Managing Innovation in Business - Aston Martin Case Study

This report discusses the importance of managing innovation in business and provides a case study of Aston Martin, a global automotive brand. It covers the company's innovation history, current performance, and future requirements. The report also includes an overview of the automotive industry in 2016 and the impact of external factors on Aston Martin's strategies and operations.

EXECUTIVE SUMMARY
The report summarises that managing innovation is crucial for a business to look ahead into
future together with come up with creative ideas that rivals have never thought of. The project is
prepared on Aston Martin which operates in automotive industry. The company is popular for
manufacturing and designing luxury sports cars and is global automotive brand.
Aston Martin has made huge number of innovations in its practices in form of cutting edge
facilities at MIRA as well as its reputation for quality along with excellent security that makes it
an ideal place for people to carry out some of its prototype development work. With passage of
time, the company have innovated its marketing and branding, co-creation, technology, social
innovation and products to continue to be truly class-leading.
The report highlights information about the company, its innovation history and present
level of innovation activities. It also reviews organisational current performance and capabilities
along with future innovation requirements in the industry.
Aston Martin is recommended to understand changing demand and apply insights to
devise rational business decisions, make necessary changes in process of supply chain and
produce as well as market electronic car in order to improve their innovation performance.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
Contents...........................................................................................................................................3
INTRODUCTION...........................................................................................................................1
THE ORGANISATION AND INDUSTRY OVERVIEW.............................................................1
Organisation and its innovation history.......................................................................................1
Organisation existing innovation performance as well as capabilities........................................2
The Industry in 2016....................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The report highlights overview of an organisation along with its history and organisational
current innovation performance along with capability. Further, it discusses industry in 2016.
Managing innovation refers to a combination of handling practices required for introducing or
coming up with ideas, prioritising, implementing and putting them into practice (Biemans, 2018).
Purpose of the report is to conduct innovation audit of the company for examining organisational
innovation history, present innovation practices along with future innovation requirement. For
the project, selected organisation is Aston Martin which operates in automotive sector to
manufacture and sell luxury sports cars as well as grand tourers.
THE ORGANISATION AND INDUSTRY OVERVIEW
Organisation and its innovation history
Automotive industry is a sector that includes range of businesses involved in practices of
designing, development, manufacturing, promotion addition to selling motor vehicles. In the
industry, Aston Martin is a company that operates to manufacture luxury sports vehicles and
grand tourers (Aston Martin, 2021). It was founded in 1913 by Lionel Martin as well as Robert
Bamford. Its rich addition to prestigious heritage to deliver beautiful awe-inspiring cars defines
the entity as something truly unique within the automotive sector (Aston Martin, 2021). It is
iconic brand that stood for beautiful and hand-crafted cars which are exhilarating to drive since
the year 1913.
By analysing innovation historical phase of Aston Martin, it is determined that the
automotive has attained significant innovation transformation in last couple of years. Aston
Martin being an iconic brand that rethink car in innovative manner which led entire automotive
industry as well as create lasting changes with practices that are certainly carried over into
housing (Aston Martin, 2021). The entity has transformed itself and experienced shift behind
fundamentals of organisational norms. This reflects that innovation strategy that is product
innovation strategy is linked to radical strategy as products of Aston Martin have undergone
significant changes which have capability to blow up current system and replace with something
entirely new (Aston Martin, 2021).
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In the year 1913, the company was established to sell cars that are manufactured through
Singer from premises in London. In 1924, around 55 cars were manufactured for sale. In the year
1975, Aston Martin was financially troubled (History of Aston Martin, 2021). In 1977, the
company modernise its line and introduced new model that is V8 Vintage and the convertible
Volante in the year 1978. The company has changed its mission and objectives to bring ample
innovation in business (Kavadias and Hutchison-Krupat, 2020). Till 1990, there were various of
its products or car models that were transformed with usage of digital technologies. Some other
factors that drive innovation in the company includes strategic orientation of activities, support
from community, involvement of stakeholders and many more (History of Aston Martin, 2021).
At present that is 2020, the entity experienced product innovation wherein it conveys changes in
its cars and offered various new models. Some of its product innovation includes Aston Martin
Standard Sports, Aston Martin Vulcan, Aston Martin V8, Aston Martin V12 Zagato, Aston
Martin One-77, Aston Martin DBX, Aston Martin Lagonda SUV, Aston Martin V12 Speedster
and hence forth (History of Aston Martin, 2021)
External environment of business impact strategies and operations of a company in many
ways. In aspect to Aston martin, analysis of impacts of external factors on the business is
possible by applying PEST Analysis. It is determined that political factors including uncertainty
surrounding planned exit of United Kingdom from European Union and exposure top global
political development impacts strategies of the Aston Martin (Aston Martin, 2021). At same
time, economic dimensions such as credit and market risks because of international exchange
rates together with changing global economic conditions restricts the venture to carry out
practices in desired manner (Jackson, 2018). Moreover, social factors comprising shifting
consumer preferences as well as increasing disposable income and ongoing growth of used car
market impacts of strategies of Aston Martin adversely to sustain edge. Likewise, technological
factor including self-driving autonomous car, growing interest in alternative fuels as well as
more towards electrification impacts strategies of organisation to boost sales volume (Gardner
and Bryson, 2021).
Porter’s five force is model that is used by managers of Aston Martin to assess impacts of
competition and attractiveness on industry. In aspect to bargaining power of supplier, it is low
for Aston Martin as the company maintains contractual relationship with varied suppliers and
when one supplier make some changes in its pricing or other strategy, the company switches to
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another for acquiring material and factors at low prices. Moreover, there are major players such
as Rolls Royce, Tesla, etc in automotive industry that impacts adversely on market share of
Aston Martin (Aston Martin, 2021).
Substitutes of Aston Martin are less in market that impacts positively on sales volume of its
vehicles. Furthermore, it is assessed that there are high bargaining powers with buyers of Aston
Martin which impacts negatively on profitability of company as the company has to reduce its
prices at some extent to influence purchase decisions of customers. In the industry, entrant of
new company brings innovations and threat for existing players because of which efficiency of
Aston Martin impacts widely (Aston Martin, 2021)
Organisation existing innovation performance as well as capabilities
The term innovation performance could be said to potential of business to transform innovation
inputs into valuable outputs (Kerzner, 2019). Similarly, innovation capability is described to
organisational competence for identifying new ideas addition to transform them into improves or
new ones which benefit in long run (Ganguly, Talukdar and Chatterjee, 2019). In aspect to Aston
Martin, series of analytical frameworks are used for assessing current innovation performance
along with capabilities which are as follows:
SWOT Analysis:
It assesses strengths, weaknesses, opportunities and threats of a business. Through SWOT
Analysis, strategists of Aston Martin summarise major issues from internal and external business
environment together with strategic capability of company which are likely to impact on
development of strategies. SWOT Analysis of Aston Martin is underneath:
Strengths:
 The company has string legacy addition to
high brand equity (Leiber, Stensaker and
Harvey, 2018).
 Aston Martin has heavy duty engineering,
manufacturing, designing and sales team
(Aston Martin, 2021).
 It provides ultimate luxury as well as
comfort through its vehicles and services
Weaknesses:
 Aston Martin have lesser penetration
as compared to other automotive
firms (Aston Martin, 2021).
 Product portfolio of the cars of the
entity are limited in emerging
economies (History of Aston Martin,
2021)
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(History of Aston Martin, 2021).
Opportunities:
 Historical values as well as heritage could
be leveraged by Aston Martin for
acquiring new customers (History of Aston
Martin, 2021).
 It has opportunity to enhance market
penetration by using extensive distribution
along with increased promotion (Weber
and Heidenreich, 2018).
Threats:
 Strict government policies and
increasing fuel costs impacts
adversely on organisational sales
(Oladian and HOSSEINI, 2020).
 Frugal engineering and innovations
in product through other big
automotive giants (Aston Martin,
2021).
Resources:
In a company, there are assets which are available for usage to complete production
process and other kinds of practices (Lind, 2017). These assets are known as resources. In
association to Aston Martin, resources available for production, designing and sales process are
below:
Physical resources: All tangible assets of company which are used at venture to create
value offering as well as value proposition to customers are physical resources. In Aston Martin,
its current physical resources include inventories, right to use lease assets, property, plant and
equipment and distribution network for proper function (Aston Martin, 2021).
Financial resources: It refers to a resource that covers all kinds of financial funds of
business. It entails cash, credit, lines of credit and potential for having alternative options of
stock plans for people of entity. In the year 2020, revenues earned by Aston Martin is
approximate of £ 611.8 million (Annual Reports 2020 of Aston Martin, 2021). Financial assets of
the company are cash balances, trade and other receivables and foreign currency contracts.
Human resources: Employees of entity are most essential resource. Employees are
human resources that are significant for functioning. In Aston Martin, approximately 3000
employees work with key skills of marketing, numeracy, data handling, designing,
communication and so on (Aston Martin, 2021).
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Intellectual capital: These are business resources which are nonphysical and intangible
in nature. Intellectual capital resource of Aston martin includes patents of car, brands of venture
as well as copyright over significant materials and partnerships (Khewsomboon, 2017).
Strategic capabilities:
Organisational ability for harnessing all of its resources, skills and capabilities for
achieving competitive benefits are strategic capabilities (Bennink, 2020). To analyse strategic
capabilities, managers of Aston Martin apply VRIO Analysis which is as follows:
Capabilities Valuable Rare Inimitable Organised
Research and development ✓ × × ×
Patents ✓ ✓ × ×
Distribution network ✓ ✓ ✓ ×
Human resources ✓ ✓ ✓ ✓
Valuable: It states whether the capability assist in exploiting opportunities and mitigating
threats in the industry. In context to Aston Martin, valuable capabilities are human resources,
patents, distribution network along with research and development. With these capabilities, the
organisation attains competitive edge through mitigating threats effectively (Koller, Nuttall and
Henisz, 2019).
Rare: When only few businesses acquire capabilities then such types of capabilities are
categorised under rare aspect (Santoro, Ferraris and Winteler, 2019). In Aston Martin, patents,
human resources and distribution network are rare capabilities as other firms lack possession on
such capabilities (Aston Martin, 2021).
Inimitable: Capabilities of entity which are hard as well as costly to substitute or imitate
are inimitable capabilities. In association to Aston Martin, capabilities are perfectly imitable
because of unique historical situations, casual ambiguity and complexities in business
environment. Some inimitable capabilities of the company are human resources and distribution
network (Jahns, 2018).
Organised: Capabilities themselves do not provide advantage for a venture. For
exploiting advantages as well as deriving values, organisation must organise itself appropriately.
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In Aston Martin, human resource are organised capabilities which are properly assemble and
coordinate practices (Bagheri, Sobhanardakani and Lorestani, 2017).
Value Chain analysis:
It is termed to a framework for evaluating all activities in value chain of business for
gaining insights about where opportunities lie for improvement (Sharmelly and Ray, 2021).
Value chain analysis includes activities that are described in context to Aston Martin below:
Primary activities: Organisational activities which directly impacts input, output along
with distribution of products are primary activities. In Aston Martin, purpose of primary
activities is to create values in the manner that exceeds cost to conduct a practice resulting in
generating higher profit. Inbound logistics, operations, outbound logistics, services, marketing
and sales are primary activities of the automotive entity (Scholtz and Kieviet, 2018).
Supporting activities: These are certain activities of an establishment that supports
primary activities (Bidmon and Knab, 2018). In Aston Martin, role of supporting activities is to
make working of primary activities more effective and efficient. Some supporting activities of
Aston Martin are technology development, infrastructure of entity, managing human resource,
procurement and purchasing (Aston Martin, 2021).
The Industry in 2016
Automotive industry of UK is popular for premium as well as sports car marques such as
Caterham Cars, Aston Martin, Rolls Royce, Bentley, Lister Cars, Lotus and hence forth. The
industry has been in subject for series of domestic and international factors since years ago. It
involves aftermath of economic downturn, depreciation of sterling in the year 2016, political and
economic uncertainty as well as increased climate awareness. The industry has experienced
ample number of innovative transformations, all of these are possible due to emerging business
concept (DaSilva, 2019). Aston Martin is one of establishment of automotive industry which
employ wide largest people in UK with annual sales of around 244.4 million pounds. Fittingly
for a sector is all about moving people as well as things around, automotive industry is in
transition heading towards 2022. Potential revisions for fuelling economic standards of UK,
semiconductor shortages and ongoing rise of all-electric together with plug-in vehicles are
several notable trendlines to keep eye on existing year and in coming decade.
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Penthalon Framework features human factor in innovation , particularly, for purpose of
recognition about th ways peope and business climate play a role and value seeking conducive
culture in whicg human resources are motivated for innovation. It is applied by managers of
Aston Martin as it provides foundation for innovation management and also it is a great tool to
align people with diverse background and experiences to more academically correct as well as
commonly accepted view (Sanz-Hernando, Cabrera and Baptista, 2020). Moreover, it provides
traceability of process of innovation and helps workforce to understand requirement for focus to
improve the overall outcomes.
Within automotive industry of UK, there are certain factors that puts pressure or impacts
adversely on top players. At present, COVID-19 pandemic has impacted widely on
disappearance of new vehicle registration. Other than this, varying household income impacts
sales of automotive in current situation (Kisno, Simanjuntak and Simanjuntak, 2018). To sustain
competitive edge in 2020 and beyond, it is recommended to Aston Martin managers to maintain
strong understanding of changing demand as well as use insights for devising rational business
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decisions. It is recommended to the company to make changes in process of supply chain or
innovate distribution network so to meet demands of customers and fulfil requirement of market.
Also, the entity is recommended to produce electric based car and launch them through
improvising its innovation culture. Self-driving vehicles, artificial intelligence, human machine
interface, data analytics and block chain are some innovative opportunities for automotive
industry. Aston Martin, through putting emphasis on all such innovative opportunities could help
in achieving first mover benefits and manage technologies within the industry. Along with the
entity, there are some players in automotive industry which launches ample number of
innovations for enjoying success together with ensure sustainability in long term.
CONCLUSION
As per above information, it is concluded that managing innovation in business guide to
faster introduce new products and achieve higher launch rates of success. Innovation
management helps in earlier detection of non-viable ideas, making better implementation plans,
building greater monetary efficiency, reducing cycle time, increasing customer satisfaction and
better correlation among departments. There are series of analytical frameworks including
SWOT Analysis, Resource analysis, VRIO Analysis and Value Chain Analysis for reviewing
existing capabilities as well as innovation performance. In an industry, multiple trends,
opportunities and development assist businesses to reach sustainable success.
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Online:
Annual Reports 2020 of Aston Martin. 2021. [Online]. Available through:
<https://www.annualreports.com/HostedData/AnnualReports/PDF/LSE_AML_2020.pdf
>
Aston Martin. 2021. [Online]. Available through: https://www.astonmartin.com/en/welcome
History of Aston Martin. 2021. [Online]. Available through:
<https://www.astonmartin.com/en/our-world/heritage>
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