Innovation and Automation Report 2022

Running head: INNOVATION AND AUTOMATION
INNOVATION AND AUTOMATION
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Executive summary
The report aimed at identifying the concern that is being encountered by the concerned
organization Volvo Cars. It has been observed that the rising cost of operations and degrading
margins annually posed a serious threat to the organizational sustenance. In this connection, the
report enumerated a list of innovations that might be considered by the organization. The report
analyzed the suitability, affordability and feasibility of the innovations while choosing the most
preferred activity. The research also enumerated the different challenges that might be
encountered by the organization and suggested recommendations for the same. Therefore, the
overall purpose of the research is to develop cognition on the manner in which an organization
might take decisions while implementing an innovation.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Problem to be solved and insight on the core problems..............................................................3
3. Alternatives..................................................................................................................................4
4. Selection of proposed solution out of the alternatives.................................................................5
4.1 Solution selection analysis.....................................................................................................5
4.2 Novel value proposition.........................................................................................................8
4.3 Targeted customers................................................................................................................9
4.4 Competitive advantage and strategic fit..............................................................................10
5. Issues that might be faced while implementing the proposed solution.....................................11
6. Recommendation for overcoming issues...................................................................................12
7. Conclusion.................................................................................................................................12
References......................................................................................................................................14
Appendix........................................................................................................................................17

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1. Introduction
Volvo Cars is a Swedish luxury vehicles brand which was established in the year 1927
and is headquartered in Gothenburg, Sweden (Volvocars.com., 2020). The company markets its
vehicles being safe, solidly built and reliable. The cars are luxurious and the distinctive value
proposition that is made by the organization enabled the same in improving their operations in
the different markets over the years (Volvocars.com., 2020). However, the organization has been
facing significant issues due to the increased operating expenses and declining margins.
Therefore, the report will aim towards identifying the specific aspects of the concerns that are
being faced by the concerned organization and proposed a solution after reviewing the
alternatives. The report will also enumerate the challenges that the organization might face while
implementing the proposed solution and thereby suggest recommended activities for overcoming
the challenges.
2. Problem to be solved and insight on the core problems
The concerned organization faced a significant issue relating to the growing rate of
operational expenses and minimized annual earnings (Peiró-Signes & Segarra-Oña, 2018). It has
been observed that the organization focused towards developing fuel efficient models that
required the organization to facilitate increased investments on the operations. Again, the
specific human related errors might affect the capability of the organization in maintaining the
efficiency of the business operations as per the common goals of the venture. Ahmad and
Ramzan (2018) stated that the major challenges that are absence of innovative practices in an
organization restricts the capability of the same in improving the efficiency of the business
earnings. In this connection, the absence of technological measures being implemented by the

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organization has affected the capability of the same in realizing increased earnings while
reducing the operational expenses. On the other hand, the organization aimed at providing the
customers with valued luxury cars. However, the increased human intervention and common
errors in practices have affected the capability of the organization in retaining the trust and
commitment of the target audience. The absence of automated systems has affected the
capability of the organization in improving the overall efficiency while catering to the changing
needs of the customers (Dingler & Enkel, 2016). It has been observed that the human related
errors have worked as a restrictive force while the organization focused towards the development
of the energy efficient vehicles (Cano-Kollmann, Hannigan & Mudambi, 2018). The errors in
assembling the auto- parts and the paint jobs have affected the capability of the organization in
keeping up to the promised luxury of the brand.
3. Alternatives
The alternatives that might be considered by the organization with the purpose of
minimizing the impact of the challenges while providing the customers with the expected value
proposition and minimizing the operational costs are being discussed in this section.
 Alternative 1: Artificial intelligence: The use of Artificial Intelligence or AI would
allow the organization in minimizing the errors in the assembling or other processes that
are undertaken by the humans (Dodge et al., 2017). Moreover, the utilization of AI
technologies would allow the organization in minimizing the wastes, in complex projects,
while guiding the operations in a sustainable manner which would significantly support
in reducing the operational expenses for the business.
 Alternative 2: Robots: The use of robotics in the manufacturing, assembling or the other
processes would allow the organization in minimizing their dependence on the human

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workforce while reducing the human intervention. However, the complete dependence on
the robots might restrict the organization in customizing the operations and enable an
organization in continuing with the operations in system failures.
 Alternative 3: Augmented, mixed and virtual reality: The use of AR, VR or Mixed
reality can significantly improve the operational process of an organization (Yu & Lee,
2017). However, the implementation of the AR, VR and MR would not eradicate all of
the concerns that are being encountered by the business. Moreover, it would contribute to
the increase in operational costs without significant changes in the operational activities
of the organization.
 Alternative 4: Big data Analytics: Big Data analytics would assist an organization in
identifying the different technological changes that are being undertaken by the other
companies in the industry (Zhou & Wang, 2019). The knowledge on the use of
technologies that are being made in the industry would assist the concerned organization
in developing their capabilities towards the improving the operational activities.
4. Selection of proposed solution out of the alternatives
4.1 Solution selection analysis
Alternatives
Suitability
(customer
desirability)
Rating between 1-
5 (1- low, 5- high)
Affordability
(financial viability)
Rating between 1-5
(1- low, 5- high)
Feasibility
(technical
feasibility)
Rating between 1-5
(1- low, 5- high)
Total
Artificial 5 4 5 14/15