Innovation and Business Model Analysis

This assignment requires a detailed analysis of innovation strategies in the context of business model change. It involves reviewing various resources such as research papers, case studies, and marketing concepts to identify key themes and principles. The goal is to provide an in-depth understanding of how businesses can successfully transform through innovative approaches and strategies.

Running head: KIA MOTORS AND TRADER JOE’S
Kia Motors and Trader Joe’s
Name of the Student:
Name of the University:
Author Note:

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Answer 1:
The following are the three recommendations which Kia Motors can use:
Hiring and outsourcing of expertise:
Kia Motors can outsource its expertise to third party innovation laboratories which would
continue innovation. This would enable the South Korea automobile giant to carry out
continuous product development. This would enforce stronger product line and enable the
company to serve its international base more appropriately. Outsourcing of innovation and
expertise among the regional firms spread in different markets like Asia and Europe would
enable Kia Motors to introduce more market specific products, thus ensuring high degree of
customer satisfaction and revenue generation (Dodgson, 2018).
Strengthen its corporate image:
Kia Motors must promote its brand image in the market to strengthen its revenue
generation. The automobile manufacturer should promote its automobile products in the market
to strengthen in the international market. This would enable it to attract new firms to which Kia
Motors would be able to outside its expertise and innovation activities. This would ultimately
enable it to strengthen its business model and create more value to the customers, thus enhancing
its sustainability (Bohnsack, Pinkse & Kolk, 2014).
Promotion of its unique selling propositions:
The South Korean automobile giant should promote its premium collection of cars and
highlight their unique selling propositions. This would enable the company to attract the upper
class consumers and earn high revenue by catering to their needs, thus gaining financial
sustainability (Aghion et al., 2016).

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Answer 2:
The first point of difference between Trader Joe and Kia Motors lies in the industry these
two organizations belong. Trader Joe’s was a retailer based in the United States of America
while Kia Motors is an automobile making company based in South Korea. Thus, while Trader
Joe’s belong to the retail industry, Kia Motors was from automobile manufacturing industry
(Drucker, 2014).
This differences between Trader Joe’s and Kia in terms of operations and industries
would have different implications of applying the recommendations mention above. The first
recommendation was outsourcing of the experts and innovation staffs. Trader Joe’s being a retail
company, the innovation would mainly revolve around product line, pricing and promotion of
goods which the retail chain can make available to consumers. As far as Kia Motors is
concerned, the innovation using outsourced facilities would involve manufacturing and
marketing and not limited to marketing like the former (Zailani et al., 2015).
The difference between Trader Joe’s and Kia Motors would have difference in terms of
application of the second recommendation, strengthening of corporate image. Trader Joe’s while
strengthening corporate image would compete with international chains like Tesco. Kia Motors
in order to strengthen its brand equity would have to compete against car makers like Hyundai.
The second difference in this regard would in terms of product (Nykvist, & Nilsson, 2015).
Trader Joe’s sells goods manufactured by other consumer goods manufacturing company. Thus
while promoting its brand equity it cannot use the brand names of the products it offers because
it does not own those names. Kia Motors on other hand manufactures cars under its own brand
name and can use premium models to promote its brand equity since it owns the intellectual
property rights of those brand names.

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The difference between Trader Joe’s and Kia Motors would have different implication in
case of the third recommendation using of USP. The USP of Trader Joe’s would have its huge
variety of products while in case of Kia Motors, its USP would be cars using advanced
technology (Davis et al., 2016)
Answer 3:
The two matrices for measuring the success of the outsourcing of innovation would
employee productivity and employee turnover. The two yardsticks of measurement of the
efficiency of strengthening of corporate image is market value of the brand name and market
position. the two basis of judging the power of USP of Kia Motors and Trader Joe’s would be
revenue generation and share index (Ponnam & Balaji, 2015).
Answer 4:
The two matrices to judge the efficiency of outsourcing of R&D at Trader Joe’s and Kia
Motors are employee productivity and employee turnover. Employee productivity would show
the rate of efficiency the research and development of the companies have gained after
employing third part companies. Again, high employee turnover would show that the third party
companies are not efficiency to manage the human resources of research and development
activities of the company. The importance of these two parameters lie in the fact that they are
measurable and can be reviewed periodically. For example, if the management of Kia Motors
observes that after outsourcing its R&D, there is high employee turnover, it would means loss of
R&D staff and loss of innovation. Thus, the management may again consider taking the R&D
under its own umbrella.

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KIA MOTORS AND TRADER JOE’S
The matrices like the brand equity, revenue generation and share indices are measurable
and can show Trader Joe’s and Kia Motors their respective market positions compared to their
rivals. The management can take appropriate steps to improve them if required.
Answer 5:
The two companies being studied, Trader Joe’s and Kia Motors should use different types
of data to measure each of the parameters. The employee payroll would provide information on
employee turnover. Again, the productivity record of the employee would show the companies
the productivity of their respective employees.
The corporate image of the company would be revealed by market analysis and surveying
customers. The profit and loss account would show the revenue generation while the stock
exchanges on which these companies are listed would show their share indices (Gürhan-Canli &
Sarial-Abi, 2016).
Answer 6:
Trader Joe’s and Kia Motors can gain information on these parameters by using
secondary sources of information, primary sources of information or a combination of both. For
example, in order to gain information on employee turnover, the companies have to gain
information from their employee payroll maintained by their respective HR departments. Again,
to gain information on revenue, they have to maintain financial statements which are primary
sources of information for them. In order to gain information on brand power, Trader Joe’s
would have to conduct market survey which would primary sources of information. The stock
exchanges showing their share prices on regular basis should be primary sources of information
(Ramaswamy & Ozcan, 2016)

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Answer 7:
the following are the challenges which Trader Joe’s and Kia Motors would have to face
while implementing the three recommended courses of action namely, outsourcing of research
and development, strengthening of corporate image and promoting of their unique selling
propositions:
Bureaucratic control and delay in decision making:
Trader Joe’s and Kia Motors would face challenges in adopting recommended strategies
like outsourcing their R&D due to their complex bureaucratic structure. It is evident from the
case studies that both the companies have several branches each under a different branch head.
Trader Joe’s branches are limited to the US whereas the Kia Motors operates in America,
Europe, Mexico and India. This means that these subsidiaries have their own apex management
which consist senior executives like director. Moreover, Honda is a shareholder of Kia Motors
and the company also present in the defense sector. This complex operation and management
structure of these two companies making decision like outsourcing of R&D to conduct open
innovation under third party firm very lengthy processes. Moreover, outsourcing decision create
panic and insecurity among employees and they may resist the changes. Thus, tall structure and
complex bureaucratic control make decision making in these two companies difficult and
complex (Gupta et al., 2016).
Macroeconomic structure:’
the macroeconomic conditions have strong impacts on the adoption of strategies like
promotion of brand names and outsourcing of R&D and often challenge their effectiveness. The
political conditions play important role in the business of foreign companies since they have to
operate in several countries. For example, national governments of countries may provide

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facilities like tax deductions and loans at concessional rates to their resident companies to
promote them. The foreign companies like Kia Motors are often deprived from these facilities
and often have to pay more taxes in foreign companies (Zhang, Kandampully & Bilgihan,
2015).
Diversity in the economic and technological advancements in different markets impact
the efficiency of the R&D outsourcing. Markets like the US and India are developed and have
their own resident automobile companies some of which are international in scale of operations.
Kia Motors can enter into open innovation with the automobile companies and outsource these
departments to speed up new product development. However, markets like Africa may not be
developed and cannot provide the outsourcing facilities for the R&D operations. Thus, rate of
economic development in different markets challenge adoption of the stated recommendations
(Vargo, Wieland & Akaka, 2015).
Deteriorating political relationships prevents multinational companies from entering
markets to take advantage of R&D prowess. For example, Kia Motors is a South Korea based
company. South Korea have strong political ties with the US and India but not with China. Thus,
the car manufacturer can easily get access to research and development facilities of the US and
India but not China. These limitations hinder smooth new product development.
Challenges from competitors:
The presence of strong competitors pose challenge in adoption of R&D outsourcing,
brand promotion and strengthening of USP at Trader Joe’s and Kia Motors. For example, as far
as Kia Motors is concerned, the automobile manufacturer has strong competitors in all its
markets. The company competes with multinational automobile makers like Ford in the US and
Tata in India. Moreover, its Asia based competitors like Toyota and Hyundai are present in all

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these markets. The automobile engineering firms in these markets automatically give preferences
to the resident companies like Ford in the US and Tata in India. Thus, this challenge from strong
competitors impact the outsourcing of R&D of Kia Motors. Again, these companies compete for
market position, thus challenging the adoption of the other two recommendations (Johnston &
Marshall, 2016).
Answer 8:
The two companies Trader Joe’s and Kia Motors can take these situations by using the
following strategies:
Acquisitions:
The two companies are acquire resident companies in host countries. This strategy holds
truer for Kia Motors which faces stiff competition from multinational automobile companies
both in its home country South Korea and host countries like the United States of America.
Acquisition of resident automobile research and development facilities would have several
positive implications. First, the company would be able to use the resources of these subsidiaries
to carry out open innovation. Second, since these R&D firms are subsidiaries of Kia Motors, they
would be answerable to the later for their employee productivity and employee turnover. Second,
these acquisitions would add to the asset value of the company and attract investors. The
company would use the third party R&D facilities in the host countries and create employment
opportunities. Thus, it would Kia Motors to get concessions from governments. Thus,
acquisition strategy would enable Kia Motors and Trader Joe’s R&D facilities, brand
enforcement and USP promotion (Vargo, Wieland & Akaka, 2015).

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Promotion:
The two companies Kia Motors and Trader Joe’s must promote their products and
services. This would enable them to attract new customers and maximize their revenue
generation. They as a result would be able to give more returns to their investor’s, thus attracting
more investments. This strong capital base would enable the firm to acquire more top R&D
facilities to outsource its innovations (Laeven, Levine & Michalopoulos, 2015).
Answer 9:
The above discussions reveal several parameters for Trader Joe’s and Kia Motors like
revenue generation and market position strengthening. This analysis would show that all the
recommended strategies on the yardstick of SMART analysis which is as follows:
The strategies like strengthening of brand equity are specific and can be applied to either
particular brands or to all the brands. Kia can either strengthen the brand value of its premium
fleet of cars or its entire fleet. Thus, recommendations like strengthening of brand value
discussed above quality the first parameter of specifies.
The brand value can be measured in terms of money for a given time period say a year.
This means the recommendations are measurable and time bound. They are achievable and
realistic. This shows that the recommendations above quality the SMART analysis
(traderjoes.com, 2018).

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KIA MOTORS AND TRADER JOE’S
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