Innovation in the Business for Ford Company
BA Hons in Business Management
Managing Innovation in Business CW2
Innovation is always required in every industry in order to maintain the sustainability in business. This current assignment is intended to describe the future innovation in the automotive manufacturing industry for the Ford Company. I found out that the automotive industry has achieved the sufficient amount of growth and within 2020 it is expected that they will produce more than 1.5 million cars. This will generate the employment of more than 5000. Mai factors which drives Ford company for innovations is huge competition in the industry, demand for new technologies, changes in regulations and legislations Different top automotive industry is continuing to invest in UK because of the attraction of the country. I observed that the government of UK provides support for the electric and the hybrid automotive model that help the automotive companies to increase level of innovation.
In the report has been defined what requirements are necessary for the Ford company to innovate, has been defined that innovation procedure is involved with a thorough research on the selected innovation.This process needs a cycle of divergent procedure of thinking and along with a settlement of convergence. For future innovation Ford Company has to allocate sufficient amount of resources such as human and finances.
Has been founded out that for Company successfully establish the future innovation capabilities for the organization it is necessary to consider such facts as knowledge management, changes in management.This industry has a very advanced prospect, its resources and management capability is indeed very bright. With inhabitation of modernized technology it can achieve an ever winning success with influential impact. The ways that it can inhabit success is elaborated in this study thoroughly. The management is basically designed up on the knowledge management skill. This study sheds light on competitive analysis of the company and the change management procedure to foster advancement for its growth.
Innovation is considered as one of crucial aspects in modern organisation because it provides a new edge to organisation. Huge competition in the industry creates increasing need of the innovation process. Due to this factor, the technological changes in automotive industry are growing in highest extent. It is expected that within the 15 to 20 years of period it is expected that different mix of the technologies regarding the vehicles will be utilised.
This assignment is intended to describe the innovation in the business for Ford Company, which is one of the American multinational organisations. This report mainly describes future condition of the automotive industry 2020 and beyond, Ford innovation requirements 2020 and beyond as well how to build future Capabilities for Ford Company. On the end conclusions are defined.
2.0 The future of the industry 2020 and beyond:
2.1 Car manufacturing in UK in 2020:
The UK automotive industry is intended to produce the two million vehicles in a year from 2020 and beyond (Zhao, 2013). Along with those, employment in supply chain of UK regarding car manufacturing sector will be increased and it will reach to the 121000 (Autonews.com, 2016). A recent study describe that car manufacturing sector of the UK will get a huge growth and within 2030 the worth of automotive market of the UK will be 51 billion euro. It is seen that from the 2010 to 2030 the car manufacturing of the UK will be increased.The below mentioned diagram depicts the increasing rate of automotive industry that is growing in remarkable way in UK.
Figure 1: Image of contemporary car industry in UK
(Source: Autonews.com, 2016)
This diagram represents the innovative grade of the remarkable companies that are intending economic growth of UK. It is clear from the analysis that future automotive industry is impacted with a huge innovation and revolution.
2.2 Comparison between car manufacturing in UK with all over world:
It is seen in all over world car manufacturing in UK is not more important. The main reason behind that is high level of car manufacturing in China and other emerging markets. Due to less amount of human resource cost helps those countries to achieve high level of productivity. On the other hand, in Mexico and North America more premium brands are opening their brand. Among those countries, they are considering Mexico more attractive (Tayloret al. 2011). The main reason behind that are different free trade agreements and low level of manufacturing costs.
Figure 1: Major vehicle producing country
(Source: Autonews.com, 2016)
By comparing car manufacturing in all over world it can be said that in year of 2020, Europe will produce 22.6 million cars in total, whereas China will produce 32.64 million cars, Nafta will produce 19.3 million of cars and Japan will produce almost 8.57 million cars in all over world (Turnbullet al. 2014). The table also reveal the fact that in year of 2020, car manufacturing in India will be 6.7 million, whereas, in Korea car manufacturing will be 4.35 million. It is seen that in upcoming future car manufacturing industry of UK will be shifted to higher level premium cars from basic and entry level cars. It is seen that in year of 2010, only 37% of total cars consisted of premium value car which is expected to be increased within 2020 by 17%. The main reason behind this is UK is considered by premium ranged car manufacturing companies as very attractive and economically viable country (Baines et al. 2011). Along with that, the sell of medium level car will be decreased.
The future of this industry is intended with a huge prosperity. The future of the car industry is elevated with modernised technology and proper attribution of technical advancement. The continual innovation in this industry has initiated a tough competition. The entire business world is facilitated with a severe fight regarding their existence(Herronand Hicks, 2013). This fact has inserted in them a challenging attitude of innovating products with improvised features. The growing completion in the car industry has initiated integration towards innovation and invention of different launches. The growing demand of market is also increasing day by day. Therefore, the future of this industry is supposed to intend the world with a superficial production and super innovative car production to the world. This organisation is also running successfully with rapid progress. Thus; it can be estimated that this organisation too will contribute to glorify the improvisation of this industry.
The completion of this industry is gradually growing. This is about the progressing stretch of the automotive industry. The innovation and successions growth of this industry has accompanied in raising a tough competition between the successfully leading companies. The innovation of the British car industry and its rapid success in leading the car industry of UK to a higher position is significance of that. Therefore, Ford needs to accompany with the relative consolidations to remain successful and integrate their innovation day by day(Buckley and Casson, 2015).
It is seen that current generation wants a car that is fully automatic (Bcgperspectives.com, 2016). Therefore, within 15 years different alternative power trains, partly automated and fully connected cars are more likely to form. In late 2020 car will have self-driving mode that will not interact driver. Current models of Ford can provide some efficiency in fuel but it does not have extensive design so they can provide effective and technological effectiveness to products (Prnewswire.com, 2016).
The timeframe for autonomous vehicle is currently growing in highest extent and arrival of autonomous system is becoming a major shift in technology (Scharmer, 2012). It is seen that Ford in current times, are making cars that can park themselves or brake at the sign of danger or they can stay in particular lanes without the assistance from the driver. However, it is seen that need of customers are growing so they want more technologies from different car manufacturer (Geffen and Rothenberg, 2013). Therefore, in order to address needs of customers, it is very much important for any organisation to develop different types of new technology which not only provide a more and effective level of protection but it will also be effective to provide a more delighted services to customers
Change in regulations and legislations:
Regardless of the innovation and its fastest growth, different constitutions also developed and composed for the safety of manufacturers. The ethical consolidations are the safe guard for the service providers and for the customers too(Buckley and Casson, 2015). The Commission Regulation EU, 2015 constitutes rules about the invention of two wheelers. However, the modifications of the existing products also undergo distinctive consolidations. Therefore, the laws and regulations have been revised as long as the industry has become versatile and innovative. Based on the Global Warming solution Act, the industry has been limited in manufacturing of products and use of chemicals in a certain period. To elevate successfully in the industry, the successful organisations are amended to abide by the guidelines as per the regulation and legal consolidations.
3.0 The organizations innovation requirements 2020 and beyond:
3.1. Process view of Innovation
Innovation procedure is involved with a thorough research on the selected innovation. This further contributes to take grudge on exploration as well as a proper synthesis on the market demand and criteria. Innovation can be of different types. Therefore, the probable consequences need to be planned before taking initiative for innovation to the industry(Barlow, 2013). This process needs a cycle of divergent procedure of thinking and along with a settlement of convergence. Howsoever, innovation policies need to be supported by government policies. Therefore it needs to be accompanied with the rules of government and go complied with the enterprise and individual level. This procedure involves the approach of Linear model. As this industry is growing in a rapid motion, a series and sequence of consolidations are in specific requirement.
Figure 2: Process of innovation
(Source: Holweg and Miemczyk, 2012, p. 75)
The basic concept of Linear model is associated with distinctive procedure that could have helped Ford by adopting implementation in a sequential way. This leading brand could research for improvised technology by proper search and selection should have been based on that. This is inclined with dimensional progress for the company. This research is beneficial in the sense that it helps to know about different ways regarding the contemporary trend and demand of market. On the other way a proper selection helps industry plan in distinguished way and leads management to take appropriate strategy. A keen note on the continual exploration as well as synthesis of the industry is deliberate in planning glorious feedback for the company. Moreover, it helps in strengthening the competitive power too. Adoption of these two stages gradually helps the internal management to think of the implementation in proper way and helps to initiate convergence. As this company is leading very successfully, this model directly inclines with its contemporary will. The gradual steps of this model help in remarkable way with proper implementation in a synchronised manner.
3.2. Resources: human, finances
This industry evokes a huge source of human power at different level. However the specific need is contaminated with the innovation, the requirement of human resource mostly required at the strategic and technical level. It will be helpful for the organisation to appoint 200-500 technicians and 1000 employees to work at the service general level (Barlow, 2013). For the designed as well as expected improvisation the necessity of finance is supposed to be 1, 50,000 dollar billion. Therefore good terms and bonding with government laws and consolidations are eminently required. However, the sources of human resources have been well planned by this organisation.
In case of Ford, to catch opportunities from all of the countries, they need innovation because currently only the Ford Fiesta that is B segment cars of the Ford is generated in highest volume but there are not any comparable cars that are manufacture in UK in such a high volume.
It is seen from table that in the 2020, mid-level crossovers and SUV will be increased by 26.7% and mid-market sedans and hatchbacks cars will be increased by 19.4% but manufacturing of premium quality cars will be increased by 54% (Telegraph.co.uk, 2016). Therefore, it can be easily assumed that customers wanted those cars that are high in technology, low in fuel and facilities will be provided by product will be more than the average (Holweg and Miemczyk, 2012). Therefore, it is very much important Ford to invest more on their premium quality cars and for this reason innovation is important because any kind of new premium quality cars requires sufficient amount of technological advancements (Barlow, 2013). However, premium quality products are not needed in all of countries; there is also equivalent pressure to make high value vehicles in low costs (Herronand Hicks, 2013). It is seen that in near future power system of vehicles will be replaced by full battery electric, hybrid and fuel cells. However, in order to make a clear shift towards electric vehicles requires almost 10 years.
Therefore, in order to make a fully electrical and energy efficient cars will require sufficient amount of innovation of the Ford Company. Therefore, in order to achievethisthey need to invest sufficient amount of revenue in their research and development (Buckley and Casson, 2015). It is seen that in the recent times, different types of technology regarding the autonomous technology are developing and it is expected to bethe growth of the autonomous vehicle technology will be 50 billion euro with the year of 2030 (Brogårdh, 2012). Therefore, in order to adapt more autonomous system in the premium quality cars, it is very much important for Ford Company to facilitate more innovation in their organisation (Sharpet al. 2011). However, it is very much difficult for the organisation to assume the adaption rate of cars from now because autonomous car technology mainly require the skilled users so it will be difficult for unskilled users to utilise it.
4.0 Establishing the future innovation capabilities for the organization:
The timeframe for autonomous vehicle is currently growing in highest extent and arrival of autonomous system is becoming a major shift in technology (Scharmer, 2012). It is seen that Ford in current times, are making cars that can park themselves or brake at the sign of danger or they can stay in particular lanes without the assistancefromthe driver.However, it is seen that need of customers are growing so they want more technologies from different car manufacturer (Geffenand Rothenberg, 2013). For maintaining the innovation strategy in organisation, Ford creates an interdependent and sustained relationship with different stakeholders such as customers, suppliers, universities, research organisation, consultants, suppliers and trade unions.Therefore, in order to address needs of customers, it is very much important for any organisation to develop different types of new technology which not only provide a more and effective level of protection but it will also be effective to provide a more delighted services to customers. Inorder to satisfy the need of the suppliers they must make some effective agreements with the suppliers so they can get continuous facilities from them. It is important for them to take some active consultation with different universities or different organisation so they can accept some knowledge from them and enriched their organisation with different types of knowledge’s. In order to conduct their business more effectively, it is imperative for them to follow all of the rules and regulations implemented by thetrade unions. They must provide them effective levies to the trade unions to make their businesses. Ford hires several consultants from other developed automobile industry so they can get enough skill regarding automatic car system and achieve competitive advantage. From different same type of organisation, some software company (such as Google) and from the University of MIT they can achieve huge skills regarding automatic car facilities.
The Ford Company have mainly applied the knowledge management in the verification process of the product and they have mainly applied this process in the department of their product development. The company initiated the knowledge management in their organisation in order to reduce the cost regarding the product verification process. The success of the organisation is mainly relied upon the effective utilisation of knowledge management(Boyeret al. 2014). Knowledge management of any organisation mainly creates shares, manage and utilise different information and knowledge regarding any organisation. The multi-step and the licensed knowledge management system of Ford Company are called the best practice replication. The best practice replication of the Ford Company is mainly characterised by three different set of activities such as valued practices, management of the process by utilising the reports and the real time status and quantify as well as qualify the value added to the company. According to most of the people knowledge cannot be managed, but according to knowledge management team at the Ford knowledge can be effectively managed. The main objective of the KM in Ford is to generate a common, improved as well as the standard business process. In the Ford the team ofknowledgemanagement accept to learn something from some people who are doing something good and after receiving the knowledge they share the knowledge with other people (Rindfleischand Heide, 2012). The best practice replication process is one of the most effective as well as mature initiatives of Ford. Along with that, Ford also has some other knowledge management initiatives such as knowledge based engineering that can be best described as the interfaces between the knowledge databases and the CAD. It is seen that if any professional violates the rule regarding the system of knowledge management then the flag regarding the CAD provide some suggestion top correct it.
Change management is a way that can help this organisation to deal with the complications. Main focus on the knowledge management is not adequate. Thus focus on the specific need is very much required. For this purpose organisation needs to identify the chief purpose. However, different situation gives birth to distinctive situation that makes difficult for the organisation to deal with. Even though there is a general purpose and a valid issue. Thus, creation of the urgency in respect with the main challenges or obstacles is too much in need. This selection or initiative helps in formation of powerful coalition. This contemporarily creates a divertive vision that initiates predictive change for the company. There are multiple theories and models on the change management. The Lewin’s model seems to be protective for Ford to foster its advancement. There are eight stages in this model. This puts focus on the short term wins. Ford’s view is associated with among term and long marginal profit. A divertive way if associates the prospect to attain short term profit, it will gradually intend the prosperity and give a hike to the profit margin too. Therefore, a detailed view on the market and synchronization change in the management is inevitable to accelerate the advancement of the company with rapid motion.
In order to implement the innovation in organisation, Ford mainly faces huge issues from their employees. This is because, any innovation mainly require a complete restructuring of the production unit. If Ford wants to introduce automatic cars so thattheymustprovide effective training to employees regarding the autonomous system because there may be some situation that their existing engineer does not have the effective knowledge regarding the autonomous system(Lundvall, 2015). Therefore, they must have some effective research and development team who should initiate different innovative strategy by which they can facilitate introduce some autonomous cars. Here the problem that they may face regarding lack of knowledge among their employees so in order to reduce the problem they must provide the opportunity to the employees so they can effectively develop their skills.
The above study describes upcoming innovation in car manufacturing industry. It mainly describes innovation for UK market. The above discussion concludes fact that in order to satisfy the needs of the customer’s different effective level of innovation is very much necessary. This is because need of customers is changing. It is seen that few years ago customers were preferred Cclass cars and economy class cars but due to the increment in disposal income of customers they are more tending to buy premium class cars. However, the Brexit issues create some problem for car manufacturing organisation by creating inflation in UK which creates huge impact on other different countries also. It is seen that despite of this Brexit issue car buying in the UK is increasing. It is seen that customers only like to buy Ford Fiesta as the B class cars but they do not use other kind of cars. It is seen that sales of other different luxury and premium class cars has been increasing. Therefore, it is very much for Ford to develop manufacturing of their premium class cars. As need of customers is continuously changing so it is important for organisation to facilitate innovation in organisation. It is seen that customers more prefer autonomous technology so that Ford Company must consider technology and implement autonomous system in their upcoming cars.