- to 3-page Word document with double spacing, 12-point Times New Roman font, and one-inch margins. You are not required to use sources. However, if you choose to use sources, they should be cited in APA format. Consult the

Shapiro Library APA Style Guide

for more information on citations.

Case Study Link:  

Cases S-U | Managing Innovation (johnbessant.org)

 

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

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