Innovation Strategy for Volvo: A Report on Design Thinking

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MGMT20132: Innovation and Sustainable Business Development
Assessment 1: Individual report: innovation strategy
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Executive summary
The complete report includes the chosen innovation trend & its impact on the chosen business
organization in order to identify the effective business innovative strategies which should be
implemented by the business managers in the effective as well as in an efficient manner. The
whole environment of the business organization is also being analyzed along with the ways for
ensuring & enhancing the strategic alignment which is very essential for the business
organization. The effective recommendations are also being illustrated in the context of the best
innovation strategy along with the strong strategic alignment.
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Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Business organization......................................................................................................................4
Innovation trend...............................................................................................................................5
Organizational environment........................................................................................................5
Innovation strategy......................................................................................................................6
Innovation capabilities & innovation value creation...................................................................6
Innovation strategy ensuring strategic alignment............................................................................6
Impact of an innovation trend..........................................................................................................7
Strategic tool....................................................................................................................................7
A business model canvas of Volvo..................................................................................................8
Recommendations for Volvo’s innovation strategy........................................................................8
Recommendations for ensuring strategic alignment......................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
In order to ensure & enhance the sustainable growth, success & development in the competitive
business environment, it is very essential for each & every business organization to deliver &
offer all its potential customers with the high level of innovative products & services so that
maximum numbers of customers can get attracted towards the business organization.
Implementing the innovation strategy means creating winning products in order to ensure
profitable segments for all consumers. With the help of these, the unexpected needs, demands &
basic requirements of all the consumers can be fulfilled effectively & efficiently.
Business organization
The chosen business organization is “Volvo” which is a “Swedish multinational manufacturing
company”. It supplies the drive systems in the area of marine & industrial areas along with the
financial services in the standard manner. It was founded in the year 1927 by “Assar Gabrielsson
and Gustav Larson”. The company was considered as the second largest manufacturer of the
heavy-duty trucks in the year 2016. The core work of the business organization is related to the
areas of production, distribution & the sale of all the trucks, construction equipment & buses.
The overall organizational environment is also being analyzed in the context of the chosen
innovation business trend. It was originally registered as a trademark with the brand name
“Volvo” in the year 1911.
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Figure: logo of Volvo
Source: By Volvo Car Group, 2014
Important Definitions
Innovation trend
The chosen innovation trend for the business organization of Volvo is “design thinking”. This
innovation trend is being termed as the design methodology which provides an effective
approach based on the appropriate & standard solutions in order to solve the different identified
problems of the business organization. In order to enhance the complete process of design
thinking within the business organization in an effective manner, the business managers should
follow up the essential five steps including the steps of empathizing, define, ideate, prototype &
test.
The business managers should firstly gain the deep & empathic understanding related to the
identified organizational problem which is to be solved out effectively. Under the defining step,
all the gathered information is being put forward to analyze all the observations. Under the third
stage, the designers generate innovative ideas for understanding the basic needs & requirements
(Carlgren, et.al. 2014). Under the step of the prototype, the solutions for all the problems are
being investigated & all the solutions are being tested & shared in an effective manner. Under
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the last step of testing, all the results are being tested & all the deficiencies are being corrected
with the help of effective measures.
Organizational environment
The environment of the business organization of Volvo includes the different factors such as the
political, social, economic, legal, technological & environmental which are to be analyzed &
taken care of in the standard as well as in an appropriate manner. The business managers of
Volvo take care of all its products & services so that they may not harm the business
environment. The lifecycle of the product is being enhanced in consideration of the
environmental impact. The business organization also includes the different aspects of energy
efficiency, water resources, reduction of waste, using the eco-friendly chemicals & the effective
utilization of natural resources (Benson & Dresdow, 2014). Volvo also believes in the
continuous improvement for supporting all its targets in an effective manner.
Innovation strategy
The business managers of Volvo identify & also implement the different business strategies in
order to enhance the innovation trend of design thinking within the business organization. They
believe that with the help of the innovation within the transport, all the related facilities will help
in reshaping the different cities of the World in the upcoming future. The quieter, cleaner, as well
as the safer megacities, can be ensured & enhanced for the environment to grow & prosper
through the automated driving, connected vehicles & the electromobility. For the complete group
of Volvo, the innovation technology means the aspiration for moving forwards towards the
sustainable success & growth, working together in a constant manner & improving day by day
for enhancing the better things. All these innovated business strategies will help in solving out
the major problems of the business organization (Kalelioğlu & Gülbahar, 2014).
Innovation capabilities & innovation value creation
The innovation capabilities are very essential to be enhanced for enhancing the competitive
advantage within the dynamic business environment. These capabilities of innovation help in
creating & developing a positive impact on the overall complete process of innovation & help in
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developing strong organizational success. All these things & activities help in creating & adding
up the value creation within the business organization (Saebi, & Foss, 2015).
Innovation strategy ensuring strategic alignment
It is very essential for the business managers of Volvo to effectively align all the innovated
business strategies in accordance with the defined, goals, objectives & targets of the business
organization. The business managers can effectively ensure the strategic alignment in an
effective manner with the help of developing the supportive culture, modifying all the related
factors which may affect the organizational alignment & promoting both the individual as well as
the efforts of the overall organizational team. In these entire manners, the strategic alignment can
be promoted effectively & efficiently. A higher level of organizational performance is being
enhanced along with considering the different level of contributions of all the organizational
employees (Paunescu, 2014). With the help of the strategic alignment, different processes can be
enhanced for realizing the organizational goals & objectives which are measurable. The waste is
also reduced & all the efforts can be effectively redirected towards the common organizational
purpose.
Impact of an innovation trend
With the help of enhancing the innovation trend of “design thinking” within the business
organization of Volvo, the needs & different preferences of all the consumers can be known in
the effective as well as in an efficient manner. The innovative technologies & the creative human
values can be enhanced & directed towards the fulfillment of desired needs & customers’
preferences. This innovation trend will also help in enhancing & improving the wide varieties of
innovation capabilities so that new & innovative ideas can be explored effectively & efficiently.
The overall culture of the business environment is also get improved & enhanced along with the
various effective factors of motivation, team engagement & collaboration. Therefore, design
thinking positively impacts the sustainable growth & success within the business organization. it
also helps in enhancing the competitive advantage among the huge competitive business
environment (West & Bogers, 2014).
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Strategic tool
The chosen strategic tool is “SWOT analysis”. The strengths of design thinking include the
leveraging of the brand recognition of Volvo in the new segments or the organizational divisions,
implementing the models of a diverse amount of revenue & the first mover advantage. The
weaknesses of this innovation trend include the investing of the huge amount of money towards
those products & services which are customer-oriented along with the weaker chain of supply,
higher turnover of all the organizational employees and decline in the share of the market.
Certain opportunities were also being found out of the design thinking including the innovations
of accelerated technology & advances, increased legal regulations of the government, a lower
rate of inflation, migrating trends of all the customers & the effective opportunities for the online
space. Apart from all these, there are few threats also which were been identified including the
high level of competitors catching up the development of innovated products, changing the
political environment, dynamics in the demographics & the high level of competitive pressure
(Joyce, & Paquin, 2016).
A business model canvas of Volvo
Following table represents the business model canvas of Volvo which includes the different
factors & their respective relationships with each other:
Key
partnerships
 Hardware
vendors
 Outsourci
ng
partners
Key activities
 Software
developme
nt
 Marketing
through the
web
Value
prepositions
 Reductio
n in the
cost
 Better
valuatio
n
Customer
relationship
 Close
relatio
ns
throug
h the
online
sources
Customer
segments
 Horizont
al
segment
 Vertical
segment
Key resources
 Software
& services
 Knowledg
e of
process &
domain
Channels
 Interne
t
channe
l
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Cost structure
 Mentioning the software development
 Marketing
 Hosting the consumption
Revenue streams
 Subscription
 Services
Recommendations for Volvo’s innovation strategy
The innovation strategy of the business organization, Volvo includes the aspects of the overall
organizational mission, vision, aspirations, effective values & the code of conduct. All these
aspects of the factors are being included under the strategy in the form of the hierarchical
position. Following are the effective recommendations which should be implemented by the
business managers in the standard as well as in an appropriate manner:
 The business managers can organize the identified innovation activities within the
business organization with the help of discussing the creative & innovative ideas in the
central location, labeling all the listed ideas & implementing each idea with the complete
support of all the organizational leaders.
 The business managers of Volvo can enhance the additional capabilities of the innovation
such as the innovative technologies, online applications & the other sources of enhancing
the high level of innovative interaction with all the employees & potential customers
(Kalkan, et.al. 2014).
 Apart from the effective innovation technological capabilities, the business managers of
Volvo should also enhance the different innovation initiatives such as the high level of
emotional intelligence, increased level of coordination, the maximum level of creativity
& also enhancing the concept of critical thinking.
 The business managers of Volvo can ensure the innovative value creation with the help of
all the above-illustrated innovation capabilities & initiatives. The high level of value
creation will also help in creating & enhancing the higher level of attraction of all the
potential & loyal customers towards the business organization (Audretsch, et.al. 2014).
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Recommendations for ensuring strategic alignment
Following are certain effective recommended points which should be effectively considered by
the business managers of Volvo in an appropriate manner for ensuring the innovative strategic
alignment in the best manner through the chosen innovation trend of “design thinking”:
 The business managers can follow up the essential steps of ensuring the process of
strategic alignment including the sort out of strategic plan, establishing the selected
projects, managing all the projects, creating & developing the most appropriate structure
of the business organization, enhancing the culture of the business environment, investing
upon the human resources and managing the level of different employees’ performances.
 The business managers can also consult with the professionals for enhancing the process
of aligning management within the business organization of Volvo.
 All the individual, as well as the team efforts, should be promoted for enhancing the
higher level of authority which can directly drive towards the strategic alignment of the
business organization (Dibrell, et.al. 2013).
Conclusion
It has been concluded that it is very essential for each & every business organization to
effectively enhance & implement the suitable innovation trend for maintaining the high level of
sustainable growth & development within the whole business organization. The innovation trend
is also being analyzed of design thinking in the context of all the organizational operations of
Volvo. Different effective innovation strategies are also being implemented in order to enhance
the chosen innovation trend in an effective manner. Certain standard recommendations are also
being provided in the context of the company & the innovation trend.
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References
Audretsch, David B., Coad, Alex, & Segarra, Agusti. (2014). Firm growth and innovation. Small
Business Economics, 43(4), 743-749.
Benson, J., & Dresdow, S. (2014). Design Thinking: A Fresh Approach for Transformative
Assessment Practice. Journal of Management Education, 38(3), 436-461.
Carlgren, Lisa, Elmquist, Maria, & Rauth, Ingo. (2014). Design thinking: Exploring values and
effects from an innovation capability perspective. Design Journal, 17(3), 403-424.
Dibrell, Craig, & Neubaum. (2013). Linking the formal strategic planning process, planning
flexibility, and innovativeness to firm performance. Journal of Business
Research, Journal of Business Research.
Joyce, & Paquin. (2016). The triple layered business model canvas: A tool to design more
sustainable business models. Journal of Cleaner Production, 135, 1474-1486.
Kalelioğlu, F., & Gülbahar, Y. (2014). The Effect of Instructional Techniques on Critical
Thinking and Critical Thinking Dispositions in Online Discussion. Journal of
Educational Technology & Society, 17(1), 248-258.
Kalkan, Bozkurt, & Arman. (2014). The Impacts of Intellectual Capital, Innovation and
Organizational Strategy on Firm Performance. Procedia - Social and Behavioral
Sciences,150, 700-707.
Paunescu, C. (2014). Current trends in social innovation research: Social capital, corporate social
responsibility, impact measurement. Management & Marketing, 9(2), 105-118.
Saebi, & Foss. (2015). Business models for open innovation: Matching heterogeneous open
innovation strategies with business model dimensions. European Management
Journal, 33(3), 201-213.
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West, J., & Bogers, M. (2014). Leveraging external sources of innovation: a review of research
on open innovation. Journal of Product Innovation Management, 31(4), 814-831.
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