Managing Innovation: A Comparative Analysis of BMW and Toyota

This report analyses the innovation strategies and management processes of BMW and Toyota. It discusses their main innovations and end results, maps and critiques their innovation space, and identifies recommendations to improve their innovation management. The report also provides an overview of the organisations, their innovation strategies, and management processes using Tidd and Bessant's 4 step model.

Managing Innovation

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of the organisation and discussing their main innovation and end results....3
Map and critique the innovation space of the two organisations setting out existing
practice..................................................................................................................................5
Mention the innovation strategy and management process applied in the company with
the help of Tidd and Bessant's 4 step model......................................................................8
Identify recommendations to improve the innovation management of the two
organisations.......................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES:.............................................................................................................................14
Books and Journals...............................................................................................................14

INTRODUCTION
Innovation is a process which helps the organisation to become better in the market. With
the help of innovation, the company could offer different products and services to the consumers.
Various organisation nowadays creating new innovative ideas with the changing market trends
(Aagaard, 2018). The report aims to analyse about different critical strategies about the
innovation and management process. There are two organisations which are analysed in this
report. BMW is an German international manufacturer. The organisation is known for making
quality and luxury service vehicles in the market. On the other hand, Toyota is Japanese motor
corporation. The company manufactures vehicles and provide different services in the market.
Both the companies has acquired a huge share in the market from their products and services.
Along with that, there will be discussion about the innovation space which the two organisations
has set in the market space. For further instance, there will be discussion about the innovation
strategy and management process of these organisations. In this report there will be
recommendations which will improve the innovation management of the two organisations.
MAIN BODY
Overview of the organisation and discussing their main innovation and end results.
Bayerische Motoren Werke AG is refereed as BMW. It is an German multinational
corporate manufacturer. It is headquartered in Munich Bavaria Germany the company was
founded in 1916 (Kazemargi and et.al., 2022). Firstly, the organisation manufactures aircraft
engines and they transform and start the production of luxury vehicles to generate more revenues
from the market. Today the company is operating across 15 countries all over the world and
achieving their inherent goals and objectives. The company is innovating new ideas and they are
becoming better every day by upgrading new technologies from their products. On the other
hand, the organisation provides luxury vehicles according to the customer preferences in the
market. There are various innovation strategies which are by BMW to capture the market.
The innovative strategies are described below:
 BMW group of engineers has achieved rapid advancements to make their vehicles more
effective towards the changing surroundings. The organisation has made a rapid growth
towards every aspect to perform better in the market. Due to their up-gradation in
technology the company is generating more revenues in the market.

 BMW has enabled the new artificial intelligence technology in their vehicles. This helps
them to gain a competitive advantage in the market. The organisation is becoming more
dependent on creating new and innovative ideas. They are seeing and sustainable growth
in the market.
 BMW has also introduced the e drive technology in the market. With this technology
they are disrupting the market and it is becoming the main factor to attract different
customers in the market. It is one of the newest additions in their vehicles. On the other
hand their engineering teams called this the efficient dynamics program.
 The company has also introduced electric vehicles in the market. Through this BMW can
protect the environment and achieves a sustainable performance in the market.
Toyota motor corporation is a Japanese brand which produces the vehicles for the
customers in the market. The operations of the company is first started in 1993. Their divisions
of operations are called Toyoda automatic loom (Ojha and et.al., 2020). The organisation has
developed new ideas and effective use of technology helps them to achieve the inherent goals
and objectives in the market. In this new market the organisation offers the hybrid technology to
the customers. Due to this their vehicles are giving tough competition to different competitors in
the market. Toyota is growing and the company is increasing their operations at various new
regions in the world. There are various innovation strategies which Toyota used it is mentioned
down below:
 The company is achieving new possibilities and creating new innovative ideas with the
help of their work culture and experienced management. The organisation has recently
rolled out the Hybrid synergy technology. They started the production of hybrid cars with
this technology. These vehicles provide immense power which helps the vehicles to
perform better in the tough conditions.
 Due to the Hybrid technology the company is protecting the environment. On the other
hand, they had introduced a new power generation source which helps to attain ab
sustainable performance in the market. Toyota is canalising on the newer opportunities in
the market. This will help them to succeed for a long term in the upcoming future.
 Toyota is offering Eco friendly vehicles to the customers in the market. On the other
hand, the company vehicles has an excellent build quality which provides a safe driving
experience to their customers.

Map and critique the innovation space of the two organisations setting out existing
practice.
An innovation space helps the organisation to fuel for their growth in the market.
The main focus of the innovation is to stimulate the creativity of the users. The
organisation has to innovate new ideas to gain a competitive advantage in the market
(Ratten, Ramírez-Pasillas and Lundberg, eds., 2019). On the other hand, customer
preferences is also changing. For this the organisation has implement new changes in
workplace. They had to adopt new strategies and models which could help them to have an
efficient growth in the future. The management of the organisation is working in an
effective manner to capture a huge share in the market. There are different types of
innovation. It is broadly categorised into four stages which are mentioned below:
4Ps of Innovation BMW Toyota
Product innovation – In this
stage the organisation develops
different products and services
and innovate them according
to the changing customer
preferences in the market.
 The company innovate
new ideas to make their
vehicles more suitable
and provide never
imaginable experience
to the customers.
 BMW vehicles are
adapting to the new
changes and they are
production is according
to the customer
preferences in the
market.
 The company has also
introduced the electric
vehicles which helps
them to achieve
sustainable
performance in the
 Toyota is growing
company and they are
innovating new ideas to
make their products
more immersive. The
most important thing
the organisation is see
sustainable growth in
the market with their
services.
 Toyota products are
build to fulfil the two
main aspects. First in
the social and other is
generating profits
through their vehicles
in the market.

market.
Process Innovation – In this
factor the organisation changes
their process to make their
products and services more
established in the market.
 BMW has segmented
their choice of
customers (Behl ed.,
2020). They only target
the right audience
which had the
capability to avail their
services.
 BMW vehicles come
with new technologies
and advancements. Due
to this they are
attracting new
customers in the
market
 Toyota is offering their
vehicles to every target
audience and they had
new ways to promote it
in the market. The
company is growing at
an exponential rate due
to their practices.
 Toyota production
innovation
system(TPS) helps
them to create a radical
innovation strategy
which is beneficial for
the sustainable growth
in the market.
Position Innovation – In this
factor the organisation changes
the context in which their
products and services are
launched in the market.
 The company has
created an upward
position form their
products and services
(Salvador and
Pedersen, eds., 2022).
They are improving it
to become more stable
in the market.
 BMW has repositioned
themselves in the
 Toyota is a growing
brand and the company
position is stable in the
market. They are
facing an upward trend
from their product and
services.
 The company has
improved their position
in the market with the
new hybrid technology.

market. The
organisation vehicles
come with the changes
according to the
regions.
Their vehicles and
creating less pollution.
On the other hand, they
are protecting the
environment.
Paradigm Innovation – In
this factor the organisation
frame different mental models
within the workplace.
 The organisation has
changed their
traditional business
model and cop up with
the new market trends
to achieve more
revenues in the market.
 The organisation has
also developed
different models and
strategies to have an
sustainable growth in
the market (Olimov,
2021). BMW brand
reputation helps the
achieve the inherent
goals and objectives in
the market They are
seeing an efficient
growth in the long
term.
 Toyota has introduced
new ways to improve
their sales in the
market. They have
used new business
model (Alexander and
Joe, 2019). The
organisation is grown
and achieve the
inherent goals and
objectives in the
market.
 Toyota has changed its
philosophy and style of
working in the
management. The
organisation wants to
create an impact on the
society with their
product and services.

Mention the innovation strategy and management process applied in the company with the
help of Tidd and Bessant's 4 step model
The innovation strategy directs for the decision making of the resources to be utilised for
meeting the requirements of business in innovation, create a benefit for competition and deliver
value. This should be indulging an evaluation on the organisation's competitive benefit and the
technological surrounding (Lorenzo and et. al., 2022).
There are some external challenges as well as opportunities in it. The innovation strategy is
represented by the improvement efforts that can simply need some research, increase the
entrepreneurial ventures and development of the efforts. This is a mission and a deep plan for the
motive of creating a value for the customers to pay for using it. There is set of policies and
behaviour that makes a growth for the company. The management process of the company is
defined as the alignment of the method in a company's strategic aims, designing and proceeding
the designs, introducing process handling systems that can indulge in the company's aims,
education and managing the heads so as to manage the method effectively (Amedzro St-Hilaire,
2022). The management process comprises of some functions which are implemented stepwise
such as planning, organising, staffing, leading and also controlling. This is essential to allocate
the resources which are differently divided such as financially, technologically, natural and
human. There is a description given below about a model instructed which is in the context to
BMW and Toyota company (Reilly, 2022).
Tidd and Bessant's 4 step model
This model is related to the innovation process, it was founded in 2008 by Tidd, Bessant
and Pavitt. They defended a central model that includes four basic serial wise steps that are
search, selection, implementation and learning. There is a release in them for losing up as well as
initiate providing ideas, thoughts and suggestions (Dicuonzo and et. al., 2022). The innovation
management includes the method of controlling a procedure for company's innovation, it initiates
a method for the thought process to the last stage for the proper execution. It comprises some
decisions, tasks and execution of devising as well as executing the innovation strategy. As per
Rothwell, the fifth generation is mainly for the fourth generation that is parallel as well as
integrated within the technology of advance changes which is changing in its own. The fifth
generation is a developing model motivated in the concept about the Darwin's evolution by the
simple selection (Shang and Chiu, 2022). There are five types of innovation model that are

conceptual which are such as black box model that is of first generation, Linear model that is of
second generation, Interactive models that is of third generation, System model that is of fourth
generation, Evolutionary model that is of fifth generation and Innovation milieu model that is of
sixth generation. There are some reasons why innovation is important for the organisation that
this grows the organisation as the growth defines a result for the profits. Secondly it is necessary
because this advantages to stay in front of the competition and it also benefits in new
technologies (Junaid, Zhang and Syed, 2022).
This 4P's of innovation was introduced by John Bessant and also Joe Tidd. They both are
lecturers in the Exeter University of United Kingdom. They both have published this model in a
book that is Managing Innovation – Integrating Technological, Market and Organisational
change. The most essential part of the innovation management is to capture innovative ideas and
thoughts of the workers from different levels, creating an active as well as collaborative
employment, recognising worker's performance and communicating effectively to every
stakeholder that are important in making blocks innovation management for the ongoing
development. There are four various types of innovation that are such as Incremental, Radical,
Disruptive and Architectural that can help in innovating the organisation in a different way.
There are more directions to innovate other than all the mentioned types of innovation (Braastad
and et. al., 2022).
 Searching - The first step of model is about searching that related to the research and
innovation process which is done by going through the analysis of the market's
information and the technological updates. For example, BMW is having a big challenge
in research process for the car modification and bring the new versions in the market
according to the demands of their customers. Whereas Toyota is working on the research
and development process by taking the view of their customers as well as analysing the
market changes by comparing to their competitors as they want their cars to be different
from al the others. There is a need to search for the new changes in the market in the
terms of demand, versions, technology, trends and many more so that they can compete
for the competition and bring an innovation for the company (Rikap, 2022). BMW has
opted some strategies to search that is by sending out the scout by dispatching the thought
hunters for tracking the new innovative ideas. They explore different futures by using
some characteristics techniques for exploring the alternative options which are possible

for the future and also, they enhance their innovation in the options for them. Toyota uses
web for harnessing the power of it by the online communities as well as virtual
environment such as they detect the new changes. They always work with active
individuals who can help them by teaming up with the goods and services that individual
can think in some ways to that they can implement changes and enhance the remaining
offers. BMW does the deep diving for studying the procedure of the people so they have
to do as they commit to do. They probe and learn by using the prototype as instrument to
analyse the emergent phenomena and act like a boundary subject to get the key
stakeholders in the innovation method (Papamichail, Rosiello and Wield, 2022). They
mobilise the mainstream by getting the mainstream actors for the goods and services in
the development process. They can also do the corporate venturing by making as well as
deploying the venture entities. They do corporate entrepreneurship by influencing and
nurturing the entrepreneurial talent in the company. They use the brokers as well as
bridges by casting the thoughts of net fair, wide and connect with every industry. They
use creativity tools for the purpose to generate their ideas.
 Select - The second step for the innovation process is about select which explains for the
selection of one suitable idea and thought that should be implemented by the organisation
further. BMW uses an effective idea selection for their systematic innovation by an
obvious strategy for selecting and even analysing the thoughts. They opt a clear set of
criteria in screening thoughts as well as taking effective training of the individuals in the
selection group which is critical in real in the systematic innovation. On the other side
Toyota selects the ideas for their innovation process as they evaluate the whole market
and analyse only one suitable action to be taken as well as acquired by them.
 Implementing - The third process is about implementing the process of innovation, as
when the company has chosen one idea and process that is suitable for them in their
innovation of the products and services then they need to execute the idea. For example,
BMW focuses on the implementation process the most as they are concerned for their
results as well as the funds implemented in the innovation process so they take it on their
serious note for their operations to be implemented effectively. On the other side, Toyota
implements the idea after selecting the idea and process which is suitable for them and is
likely to bring a positive effect in their innovation of products and services in the future

period. They do this process so effectively while ascertaining their work for their future.
They have to train and develop their workers to implement the idea and process as they
have decided (Saguy, 2022).
 Capturing - The last step is about capturing the ideas and thought in the innovation for
the company. They would need to capture as well as harvest their advantage them to
extract the innovative ideas as well as prioritise them as they do. The organisation must
continue towards the growth and innovation when there is a necessity for implementing
the process and the method to know, capture and prevent to be developed as well as
investment. This process in BMW company as an importance as they get a good market
power in the critical resources that are needed for them to make innovation on the cash
generative. BMW creates in house patent teams or the external suggestions that provides
them a mechanism for identification, extraction and evaluate the inventions. Toyota has
to capture the ideas from the market as they need to check upon their competitors who are
performing well in the same field.
Identify recommendations to improve the innovation management of the two organisations.
Both the companies Toyota and BMW are adopting several innovative strategies through
the usage of hybrid technology and artificial intelligence. In order to expand the business, the
management is required to bring constant innovation in their cars. It is recommended to the
Toyota company to expand their by doing manufacturing of other vehicles rather than cars. It
will help the business organisation in covering the huge amount of customers. Currently, the
Toyota company is doing manufacturing of only cars. Hence, they have a small range of target
customers and market (Trapp, Voigt and Brem, 2018). If the management start the
manufacturing of crane, forklift, tractor, recycling truck, cement mixer, dump truck, tram and
many more, they can cover the higher number of customers which leads to the attraction of new
customers and result in increase in generation of revenue as well.
On the other hand, the BMW is also using the artificial intelligence technology in their
vehicles as an innovative strategy of organisation. The organisation is performing very well in
the market as this innovative strategy is also helping the organisation in beating the competition
as well. It is recommended to BMW to do the production of electric vehicles as well. They can
bring the innovation to create the buses and other public transport in electric form. This
innovation leads to the attraction of people towards the company along with fulfilling its

Corporate Social Responsibility towards the society. The electric vehicles do not create pollution
in the environment and these are much cheaper than the other fuel vehicles. By introducing the
electric public vehicles, the organisation is also trying to reduce the fares of public. The general
public have to pay less fare for travelling through the electric buses and electric taxis.
Both the organisations, Toyota as well as BMW are recommended to reduce the use of
carbon in the production process of vehicles as it is directly effecting the environment. It can be
the reason that people start hating the organisation (Huesig and Endres, 2018). Along with this,
both of the organisations are required to do constantly focus on the advancement of technology
in the field of automotive industry as it is very essential for the firm to analyse it because it help
them in beating the competition and generating revenue as well.
All the above-mentioned recommendations help Toyota and BMW in enhancing the long
term and sustainable growth and performance of organisation. In today's world, the advancement
of technology is bringing several changes in the production process of cars. This advancement is
also adding several new features which also leads to the increase in competition in the market.
Above mentioned recommendations to the Toyota and BMW helps the business firm in
expanding their businesses through enhancing their offerings. Through doing the production of
other vehicles rather than the advance features cars, BMW can attain the higher number of
people. Through the production of crane, forklift, tractor, recycling truck, cement mixer, dump
truck, tram and many others, the organisation can expand to the other industries as well (Didonet
and Diaz-Villavicencio, 2020). The cars are being bought by the individual customers but the
heavy vehicles are mostly being used in the other industries such as transportation, construction
etc. Hence, the organisation can expand their reach and make the other industries as their clients.
The recommendations which are provided to Toyota are found as really effective as it
also help them in coving the wide range of their customers. They can innovate the cars with the
new and advance technology through the use of less carbon. It help the organisation in saving the
environment. Along with this, the organisation can also innovate new public vehicles which can
be run through electricity.
Innovation management can work well by managing all the task and investing higher
amount in the research and development department (Babenko, 2020). The research and
development department will work for identifying the new and advance technology which the
organisation can use while doing production in order to enhancing the profitability and

productivity of organisation along with reducing the cost of production as well. Through
managing the innovation on time, both the business firm can make higher profit along with
beating the competition. It is found as essential for the firms to analyse the entire situation before
investing in the innovation. The organisation has to make a proper plan and arrange all the
necessary resources before planning for an innovation. After innovation, it is recommended to
both the organisations to invest in the marketing activities as it will help the firm to reach to the
customers and attract them to buy the particular vehicle.
CONCLUSION
From the above report, it has been concluded that the innovations mean to introduce
something new in the organisation. It helps the business organisation in maintaining the interest
of people towards the organisation and attract them which leads to the increase in profitability
and productivity of organisation. Along with improving the revenue generations, it also results in
beating the competition. In automotive industry, the organisation has several options to bring
innovation in design, services and many more. Toyota and BMW, both organisations are
performing very well in innovation by adopting effective innovative strategy. Tidd and Bessant’s
4 step model involve 4P's of innovation space which include Paradigm, Product, Position and
Processes. The use of Hybrid technology in the organisation of Toyota bring innovation in the
organisation. This innovation strategy is found as effective as it attracts the customers. Whereas
BMW is adopting several innovation strategies through the use of advance technology of
artificial intelligence.

REFERENCES:
Books and Journals
Aagaard, A., 2018. Managing Sustainable Innovation. In Innovation Management and Corporate
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