Managing Innovation in Business - Aston Martin Innovation Audit

This report discusses innovation in the automotive industry in the context of Aston Martin. The report effectively describes the company's history of innovation in launching new vehicles with new technologies. To further analyse the performance and capabilities of the Aston Martin SWOT and VRIO analysis framework used in the report. Finally, the report effectively showcases the development trends of the auto industry in 2021 such as autonomous vehicles, electric vehicles and artificial intelligence.

Managing Innovation in
Business

Table of Contents
Executive Summary.........................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................5
The Organisation & Industry Overview.................................................................................5
The Organisation (introduce the chosen organisation) and its Innovation History ...............5
The Organisations existing Innovation Performance and Capabilities .................................8
Knowledge Transfer through Cross-Functional Co-operation.............................................12
Gantt Chart for completion of innovation based techniques................................................12
Pestle Analysis......................................................................................................................15
Porter's five force model ......................................................................................................16
The Industry in 2021 ...........................................................................................................17
CONCLUSION .............................................................................................................................19
REFERENCES..............................................................................................................................20
Books and Journal ..............................................................................................................20

Executive Summary
In the digital age, innovation is an ongoing and complex process within an organization.
Therefore, management innovation is a basic management activity that enterprises must apply in
management activities. This report discusses innovation in the automotive industry in the context
of Aston Martin. The company is a leading organization in delivering luxury sports cars to
customers using high-quality technology. The report effectively describes the company's history
of innovation in launching new vehicles with new technologies. To further analyse the
performance and capabilities of the Aston Martin SWOT and VRIO analysis framework used in
the report. Finally, the report effectively showcases the development trends of the auto industry
in 2021 such as autonomous vehicles, electric vehicles and artificial intelligence

INTRODUCTION
Innovation is the key to the success of every organization in the automotive industry.
Innovation auditing is a method of identifying and understanding how an organization is
effectively and successfully managing innovation (Prange and Schlegelmilch, 2018). The
purpose of this report is to develop an innovation audit of Aston Martin, the market leader in the
UK luxury car industry. The report will examine the organization's past, present and future
innovation activities and capabilities. The report will include an overview of the organization and
its history of innovation. In addition, the organization's existing innovation performance and
capabilities are discussed in the report. Finally, there is industry analysis for 2021 is discussed in
the report.

MAIN BODY
The Organisation & Industry Overview
The Organisation (introduce the chosen organisation) and its Innovation History
Overview of organisation
Aston Martin Logonda is the public limited company in the British Automotive industry.
The company is independent manufacturer of the luxury sports cars and grand tourers. The
company was established in year 1913 by Lionel Martin and Robert Bamford. The company is
headquartered at Gaydon, Warwickshire, England, UK (LSE_AML_2020.pdf, 2020). The
company is international organisation with employee strength of 3000. the company only offer
luxury cars to their customers as it has monopoly in the market for manufacturing explicitly high
quality luxury cars.
Innovation history
Aston Martin, a car company founded 109 years ago in 1913, is known for its
differentiation in building luxury sports cars. The company's history of innovating through
technology surpasses its limits, making it a market leader (PAST, PRESENT AND FUTURE:
ASTON MARTIN’S DYNAMIC STORY, 2022). In its early history, by combining aerodynamic
innovation and elegant design, the company has developed some of the brand's most iconic and
legendary luxury car models, from the 1934 Ulster and 1977 V8 Vantage to the DB11.

The company has a long history of innovation, as Aston Martin engineers and designers have
enhanced the performance of sports cars. Aston Martin's technological innovations have reduced
drag, wind noise and other aerodynamic instabilities such as lift for most of this century. In
Ulster in 1934, Aston Martin used innovations in aerodynamic elements to provide models for
amateur racers.
With the innovation of 100 mph car featured a deliberately low frontal area. In the history
based on the Mkll chassis, the model was replica of the racing Aston Martin which won the prize
in the RAC tourist Trophy. In continue to this, in the mid-1930s 15/98 2-litre Speed Model C-
Type variant, with its early attempts at streamlining, earlier to this a breakthrough demonstrated
by the unique Atom prototype, formulated in 1939. Thus, this innovation of Atom by the Aston
Martin was considered dazzling array of new technologies (Biemans, 2018). Later in 1940 the
Atom was completed and registered after the allied evacuation from Dunkirk.

These innovation has helped the company to win the World Sports Car Championship in
the same year. Additionally, German aerodynamicist Wunibald Kamm discovered in 1965 that
the rear of a car was chopped off almost vertically. In 1965, the company innovated the DB6 at
the London Motor Show, which was still the longest-running Aston Martin model in the history.
Now, the latest sports car from the company DB11, with some modifications as an "aesthetic
revolution", articulates a clean car design with the most specific features of its innovative
aerodynamics (PAST, PRESENT AND FUTURE: ASTON MARTIN’S DYNAMIC STORY, 2022).
Throughout the 1950s Aston Martin's renewed aim was on racing with the different DB-
badged models that brought huge success to the company. In 1959 the innovation of DBR1, with
lightweight space, streamlined body has beat the Ferrari in the Le Mans 24- hours race. Aston
Martin has globally 508 patents among which 82% parents are active. In year 2021 the company
has generated the annual revenue of $563.77 million (Aston Martin Patents – Key Insights and
Stats, 2021). In comparison to the Aston Martin the rival company Ferrari has been granted with
over 100 US design patents for their cars and other components (17 Feb Protecting Car designs,
2021). Ferrari's annual revenue has increased about by 811 million euros in 2021.

The Organisations existing Innovation Performance and Capabilities
SWOT Analysis of Aston Martin
Aston Martin is the luxury brand famous for manufacturing the luxury sports car. The
company has become a symbol of the British when the famous actor James Bond used it as a
choice of car in film “Goldfinger” this has lead the company to huge degree of popularity. To
analyse the current internal innovation performance and capabilities of the company SWOT
analysis is effective framework to be utilized and discussed below:

Strengths
Good quality cars: with the new edge cutting technology of the company is the key strength of
the company that uses the aerodynamic features (Mousavi, Bossink and van Vliet, 2018).
Through this company is able to design high quality cars that roll out as powerful, perfect and
aesthetically designed cars. Therefore, racers carve for Aston martin because of its high
innovation performance and capabilities.
Illustration 1: How to Complete a Personal SWOT Analysis, 2017
(Source: How to Complete a Personal SWOT Analysis, 2017)
Illustration 2: Carbon Neutral innovative car by Aston Martin, 2022

World class design and engineering topped with leading execution: World class design and
engineering topped with leading execution: Aston Martin is one of the popular brand on
international level which provides high and classic designs of sport cars. The company also have
strong engineering team and designing team which helps it in manufacturing powerful as well as
stylish cars. It is famous for its sports cars which provide high quality and performance for
clients.
Weaknesses:
Dependence on limited number of suppliers: As the respective organisation mainly focus on
providing luxurious sports cars, its range of suppliers become fewer which further leads to their
high power of negotiation (Kim, Paek and Lee, 2022). The company is unable to manufacture
wide range of designs of cars which make it difficult for customers to select their choice of cars.
The limited product portfolio makes it difficult for the company to attract large base of
customers.
Smaller market than other similar companies: The respective company only targets luxurious
and sports car oriented market which mitigate its chances to penetrate into new market. The
market for this type of product is very niche and very few people prefer to buy these types of
cars that results into decrement in market share for the company.
Opportunities:
Affordable automobiles: Aston Martin must focus on expanding its market by introducing auto
mobile products that could be used by people on daily basis. This expansion in product portfolio
will assist the respective company in expanding its market share and attract large base of
customers (Snihur, Zott and Amit, 2021). By manufacturing budgeted auto mobiles respective
company will be able to compete with mass-market auto-mobile producers such as Ferrari and
others.
Rise in electric market vehicles: As people are becoming more concerned towards environment
which is resulting into rise in electric vehicles. This rise in electric market would help the Aston
Martin in shifting its focus towards manufacturing eco-friendly cars that could assist in reducing
its carbon footprints. From this approach the respective company would be able to become
responsible towards environment and enhance its positive image in the market.
Threats:

Rapid change in technology: Aston Martin is facing a huge threat from rapid technological
change due to which company may fails to optimize the use of its resources in production
centres. This can lead to high costs and low profit margins for the company, which can be hugely
detrimental to the company's profitability.
Product innovation and frugal engineering by other competitors: Aston Martin's competitors
focus on making innovative products, creating stiff competition for their respective companies.
The group's competitors have also implemented frugal engineering that helps them reduce the
cost of their products and their manufacturing. These approaches divert customer interest to
different brands, thereby reducing Aston Martin's consumer base. The companies involved must
focus on expanding their product portfolios by introducing new designs that can attract large
numbers of customers.
Illustration 3: Innovation in Automotive industry, 2022

Analysis- The above graphical representation shows that innovation in the automotive industry
has decreased in the last three months. It is major role of Aston martin to focus on development
of innovation in order to capture the marketplace. The sales and profitability of company will be
increased in a crucial manner with the support of innovative techniques.
Knowledge Transfer through Cross-Functional Co-operation
The cross-functional knowledge is considered as key approach which provides whole
perspective of the way different issues and challenges are tackled by each functional group of a
business. It is essential for a business entity to develop knowledge transfer through cross
functional cooperation in order to achieve competitive growth (Jugend, Araujo, and Hilletofth,
2018). The knowledge is developed through sharing in a systematic manner by developing a
cross-functional approach. It is major role of a business to develop knowledge through cross-
functional co-operation in order to gain marketplace success. Aston Martin company should also
develop effective strategies and frameworks which are important for supporting knowledge
through cross-functional co-operation.
Gantt Chart for completion of innovation based techniques
Activities Year 1 Year 2 Year 3 Year 4
Conducting
survey and
research for the
innovation
Development of
innovative
process
Evaluation of
innovative
process
Innovation
assessment and

feedback
VRIO Analysis
VRIO stands for the value of the resources, Rareness of the resources, Imitation risk and
organisational competence (Hendriarto, 2021). VRIO is strategic tool that is highly focused on
the resources of the organisation which help the leaders of the Aston Martin to build a
sustainable competitive market by the effective and optimal understanding of role of resources
for the entire business model.
Resources Valuable Rare Inimitable Organisable Competitive
performance
Engineering
and design
team
YES YES YES YES Providing
strong and
sustainable
competitive
advantage
Technology YES YES YES NO Competitive
advantage
Illustration 4: VRIO analysis checklist, 2021
Source: VRIO analysis checklist, 2021

Research and
development
YES YES NO NO Temporary
competitive
advantage
Financial
resources
YES NO NO NO Competitive
advantage
Valuable: Employees, including Aston Martin's design and engineering teams, are the
company's most valuable resource and provide the company with a huge competitive advantage.
Aston Martin's current team has enormous potential to enhance the company's performance and
capabilities. The company's technology is also valuable because the company uses unique
aerodynamic elements in cars to make them valuable to customers. The R&D department of a
company also falls into this category as the company has effective techniques and tools to deeply
analyse new tools and technologies such artificial intelligence, virtual intelligence, machine
learning etc.in the market. The company's financial resources are also valuable to the company
for growth and expansion (Gerybadze, 2020).
Rare: Engineering and design team, technology and research and development tools and
techniques are the rare resources of the Aston martin. The design and engineering team is rare as
they have talented and repudiated designers and engineers of different genre. Also the
technology of the company is rare in context of feature and application they add to luxury sports
cars of the company.
Inimitable: The Engineering and design team and technology are only two resources of the
company that are inimitable in the Aston Martin. As both the resources are highly efficient that
provide a company huge advantage to attend good market share and also to stay competitive in
the automotive industry.
Organisable: the only resource of the company that is organisable is Engineering and design
team. The whole human resource management is aligned to make this resource organised so that
it can be utilized optimally and they can bring worth to company's product and profitability
(Wang, Day and Farid, 2019).

Pestle Analysis
Political: the company has been highly benefited by the political environment of UK due to the
low taxation policies that allow the company to run all its innovation practices at lower tax rates.
This has also resulted into the high profits and increase spending on R&D (Wellings, Greenwood
and Coles, 2021).
Economic: from many years the economic conditions of the UK has remains stable this means
good disposable income, increasing investment into the new industry and much more is highly
beneficial for the Aston Martin to grow their business.
Social factors: the social media and digital marketing is hue trend among the customers of the
company which is good tool to be leveraged by the Aston Martin to reach better customer base
and also to potion its new innovative products in market (Guno, Collera, and Agaton, 2021).
Technological: the technological advancements are highly disruptive and fast in pace but they
are good for the company to leverage it to bring the innovation in customer service. Technology
is the key element for the company's innovation in its product offerings by access of high-quality
great information.
Illustration 5: Using PESTLE Analysis To Develop New Products In The
Manufacturing Industry, 2018
sOURCE: Using PESTLE Analysis To Develop New Products In The
Manufacturing Industry, 2018

Legal: the UK laws and legislations have different segment for the business law that must be
followed by the Aston Martin. This also includes the company must protect their data with the
data protection laws.
Environmental: for the environment safety and security the Aston Martin is effectively utilizing
the renewable technology in its cars and other products. Also in the product innovation the
company's products designs are based on the environmental standards (Jacinto, 2021).
Porter's five force model
The porter's five force model is used to analyse the competitive business environment of
the Auto mobile industry in which Aston Martin operates.
Threat of substitutes: for the Aston Martin threat of substitutes of its products and services if
high. To mitigate this threat company must regularly involve into the investing into the research
Illustration 6: Porter's Five Forces Analysis Definition
and Examples, 2022
Source: Porter's Five Forces Analysis Definition and
Examples, 2022

and development or it make enter into a risk of losing market share and position (Russo and et.
al., 2022).
Bargaining of Buyers: this factor is lower in terms of Aston Martin. As when the bargaining
power is high there is usually a tendency to drive the prices low which will limit the Aston
Martin earning ability of sustainable profits.
Threat of new entrants: the threat of new entrants in this industry is low as the products,
technology and resources required to enter the industry requires heavy investment. Also high
degree in this factor will may cause difficulty for the existing players to earn lower profit.
Competitive Rivalry: The Aston Martin is part of highly competitive industry, in the auto-
mobile industry with the daily technological advancements the competitors are innovating new
products to raise their level of competitiveness in the industry (Focacci and Kirov, 2021).
Bargaining power of Suppliers: suppliers have strong bargaining power then they will extract
higher price from the Aston Martin Lagonda. It will impact the potential of Aston Martin
Lagonda to maintain above average profits in Auto & Truck Manufacturers industry (Bogonam,
2021).
The Industry in 2021
In 2021, the automotive industry is trying to move from conventional engines to electric
vehicles using EV technology. 2021 looks to bring huge technological change in the automotive
industry due to the acceleration in mobility. 2021 is a big year for the electric vehicle market to
penetrate the automotive industry as the vehicle industry is more turning towards sustainable and
eco- friendly business. In the UK car industry in 2021, electric vehicles are growing fast due to
rising CO2 emissions. In this respective industry, there is a huge trend towards electrification of
all functions of the car. Also in the auto industry in 2021 there is a huge trend towards
autonomous driving (What are the top five automotive trends for 2021). This technological
advancement is disrupting the automotive world. By 2021, the automotive industry will witness
greater penetration of autonomous vehicles. As the technology is designed to reduce accidents by
reducing driver fatigue. The automotive industry in 2021 has been pushing for a full transition to
electric vehicles as fossil fuel stock levels decline and air pollution increases.
Like the other industry in 2021, the auto-mobile industry in 2021 has also witnessed the
greater implications of the Artificial intelligence technologies. These technologies in the Auto-
mobile industry is assisting the drivers towards more safety measures, improving services like

vehicle inspection, managing fleets etc. (Mihalache and Volberda, 2021). Block chain
technology is also an innovation in the auto-mobile industry which has increased the efficiency
in this sector and also reduces the margin of errors in the sports cars. For example, in the Aston
Martin the in year 2021 the company has improvised huge amount of innovation in the cars and
their daily operation due to the Covid-19. For the transformative technology agreement, the
company has shared its 20% equity with the leading competitors of the Auto-mobile industry that
is Mercedes- Benz (LSE_AML_2020.pdf, 2020).
The automotive industry in 2021 is characterised by innovations in designs and models of
the auto-mobiles and technology is playing a major role in the development of the products.
Technology has evolved the transformation of automotive industry and has resulted in advanced
models in design of cars implying automation and highly advanced features which has also
increased safety through reducing possibilities of hazards. However such trends in technological
innovations are increasing the energy consumption and thus the trend of electric auto-mobiles are
emerging this industry. Aston martin is also planning to launch its first electric vehicle in 2025
which would significantly increased the attention of audience towards electric vehicles as the
brand is highly reputed and it's designs are trusted by customers (Aston Martin Is Going Electric,
Launching Its First EV in 2025, 2022). The trend of electric vehicles are increasing as they are
more sustainable and leads to reduction in level of carbon emissions as they do not emit smoke
in the environment. Moreover, the emergence of concept of electric vehicles is gaining
popularity as they will substantially reduce the level of air and noise pollution as well. Aston
martin is planning to create its electric vehicle design in order to encourage sustainable practices
and delivering consumers maximum satisfaction with constructive models.

CONCLUSION
From the above report, it can be concluded that in the automotive industry, innovation
through technology has enormous implications. According to the analysis, the organization has a
long history of innovating high-quality luxury sports cars and has revolutionized the industry
with its aerodynamic component technology. The company has a very high level of innovation
performance and capability that has made the company a major competitor in luxury sports cars.
The company's engineering design team is the company's most valuable, organized, and reliable
resource. Therefore, the automotive industry is currently booming with artificial intelligence,
virtual and machine learning technologies.

REFERENCES
Books and Journal
Prange, C. and Schlegelmilch, B.B., 2018. Managing innovation dilemmas: The cube
solution. Business Horizons, 61(2), pp.309-322.
Biemans, W.G., 2018. Managing innovation within networks. Routledge.
Mousavi, S., Bossink, B. and van Vliet, M., 2018. Dynamic capabilities and organizational
routines for managing innovation towards sustainability. Journal of cleaner
production, 203, pp.224-239.
Kim, J., Paek, B. and Lee, H., 2022. Exploring Innovation Ecosystem of Incumbents in the Face
of Technological Discontinuities: Automobile Firms. Sustainability, 14(3), p.1606.
Snihur, Y., Zott, C. and Amit, R., 2021. Managing the value appropriation dilemma in business
model innovation. Strategy Science, 6(1), pp.22-38.
Sharmelly, R. and Ray, P.K., 2021. Managing resource-constrained innovation in emerging
markets: Perspectives from a business model. Technology in Society, 65, p.101538.
Hendriarto, P., 2021. Understanding of the role of digitalization to business model and
innovation: economics and business review studies. Linguistics and Culture
Review, 5(S1), pp.160-173.
Gerybadze, A., 2020. Technology and innovation management in a global perspective.
In Managing Innovation in a Global and Digital World (pp. 207-225). Springer Gabler,
Wiesbaden.
Wang, C.N., Day, J.D. and Farid, M., 2019. Service innovation model of the automobile service
industry. Applied Sciences, 9(12), p.2403.
Mihalache, O.R. and Volberda, H.W., 2021. Business model innovation in transforming
economies: a co-evolutionary perspective for a global and digital world. Management
and Organization Review, 17(2), pp.202-225.
Wellings, J., Greenwood, D. and Coles, S.R., 2021. Understanding the Future Impacts of Electric
Vehicles—An Analysis of Multiple Factors That Influence the Market. Vehicles, 3(4),
pp.851-871.
Guno, C.S., Collera, A.A. and Agaton, C.B., 2021. Barriers and drivers of transition to
sustainable public transport in the Philippines. World Electric Vehicle Journal, 12(1),
p.46.
Jacinto, P.M.M., 2021. Paradigm shift in the automotive market: how will premium brands deal
with the innumerous challenges they will face? Current strategy overview (Doctoral
dissertation).
Russo, M and et. al., 2022. The Changing Shape of the World Automobile Industry: A
Multilayer Network Analysis of International Trade in Components and Parts.
Focacci, C.N. and Kirov, V., 2021. Regional entrepreneurial ecosystems: Technological
transformation, digitalisation and the longer term—The automotive and ICT sectors in
the UK and Bulgaria. Local Economy, 36(1), pp.56-74.
Bogonam, H., 2021. Marketing Plan: The automotive sector and its exports in times of
Coronavirus.
Jugend, D., Araujo, T.R.D., and Hilletofth, P., 2018. The role of cross-functional integration in
new product development: differences between incremental and radical innovation
projects. Innovation, 20(1), pp.42-60.

PAST, PRESENT AND FUTURE: ASTON MARTIN’S DYNAMIC STORY, 2022.[Online],
Available Through:<https://magazine.astonmartin.com/heritage/past-present-and-future-aston-
martins-dynamic-story>
LSE_AML_2020.pdf, 2020. [Online], Available Through:
<https://www.annualreports.com/HostedData/AnnualReports/PDF/LSE_AML_2020.pdf>
What are the top five automotive trends for 2021?, 2022. [online], Available
Through:<https://www.automotiveworld.com/articles/what-are-the-top-five-automotive-trends-
for-2021/>
Aston Martin Patents – Key Insights and Stats, 2021. [Online], Available Through:
<https://insights.greyb.com/aston-martin-patents/>
17 Feb Protecting Car designs, 2021. [Online], Available
Through:<https://foundationlaw.com/car_design_patents/>
Aston Martin Is Going Electric, Launching Its First EV in 2025, 2022. [Online]. Available
through: <https://www.caranddriver.com/news/a39798418/aston-martin-electric-lineup-reveal-
first-ev-2025/>