Innovation Trends and Volvo Cars' Strategic Response

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Assessment 1 – Individual Report: Innovation
strategy
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Contents
Executive summary.........................................................................................................................3
Introduction......................................................................................................................................4
Concepts of organisational environment, innovation trend, innovation strategy, innovation
capabilities, innovation value creation, and capture........................................................................5
Creation of innovation strategy to make sure the organisation’s alignment and its importance:....7
Impact of design thinking on Volvo Cars:.......................................................................................8
Recommendations..........................................................................................................................10
How the organisation’s innovation strategy best responds to the innovation trend..................10
What innovative initiatives should it pursue?................................................................................10
How should the organisation ensure that it creates and captures value from the innovation?. .10
How the strategies of the organisation ensure the alignment to trends of the innovation.............11
Conclusion.....................................................................................................................................12
References:....................................................................................................................................13
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Executive summary
In the report, the impact of current innovation trend design thinking on Volvo Cars will be
explained. Design thinking is the new innovative trend which focuses on designing the products
in accordance with the requirements of the consumer. Volvo cars manufacture and develop the
cars keeping in mind the safety of the consumers. The company is using this innovation trend to
bring technological advancement in cars and to enhance the brand value. Design thinking is
assisting the company to target more customers and to survive in the long run.
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Introduction
Design thinking is an iterative process which emphasises understanding the users, identify the
challenges, redefine problems and find innovative solutions to the problem. It is a creative
process that aims at harvesting feedbacks of the customers and redesigns the product in exquisite
form. Volvo was founded in 1927 with the concept of safety in Sweden. Volvo cars were the part
of Volvo group until 1999. The Volvo group decided to sell the automobile industry in order to
concentrate on other manufacturing. Ford motor company purchased the Volvo cars in the year
1999. Volvo cars were the part of ford motor company till 2010. In the year 2008, the company
suffered losses and decided to sell Volvo cars and it was purchased by the Group in 2010.
Currently, it is the part of Zhejiang Geely Holding Group. Volvo car is performing well and sold
over 60000 cars in the last year. In the report, the impact of the innovation trend will be
analysed. In the report innovation trend in the context of Volvo cars will be discussed
elaborately.
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Concepts of organisational environment, innovation trend, innovation strategy, innovation
capabilities, innovation value creation, and capture
The organisational environment consists of forces and factors which affect the performance
and operation of an organisation. It is a mixture of internal and environmental factors. The
internal environment consists of employees, stakeholders, management and other staff working
in the organisation. The external environment consists of legal, social, environmental and other
factors. There must be a proper balance between the external and internal environment for
accurate management of operations of the company. These factors play an important role in the
survival of the company (Duffield, & Whitty, 2015). The external and internal environment
offers a range of strength, opportunities and several benefits however these factors provide threat
as well. Hence for the smooth running of the business, these factors should be properly balanced.
Innovation trend is classification and implementation of new approaches and tools for solving
the problems and to generate more profits. It is an approach for determination of the challenges
and hurdles and finding ways to resolve the challenges and create value (Turunen, & Finne,
2014). Design thinking is the new innovation trend and it consists of 5 phases which are as
follows:
Stage 1 empathizes: This is the first stage of design thinking trend. This step involves research
on the needs of the customer instead of determining own assumption regarding the needs or
requirements about the customers. Volvo cars should investigate the needs and preferences of
the customers and then they should design their cars. Setting up customers’ needs to assist the
organisations to target more customers.
Stage 2 Define: This stage specifies that the organisation should determine the problems which
customers are facing. Currently, the automotive industry is going through the great
transformation driven by technological advancements, consumer behaviours and other things.
Now the demands of the customers are not stable their preferences are changing rapidly. Volvo
cars should determine the problems which customers are facing in using their cars at this stage.
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Stage 3 Ideate: This stage describes that the company should find innovative ideas and methods
to resolve the problems. Macro trends are impacting the operations of the Volvo cars. The
company should generate new ideas to stable the operations of the company.
Stage 4 Prototype: At this stage, various alternatives are generated to sort out the challenges. The
company should discover numerous alternatives that assist the company to find solutions to the
problem.
Stage 5 Test: This is the execution stage. The Volvo Cars should choose the best alternatives
among the numerous alternatives available to resolve the issues. If the alternatives are not good
and they do not find the best solution to the problem then the designers of the company should
follow the whole procedure again for the long survival of the company.
Innovation strategy is a strategy or plan designed for the expansion of the business. Innovation
strategy supports business organisations to create sustainable value and growth (Kolko, 2015). It
is a method of sustainable enlargement of the company. Volvo Cars should outline a new
innovation strategy in a manner that the company can work effectively and efficiently.
Innovation capability is the capability of an organisation to launch new and attractive methods
so that the company can enhance its brand value. Volvo Cars is facing the diversity in the
choices and preferences of the customer hence it should develop the innovation capability in
order to create a good brand value.
Innovation value creation
Innovation value creation is the value created by the company through innovation. Capture
describes that every operation and transaction must be captured or documented (Liedtka, 2015)..
Volvo Cars manufacture sells and develops a series of premium cars and it is recognised for
technological innovation.
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Creation of innovation strategy to make sure the organisation’s alignment and its
importance:
Innovation strategy assists the organisations to find innovative methods for designing the
product. Strategic alignment is the procedure of putting the actions of all the divisions together to
achieve an end to end objectives of the organization (Elsbach, & Stigliani, 2018). It links the
innovation strategy to the goals and objectives of the business. By generating new ideas for the
accomplishment of objectives of the business innovation strategy ensures strategic alignment.
Importance of innovation strategy
Extension of the business: A strong innovation strategy assists the business organisation to
operate in the competitive environment successfully. Volvo cars by designing a good innovation
strategy in accordance with the needs of the customer can sell more cars and can earn more
profits. By using new technologies and new advancement Volvo cars can create value and can
enhance the brand image.
Generation of more revenues: Innovation strategy helps out business organisations to generate
more revenues. Innovation strategy is designed to resolve the problems and to manufacture
exquisite products. If the products will be remarkable then more customers will be attracted. For
each and every company it is necessary to manufacture or produce innovative products so that
the company can expand its business (Liedtka, 2015). It supports the company to earn plenty of
profits. Volvo Cars is a reputed company. The company every year manufactures attractive cars
with the help of innovation strategy and every year boosts its sales.
Creativeness: Innovation strategy perk up the imagination and creativity of the company as the
innovation strategy aims at creating innovative and unique products. It enhances the decision-
making ability of the employees of the company. Innovation strategy allows the business to
explore the work and find the best ways to bring innovation in the products and services.
Improved quality of products and services: Innovation strategy aims at providing better and
improved services to the customers. By providing the best solutions and design it helps out the
companies to improve their services and create a unique identity. Volvo Cars are providing better
services to its customer as their first preference is the safety of the customers.
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Impact of design thinking on Volvo Cars:
The impact of design thinking new innovation trend resulted in higher sale and expansion of the
business for the company. The company by creating innovative and advances designs of cars
increasing its brand value (Vaughan, 2017). Design thinking is crucial for the attainment of the
end to end goals as it emphasises on targeting maximum customers by delivering high quality of
services. The current innovation trend design thinking resulted in higher productivity and higher
sales of the car for the company.
SWOT analysis
To examine the impact of innovation trend design thinking, swot analyses will be used. Swot is
for strength, weakness, opportunities and threat. The swot study enables an organisation to
discover or ascertain new opportunities with reducing the threats.
Strength: Weakness:
 Strength is an inherent ability of a
company which the company can use
to get the advantage over the other
firms.
 Volvo Cars with the help of
innovation trend using manufacturing
attractive cars which provide safety to
the consumers.
 The company with the design
thinking going global and expanding
the business.
 Weakness is the disability of a
company which the other business
can target and can get an advantage.
 The company is not able to provide
maximum satisfaction due to the
changing demands of the customers.
Opportunities: Threat:
 The innovation trend design thinking
is an opportunity for the Volvo cars
the aim of the company is to
manufacture advances cars which
 The threat is the vulnerability
prevailing in the market and the
company should try to find ways to
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provide more safety to the customers.
 With the help of design thinking,
comaony can enlarge its business and
can increase the sale of its cars.
prevent it.
 Currency fluctuation is affecting the
business of Volvo cars.
 Volvo cars are facing tough
competition and it is forced to create
attractive designs for survival.
Business model canvas
Key Partners
 Retailers.
 Dealers.
 Suppliers.
 Social
media.
 Service
centres.
 Companie
s
Key Activities
 Manufacturing
.
 Marketing.
 Production.
 Distribution.
 Financial
Services.
Value
Proposition
 Value
creation.
 Self-
driving
vehicles.
 Safety of
customers
.
Customer
Relationships
 Trust.
 Innovation.
 Transformation
.
 Improved
services.
Customer
Segments
 Every
segment as it
manufacture
s cars for the
safety of the
people.
Key Resources
 Brand
 Advance
technologies
 Network.
Channels
 Agencies.
 Stores.
 Intermediaries.
Cost Structure
 Technologies.
 Equipment.
 Raw material.
 Parts and apparatus.
Revenue Streams
 Technical services.
 Spare parts.
 Sale of cars.
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Recommendations
How the organisation’s innovation strategy best responds to the innovation trend
 Volvo Cars should conduct research on the requirements of the consumers and it should
design its cars according to the preferences of the consumers.
 The company should use high and advance technologies in cars.
 The company should do a swot analysis in order to determine the new opportunities and
threat in the market.
What innovative initiatives should it pursue?
The company should design the self-drive cares that will create more value and will result in the
higher sales of the cars. Nowadays customer has become more particular about the comfort
hence this initiative will enhance the image of the company and the company can provide
improved services.
How should the organisation ensure that it creates and captures value from the innovation?
The company should harvest the data after the innovative product and services. It should find out
whether the innovation is creating and capturing value or not by asking the views of the
consumer about the innovative product and service. Volvo Cars should gather information
regarding the views and the challenges their customers are facing and should try to resolve the
issues of the consumers for the determination of innovation is creating value or not.
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How the strategies of the organisation ensure the alignment to trends of the innovation
The Volvo Cars should frame the strategies in a manner so that it best aligns to the organisation.
Organizational strategies are structured for the effective running of the business. Innovations
trends are the best way to address the needs of the customer and to improve the services of the
company. The strategy should be formed in such a way that it addresses the needs of the
consumers and the needs of the organization s as well. The company is making strategy in such a
form that it can attain the objectives of the company and it can meet the expectations of the
consumers too.
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Conclusion
It has been concluded from the studies that design thinking is crucial for the overall growth of
the organisation. The Volvo cars are growing well with the application of innovation trend. In
the report concepts of organizational behaviour, innovation strategy, innovation trend etc. SWOT
analysis has been done to examine the impact of innovation trend on the Volvo Cars. Volvo cars
manufacture and develop cars and other appliances and an emerging company.
Recommendations have been given to properly regulate the innovation trend for the smooth
functioning of the business.
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