Scenario
You work as a middle manager for one of the top U.S. producers of luxury and mass-market automobiles and trucks. You are now leading a cross-functional team to move forward with the company initiative. To remain a viable competitor and meet the demands of consumers’ desire for technology, the company’s chief technology officer (CTO) has decided to implement the internet of things (IoT) into its product line.
In Milestone One, you and your cross-functional team looked at risks and benefits of each innovation option, competitors in the market, and the company’s internal capability for moving forward with the innovation. After doing this analysis, you presented your recommendation to various stakeholders about how to proceed. You chose one of the following:
Design a completely new product line, based on the recent technology (discontinuous innovation)or
Add recent technology features into one model and then incrementally into the broader product line (incremental innovation)
The CTO has accepted your recommendation. Now you are ready to develop a strategy for taking the innovation to market. In order to develop a strategy, you will need to look at your competitors’ relative strengths in the current marketplace, to understand how the company compares to your competitors, and to identify the total market and the market’s annual growth rate. Finally, you also need to share your thoughts on how to respond to changes in business conditions. Although no one can predict what is going to happen, it is important to think about how flexible your plan is in order to meet unexpected conditions.
Prompt
Using the recommendation you provided in Milestone One, develop a strategic plan to implement the innovation and gain competitive advantage. Use the Sales Forecast, Comparative Growth Data and Comparative Operating Statistics to complete this milestone.
Strategic Plan
Analyze the competitors’ relative strengths in the marketplace.
Write a short paragraph describing the growth rate of each competitor. You will get the solution from the comparative growth data sheet.
How much of the market does each competitor now own? Do you see a trend of gaining or losing market share? Present your findings using Power BI.
Perform your analysis for the cars and trucks category. Create pie charts using columns C and F from the comparative growth Excel sheet in Power BI.
Perform your analysis for the connected cars and trucks category. Create pie charts using columns H and K from the comparative growth Excel sheet in Power BI.
Determine each competitor’s financial strength by looking at their comparative operating data.
Explain how your company’s market share compares to your competitors’.
Is your company gaining or losing market share? Expand on the analysis done in Task 1 above and explain the major factors behind the change in market share.
What is your company’s growth potential in the industry?
How do your company’s financials look compared to your competitors’?
Identify future potential total available market (TAM) and growth for each chosen product/service and technology.
What is the TAM for cars and light trucks?
What is the TAM for IoT-connected cars and light trucks?
What is the projected compound annual growth rate (CAGR) for cars and light trucks?
What is the projected CAGR for IoT-connected cars and light trucks?
Identify the fastest-growing competitor.
Identify ways to adjust if business conditions change.
What can you do if your customers are slow to respond (buy) the innovation?
What can you do if one competitor is overtaking all the others, including your company?
Describe the steps your company needs to take from concept outline to launch. Consider your learning from the previous two modules to ensure the steps are easy to understand for your team.
What is the size of development that will be required?
Full Answer Section
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- Luxury Trucks: Competitor G has shown substantial growth in the past few years. Competitor H has minimal growth.
- Mass-Market Trucks: Competitor I experiences fluctuating growth, with a recent upward trend. Competitor J exhibits consistent growth, although at a lower rate than Competitor I.
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Market Share Analysis (Power BI Pie Charts):
- (Cars & Trucks): [Insert Power BI pie charts here showing market share for each competitor based on columns C and F from the Comparative Growth Data sheet. Example description below.]
- Luxury Cars: Competitor A holds the largest share, followed by Competitor B. Competitor C has a significantly smaller share.
- Mass-Market Cars: Competitor D dominates the market. Competitor E and F hold smaller, relatively equal shares.
- Luxury Trucks: Competitor G holds a strong majority of the market share. Competitor H has a much smaller share.
- Mass-Market Trucks: Competitor I and J share the market, with Competitor I holding a slightly larger portion.
- (Connected Cars & Trucks): [Insert Power BI pie charts here showing market share for each competitor based on columns H and K from the Comparative Growth Data sheet. Example description below.]
- Luxury Cars: Competitor B has the largest share in this emerging segment, followed by Competitor A. Competitor C lags behind.
- Mass-Market Cars: Competitor D also leads in connected cars, although their share is smaller than in the overall market. Competitor E and F are beginning to make inroads.
- Luxury Trucks: Competitor G is also the leader in connected luxury trucks.
- Mass-Market Trucks: Competitor I is the clear leader in connected mass-market trucks.
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Financial Strength (Comparative Operating Data): [Insert analysis of Comparative Operating Data. Example below.]
- [Company Name]: [Analysis of key financial metrics, e.g., revenue, profit margin, debt-to-equity ratio, compared to competitors. Highlight strengths and weaknesses.]
- Competitor A: [Similar analysis]
- [Repeat for all competitors]
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Company Market Share & Growth: [Analysis of company's market share trend. Example below.]
- [Company Name]: [Description of current market share and trend (gaining, losing, or stable). Explanation of factors contributing to the trend, referencing the Power BI charts and growth data. For example: "Our company currently holds X% of the overall car market, a slight increase from last year. This growth is primarily attributed to increased sales in the mass-market car segment, where we successfully launched a new fuel-efficient model. However, our share in the luxury car segment has been declining due to increased competition from Competitor B, who has aggressively marketed their new connected car features."]
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Company Growth Potential: [Assessment of growth potential. Example below.]
- [Company Name]: [Analysis of growth potential, considering market trends, competitive landscape, and company capabilities. For example: "Our company has significant growth potential in the connected car market. By strategically integrating IoT features into our existing models and leveraging our strong brand reputation, we can capture a larger share of this rapidly expanding segment."]
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Company Financials: [Analysis of company's financials compared to competitors. Example below.]
- [Company Name]: [Comparison of key financial metrics to competitors. Highlight areas of strength and weakness. For example: "Our company's profitability is slightly lower than Competitor D's, primarily due to higher manufacturing costs. However, our debt-to-equity ratio is favorable, giving us financial flexibility to invest in innovation and expansion."]
2. Future Potential TAM and Growth:
- Cars & Light Trucks TAM: [Insert TAM value from provided data.]
- IoT-Connected Cars & Light Trucks TAM: [Insert TAM value from provided data.]
- Cars & Light Trucks CAGR: [Insert CAGR value from provided data.]
- IoT-Connected Cars & Light Trucks CAGR: [Insert CAGR value from provided data.]
3. Fastest-Growing Competitor: [Identify the fastest-growing competitor based on the provided data.]
4. Adjusting to Changing Business Conditions:
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Slow Customer Response:
- Targeted Marketing: Focus marketing efforts on early adopters and tech-savvy consumers.
- Price Incentives: Offer limited-time discounts or promotions to stimulate demand.
- Educational Campaigns: Highlight the benefits of connected car features through online content, test drives, and partnerships with influencers.
- Refine Product Offering: Gather customer feedback and make adjustments to the features or pricing based on market response.
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Competitor Overtaking:
- Accelerated Innovation: Increase investment in R&D to develop next-generation connected car technologies.
- Strategic Partnerships: Explore partnerships with technology companies or other automakers to gain access to new technologies or expand market reach.
- Aggressive Marketing: Launch a targeted marketing campaign to differentiate our offerings and highlight our unique value proposition.
- Cost Optimization: Identify opportunities to reduce manufacturing costs to improve competitiveness.
5. Steps from Concept to Launch:
- Market Research & Customer Insights: Conduct thorough market research to understand customer needs and preferences regarding connected car features.
- Feature Prioritization & Design: Prioritize the most valuable IoT features based on market research and technical feasibility. Design the user interface and experience for seamless integration.
- Technology Selection & Development: Select appropriate IoT technologies and develop the necessary software and hardware components.
- Integration & Testing: Integrate the IoT features into the chosen model and conduct rigorous testing to ensure reliability and security.
- Marketing & Communication: Develop a comprehensive marketing and communication plan to highlight the new features and their benefits to target customers.
- Sales & Distribution: Train sales staff on the new technologies and ensure smooth integration with existing sales and distribution channels.
- Post-Launch Monitoring & Feedback: Monitor customer feedback and usage data to identify areas for improvement and plan future updates.