Managing Innovation in Business

MANAGING INNOVATION
IN BUSINESS

EXECUTIVE SUMMARY
Innovation is the introduction of new and unique ideas which leads to the creation of
technological, economic, corporate and social values and improves core business competency in
today's world. BMW is a German automotive company which manufactures luxury cars and
motorcycles. It was founded in 1916, headquartered in Munich and is regarded as a leading
producer of motor vehicles. The aim of the report is to evaluate the future innovation building
capacities of BMW by 2020 and beyond. The future of automotive industry is illustrated and
Porter’s five force model is used for competitive analysis. The outcome of analysis in context of
competition are need of new technological developments such as automation in assembly,
upgradation of the car features for customer satisfaction, making a dedicated segment for low
emission and electric car models. Future Trends and technology in the industry encompasses AI,
shared mobility, Vehicle to vehicle connectivity and automation. A PESTLE analysis is done to
assess the future requirements of the company. Integrated innovation model is applied for
evaluating future building capacities of BMW which implied innovation requirements in the
areas of science and technology, Business and Society. Various approaches that BMW can
follow are commitment to a transformation roadmap, defining the what and how of development
and managing changes. The capacities can be built via electrification, autonomous operations,
sharing, connectivity and annual updation. The current practices of the company in terms of
Technological, business and societal innovations have been determined.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.........................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
1. The Future of Automotive Industry.........................................................................................4
2. BMW's future innovation requirements...................................................................................6
3. Future innovation Building capabilities of BMW...................................................................8
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1

INTRODUCTION
Innovation refers to the introduction of something new and unique which leads to the
creation of technological, economic, corporate and social values and is a core business
competency in today's world. The companies should focus upon aligning their business strategies
to innovations. BMW is a German automotive company which manufactures luxury cars and
motorcycles. It was founded in 1916, headquartered in Munich and is regarded as a leading
producer of motor vehicles including Formula 1 sports cars and touring vehicles. This report will
highlight the future of automobile industry by using Porters Five force model and finding out
new innovations that are happening in the industry. BMW's Pestle Analysis will describe its
innovation requirements and future capacities for innovation in the company will be evaluated by
using drivers and model for innovation and approaches that should be adopted by the company in
future by focusing on certain areas.
MAIN BODY
1. The Future of Automotive Industry
The automobile industry is changing with the dynamic technological trends and
innovations. Consumers have a tendency to adopt highly complex or even expensive technology
in order to make their lives easier (Kalaignanam, Kushwaha and Swartz, 2017). Users of the 21st
century value Ease and Convenience. The core values have shifted to these two areas and the
automobile industry is defining its technical cultural dimensions in present times.
Porters' Five Force model is used to analyse the industry attractiveness and determine the
potential competition and industry's profitability (ÖNEREN, ARAR and YURDAKUL, 2017).
1. The threat of new entrants: This is a weak form of threat when it comes to automotive
industry. This is due to the major barriers faced by new players such as requirement of
upfront capital (the setting up of an AI based advanced robotics manufacturing facility)
and development of a strong brand equity (Hayward, 2017).
2. The bargaining power of Buyers: The customer of the future will be very conscious of
the purchase decisions and might conduct a thorough examination of available options.
Customers can use various sources for research purposes such as automotive reviews
from various online sources like expert channels and reviewers or travel magazines. A