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Strategic Management of Technology and Innovationon

Assignment 2{ Industry : Automobile , Corporation : onda !

Submitted To:Prof. Arun Kumar Jain

IIM Lucknow - Noida Campu

GROUP 7 : Section B

!MP"##$" %a&u' Kapoor!MP"##() Ku& Ma'ik!MP"##$* Sandeep Sin&a!MP#$#)* Nik&i' T&apar

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Based on your learning’s from SWATC case!

c"oose an industry #$refera%ly t"e one you "ad for

Assign & %ut it can %e any ot"er' and identify t"edisru$tions and discontinuities it "as undergone in

last &( years or so) Pic* u$ any large cor$oration

+it"in t"at industry and +rite "o+ it managed t"e

identi,ed disru$tions and discontinuities) W"at

+ere t"e results-

T&e Automobi'e Indutr+

&) .ntroduction T&e word automobi'e come, ia t&e renc& automobi'e from t&e Ancient/reek word 01234 5aut6, 7e'f78 and t&e Latin mobi'i 57moab'e78 meanin9 ae&ic'e t&at moe ite'f. T&e a'ternatie name car i be'ieed to ori9inatefrom t&e Latin word carru or carrum 57w&ee'ed e&ic'e78, or t&e Midd'en9'i& word carre 57cart78 5from ;'d Nort& renc&8, in turn t&ee are aid to&ae ori9inated from t&e /au'i& word karro 5a /a''ic C&ariot8

Automobi'e - An automobi'e, auto car, motor car or car i a w&ee'ed motore&ic'e ued for tranportin9 paen9er, w&ic& a'o carrie it own en9ine ormotor. Mot de<nition of t&e term pecif+ t&at automobi'e are dei9ned torun primari'+ on road, to &ae eatin9 for one to ei9&t peop'e, to t+pica''+&ae four w&ee', and to be contructed principa''+ for t&e tranport ofpeop'e rat&er t&an 9ood.

T&e automotie indutr+ dei9n, dee'op, manufacture, market, and e''t&e wor'd= motor e&ic'e. In )##$, more t&an (# mi''ion motor e&ic'e,inc'udin9 car and commercia' e&ic'e were produced wor'dwide.In )##(, a tota' of (".> mi''ion new automobi'e were o'd wor'dwide: )).>

mi''ion in urope, )".* mi''ion in t&e Aia-Paci<c %e9ion, ">.* mi''ion in t&e?SA and Canada, *.* mi''ion in Latin America, ).* mi''ion in t&e Midd'e atand ".* mi''ion in Africa.

T&e market in Nort& America and Japan were ta9nant, w&i'e t&oe in Sout&America and ot&er part of Aia 9rew tron9'+, ;f t&e ma@or market, C&ina,%uia, raBi' and India aw t&e mot rapid 9rowt&.About )# mi''ion e&ic'e are in ue in t&e ?nited State. Around t&e wor'd,t&ere were about $#D mi''ion car and 'i9&t truck on t&e road in )##(, t&e+

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burn oer )D# bi''ion ?S 9a''on 5>$#,###,### mE8 of 9ao'ine and diee' fue'+ear'+. T&e number are increain9 rapid'+, epecia''+ in C&ina and India. Int&e opinion of ome, urban tranport +tem baed around t&e car &aeproed unutainab'e, conumin9 eFceie ener9+, aGectin9 t&e &ea't& ofpopu'ation, and de'ierin9 a dec'inin9 'ee' of erice depite increain9

inetment. Man+ of t&ee ne9atie impact fa'' diproportionate'+ on t&oeocia' 9roup w&o are a'o 'eat 'ike'+ to own and drie car. T&e utainab'etranport moement focue on o'ution to t&ee prob'em.In )##$, wit& rapid'+ riin9 oi' price, indutrie uc& a t&e automotieindutr+, are eFperiencin9 a combination of pricin9 preure from rawmateria' cot and c&an9e in conumer bu+in9 &abit.

T&e indutr+ i a'o facin9 increain9 eFterna' competition from t&e pub'ictranport ector, a conumer re-ea'uate t&eir priate e&ic'e ua9e.%ou9&'+ &a'f of t&e ?S= <ft+-one 'i9&t e&ic'e p'ant are pro@ected topermanent'+ c'oe in t&e comin9 +ear, wit& t&e 'o of anot&er )##,### @obin t&e ector, on top of t&e D#,### @ob 'ot t&i decade.Combined wit& robut 9rowt& in C&ina, in )##>, t&i reu'ted in C&ina

becomin9 t&e 'ar9et automobi'e producer and market in t&e wor'd.C&ina )##> a'e &ad increaed to "E.D mi''ion, a i9ni<cant increae fromone mi''ion of dometic car a'e in )###

/) istory of Automo%ile SectorHitor+ of t&e automobi'e can be diided into a number of era, baed on t&eprea'ent mean of propu'ion. Later period were de<ned b+ trend ineFterior t+'in9, iBe, and uti'it+ preference.

In 1768, the frst steam powered automobile capable o humantransportation was built by Nicolas-Joseph Cunot

In 18!7, "ran#ois Isaac de $i%a& desined the frst car powered by an internalcombustion enine ueled by hydroen'

In 1886 the frst petrol or asoline powered automobile the (en& )atent-*otorwaen was in%ented by +arl (en&'. /his is also considered to be thefrst 0production0 %ehicle as (en& made se%eral identical copies'

At t&e turn of t&e )#t& centur+ e'ectrica''+ powered automobi'e appeared but on'+occupied a nic&e market unti' t&e turn of t&e )"t centur+.

0) 12olution of Automo%ile Sector

E.". "irst worin 2/34* )53$3 39IC:3 was built by "erdinand erbiesta "lemish member o a Jesuit mission in China around 167' It was a 6; cm-lon scale-model toy or the Chinese emperor, which was unable to carry adri%er or a passener

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E.). Nicolas-Joseph Cunot is widely credited with buildin the frst ull- scale,sel-propelled mechanical %ehicle or automobile in about 176<, he created asteam-powered tricycle'

='=' Cunot>s Car ? /he 17!!s were dominated by %arious in%entorsworin to perect the steam enine - /homas Newcomen and James att are probably the most amous o these, but there were many more' (utthe frst person to tae a steam enine and place it on a ull-si&ed %ehiclewas probably a "renchman named Nicolas-Joseph Cunot, who between176< and 1771 built a steam-powered automobile more than thirty yearsbeore the railway>s irst steam locomoti%e' Cunot>s desin was, to put

it mildly, uni@ue' /he contraption weihed about '; tons, had two biwheels in the bac and a sinle thic central wheel at the ront, and couldseat our people' /he boiler was placed well out in the ront, which madethe %ehicle e%en more fendishly diAcult to control' hile its top speedwas meant to be about f%e miles per hour, it ne%er e%en ot close to thatast in practice'

='B' In 18!7 Nicphore Nipce and his brother Claude probably created theworld>s frst IN/3$N4: C5*(D2/I5N 3NEIN3 which they called a)yrolophore, but they chose to install it in a boat on the ri%er 2aone in"rance'

=';' In 187<, +arl (en& was ranted a patent or his frst enine, which hadbeen desined in 1878' 9is frst *otorwaen was built in 188; in*annheim, Eermany' In 4uust 1888 (ertha (en&, the wie o +arl (en&,undertoo the frst road trip by car, to pro%e the road-worthiness o herhusband>s in%ention' 4 photoraph o the oriinal (en& )atent-*otorwaen, frst built in 188; and awarded the patent or the concept

='6' In No%ember 1881, "rench in%entor Eusta%e /rou% demonstrated a

worin three-wheeled automobile powered by electricity at theInternational 3Fposition o 3lectricity, )aris='7' aimler and *aybach ounded aimler *otoren Eesellschat G*EH in

Cannstatt in 18<!, and sold their frst automobile in 18< under the brandname, aimler' It was a horse-drawn staecoach built by anothermanuacturer, that they retroftted with an enine o their desin In 18<!,mile :e%assor and 4rmand )eueot o "rance bean producin %ehicleswith aimler enines, and so laid the oundation o the automobileindustry in "rance'

='8' In 18<=, the frst runnin, asoline-powered 4merican car was builtand road-tested by the uryea brothers o 2prinfeld, *assachusetts'/he frst public run o the uryea *otor aon too place on 12eptember 18<=, on /aylor 2treet in *etro Center 2prinfeld

='<' +arl (en& patented the three-wheeled )atent *otorwaen on January<, 1886 and produced it as the frst commercially a%ailable automobilerom 1886 throuh 18<=' 9e ollowed this initial success with theintroduction o the (en& elo model o 18<B' /he elo and the uryea*otor aon, patented in 18<;, are credited as the frst standardi&edcars' (en& 0elo0 model G18<BH by Eerman in%entor +arl (en& enteredinto an early automobile race as a moto-cycle'

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='1!' In 18<6, (en& desined and patented the frst internalcombustion Kat enine, called boFermotor' urin the last years o the nineteenthcentury, (en& was the larest automobile company in the world with ;7units produced in 18<< and, because o its si&e, (en& L Cie', became a

Moint-stoc company'='11' In 18<7, $udol iesel built the frst iesel 3nine' 2team, electric, and

asoline-powered %ehicles competed or decades, with asoline internalcombustion enines achie%in dominance in the 1<1!s

='1' /he "ord *odel / is an automobile that was produced by 9enry "ord>s"ord *otor Company rom 5ctober 1, 1<!8, to *ay 7, 1<7' It isenerally rearded as the frst aordable automobile, the car that openedtra%el to the common middle-class 4merican, some o this was because o "ord>s eAcient abrication, includin assembly line production instead oindi%idual hand cratin' /he "ord *odel / was named the world>s mostinKuential car o the !th century in an international poll'

='1=' /he $olls $oyce 2il%er Ehost o 1<!6 was a siF cylinder car that stayedin production until 1<;' It represented the best enineerin and

technoloy a%ailable at the time and these cars still run smoothly andsilently today' /his period mared the end o the beinnin o theautomobile'

='1B' *ass production O /he lare-scale, production-line manuacturin oaordable automobiles was debuted by $ansom 5lds in 1<! at his5ldsmobile actory located in :ansin, *ichian and based upon theassembly line techni@ues pioneered by *arc Isambard (runel at the)ortsmouth (loc *ills, 3nland in 18!' /he assembly line style o mass

production and interchaneable parts had been pioneered in the D'2' by/homas (lanchard in 181, at the 2prinfeld 4rmory in 2prinfeld,*assachusetts' /his concept was reatly eFpanded by 9enry "ord,

beinnin in 1<1B' O 4s a result, "ord>s cars came o the line in fteen-minute inter%als, much aster than pre%ious methods, increasin producti%ity eihtold Gre@uirin 1';-man- hours beore, 1-hour ==minutes aterH, while usin less manpower' It was so successul, paintbecame a bottlenec' 5nly Japan blac would dry ast enouh, orcin thecompany to drop the %ariety o colors a%ailable beore 1<1B, until ast-dryin uco lac@uer was de%eloped in 1<6' /his is the source o "ord>sapocryphal remar, 0any color as lon as it>s blac0' In 1<1B, an assembly line worer could buy a *odel / with our months> pay'

='1;' "ord>s compleF saety procedures Pespecially assinin each worerto a specifc location instead o allowin them to roam aboutP

dramatically reduced the rate o inMury' O /he combination o hih waesand hih eAciency is called 0"ordism,0 and was copied by most maMorindustries' O /he eAciency ains rom the assembly line also coincidedwith the economic rise o the Dnited 2tates' /he assembly line orcedworers to wor at a certain pace with %ery repetiti%e motions which ledto more output per worer while other countries were usin less

producti%e methods' O In the automoti%e industry, its success wasdominatin, and @uicly spread worldwide seein the oundin o "ord

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"rance and "ord (ritain in 1<11, "ord enmar 1<=, "ord Eermany1<;Q in 1<1, Citroen was the frst nati%e 3uropean manuacturer toadopt the production method' 2oon, companies had to ha%e assemblylines, or ris oin broeQ by 1<=!, ;! companies which did not, haddisappeared

='16' /oyota introduces cars with autopilot systems='17' 9ybrid Cars='18' 2el-ri%en Cars='1<' 4lternati%e uel CNE, :)E='!' 3lectric cars /esla *otors

3) 4isru$tions and discontinuities su5ered %y t"e automo%ile industry

In t&e pat E# +ear, t&e motor e&ic'e &a under9one a remarkab'e eo'ution. T&e perona' paen9er e&ic'e i now t&e mot &i9&-tec& purc&ae mot&oue&o'd wi'' eer make: toda+ car contain more com$uter c"i$s and lines

of soft+are code t&an t&e <rt e&ic'e 'aunc&ed into pace.

6ain reason of c"ange:

" . /'oba'iBation and enironmenta' iue .

) . Traditiona' carmaker are facin9 eriou prob'em wit& ta9natin9 or s"rin*ing

core mar*ets, w&i'e new market wit& new p'a+er are on t&e rie.

E . Traditiona' combution en9ine are bein9 c&a''en9ed and new 'ow- or Bero-emiion o'ution are maturin9 and bein9 9radua''+ introduced.

er increain9 demand of cutomer , c&an9in9 /oernment re9u'ation andCompetition and preence of tec&no'o9ie at muc& c&eaper price , &ae made t&eautomobi'e indutr+ to &and'e t&e be'ow A9enda in diGerent wa+

W"at Customer +ant W"at 6anufacture +ant W"at Go2ernment

+ant

Hi9& e&ic'e ua'it+ Maintain or reduce price :conom+ of Sca'e

Increae urbanCon9etion 'imitin9 t&eue of car in man+'ar9e citie

%e'iabi'it+ nironment Concern :reduce miion of C;) More aggressivegovernment fuel economy

standards

Hi9& Safet+ Standard More adanced interna'combution en9ine

more stringent greenhousegas emissions rules

?ti'it+ A'ternatie Source of fue'uc& a io ue' , So'ar or

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H+dro9en

Com$lementary resources

& ) Po+ertrain and uels :

/ ) 6aterials and orming

E. 1lectronics! Soft+are and Controls

'ectronic are a part of near'+ eer+ ma@or e&ic'e +tem, inc'udin9 t&oe t&at aremec&anica' in nature e'ectronic content i particu'ar'+ critica' for enor andactuator, powertrain and tranmiion contro' 5epecia''+ a e'ectric drie +tembecome more prea'ent8, e&ic'e afet+ +tem, infotainment +tem and e&ic'ecommunication, a we'' a t&e oera'' e&ic'e e'ectrica' arc&itecture. T&rou9&power e'ectronic, mart enor, e'ectronic contro' unit 5C?8 and ot&er

component, e&ic'e e'ectronic contribute i9ni<cant'+ to a e&ic'e improed fue'econom+ and reduced emiion

() o+ onda .denti,ed 4isru$tion and 4iscontinuationCor$oration 8 onda

& ) PROC1SS .99OAT.O9 : /'oba'iBation trate9+ of bui'din9 factorie around t&e wor'd t&at wou'dmeet t&e need of 'oca' cutomer . "## actorie in EE countrie

T&e mot notewort&+ c&an9eoccurrin9 wit&in t&eautomotie indutr+ i t&ereemer9ence of t&e e'ectrice&ic'e 58. T&e dee'opmentof a'ternatie form of ener9+tora9e 5primari'+ batterie8 irapid'+ pro9rein9, but t&einterna' combution en9ine5IC8 ma+ remain t&e

T&e need to make e&ic'e 'i9&terwit& t&e intent of improin9e&ic'e fue' econom+ i t&eprimar+ drier of dee'opment andc&an9e in t&e rea'm ofautomotie materia'. %ecentimproement in e&ic'e 'i9&twei9&tin9 &ae primari'+ beenac&ieed t&rou9& ue of adanced9rade of tee', t&e dominantmateria' in t&e modernautomobi'e. T&e dee'opment ofnew a''o+ wit& increaedtren9t&-to-wei9&t ratio,combined wit& t&e re'atie'+ 'ow

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/ ) PRO4UCT .99OAT.O9 Creation of New H+brid e&ic'e &ow it nironmenta' ConcernIntroduced fue' eOcient H+brid e&ic'e Ini9&t

Mi'ea9e D" Mi'e per 9a''on in cit+ D$ Mi'e per 9a''on onHi9&wa+

Ty$e of .nno2ation %adica'

">$D irt ma produced * c+'inder care

">$> -Q irt compan+ to ue So'ent free paint

">>D Introduced So'ar power Car

">>$ Comp'ete 'ectric e&ic'e

">>> irt to introduce H+brid Car in ?S .H+brid e&ic'e for ue' eOcient car rat&er t&an emiion contro'.

)##) Created <rt fue' ce'' e&ic'e

)## Honda CR became er+ <rt fue' ce'' e&ic'e to be o'd

Com$etence 4estroying .nno2ation Honda ue' ce'' tec&no'o9+ car i competence detro+in9 , a it wi'' make<rt 9eneration H car obo'eteue' tec&no'o9+ wi'' be tec&nica' and radica' innoation for Honda

Strategies:

nterprie Strate9+ Hi9& ua'it+ product at reaonab'e price . Takin9 new c&a''en9e wit& t&e puruit of Initiatie,

Tec&no'o9+ and ua'it+,

Corporate Strate9+ Superior ue' econom+ , ;ptimum afet+ , riin9P'eaure

uine Strate9+ % S+tem U Approac& : urabi'it+ , %e'iabi'it+ ,ocu oundation

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U imenion: conomica' ,nironmenta' , Socia' Iue

;perationa' Strate9+ : iide D adminitratie re9iona' 9roupPurue independence of 'oca' mana9ement and

a'e operation

;perate under conduct 9uide'ine VQ keepea'uatin9 and rik mana9in9

Hi9& 'ee' of tranparenc+

Indiidua' Strate9+ T&e T&ree Jo+U T&e Jo+ of bu+in9U T&e Jo+ of Se''in9 WNot on'+ re'ation&ip , ut fee'

pride b+ poitie re'ation&ip X U T&e Jo+ of Producin9 : Pride in eFceedin9 t&ecutomer eFpectation

SWOT analysis :

O94A APPROAC

Strengt"s Wea*nesses

". ieri<ed product portfo'io

). Hu9e inetment in %

E. Stron9 brand ima9e

*. Automobi'e market &are in wor'd

". Product reca''

). !eak poition in uropeautomotie market

E. ecreain9 a'e

O$$ortunities T"reats

". Increain9 fue' price

). Poitie out'ook for 9'oba' automobi'eindutr+

E. /rowin9 9'oba' demand for

enironmenta''+ friend'+ e&ic'e

*. /rowt& t&rou9& acYuiition

". Intene competition

). ecreain9 fue' price

E. %iin9 raw materia' price

*. Natura' diater

. iruptie tec&no'o9+

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Colla%oration: Honda c&ooe not to co''aborate and 'icene it tec&no'o9+ toot&erSegment 8 ; Honda motor &a a tron9 marketin9 miF becaue of it d+namic ueof t&e product marketin9 miF concept

Critica' Succe actor -Q Safe , et ua'it+ , et ue' conom+

Results

& ) Colla%oration :

Honda c&ooe not to co''aborate and 'icene it tec&no'o9+ to ot&er , &aei9ni<cant'+ reduced it market &are compared to competitor 'ike To+ota in H+bridcar market .

To+ota t&rou9& co''aboration &ae 9ot more "### patent re9itered

/ ) 1lasticity of Scale for y%rid :

Honda &ae initia''+ 'ot $### Z per car it produced. A'o t&e Hi9& cot of H+brid .InuOcient o'ume to ac&iee economie of Sca'e .Coner9ence of Sin9'e &+brid tandard cou'd &e'p in ac&iein9 econom+ of ca'e

0 )Com$lementary tec"nology :

ue to H+brid Comp'eFitie, Comp'ementar+ tec&no'o9ie uc& a tora9e andConerion +tem , ti'' &ae room of improement .

3 ) S Cur2e Analysis : Com$etence 4estroying .nno2ation

Honda ue' ce'' tec&no'o9+ car i competence detro+in9 , a it wi'' make <rt9eneration H car obo'eteue' tec&no'o9+ wi'' be tec&nica' and radica' innoation for Honda

( ) Tec"nology 4i5usion : Adoption i 'ow for H+brid car uer a mot of t&emti'' t&ink t&at H+brid car need eFterna' ource of c&ar9in9 and are not aware ofpara''e' tec&no'o9+ ued

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< ) O2er All 6ar*et s"are

It &ard to a+ w&at i market 'imit of H+brid tec&no'o9+, a new tec&no'o9+ 5 ue'Ce'' 8 are a'read+ t&ere in market . !e can a'o a+ t&at H+brid tec&no'o9+ i @utbrid9e between traditiona' combution en9ine and ue' ce''

D. How t&e indutr+ tranformed becaue of t&e dicontinuitie(. %eference

". T&e Auto Indutr+ Tranformation: imenion of C&an9e W riin9!orkforce C&an9e reportX

). IH Automotie 'o9 : Automotie &+brid mode' count continue torie, but a'e dont keep pace

E. Honda Cae : C&apter E Strate9+ mana9ement of tec&no'o9+innoation , Me'ia A Sc&i''in9

*. Tranportation ep'o+ment CaebookAn Ana'+i of t&e Life C+c'e ofH+brid 'ectric Car : !ikibook

. our iruptie Innoation Strate9ie for uine /rowt&, + SorenKap'an, P&., Mana9in9 Principa', Innoation Point

D. % Sc&u'tB, et a'., Meta''ic Materia' Trend for Nort& American Li9&te&ic'e, )##>

(. !ikipedia$. &ttp:www.unido.or9<'eadminuer[mediaPub'icationPub[free/'ob

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