Leading Innovation and Change Report

The report analyzes the importance of innovation and change management for Aston Martin, focusing on situational analysis, SWOT and PESTEL analyses, and the implications of proposed changes on the company's business practices and market strategies. It highlights the challenges faced in implementing change and the potential for growth in emerging markets.

Leading Innovation and Change Module

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Situational Analysis.....................................................................................................................1
SWOT Analysis...............................................................................................................................1
PESTEL Analysis........................................................................................................................4
Competitive Analysis of Aston Martin........................................................................................5
Key Challenges faced against strategic ambitions for shareholders values gains.......................6
Proposing resolution through intervention of an agenda of feasible and desirable change for
incremental value addition...........................................................................................................7
Assessing the impact upon current business practices and organizational learning....................8
Reviewing wider implication if proposed changes are not implemented....................................9
PART 2..........................................................................................................................................10
Literature review............................................................................................................................10
PART 3..........................................................................................................................................15
REFLECTION...............................................................................................................................15
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................18

INTRODUCTION
Innovation and change management is the most important aspect for business because it
supports business to ensure upward direction with increase overall rate of return. It enables
corporation to carry out all operational activities effectively as they are able to cater need of
buyers. Present report is based on Aston Martin which is British manufacturer of Luxury sports
cars and grand tourers. The corporation was founded in 1913 by Lionel Martin and Robert
Bamford in order to offer quality services with continuous innovation and change. Aston Martin
Racing and Lagonda are subsidiaries of selected organization. The unique selling proposition of
company is ultimate luxury and powerful performance which contribute towards increasing
customer base. Strong engineering and designing team of company make it possible to deliver
good quality of product (Innovation on the cards for luxury automaker Aston Martin, 2016).
Furthermore, situational analysis has been done by focusing on internal and external
environment of business. It is helpful to understand current performance, productivity and
competitive position of organization. In addition to this, key challenges associated with strategic
ambitions for stakeholder value gains have been evaluated. Apart from this, feasible and
desirable changes are proposed by company through which value addition can be ensured.
However, impact of proposed changes on current business practices as well as the organizational
learning challenges are also highlighted.
PART 1
Situational Analysis
SWOT Analysis
Strengths: The biggest strength of Aston Martin is Legacy because it has developed
itself as a luxury brand that has been around more than 102 years. In addition to that business has
high brand equity. A well-developed rich and prestigious heritage is another strength of Aston
Martin. The values leading to strong customer connect which denotes customer loyalty. The
cited brand pride for its craftsmanship denotes the strengths of business and it has a strong
engineering & designing team. The brand is known for its ultimate luxury & comfort in cars
along with cutting age innovative and technological features. Aston Martin has gained significant
image as a sport car brand and has a strong presence in racing and motor sports events. The
1

marketing initiatives of business are the biggest strengths as it has created marketing and
branding through advertising (Aston Martin SWOT Analysis, USP & Competitors. 2016).
Weaknesses: The major weakness of Aston Martin is its limited product portfolio in
emerging economies which restricts it from capturing enough market share. Along with this,
Aston Martin has a limited model range with lower price which is not as per changing
demographic. It denotes that the mentioned company has comparatively lesser market
penetration. The people in emerging economies are now capable to afford luxury cars but
weakness for Aston Martin is that these market have not been targeted yet, hence, there is limited
product portfolio in emerging economies.
Opportunities: The cited company has various opportunities to develop its market in
emerging countries for which it can go for expanding automobile market. Aston Martin can use
its historical values and heritage to leverage it for acquiring new customers from marketplace.
The corporate entity has various opportunities to increase market penetration while using
extensive distribution as well as focusing on increased promotion. Addition to this, the business
attract more customers through adopting competitive pricing. Putting steps into spare parts
industry is an opportunity for the mentioned company for which it has to increase the availability
of service and spare parts (Aston Martin SWOT Analysis, USP & Competitors. 2016).
Threats: The organization has threats of competitors in the market place which affects its
business operational and profitability. The competition with leading brands such as Mercedes
Benz, Porsche, Bentley, Lexus, Audi, Maserati puts another threats to business. Fuel cost has
continually been increased which proposes threat to business in regard to decreasing sales. There
are many competitors which are trying to offer competitive products along with same features at
low cost, this aspect can be a threat to business. Product innovations by leading competitors can
also be a threat for business entity (Aston Martin SWOT Analysis, USP & Competitors. 2016)..
Table 1 SWOT Analysis
Strengths
 Strong legacy
 High brand equity/ image
 Rich historical heritage and values
Weaknesses
 Lesser market penetration
 Narrow defined market
 Limited product portfolio
2

 Qualified engineering & designing
team
 Innovations (Aston Martin SWOT
Analysis, USP & Competitors. 2016).
 Brand image as a racing and sport
vehicle
 Strong marketing and branding
 Less market share in emerging
economics (Aston Martin SWOT
Analysis, USP & Competitors. 2016).
Opportunities
 New market penetration
 Converting into public limited
Company
 Increasing vehicle market
 Historical values and heritage
could be leveraged to attract
new customers
 Focus on market penetration
(Aston Martin SWOT Analysis, USP
& Competitors. 2016).
 Extensive distribution and
increased promotion
 Competitive pricing
 Increasing the availability of
service and spare parts
Threats
 Continuously increasing fuel costs
 Intense competition from big
automobile giants such as Mercedes
Benz, Porsche, Bentley, Lexus, Audi,
Maserati
 Competitive products offering with
same features at low cost
 Product innovations by competitors
PESTEL Analysis
PESTEL analysis is conducted to carry out in-depth research into external factors
affecting business of Aston Martin. The external factors including political, economic, social,
technical, environmental and legal. Here is a PESTEL analysis of Aston Martin|:
3

Political factors: Political stability is a major factor affecting the business of mentioned
company. Including this, EU regulation related to increased export prices and tax structure of UK
government affects Aston Martin’s business practices. However, business is also affected by
pressure groups but company has adopted a territorial growth strategy which expose company to
different export taxes and market restrictions (Michel, Todnem and Burnes, 2013).
Economic factors: Being a global brand, Aston Martin is affected by economic factors
such as exchange rates, currency fluctuations, interest rate changes and purchasing power of
individuals in the society. Inflation in the economy and GDP growth rates affects business in a
significant manner.
Social factors: The social factors of business significantly affects the organization and its
practices. Being a luxury brand, it deals with cars of high prices which satisfies the needs and
wants of individuals. The target market of Aston Martin is small as there are less people with
purchasing power who by products (Martin, 2013). The people in the society with luxury life
style demand more cars as compared to middle income level. Consumer purchasing power is the
social factor affecting individuals as compared to others.
Technological factors: The emerging trend of technology provides a progressive way to
business and affects it in a significant manner. Aston Martin has proved itself as a technical
leader as it believes in innovation and offers well balanced product with desirable technological
features. The automated production line has supported company to increase its sales while
reducing cost of business. New technologies in automotive field possess significant impact on
business, however, innovative marketing and advertising affects business in a positive manner
(Martin, 2013).
Environmental Factors: Within UK, road transportation is the biggest sources of
pollution in the UK which lead to poor air quality and other negative climatic affects. The
government of Britain is imposing some regulations on CO2 emission from cars. The automotive
leader is making cars with the technology of efficient reduction of CO2.
Legal factors: The legal environment consists of laws related to trade practices. The
European Commission is new laws covering competitive behaviour, product standards, labour
laws etc which are significantly followed by Aston Martin (Martin, 2013).
4

Competitive Analysis of Aston Martin
Luxury car market of UK has intense competition where Aston Martin faces competition
with Mercedes Benz, Porsche, Bentley, Lexus, Audi, Maserati, Mercedes Benz and Porsche are
two major competitors of Aston Martin as they are dealing in luxury sport car segment however,
they are different from Aston Martin in terms of total investments on advertising. Aston Martin
has created a distinct image from its competition in terms of 3 important elements such as power,
beauty and soul. Advertisements of Mercedes and Porsche are focused towards brands rather
them product and these entities reaches target audience using IMC tools so as to communicate
with mass. The major reason behind this fact is that the business has a huge brand portfolio
which is adopted to different needs and wants. Ferrari focuses towards exclusive events to owner
and their relatives so that people can be forced to have similar style and habits to the brands.
However, Ferrari has its own team of marketing which mainly focus on maximising the media
exposure through live broadcasting of the races. On the other hand, Aston Martin uses varied
mix of communications, sponsoring races and automotive competitions. In addition, it
advertisers brand while using conventional and non-conventional media channels. The
advertisements of Aston Martin are focused on developing partnership with brands that is going
to add value to Aston Martin, hence, it relies on direct marketing approaches. Aston Martin uses
various communication methods to communicate with market people such as Direct, Marketing,
Online, Press, OOH, public relations etc.
Top end cars UK market
share
Percentage
Mercedes Benz 37%
Porsche 28%
Aston Martin 6%
Ferrari 4%
Others 25%
5

37%
28%
6%
4%
25%
Top end cars UK market share
Mercedes Benz Porsche Aston Martin
Ferrari Others
Key Challenges faced against strategic ambitions for shareholders values gains
Whenever business implements change within the organization it faces some challenges
from both international and external market, however, challenges faced strategic ambitions for
shareholders values gains is the major issue faced in internal environment. The change is
implemented in the organization to provide a good return to the shareholders who have invested
their money in the business. Aston Martin’s shareholders want to have good returns, the business
is proposed with having some technological changes to increase the brand portfolio in emerging
economics (Hurn, 2012). Surly the company is going to face some challenges against strategic
ambitions for shareholders values gains:
Communication: The major challenges is of communication which is to be faced at the
workplace in which shareholders might not be communicated with the benefits of proposed
changes, hence, they will not support the change held in the business, in such manner it is
important to convince shareholders by making a financial projection and convincing them that
business is going have good returns (Bourne, 2012).
Unclear understanding of shareholder’s requirements: The major challenge is faced
regarding understanding of shareholder’s requirements which become challenge in the process of
convincing them and gaining their support. The major task of management is to effectively
6

communicate with the shareholders to identify their requirements so that they can be influenced
for adopting proposed changes that matches their requirements.
Lack of support: The major challenge is related to lack of support from shareholders for
the proposed changes if they are not provided a justifiable reason of proposing such changes.
Financial issues: To propose new changes, the company requires to have sufficient
finance in relation to propose new changes for which It is required that the shareholders invest
their money for having good returns.
Proposing resolution through intervention of an agenda of feasible and desirable change for
incremental value addition
According to the situational analysis, it has been found that company has limited product
portfolio in emerging economic like India and China. However, the main reason behind the same
might be high cost of production and barriers related to culture or other related. At this juncture,
company has chance bring innovation in its services or products in order to satisfy buyers of
emerging economies who desire to own luxury vehicle. This will be effective for increasing
market penetration with the help of promotion (Appelbaum and et.al., 2012). This change will be
implemented by producing economic luxury vehicle where ordinary spare parts will be used. It
can be critically evaluated that, organizational like Aston Martin always produce luxury car with
premium price where it becomes impossible to offer the same in economic prices. Owing to this,
Aston Martin can contract ordinary suppliers of spare parts for producing cars in emerging
economies. Though, design of car will be kept same for the purpose of making customers
satisfied. This is the effective aspects for reducing cost of production and setting affordable price
for customers of emerging economies (Bevington and Samson, 2012).
Furthermore, this change can be implemented by preparing team of competent and skilled
personnel. This team will help company in offering quality product to end users without having
much impact on productivity and profitability. Similarly, production procedure must be changed
in the light of cost and non-monetary benefit (Cameron and Green, 2009). For example, buyers
of India would like to prefer cost effective product as that is developing nation. Here, luxury cars
like Aston Martin might not be able to sell costly product. For this purpose, designing of cars
will be kept the same its internal structure will be changed. This aspect may have impact on
quality of products in long run however, management have clear justification regarding the same.
7

At this juncture, suppliers offering ordinary spare parts are signed on the basis of long term
contract. They can also provide certain percentage of commission in accordance with policies
and procedure of corporation (Cennamo, Berrone and Gomez-Mejia, 2009).
In addition to this, in order to ensure incremental value addition this require on priority
basis which aids to increase customer base. However, company can follows the rules and
regulation imposed by government of another country which related to CO2 emission. This
aspects contribute towards increasing ethical conduct of business at global level. Moreover,
current technological change is quire feasible but initially high investment will be required to
impart training among existing personnel (Claire, 2010). It will make possible for company to
cater need of different types of buyers. Therefore, this desirable changes facilitate company to
add more value in its products and services. It proves to be effective for creating competitive
edge in the marketplace. However, market penetration available as opportunity of firm can be
applied at the time of implementing desired changes. This ensure long run growth of corporation
with increased rate of return. Hence, feasible change in team will be helpful for upward
movement of business in global market (Giraud and Autissier, 2013).
Assessing the impact upon current business practices and organizational learning
The resolution of proposed changes will not have more impact on current business
practices. This is because market or production will continuously move as it is but there will be
minor changes in cost structure. Here, impact of changes will be observed on current business
practices and organizational learning both. These are explained as follows-
Current business practices
The current business practices of Aston Martin will have some changes because
production might take place in two lot. One lot will be there in order to provide products for
emerging economies. On the other hand, second lot helps in meeting requirement of daily users
of country like UK and other foreign countries (Parker and et. al., 2013). However, organization
will require to access cost effective source of finance which aid to lower down cost of
production. Furthermore, Aston Martin require to provide training to workforce in order to
enhance their skills and potential. This aspect facilitates organization to cater need of buyers who
want to own luxury vehicles in cost effective manner. Similarly, profitability may go down due
to investment in new proposal or technological innovation (Shoham and Perry, 2009).
8

The current aspect of doing work is quite different from that which company is purposed
to implement. However, customers of UK and other related countries are happy with products
and services offered by Aston Martin. However, suppliers contact will be established in order to
ensure smooth flow of production in the marketplace (Smith, 2011). In the absence of continuous
supply of luxury cars, company might loose its customer base. For this purpose, it is necessary to
deliver good quality of products and services by ensuring consists flow of production.
Organizational learning challenges
In order to implement technological change, company may face challenges related to low
rate of return and dissatisfaction among buyers. This is because first time users generally face
issues related to mileage, quality and pricing strategies. For this purpose, management of Aston
Martin get ready to resolve all these issues by implementing effective strategies (Cloud, 2010.).
Here, firm needs to take care of all related aspects such as preferences of buyers and their need
such as small vehicle or large. Even by incurring huge investment, there are uncertainties
because of completions in the emerging market (Aston martin and red bull racing to create next
generation hypercar, 2016). For this reason, research activities must be focused which will
directly increase flow of production. It can be critically evaluated that competitors can copy the
design of products for this purpose market penetration and other related promotion strategies will
also be implemented.
However, workforce can resist changes which take place because of technological
innovation. Apart from this, being successful organization in luxury segment, company can train
its personnel and make them ready to accept all changes taking place in production procedure.
Therefore, some of the changes will take place in technical aspect and accordingly mechanical
staff are also required to be trained (Miller, 2011). Hence, company can resolve issues as it is
going to get long term benefit by creating its goodwill at international marketplace. Not only this
but buyers will get luxury product in cost effective manner which in the they can be retained by
Aston Martin for longer time span.
Reviewing wider implication if proposed changes are not implemented
The current technological innovation is key to success of company in the marketplace.
This is because organization is able to grab opportunities related to market penetration and along
with that affordable luxury cars can be provided in emerging economies. In case company does
to implement that change it will have to pay the higher cost for the its competitors. This is
9

because market will be captured by its competitors (Boeker, 2009). Owing to this, company
should implement the change in order to carry out all business activities at international level.
Furthermore, many of the corporation like to invest their fund for expansion of business. Here,
Aston Martin will decrease its customer base if it does not bring such kind of innovation in the
marketplace. The external factors like higher competition, increasing demand of buyers and their
preferences related to pricing make huge difference on reputation of organization. It shows that
company can adopt this feasible change as it will not affect any of its production activities to a
great extent. However, company can acquire cost effective sources of finance in order to have
contact with suppliers offering spare parts (Appelbaum and et.al., 2012).
Furthermore, Aston Martin must provide training for its personnel in order to increase
their expertise. This will directly give power to organization for implementing feasible changes.
However, there will be some issues regarding managing this change during initial stage. It proves
to be effective for delivering good quality of services for large number of buyers. Therefore,it
would be more beneficial for management to implement the proposed changes and get
competitive edge in the marketplace (Cloud, 2010). Apart from this, business can easily enter
into emerging economies when external factors like legal, political and technological bring
adverse impact.
PART 2
Literature review
Innovation and change
Innovation is a key to success which significant lead to change. To the view point of ()
organization need to constantly innovate if they wants to succeed in the marketplace. In a general
phenomenon, Innovation is defined as a scientific, technological, organizational, financial, and
commercial activity which is required to create new products or processes.
In addition to this, Innovation is termed as an aspect which is adopted to make things better,
faster, or cheaper as compared to competitors. The author has further supported that change and
innovation lead to ongoing improvements and relatively helps in gaining new idea for changes.
According to Mantere, Schildt, and Sillince (2012) innovation lead to increased productivity
which can be lead to improve wealth in an organization and make its competitive in the
10