Innov/Strat High-Perform Org Week 3 Assignment

in

Market for Connected Cars & Light Trucks (billions) TAM

Global

100%

100%

100%

Markets and Competitors	Annual Cars & Light Trucks Revenue in 2020 (billions) TAM	Market share percentage for cars and trucks now	Projected CAGR over the next 10 years	Projected revenues in 2030 (billions)	Market share percentage for cars and trucks in 2030		Global	Market share percentage for connected cars and trucks now	CAGR over next 10 years	Projected Conencted Car Revenues (billions) in 2030	Market share percentage for connected cars and trucks in 2030
$ 3,227.70				100%	4.10%	$ 4,810.0	53.9	25.20%	$ 510.07
Your Company	$ 187.10	5.80%	3.10%	$ 254.2	5.28%	3.83	7.10%	10.20%	$ 10.11	1.98%
BMW	$ 126.10	3.91%	3.70%	$ 181.5	3.77%	1.62	3.00%	25.50%	$ 15.67	3.07%
Toyota	$ 275.40	8.53%	3.90%	$ 404.5	8.41%	4.80	8.90%	24.80%	$ 43.97	8.62%
VW	$ 282.90	8.76%	4.30%	$ 433.1	9.00%	8.36	15.50%	23.20%	$ 67.30	13.19%
Note for student: Projected Global revenue for in-car connected services by 2030: $81.1 Billion

in

9

6.1

	in billions USD
Your Company	VW	BMW	Toyota
Revenue	187.1	282.	9	12 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	6.1	275.4
Operating Income	5.7	20.5	22.5
Net Income	0.9	16.1	19.7
Assets	310	590.6	275.9	484.7
Liabilities	270.2	443.2	203.4	293.9
Equity	39.9	147.4	72.5	190.8
Number Employees	190,000	304,174	133,778	359,542
Notes:
1 Euro = 1.21 USD
1 Yen = 0.0094 USD	0.0092
references:
Full Speed Ahead To The Future. 2019 Annual Report”. Volkswagen Group. 17 March 2020. Retrieved 17 March 2020.
converstion rages via Morningstar
Annual Report 2019″ (PDF). BMW Group. Retrieved 19 March 2020.
Toyota Annual Report 2020″ (PDF). Toyota Motor Corporation. May 12, 2020.
Ford Motor Company 2019 Annual Report (Form 10-K)”(PDF). sec.gov. U.S. Securities and Exchange Commission. January 2020. Note: numbers disguised by multiplying by 1.12 except for operating income multiplied by 10 and net income multiplied by20

2

MBA 580 Module One Memo

Terrell McGhee

SNHU

MBA580

Dr. Wisler

3/27/2022

MBA 580 Module One Memo

The company plans to explore its IoT for its trucks and cars to create connected vehicles through sensors in sharing data and reaping the benefits of technology. It means it is the company’s strategy for innovation and transition to the future. The need to screen the possible expectations using RWW (Real, win worth it) tool makes the analysis viable.

Feasibility of Product Line (Is it real?)

The need for product change through innovation is viable as IoT is among the trending technologies revolutionizing the industry. People want IoT and in future mainly in helping drivers navigate, see traffic patterns, get alerts about potential delays, free parking lots, and even communicate with other cars while on the road (Gossett, 2019)

The statistics from the market show that IoT-connected cars will grow from $54 billion in 2019 to $510 billion in 2030, which has an industry growth of 4.1%. The company needs to move with existing technologies. The market is available.

The products can be made because the company is already advancing in the industry and its competitors. The company expects to grow at 3.1%, 1%, with the current industry.

The ability of the final products to satisfy the market depends on staying ahead of competitors. For instance, BMW auto manufacturer has higher technical capabilities with IoT, followed by Toyota, Volkswagen, and the companies. Thus, great innovation will lead to maintaining and improving the market share.

The ability of the company to win the market share (Can we win?)

The company products currently have sufficient competitive advantage, which, when not maintained, can be lost to the competitors. For instance, the company enjoys a high annual revenue in cars and trucks than BMW; it has a bigger market share percentage and projected CAGR over the next ten years. The innovations are met with a greater competitive power, mainly considering the expected market share percentages of connected cars and trucks in 2030 being 1.98% for the company while other companies having a significant share shows the expected reaction (Reportlinker, 2020). The company understands the market properly and is a significant player. IoT can revolutionize all the changes and make the outcomes to its advantage if IoT is used properly.

Potential benefits of the company producing the benefits (Is it worth doing?)

The company will benefit greatly from the product change at an acceptable risk because of its resources and capabilities. The company has a substantial market share which expects to move to more connectedness. Thus, the company will potentially benefit from maintaining the market and generating a new one. It is a profitable venture.

Moving to more connectedness makes strategic sense, and one needs to be aware of the market needs and respond with the market. Consumer satisfaction is the biggest input that makes consumers stay, and its made through innovation.

The product fits the company’s overall growth strategy as the company can choose either incremental innovation or radical innovation and still satisfy the consumer needs. The senior company management will accept the change as it is already being implemented. It means little work will be needed with the convincing roles.

Reasons Why IoT connected cars are important to the company

IoT and connected cars are essentially important to the company because of the position it places the company in terms of market share. When buying new cars, consumers ant the latest technology, and growth and development bring about new features. The competitors greatly invest in the product change, and the outcomes are revolutionary. The technology is possible to implement as the company has already incorporated it. Thus, it’s a matter of strategy.

The competitors are expected to intensify the moves by investing more in the technology and partnering with other companies to intensify the resource reach. Thus, it’s expected to be a competitive venture.

Accelerating the move to the development of connected cars will help grow the company as it will change the expected position by 2030, making the company still retain its market share and create room for a wider market reach.

References

Gossett, S. (2019, August 13). IoT in vehicles: A brief overview. Built-In.

Reportlinker. (2020, August 17). 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%. 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%. Retrieved March 21, 2022, from

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

Comparative Product Plans

, Waymo

Toyota

, Ford

Microsoft

Company	Number of Sensors and Computers by 2025	Functionality Emphasis	Current Connected Services	5–10 Year Product Plans	Existing Partnerships
Your Company	65 sensors/30 computers	vehicle control, systems maintenance, entertainment, navigation, 5G	navigation, emergency services, service status	fully integrated information system, assisted driving, expanded service information, semi-autonomous vehicle within 10 years		Toyota
BMW	125 sensors/50 computers	vehicle control/safety, IFTTT-customized applications and IoT connectivity, LTE	navigation, emergency services, smart house connectivity	fully integrated information system, semi-autonomous driving, connection to traffic information systems, introduction of fully autonomous driving early 2030s	Daimler
100 sensors/40 computers	vehicle control, social media, safety, entertainment, navigation, 5G	navigation, emergency services, social media	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		Microsoft
VW	90 sensors/35 computers	vehicle control, maintenance, in-car consumer experience	navigation, emergency services, consumer orders, maintenance status	fully integrated information system; semi-autonomous driving; connection to traffic information systems; connectivity with smart home; fully autonomous vehicle early 2030s
References:
https://medium.com/@water.street/autonomous-vehicle-partnerships-how-tech-companies-and-automakers-are-collaborating-to-innovate-cf44bc9e85a
https://techcrunch.com/2019/07/04/bmw-and-daimler-partner-on-autonomous-driving-first-results-of-team-up-in-market-by-2024/

4/3/22,9:36 AM Milestone One Guidelines and Rubric – MBA-580-X4576 Innov/Strat High-Perform Orgs 22TW4

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Milestone One Guidelines and Rubric

Overview

In the highly compe��ve automo�ve market, it is cri�cal to keep up with current technology to stay in or get ahead in the

marketplace. To remain compe��ve, companies must innovate and integrate new technologies within their product lines and

services.

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 monitoring new technology developments

that the company could integrate into its vehicles to enhance the usefulness of and improve access to the data acquired by the

many digital sensors integrated into vehicle subsystems over the past 20 to 30 years. The technology trend of par�cular interest is

the internet of things (IoT)—the interconnec�on 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 be�er service and predic�ve

maintenance to its customers, improving customer sa�sfac�on and adding addi�onal revenue streams.

Based on briefings by the CTO and your Module One memo, senior management has decided to implement IoT into its product line.

Your CTO has asked you to lead a cross-func�onal team to take this ini�a�ve forward. Your first task is to create a presenta�on that

will include your recommenda�on for how the company should approach this business problem: should you use incremental or

discon�nuous innova�on?

Specifically, should the company:

A. Design a completely new product line, based on the new technology (discon�nuous

innova�on)

or

B. Add new technology features first into one model and then incrementally into the broader product line (incremental

innova�on)

The recommenda�on you and your team will make is an important first step in pursuing this new technology. Your presenta�on and

recommenda�ons will be reviewed by senior management. Un�l senior management approves your approach to this innova�on,

your cross-func�onal team will not have a budget and will not be able to start work on the innova�on. You should u�lize your work

from the Module Two presenta�on and data analysis when making and jus�fying your recommenda�on in this first milestone. In

Milestone Two, you will subsequently develop a go-to-market strategy. For your project in Module Nine, you will compile your work

from Milestones One and Two, and include a proposed organiza�onal structure to best integrate, produce, and market the new

technology.

Prompt

Create a PowerPoint presenta�on to make a recommenda�on for how the company should pursue the IoT technology to remain

compe��ve: either by discon�nuous or incremental innova�on. To make your recommenda�on, you will need to iden�fy how the

evolving IoT (sensor) technology fits into the company’s products and services and determine poten�al risks and benefits. You will

also need to look at your compe�tors to see what they are doing. Finally, you need to analyze the company’s capability (resources)

for pursuing the innova�on. Use the informa�on and data from the CTO Brief, Compara�ve Growth Data, Compara�ve Opera�ng

Sta�s�cs, and Compara�ve Product Plans to complete this milestone.

1. Explain poten�al risks and benefits for op�ons A and B.

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p p p

Overview (1 slide): Present the business problem and op�ons A and B.

Op�on A (1–2 slides): Explain at least two poten�al risks and benefits for op�on A.

Op�on B (1–2 slides): Explain at least two poten�al risks and benefits for op�on B.

2. Compare your compe��on’s products and services.

Compe�tors (3–4 slides): Evaluate the compe�tors’ current products and services.

What are your compe�tors’ current products and services?

Are your compe�tors expanding in the current market? Explain how this impacts their market strength.

3. Analyze your company’s capability to pursue the innova�on.

Complete a par�al gap analysis (2 slides):

Does your 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?

4. Recommend the innova�on approach your company should pursue.

Innova�on approach (2 slides): Explain which innova�on approach you are recommending and why.

Consider the different stakeholders—research and development (R&D), marke�ng, finance—when

communica�ng your recommenda�ons.

1. Include a descrip�on of the incremental or discon�nuous product that you are recommending for

R&D.

2. Include the sales forecasts for marke�ng.

3. Include a financial snapshot for finance.

Guidelines for Submission

Submit a 10- to 13-slide PowerPoint presenta�on with detailed speaker notes that highlight the important points you want to

emphasize to senior management. If you include references, they should be cited according to APA style. Consult the Shapiro Library

APA Style Guide for more informa�on on cita�ons.

Criteria Proficient (100%) Needs Improvement (80%) Not Evident (0%) Value

Risks and Benefits Explains poten�al risks and

benefits for op�ons A and B

Shows progress toward

proficiency, but with errors

or omissions; areas for

improvement may include

ci�ng both risks and benefits

for both op�ons A and B

Does not a�empt criterion 15

Compe�tors Compares compe��on’s

products and services

Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include

discussing whether

compe�tors’ products and

services are expanding in the

current market

Does not a�empt criterion 15

Company

Capability

Analyzes company’s

capability to pursue the

innova�on

Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include

comple�ng a par�al gap

analysis

Does not a�empt criterion

10

Milestone One Rubric

http://libguides.snhu.edu/apa

4/3/22, 9:36 AM Milestone One Guidelines and Rubric – MBA-580-X4576 Innov/Strat High-Perform Orgs 22TW4

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Recommenda�on Recommends the innova�on

approach the company

should pursue

Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include

considering stakeholders’

interests when making a

recommenda�on

Does not a�empt criterion 30

Ar�cula�on of

Response

Clearly conveys meaning

with correct grammar,

sentence structure, and

spelling, demonstra�ng an

understanding of audience

and purpose

Shows progress toward
proficiency, but with errors

in grammar, sentence

structure, and spelling,

nega�vely impac�ng

readability

Submission has cri�cal errors

in grammar, sentence
structure, and spelling,

preven�ng understanding of

ideas

20

Cita�ons and

A�ribu�ons

Uses cita�ons for ideas

requiring a�ribu�on, with

consistent minor errors

Uses cita�ons for ideas
requiring a�ribu�on, with

major errors

Does not use cita�ons for

ideas requiring a�ribu�on

10

Total 100%

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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 a radical

innovative design in several years or B) Introducing incremental improvements faster than we have in

the past and improving our current models each year. Option A does not prevent 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 discontinuous or radical innovation, or incremental innovation.

What do I mean by this?

 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.

 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?

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