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Part Three: Organizational Structure and Culture Report Based on your analysis of the organization’s structure and culture, share recommendations for changing its structure and culture to be more conducive to innovation. Describe the current organizational structure’s impact on innovation. How does your company’s organizational structure support innovation? How effective is the current structure in addressing changes in market demand? Recommend changes to the current organizational structure. How does the new structure support innovation? How will your recommended changes make the enterprise more responsive to market demand? Explain how organizational changes support a culture of innovation. In what ways does the current culture work against innovation? How does the new structure support a culture of innovation? III. Organizational Structure and Culture Report   Submit a 5- to 8-page Word document using 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations. Incremental or Discontinuous Innovation MBA 580 By: Johnathon Blake Davis Option A and B Business problem: Connected cars will become of greater demand in the future. Option A: Incremental Innovation Option B: Discontinuous Innovation Option A Two benefits of option A: Increase product diversification Protect the current business model Two risks of option A: Lack of coordination Time risk/reward related to demand Option B Two benefits of option B: - Securing the competitive advantage Increased market share/profitability Two risks of option B: Unknown demand of the new product Production cost that could potentially outweigh profit Competitors BMW: navigation, emergency services, smart house connectivity Functionality emphasis: vehicle control/safety, IFTTT-customized applications and IoT connectivity, LTE Toyota: navigation, emergency services, social media Functionality emphasis: vehicle control, social media, safety, entertainment, navigation, 5G Volkswagen: navigation, emergency services, consumer orders, maintenance status Functionality emphasis: vehicle control, maintenance, in-car consumer experience Competitors BMW: Projection of fully autonomous vehicles in the next 12 years. -5-10-year plan: fully integrated information system, semi-autonomous driving, connection to traffic information systems, introduction of fully autonomous driving early 2030s Toyota: Social media in Japan and expectation of of implementing in US markets with 5G capability. -5-10-year plan: fully integrated information system; semi-autonomous driving; connection to traffic information systems, expanded social media, and communications; consumer services; maintenance; fully autonomous vehicle early 2030s Volkswagen: Same forecast as us. They have partnered with Microsoft to try and ease ahead of competition. -5-10-year plan: fully integrated information system; semi-autonomous driving; connection to traffic information systems; connectivity with smart home; fully autonomous vehicle early 2030s Partial Gap Analysis We have some connectivity regarding the technology – driver apps, OnStar, detect accidents, and alert first responders. Most of the technology will need to be purchased to gain market share. The 10 best automotive technologies of 2021: Advanced driver assistance, emergency braking, mobile app connection, teen driver, exit warnings, wireless charging, 360-degree camera, video rearview mirror, stole vehicle software, blind-spot monitor (https://www.kbb.com/awards/best-car-technologies/) Partial Gap Analysis Available for purchase: Wireless charging 360-degree camera Video rearview mirror Navigation Wireless Bluetooth connectivity Parking sensors Push to start button Vehicle start from remote key Apple Carplay Innovation Approach The Incremental Innovation approach would be the best option for the company moving forward. Reason 1: Introducing a new product into the automotive industry isn’t a good idea. Reason 2: The reward outweighs the risk. Sales forecast/financial snapshot Sales: Gross Margin: Option A - Sales Sales Traditional 183.29999999999998 188.71249999999998 194.26526789999994 199.95984500569995 205.79753408935821 211.77936279123503 217.90604290767092 224.17792513444687 230.59494878970997 237.15658599184798 244.08999999999997 Sales Connected 3.8 4.1 875999999999998 5.2344999999999997 5.7684189999999997 7.2105237500000001 9.0131546875000002 11.266443359375 14.083054199218751 17.603817749023438 22.004772186279297 27.505965232849121 Option A - Gross Margin Gross Margin Traditional 27.494999999999997 28.306874999999994 29.139790184999988 29.993976750854991 30.86963011340373 31.766904418685254 32.685906436150638 33.626688770167029 34.589242318456492 35.573487898777195 36.613499999999995 Gross Margin Connected 0.79799999999999993 0.87939599999999996 1.0992449999999998 1.2113679899999998 1.5142099874999999 1.892762484 3749999 2.3659531054687499 2.9574413818359373 3.6968017272949218 4.6210021591186523 5.7762526988983156 References January 1, 2021. KBB Editors. https://www.kbb.com/awards/best-car-technologies/ Carroll, Andrew. Oct 23, 2019. https://innotechtoday.com/top-10-connected-car-features/ Hard, Andew. Nov 19, 2017. https://www.digitaltrends.com/cars/10-car-technologies-to-be-thankful-for/ Milestone Two There are three rivals of the organization and those include VW, BMW, and Toyota. The connected cars, as well as trucks of Toyota's market share, is 8.90 percent and it grows by 24.80 percent in the next ten years. Whereas, cars and trucks market share is 8.53 percent which is rising by 3.90% in the coming decade. As a result, Toyota's IoT vehicles are developing much quicker than simple vehicles in general (Wilbur & Farris, 2014). The second competitor is VW. The cars and light trucks of VW market share is 8.76 percent and its CAGR is 4.30%. Alternatively, connected vehicles market share is 15.50% and is grown by 23.20 percent. So, the connected cars and trucks of the VW market share are growing faster as compared to the light trucks and cars. Moreover, connect trucks and cars of VW is the huge source of profitability of the company. The third competitor of the company is BMW. BMW's current market share of light trucks, as well as cars, is 3.91 percent and it grow by 3.70% over a decade. However, the current market of IoT cars, as well as trucks, is 3.00 percent and it grows by 25.50 percent over the next ten years (Aobdia & Shroff, 2017). So this analysis shows that BMW connected cars and trucks are growing by the highest percentage over the ten years. Moreover, as a consequence, the IoT- vehicles of BMW are expanding as well as attracting more customers and markets, it is also getting the most competitive advantage. VM's sales is $282.9 billion as well as its operating profit and net income is 20.5 billion and 16.1 billion dollars, respectively. Nevertheless, by looking at the balance sheet of the VW company, its total assets are 590.6 billion dollars and its liabilities are 443.2 billion dollars which makes the 147.4 billion dollars' total equity. Furthermore, the total number of employees that work in the VW company is three hundred and four thousand, one hundred and seventy-four (Nishikawa, Kamiya, & Kawanishi, 2016). The second competitor is BMW. The number of people employed at BMW is 133,778. The total revenue of the company is 126.1 billion dollars, whereas, its net income and operating incomes are 6.1 billion dollars and 9 billion dollars, respectively. On the other hand, its assets worth is 275.9 billion dollars and total liabilities is 203.4 billion dollars, so the equity of BMW is 72.5 billion dollars. The third competitor of the company is Toyota. The total revenue, operating income, and net income of Toyota are 275.4 billion dollars, 22.5 billion dollars, and 19.7 billion dollars, respectively (Cordazzo, 2013). However, the total equity of the company is $190.8 billion and the number of people employed is 359,542. Therefore, this statement states that the financial position of Toyota is the strongest amount all competitor and company because its income and equity is high. Furthermore, it has more employees which show that Toyota company business is huge (Bataineh & Rababah, 2016). By analyzing the growth data of the company, we conclude that due to IoT-connected trucks and cars, the company is gaining market share. However, due to cars and light trucks, it is losing its market share. The major factor behind the change in the company's market share is customer preferences. Now customers prefer the drive those cars and trucks that have more sensors and technology, which positively influence the connected trucks as well as cars of the market share (Marasco, Picucci, & Romano, 2016). Another factor that positively influences the market share of connected cars and trucks is strengthening the relationships with the customer. As the company invest in the R&D process and know that strong customer relationship benefits the company as well as increase the market share. Therefore, the company is likely to know about the customer desires of new products and manufacture that product which strengthens the company's relationship with its customers. Therefore, customer preferences and strong relationship with customer plays a vital role in changing the market share of connecting cars as well as light trucks (Rahimi & Kozak, 2017). By comparing the company's growth potential with its competitor, in comparison to VW or Toyota, the company's IoT vehicle profitability market is huge. However, the company's IoT vehicles profitability market, is low in comparison with BMW. The revenue of the organization is $187.1 billion, whereas its net income and operating income, is $0.9 billion and $5.7 billion, respectively (Overby & Lee, 2006). However, the net income of the company is less than its competitors (BMW, Toyota, and VW). On the other hand, the total worth of the company's assets is three hundred and ten billion dollars as well as its liabilities are $270.2 billion. Due to this, the organization equity is $39.9 billion. The TAM, as well-referred to as total available market, refers to the revenue option accessible to a service or product if it achieves 100 percent share. It aids in determining how much effort as well as funding a company or person should place into the innovative enterprise line (Kenrick, Svabova, & Nica, 2019). The TAM for the light trucks and cars of Toyota is 275.40 billion dollars. Whereas, the TAM for the light trucks and cars of the company is 187.10 billion dollars. Moreover, the Total-available-market for VW and BMW is 282.90 billion dollars and 126.10 billion dollars, respectively. The TAM of connected trucks, and cars for the company, is $3.83 billion. However, the three rivals are VW, Toyota, and BMW. The first competitive rival is BMW, as well as its TAM for IoT cars and light trucks is $1.62 billion (Agnolucci, 2007). Additionally, another rival of the organization is Toyota. TAM for connected trucks and cars of Toyota is $4.80 billion. Furthermore, another rival of the organization is VW as well as its total-available-market for IoT light trucks and cars is $8.36 billion. CAGR refers to average annual growth of an invested capital over a time period greater than 1 year. The CAGR of the company's light trucks as well as cars over the 10 years is 3.10 percent (Mishra, Pandey, & Verma, 2018). However, the three competitors are VW, Toyota, and BMW, and its CAGR of cars, as well as light trucks over the ten years, are 4.30 percent, 3.90 percent, and 3.70 %, respectively. Over the next 10 years, the anticipated CAGR for connected cars and trucks was indeed 10.20 percent (Hamilton-Basich, 2021). BMW's connected vehicles and trucks are expected to grow at a rate of 25.50 percent. Furthermore, Toyota's projected CAGR for connected automobiles is 24.80 percent, while VW's is 23.20 percent. After comparing the connected cars and trucks CAGR as well as projected CAGR of simple cars and connected cars and trucks of three rivals, we concluded that the fastest-growing competitor of the company is VW because of its market share, TAM, and CAGR, when compared to its rivals as well as the corporation, it is greater. If the customer of the organization is slow to buy (respond) the innovation, then the company needs to change its marketing strategy. Because marketing strategy of the company plays a vital role in changing the buying decision of the customer. As the company is producing IoT-connected cars as well as lights trucks, so it needs to utilize the most effective marketing strategies (Sudha & Sheena, 2017). Therefore, the company needs to target those right individuals with the automotive campaigns. Make a different segment for the audience, as well as run separate marketing campaigns for all. The social media that can be used in the marketing campaigns are Twitter, Facebook as well as Instagram. If the competitor of the company overtakes the company as well as other competitors, then the company needs to offer a competitive price to its customers. Because one of the effective ways to defeat the competitor is by offering affordable prices (Kim, Lee, & Roehl, 2018). When companies more focus on the existing rate of the market for a product then they can set the price within the competitor price range. The development size would be high because the company needs to establish an innovative product and that needs research and development too. The company will need additional personnel as well as capital because when the company is choosing incremental innovation then it needs to add innovative feature in the existing product or technology that attracts the customers (Rask & Günzel-Jensen, 2019). For add new features in product, the company needs to invest a high amount of capital in R&D. Furthermore, it also required additional personnel that will make the new product according to the customer needs. For adding feature and launching a product, the company will take one year. To begin with the research and development, it will take two months to understand the wants and requirements of the customer through surveys and questionnaires. After R&D, the company will make changes in the product as per the demand of the customers. This process will take one month. In addition, the company will decide on target customers because if the company does not decide who they are targeting then it negatively influences their marketing campaign (Hermawan, 2018). Moreover, after deciding the target market, it will decide the marketing channels. After that, it will finalize the launch of its new product and announce the final date. In between this, the company will share the information related to the product and launch its new product. Furthermore, the company will evaluate the product's success through its sales in the first month. References Agnolucci, P. (2007). Economics and market prospects of portable fuel cells. International Journal of Hydrogen Energy, 4319-4328. Aobdia, D., & Shroff, N. (2017). Regulatory oversight and auditor market share. Journal of Accounting and Economics, 262-287. Bataineh, A., & Rababah, A. (2016). Comprehensive Income and Net Income, which is more powerful in predicting Future Performance. International Journal of Academic Research in Accounting, Finance and Management Sciences, 114-120. Cordazzo, M. (2013). The impact of IFRS on net income and equity: evidence from Italian listed companies. Journal of applied accounting research . Hamilton-Basich, M. (2021). Xifin Enters Radiology RCM Services Segment with Computerized Management Services Acquisition. AXIS Imaging News . Hermawan, H. (2018). Updates on the research and development of absorbable metals for biomedical applications. Progress in biomaterials , 93-110. Kenrick, N., Svabova, L., & Nica, E. (2019). Real-time health-related data, wearable medical sensor devices, and smart cyber-physical systems. American Journal of Medical Research, 25-30. Kim, M., Lee, S., & Roehl, W. (2018). Competitive price interactions and strategic responses in the lodging market. Tourism Management, 210-21. Marasco, A., Picucci, A., & Romano, A. (2016). Determining firms׳ utility functions and competitive roles from data on market shares using Lotka–Volterra models. Data in brief, 709-713. Mishra, P., Pandey, A., & Verma, R. (2018). Compound Annual Growth Rate of Credit Deposit Ratio of Schedule Commercial Banks. Research Journal of Humanities and Social Sciences, 740-746. Nishikawa, I., Kamiya, T., & Kawanishi, Y. (2016). The definitions of net income and comprehensive income and their implications for measurement. Accounting Horizons, 511-516. Overby, J. W., & Lee, E.-J. (2006). The effects of utilitarian and hedonic online shopping value on consumer preference and intentions. Journal of Business research, 1160-1166. Rahimi, R., & Kozak, M. (2017). Impact of customer relationship management on customer satisfaction: The case of a budget hotel chain. Journal of Travel & Tourism Marketing, 40-51. Rask, M., & Günzel-Jensen, F. (2019). Business model design and performance in nascent markets. Management Decision. Sudha, M., & Sheena, K. (2017). Impact of influencers in consumer decision process: the fashion industry. SCMS Journal of Indian Management, 14-30. Wilbur, K. C., & Farris, P. (2014). Distribution and market share. Journal of Retailing, 154-167. Market share percentage for cars and trucks Now 1.000 (78.74%) (6.9%) 0.085 (6.72%) 0.058 (4.56%) 0.088 Markets and Competitors Global VW Toyota Your Company BMW Market share percentage for cars and trucks in 2030 1.000 (79.07%) (7.12%) 0.084 (6.65%) 0.053 (4.18%) 0.090 Markets and Competitors Global VW Toyota Your Company BMW Market Share Percentage for Cars and Trucks Now and in 2030 Market share percentage for connected cars and trucks Now 1.000 (74.35%) (11.52%) 0.089 (6.62%) 0.071 (5.28%) 0.155 Markets and Competitors Global VW Toyota Your Company BMW Market share percentage for connected cars and trucks in 2030 1.000 (78.82%) (10.4%) 0.086 (6.79%) (2.42%) 0.132 0.031 Markets and Competitors Global VW Toyota BMW Your Company Market Share Percentage For Connected Cars and Trucks Now and in 2030