Managing Innovation at Land Rover

This assignment delves into the innovation management practices of Jaguar Land Rover (Land Rover). It examines historical examples of successful innovations, such as the Range Rover hybrid model. The analysis explores Land Rover's open innovation approach and its impact within the bioeconomy. Furthermore, it considers the company's responses to evolving market trends, including Brexit implications and changing consumer preferences towards sustainable transportation and vehicle ownership patterns among millennials.

MANAGING
INNOVATION IN
BUSINESS

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
LAND ROVER AND ITS INNOVATION HISTORY...................................................................1
PESTLE Analysis........................................................................................................................1
LAND ROVER'S EXISTING INNOVATION PERFORMANCE AND CAPABILITIES...........3
SWOT Analysis..........................................................................................................................3
THE INDUSTRY IN 2018..............................................................................................................6
Porter's Five Force Analysis........................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

EXECUTIVE SUMMARY
Innovation is an element which encourages improvement in the products as well as
services present with an organisation to enhance their usefulness. The current report is based on
managing innovation in business and for that purpose, Jaguar Land Rover has been chosen.
One prime agenda of this report was to determine the innovation history of the company.
To attain this purpose, PESTLE analysis has been used and evaluated in relation to all the major
innovation done by the firm in its history.
Another aspect which is covered by the report is the existing innovation capabilities of
Jaguar Land Rover. SWOT analysis has been used to effectively analyse inner strengths and
weaknesses and external opportunities and threats. Moreover, a new product has been introduced
by the name of “Safety Integration System”.
Lastly, this report undertakes an in-depth analysis on the automotive industry in 2018 and
covers all the major aspects to determine its attractiveness. This agenda has been fulfilled by
applying Porter's Five Forces Model which helped in analysing the five major aspects of this
industry.

INTRODUCTION
Innovation is an immensely important function within an organisation which considers
improving one's existing offerings in ways which enhances their importance as well as their
value (Winterhalter, Zeschky and Gassmann, 2016). The following report is based on Jaguar
Land Rover which is a British auto-mobile company, which deals in manufacturing as well as
distribution of luxury cars. It covers innovation history of the organisation, its existing
innovation performance and capabilities and the industry in 2018.
LAND ROVER AND ITS INNOVATION HISTORY
An organisation as big as Land Rover is world renowned and is associated with
innovating its products and services since the very beginning. The company has its roots even
before 1950 and is continuing to grow as one of the most effective and strong companies in the
world. To effectively showcase its innovation history, PESTLE analysis has been used which are
external pointers influencing a firm and its functions.
PESTLE Analysis
 Political:
This aspect undertakes how political stability and policies assists a firm in carrying out its
business activities effectively. Back in 1947, the firm created its first vehicle using a Jeep
chassis. To avoid using expensive tools, the structure of the car was made from light allow and
off-cut fabrication was used for the chassis (The History of Land Rover, 2019). The UK
government at that time was having a robust post-war period which created market gaps serving
as an opportunity for Land Rover to launch itself officially in 1948.
 Economical:
This factor showcases economy's performance how it influences a company's operations.
During 1960's the economic performance of the UK was quite shaky. However, it marked
reduction in various aspects, for instance, relative competitiveness. The economy of the UK has
always been a positive factor for innovation in the company. Moreover, such support from the
economy allowed the firm to launch its Series IIA with higher diesel engine capacity and
innovative 12 seater design,
 Social:
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All the social elements, such as cultural and demographic trends, customer demand, etc.
are taken into account in this factor. Since its first car in Amsterdam Motor Show, Land Rover
has always been customers' favourite. A crucial reason for the same is that it appropriately
analysed market trends and tried to involve each market need within its products. The market
trends of the country near 1970's were to drive vehicles with elegant design as well as effective
capabilities. To achieve this, the firm introduced its 3-Door Range rover which was the very first
vehicle delivering a permanent 4-Wheel drive. It had an innovative design as well which
involved clamshell bonnet and split tailgate (Experience Land Rover, 2019).
 Technological:
This factor includes all the technological advancements which influences an organisation
to adopt innovative practices and introduce innovation in their products (Van Lancker, Wauters
and Van Huylenbroeck, 2016). Automotive industry has been subjected to technological
advancements and Land Rover had always aimed at innovating its products as per new technical
requirements in the market. The firm has evident instances where its technological innovations
have changed the industry. This was remarked in 1989 where Range Rover became world's first
vehicle featuring anti-lock breaks. In addition, it later introduced world's first Electronic Traction
Control as well as Automatic Electronic Air Suspension (History of Innovations, 2019).
 Legal:
All the legal frameworks and procedures set out for a country determines the operations
of organisations. One such aspect is intellectual property which protects a firm's original and
innovative operations. The policies and legal structure of the UK has always been supportive to
Land Rover which enabled it to produce effective designs and innovative frameworks. One such
innovation is Hill Descent Control in the firm's Freelander which has been a breakthrough in off-
roading vehicle technology (70 Years of Land Rover, 2019).
 Environmental:
With rising awareness on environmental issues, each company is required to adapt its
procedures and develop methods in ways which contributes to environmental sustainability and
welfare. In 2013, Land Rover made the world familiar with Range Rover Hybrid which was
specifically designed to reduce emissions and improve fuel economy (Great Performance,
Capable and Eco-Friendly, 2018).
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LAND ROVER'S EXISTING INNOVATION PERFORMANCE AND
CAPABILITIES
Land Rover is one of those few companies which is widely respected and preferred by
masses over other companies present in the industry. However, it is of vital importance that its
existing innovation performance as well as capabilities are analysed. This would give an insight
on its core strengths and weaknesses and how it could use its capabilities to seize market
opportunities and reduce its threats (Biemans, 2018). To determine these factors, SWOT analysis
is used to identify areas which are core strengths and weaknesses of an organisation and
adequately identify its opportunities and therats.
SWOT Analysis
Land Rover is a global company dealing in all sorts of luxury car segments. Moreover,
the organisation has vital and effective strategies through which it is continuing to expand its
operations globally and reaching untouched areas. Thus, its strengths, weakness, opportunities
and threats are mentioned below:
Strengths:
There are various pointers within Land Rover which are its most effective strengths and
could aid in the objective of firm to acquire a wider market. These strengths are mentioned
below: Effective Brand: The firm has associated itself with Jaguar, which again is a leading
company in the Automotive industry. In addition, both of these firms have been
supported by TATA Motors, which is their parent conglomerate. Having associated itself
with such big scale companies has enhanced its capabilities to competitively stay ahead
in the market.
 Market Share: The firm as well as Jaguar have strong market presence in the world,
particularly in the UK. With its robust innovation like using Automation and Hybrid
Systems in their SUV's, the firm has managed to get an evident market share in the
country.
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Illustration 1: Market Share of Jaguar Land Rover
(Jaguar share of car market in the UK from January 2016 to January 2019, 2019)
Weaknesses: Diversification: Although Jaguar Land Rover manages to effectively hold the position of
one of the strongest companies in the world. However, there are still various facets which
are required to be accomplished by the company. Present business environment requires
the company to diversify and effectively introduce new product segments which is utmost
necessary as per the market demands. However, the firm has faced difficulties in trying
new segments which is a driver for innovation for the firm to completely eradicate this
weakness.
 Negative Sales Growth: Jaguar Land Rover deals in premium car segment which has
potentially grow in recent years. However, even with such growing global prospectives,
the company has experienced decline in emerging markets like Asia Pacific regions for
almost 18% (SWOT Analysis of Land Rover, 2019). The reason for the same is that within
these markets, not every individual is willing to buy a luxury car and thus, it could be
another driver for innovation within the firm
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Opportunities: Lifestyle Changes: With time, people as well as customer groups have witnessed various
changes in trends and their lifestyles as per rise or pressure of various external factors.
Currently, customers wants vehicles that give them utmost comfort, speed and most
importantly, safety. Moreover, they want all these features in price which is convenient to
them. Land Rover could create a new product or feature which would help serve all these
demands of customers.
 Technology: UK is a nation with effective access to technology. In addition to this,
Jaguar Land Rover spends a lot of amount in their R&D which channelises their efforts to
bring in new innovations and technologies in use. With rise in Automation as well as
Artificial Intelligence, a whole new spectrum has been open for the company to deliver
its utmost advanced features or products in the market.
To enhance these opportunities and limit the weaknesses, it is imperative that Jaguar
Land Rover indulge into bringing new innovative products or features that enhances its scope for
future improvements and assists in maximising its capabilities.
One such innovation is “Safety Integration System (SIS)”, which could be a new feature
which the firm could implement in its new vehicles. With enhancement in artificial intelligence,
the company could develop a system that would provide immense safety to its customers and
would fulfil their technological demands. Within this system, the firm would be using AI to
denote bystanders and other vehicles in case there is an emergency situation within the car. The
system would be activated with a single button and windows, as well as the windscreen would be
tinted from the outside denoting problem inside the vehicle. Moreover, to further enhance the
safety, Autopilot systems would safely stop the car by the side where the emergency could be
dealt with.
Such innovation would help the company in reducing their weaknesses, and grabbing
each opportunity present in the market.
Threats: Intense Competition: Automotive Industry globally is one of the most growing industries
which has effective players and market leaders that have shaped up the industry with their
innovative product designs and advanced technologies. However, with such large market,
competition also increases which again, is a driver for innovation for a company like
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Jaguar Land Rover. The biggest competitive firms in respect to Jaguar Land Rover are
Mercedes Benz, Audi, BMW Group, Porsche, etc. (Jaguar Land Rover's Competitors,
Revenue, Number of Employees, Funding and Acquisitions, 2019). All these companies
are high on innovation in luxury car segments and it requires Jaguar Land Rover to bring
in innovative new products within the market.
 Brexit: In 2016, a referendum was held regarding UK leaving the European Union and as
per majority of votes, UK exited the union. The impact of this event is quite widespread
and severe on the nation and on each large-scale company. Unstable policies by the
government as well as decrease in value of pound are serious threats for Jaguar Land
Rover.
THE INDUSTRY IN 2018
Automotive industry within the UK as well as globally, has observed advanced and
effective innovations recently (Talukder, 2016). Moreover, it is one of the fastest evolving
industries globally. There are very new aspects which have shaped businesses under this and
opened up broader markets in terms of technology and innovation. To adequately understand it,
Porter's Five force analysis has been used which would help in determining industrial
attractiveness.
Porter's Five Force Analysis
 Customers' Bargaining Power:
Currently, the UK market has transformed into a more customer-centric market.
Businesses in industry are producing features and products according to customer preferences.
Usually, these individuals, organisations or even government possess the power to distance
themselves from products whose prices are perceived as high by them. Moreover, there are vast
number of buyers who acquire vehicles and services by automotive industry and thus, this power
is high within the industry.
 Supplier's Bargaining Power:
Similar to customers, suppliers too are large in numbers. Various components such as
frame, brake systems, electrical systems, etc. are supplied to manufacturing companies within the
industry. Profitability of businesses in these industries depends heavily on the suppliers'
components. However, switching costs are quite high and it is not certain that specific quality
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would be provided with enhanced pricing by these customers. Thus, this power within the
industry is moderate.
 Substitutes' Threats:
These products are those which could be used in the place of existing offerings. For
vehicles by manufacturing companies within the industry, substitute products are public
transports. However, various studies and analysis have emphasised on the fact that millennials
are preferring public transport over cars which is quite a threat for companies within automotive
industry (Why Millennials Are Buying Fewer Cars Than Older Generations, 2019). Thus, threat
of substitutes is high in Automotive Industry.
 Threat from New Entrants:
Automotive Industry is quite expensive and it is very tough and a complex activity to
enter this industry. This is because businesses require a huge investment and appropriate
suppliers and management team to survive and grow in this industry. Moreover, after events of
Brexit, investment within the UK has dropped to more than 46% which further increases the
complexity for investment in the UK automotive market (U.K. Auto Industry Already Feeling the
Brexit Pinch, 2019). Thus, the threat of new entrants for existing businesses is low in the
industry.
 Existing Competition:
Various firms are established market leaders within the industry and are widely
renowned. There are almost 8 firms that incur more than 90% of all the revenues globally.
Moreover, almost 50 auto parts organisations. Have 80% revenues globally. In addition,
globalisation is a factor which has risen more competition within the industry. Companies like
Audi and Lamborghini compete with each other in terms of innovation, design and performance
and this competition is quite high within the industry.
CONCLUSION
Thus, it could be concluded from above mentioned information, that innovation is quite is
a necessary element to take a business forward. PESTLE analysis helps in determining external
factors which influence functions of a company, whereas, SWOT assists in identifying inner
capabilities and weaknesses. Lastly, Porter's Five Force Analysis aids in gaining an in-depth
knowledge about the industrial attractiveness and each aspect within an industry which is crucial
for the businesses to manage their businesses.
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REFERENCES
Books and Journals
Biemans, W., 2018. Managing innovation within networks. Routledge.
Talukder, M., 2016. Managing innovation adoption: from innovation to implementation.
Routledge.
Van Lancker, J., Wauters, E. and Van Huylenbroeck, G., 2016. Managing innovation in the
bioeconomy: An open innovation perspective. Biomass and Bioenergy. 90. pp.60-69.
Winterhalter, S., Zeschky, M.B. and Gassmann, O., 2016. Managing dual business models in
emerging markets: An ambidexterity perspective. R&D Management. 46(3). pp.464-
479.
Online
70 Years of Land Rover. 2019. [Online] Available Through:
<https://www.landrover.in/experiences/news/70-years-unique-broadcast.html>
Experience Land Rover. 2019. [Online] Available Through:
<https://www.landrover.in/experiences/news/range-rover-history.html>
Great Performance, Capable and Eco-Friendly. 2018. [Online] Available Through:
<https://www.thesun.co.uk/motors/2656240/we-review-the-range-rover-hybrid-2013-
from-price-to-economy-and-all-its-features/>
History of Innovations. 2019. [Online] Available Through: <https://www.landrover.in/explore-
land-rover/45-years-of-british-design/index.html#>
Jaguar Land Rover's Competitors, Revenue, Number of Employees, Funding and Acquisitions.
2019. [Online] Available Through: <https://www.owler.com/company/jaguarlandrover>
SWOT Analysis of Land Rover. 2019. [Online] Available Through:
<https://www.marketing91.com/swot-analysis-land-rover/>
The History of Land Rover. 2019. [Online] Available Through:
<https://www.ifixit.com/Wiki/The_History_of_Land_Rover_-_Small_Beginnings-
Big_Results>
U.K. Auto Industry Already Feeling the Brexit Pinch. 2019. [Online] Available Through:
<https://www.nytimes.com/2019/01/31/business/uk-brexit-auto-industry.html>
Why Millennials Are Buying Fewer Cars Than Older Generations. 2019. [Online] Available
Through: <https://www.forbes.com/sites/quora/2017/10/16/why-millennials-are-buying-
fewer-cars-than-older-generations/#210f838f7726>
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