thoughts on the recommendation for incremental or discontinuous innovation
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Michael Smith
Module One Memo
December 10, 2023
Professor Paul Markham
Memo: IoT Vehicle
Henry Ford famously stated in, My Life and Work (1922). “Any customer can have a car painted any colour that he wants so long as it is black.” Henry Ford was able to many first in bringing the vehicle to the public. He was able to introduce an assembly line which led to lower costs and made the vehicle more affordable for families to own. History shows other vehicle manufacturers have come and go and Ford did not own the entire market. Brands such as DeLorean and Pontiac have come and go in my lifetime. Telsa is a strong leader in the electric car industry; however, others have attempted to break in and be successful. Feasibility of the Product
IoT is real and the use of IoT is becoming more and more common in high end vehicles and even entry level vehicles sensors such as back up cameras, Front cameras to help keep the vehicle between the lines, to Apple Car play and Google car play are common ways to connect your cellphone to your call. Vehicles have advanced sensors and computers which measure items
such as oil pressure, transmission temperature, and tire pressure. According to an article from Tyler, 2016, in the past three decades sensors have become increasingly integrated into automobiles. Currently, a vehicle as 50-100 sensors, and it is expected to grow to over 200 over the next few years. The need exists to help make the product stand out and can lead to improved
driving conditions on the road. Consumers can take advantage of insurance breaks as well as take
advantage of features they see value in to use during their daily commutes.
The size of the market is huge and with the added value of IoT the customer can see value in a vehicle having the ability to park itself, for example. Our task will be to look at all the current IoT advances and weigh the value of the function along with the cost to implement to the desired target market of each product line. The objective is to stand out with innovation and have
cutting edge technology which in turn will drive a final product suite which will satisfy the market. Winning Market Share
We will position our products to have a competitive edge and unique offering. We want to target and integrate through an application on a smartphone that allows a user to remotely start
their vehicle. The vehicle will be able to talk to the owner and help with preventative maintenance and when the user does the maintenance it will extend the life of the vehicle. We will want to expand the capabilities of the vehicle to help the driver navigate, find the cheapest gas station, locate specific restaurants such as Texas Roadhouse or even Starbucks. Have issues finding your vehicle in a large parking lot we will have a way for the user to locate the vehicle. As mentioned before, we will expand into semi-autonomous vehicles. It is estimated that the market for IoT-connected cars will grow from $54 billion in 2019 to over $510 billion by 2030 at
a 25% compound annual growth rate (CAGR) (Meola, 2020). This compares with an overall industry growth of 4.1% (The Global Automotive Motors Market Size Is Projected to Grow from
USD 20,321 Million in 2020 to USD 25,719 Million by 2025, at a CAGR of 4.8%, 2020).
We expect our competitors to follow suit and attempt to copy. We want to own the patents and have exclusive partnerships with our vendors. We want to stay at the cutting edge of innovation and lean into feedback from our customers on what they like, what can be improved, and what they want in their vehicles. The best way to understand the market is to do a competitive analysis and see what our competitors are offering when we compare similar products which target the same segments of the market. The goal is to understand the features which drive their sales and look for opportunities our products may be missing or not available. Potential Benefits to the Company There is always risk evolving when launching new products such as IoT in connected vehicles. For the overall product to be profitable and an acceptable risk for the company we will need to see an increase in sales of the product or an increase in the price point of the product with
sales not decreasing. Launching the product does make sense when looking at the growth opportunities and if our company does not look at emerging technologies and advances, we could be left behind or even worse must spend years having to catch up with competitors. Henry Ford experienced this when he did not want to adapt and change with time as he held firm to his Model T’s and Model A’s and their design. Offering other colour options leads to consumers wanting other options as an example of choice in the marketplace. The launch of IoT makes sense for our company and fits the overall growth goals and takes additional market share from our competitors. By showing value to consumers, shareholders, and increasing market share while increasing the overall profitability of the company will lead to senior management supporting this project.
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