Innovation Approach
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.
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