Innovation Strategy in Automobile Industry: A Volvo Case Study

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Report title: Innovation strategy
Business name:
Unit number and name: MGMT20132 Innovation and Sustainable Business Development
Assessment number:
Names of student ID of the group members:
If applicable, the granted extension request:
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Executive Summary
The following research will focus on the impacts of innovation in design thinking. The
research will be based on the automobile industry giant Volvo and how it is currently using
different innovations in design thinking to make further advancements in its respective
industry. The research is based many journals and case studies which provides an insight in
the design thinking techniques of Volvo
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Table of Contents
Introduction................................................................................................................................3
Importance of innovation management..................................................................................4
Concept of innovation management.......................................................................................5
Design thinking stages............................................................................................................5
Impact of Design thinking on Volvo......................................................................................6
SWOT Analysis......................................................................................................................7
Innovation Management Theories..........................................................................................8
Innovation Strategy................................................................................................................8
Conclusion................................................................................................................................10
References................................................................................................................................11
Appendices...............................................................................................................................12
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Introduction
The following report will be based on innovation trend design thinking. Business
environment emphasize on improving the design thinking skills of an organization. This
report is generated in accordance of Volvo Company which is one of the leading automobile
manufacturing companies in the world. This report focuses on the steps required for design
thinking, tools that are used for design thinking and how SWOT analysis will be affected
after implementation of design thinking. For this analysis numerous journals and case studies
will be required. Research will address those innovation strategies of Volvo that most people
are currently unaware of. The research will be concluded with the impact that innovation in
design thinking has on an organization. Learners will then be able to give answers to the
questions which are relevant to the given topic.
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Innovation management is consists the control of process of innovation and change
management theory. It defines the innovation of organisation, process of business. It is
developed from the standard norms. It manages the ideas, thinking skills and the goals of the
organisation. Nowadays, every organisation works on innovative management by which it
can improve its performance in the competitive world.
Importance of innovation management
1) Continuous progress: Volvo focuses on its automobile business and continuously
develops its services. The proper management creates the theory of conscious effort which
brings the increment graph of progress. Large organisation quickly adopts innovation because
requires more than just another choice (Leonidou, 2018).
2) Different standard in the same platform: If an organisation is facing a lack of
innovative ideas and deficiency of innovation management. Then, it may be difficult to
staying ahead in the queue or separate position in the industry. For example, Volvo brings
innovation in the automobile world, i.e. it implements a sensor for preventing drunk driving.
By this sensor, the speed of the car will be limited.
3) Optimisation of resource: If an organisation performs its job by excellent innovation
management. The design team will always utilise the waste resource and strategy for less
waste of resource. Small organisation group have lack of experience knowledge instead of a
large organisation. So, large organisation always improves the efficiency of innovation
management.
Innovation tool: Leadership support, design of organization and practice of innovation. As
per the research and studies, most of the organisation and companies are ready to commit to
innovation. It gives a different direction towards achieving performance and productivity.
Volvo is one of the leading companies in the world. For Volvo Group technology refers to
the innovative and creative thinking which resolve the revolutionary and evolutionary
problem. Group is already started with innovative labs (Brexendorf, 2015).
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Concept of innovation management
In a business environment, the organisation collects innovative ideas from its employees at a
different level, develop a collaborative workplace and consider the effort of employees. Its
effects I communication will be useful in the workplace, and stakeholders create the blocks of
innovative ideas and implement in the management.
Design thinking is a part of innovation, and it helps in imagination, reasoning, draws logics
for exploring the possibilities which help in creating the desired result. It benefits to provide
to the customer or the ends user. It tackles the complex problem and reframes the structure
(Luotola, 2017).
Design thinking stages
1. Empathise: In the first stage, it would be determined or identify which problem needs to
be solved. It required expert knowledge and found the concerned area in which observation
and engaging with the different people for understanding their motivation and experience. In
this stage, the team set the assumptions about the world. These all undertaken in the time
constraints and the total information gathered for the next level.
2. Define: In this stage, the team will analyse and observe the collected data. It helps in to
define the core problem. Determining is based on the need of company or demand of
customer like Company need to increase the production rate per year” or “Customer wants to
minimise the cost of car”. This stage established the functions, element and different features
which allows resolving the problem.
3. Ideate: Design thinking process is to generate the ideas in this particular level or stage. In
this team understand the need of company or demand of the customer. Ideation methods or
technique used by the Volvo Company is Brain writing, SCAMPER, Brainstorm etc. It
expands the space of problem but starts simulating the free thinking (Mentzer, 2014).
4. Prototype: In this stage, the team will identify the aims and objective and determine the
best resolving technique for a particular issue. Each solution has if it is required further
investigation or accepts it depended on team review. At the end of this stage, the design team
will generate a better idea and reduce the power of constraints.
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5. Test: Design team test the best solution which is identifying during the phase of the
prototype. This is a final stage which works on specific condition like what people think over
this solution, how it will behave and how it will empathise. During this stage, refinement and
alteration will be done in the order of requirement.
Figure 1Design Thinking Process
Source-Dam, R.,(2019)
Impact of Design thinking on Volvo
Volvo is one of the leading automobile industries. Its role is producing, manufacturing and
sale of bus, truck and car. It also provides services in industry and marine drive system.
Design thinking manages all the aspect which occurs in the organisation. According to the
study, Volvo follows all the rule of design thinking and adopts the innovation according to
the time and demand of the customer. Design thinking brings the innovative trend in the
industry which helps to grow in a continuous member and achieve all the objects. After the
implementation of design thinking in Volvo, its growth rate is continuously increasing, and it
was evaluated by its total sale, total earn revenue. Design thinking helps in various issues
which are arises by the customer, employees or market involvement (Svahn,2017).
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Tools used for design thinking
Models are changing according to the engineers and designer of the design thinking team. As
per the research, mostly business executive, entrepreneurs and educators solved the problem
especially human issues. But in the innovation, it requires proper tools which resolve the
issues and find the solution of best method or techniques. When social consider as a tool of
design thinking the essential requirement is capabilities of working together or in a team,
learn from the experience, adopt the different culture. Apart from human effort, software and
technology have also become a significant part of innovation. It is not efficient thinking
according to the human, but its results will be, and it depends on the input enters by the
human only. So there are various tools developed by Google and other software companies
which help in following the design thinking steps (Leonard, 2015).
SWOT Analysis
By the help of SWOT analysis, the organisation identifies its strength, weakness,
opportunities and weakness. It helps the organisation to analyse its existing situation and
understands the significant risk will arise in the future.
Strength Weakness
Due to design thinking Volvo, deploy the
number of automobiles design, features and
implementation. The company runs from last
so many years, but due to the help of the
latest technologies and techniques implement
the design thinking in the management. After
implementation, strength becomes the
capabilities of development and has active
research. It maintains its strong position in
the market in various segments.
Design thinking is not a weakness for the
Volvo. But its other weakness will overcome
soon because its constraint is recall of
product, so its brand image is affected.
Design thinking improves the design, model
of automobile.
Opportunities Threat
In the trend of design thinking, Volvo
realises that it has a great opportunities like
in the future there will be a high demand for
the truck. Expected growth is 9 %,
innovation need in this area where growth is
It describes the hazardous area of the
organisation like Volvo automobile prices is
high as compared to other competitors.
Design thinking helps in the improvement of
performance and decreases the price rate.
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expected. Manufacturing will start in the respective in
which its product is already in the market
Innovation Management Theories
Research Theory: This theory considers the evolution of the management of innovation. It is
based on a conceptual agreement. In 1970, industries put technology in the competitive
market, and it continues until the 20s, in which scholars put investigation theory in the
innovation market. It includes the theory of paradigms which provides for system innovation,
capabilities and open innovation, value innovation (Leonidou,2018).
This theory is based on evolution and innovation management adopt or accept the changes in
the world, industry and the respective market. As now the trend is on design thinking, it is
one of the latest trend of innovation that large organisation. It follows the procedure and
stages by which every task abs issue is resolved in a particular manner. Change is not only
the implementation of ideas. It requires a proper methodology which helps in achieving the
objective of the organisation.
Innovation Strategy
It is a plan used by the company which helps to encourage the advancement in modern
technologies or services. The investing fund prepares the plan over research and the activities
of development. It is the main component which maximises gain in the competitive market.
Design thinking is the innovation strategy used in many companies. It has planned stages or
level which helps in building the innovation plan. If an organisation has an effective
innovation strategies that will help enhance the sales rates and generate more profit. By this,
an organisation increases its future sustainability in the market. Like Volvo, the strategy is to
double the sales rate every year from 2015. Its main challenges are cost reduction; create a
different position in the market. It improves its organisational structure. These all depend on
the innovation strategy of the Volvo. It future or target planning is to drag every market in the
same or standard position (Brexendorf, 2015).
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Conclusion
This report concluded that innovation is a significant component for the organisation which
helps to for a run longer time in the same industry. For this research, the Volvo Company
considered innovation trend design thinking. It helped to understand the latest innovation
adopting by the Volvo. The report discussed design thinking stages, strategies and tool. It’s
highlighted those point which gives impact after the implementation of design thinking. The
organisation develops the innovation management by which it enhances the quality of service
and improves the design of the product. Innovation is not considered only in the design or
model. Change helps in proper utilisation of resource and reduces the wastage of material.
Design thinking brings development and improvement in the organisation.
Recommendation
• Volvo keeps using the design thinking model in the future. Bring innovative ideas in the
accordance of demand and need of the customer.
• The organisation must use the latest technology and influence others to keep update
according to the time and requirement.
• Companies must develop an innovative culture in the workplace by conducting
brainstorming, brain writing etc.
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References
 Brexendorf, T., Bayus, B., & Keller, K. (2015). Understanding the interplay between
brand and innovation management: Findings and future research directions. Journal of
the Academy of Marketing Science, 43(5), 548-557.
 Dam,R.,(2019). 5 Stages in Design Thinking Process. Interaction Design Foundation.
Available at: https://www.interaction-design.org/literature/article/5-stages-in-the-
design-thinking-process [Accessed on:29th April 2019]
 Diana,M,B,R., & Thais ,B,Z.,. (2017). Use of design thinking as a tool in the process
of innovation in libraries. Encontros Bibli, 22(49), 59-74.
 Leonard, S., Fitzgerald, R., & Riordan, G. (2015). Using developmental evaluation as
a design thinking tool for curriculum innovation in professional higher education.
Higher Education Research & Development, 35(2), 1-13.
 Leonidou, Christofi, Vrontis, & Thrassou. (2018). An integrative framework of
stakeholder engagement for innovation management and entrepreneurship
development. Journal of Business Research, Journal of Business Research.
 Luotola, Hellström, Gustafsson, & Perminova-Harikoski. (2017). Embracing
uncertainty in value-based selling by means of design thinking. Industrial Marketing
Management, 65, 59-75.
 Mentzer, Nathan. (2014). Team Based Engineering Design Thinking. Journal of
Technology Education, 25(2), 52-72.
 Svahn, F., Mathiassen, Lars, & Lindgren, Rikard. (2017). Embracing digital
innovation in incumbent firms how Volvo Cars managed competing concerns.
Management Information Systems : Mis Quarterly, 41(1), 239-253.
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Appendices
Strength Weakness
Due to design thinking Volvo, deploy the
number of automobiles design, features and
implementation. The company runs from last
so many years, but due to the help of the
latest technologies and techniques implement
the design thinking in the management. After
implementation, strength becomes the
capabilities of development and has active
research. It maintains its strong position in
the market in various segments.
Design thinking is not a weakness for the
Volvo. But its other weakness will overcome
soon because its constraint is recall of
product, so its brand image is affected.
Design thinking improves the design, model
of automobile.
Opportunities Threat
In the trend of design thinking, Volvo
realises that it has a great opportunities like
in the future there will be a high demand for
the truck. Expected growth is 9 %,
innovation need in this area where growth is
expected.
It describes the hazardous area of the
organisation like Volvo automobile prices is
high as compared to other competitors.
Design thinking helps in the improvement of
performance and decreases the price rate.
Manufacturing will start in the respective in
which its product is already in the market
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