Discuss about the Fundamentals of Entrepreneurship.
The report focuses on the innovation of new products and the effectiveness it can create in the market. The entrepreneurial development of a company can be accessed by the level of innovation that an organisation brings in. According to Börjesson, Elmquist and Hooge (2014) uniqueness of a product can help an organisation gain a competitive advantage in the market. In order to understand the potential effects of innovation, the report focuses on innovation of cars. In the modern day, the purchase and utilisation of cars are popular among the people. In order to focus on a particular brand, the report focuses on Volvo. Volvo is a leading car manufacturing company in the world. The description and development of the product are provided along with the potential factors that may hinder the success of the product. In this regard, a market assessment is done in order to understand the viability of the product.
Assar Gabrielsson and Gustav Larson founded one of the leading manufacturers of luxury cars, Volvo in 1927. The headquarters of the company is situated in Gothenburg, Sweden. Over the years, the company have managed to build its reputation and compete with other big names in the car manufacturing industry. Some of the major competitors of Volvo include BMW, Mercedes and Audi. It has been seen that Volvo is that certain factors like the level of comfort, capacity, cost and uniqueness of Volvo make it a tough competitor for these brands. It manufactures all types and ranges of vehicles such as trucks, buses, SUVs and luxurious model of car. Apart from this, marine equipment is also manufactured to provide support to people engaged in marine activities. One of the main characteristics of Volvo is that it specialises in making innovative cars. This is an important asset of Volvo as it has been seen that in the past year the profit of the company has dropped. The company employs over 94,000 people and as a result, the assets of the company are high (Volvo.com 2017). Hence, innovation can help Volvo to re-establish itself in the market.
According to Drucker (2014), innovation is an essential technique for the success of a business. One of the most innovative products that Volvo can try to develop is the Vehicle-to-Vehicle communication (V2V). One car can communicate with another car while on the road by using this method. This can help to reduce any road accidents that can occur due to the carelessness of the driver. The devices can be placed inside the car and instead of normal car horn; the car can communicate with another vehicle. For example, in the case of turning a corner if the driver fails to spot an upcoming vehicle, the car can understand it through the sensors installed in it. This can help to make the driver aware of the upcoming danger and avoid any accidents. Thus, the V2V communication can help the transport department to reduce accidents on road. Not only the drivers but also the local people travelling by foot can benefit from it. This innovative technique is long from being famous in the market (Kirzner 2015). This is mainly because of the possible issues in the development of the product.
According to Foley et al. (2013), Ownership includes possessing a brand or company that is owned by an individual. Ownership of a car usually falls under one individual or the dealer. Certain documents are required in order to gain ownership. The documents are legalised by the Government and the purchase or sale of cars required the presentation of these documents. According to Wagner, Ortman and Maxfield (2016), the development of an innovative technique requires skilled expertise and creative thinking. Hence, it is important for every organisation to hire employees skilful enough to help it to achieve its goals. Similarly, in the case of car manufacturing companies, the hiring of engineers is required in order to remain competitive in the innovative market. In the case of Volvo, the innovative technology that the company aims to adopt needs considerable market research. This is because the company needs to understand the ways by which such a development technique needs to be executed.
Systematic development of the car can help in the proper execution of the manufacturing process. The first thing that the car needs to develop is its sensitivity. The senses are the main factor for the car. Without these, the car cannot function in the intended innovate manner (Kuratko 2016). The use of hi-tech gear is important in order to provide technical advancement in the car. Hence, it is important for every car manufacturer to remain updated and purchase the latest technology in order to gain a competitive edge in the market. In the case of Volvo, the purchase of these technologies can be helpful for the company. Although the company have gone through a major financial loss, the manufacturing of the innovative car can help it to gain profit for the company. However, a proper market analysis is also required in order to achieve the target (Köhler et al. 2013).
In order to launch a product in the market, it is necessary that the managers complete a thorough market research. This can help them to estimate the response that may be given by the people. Storey (2016) stated that the market assessment is one of the important factors that need to be considered by a manager. In order to analyse the market, the managers need to perform an assessment of risk, environmental factors and the internal strength of the organisation. According to Nwankwo, Hamelin and Khaled (2014), based on these things, the cost of marketing a product can be made. The economy also needs to be considered in order to understand the level of success that can be received from the product. The opportunities provided in this regard can help in eliminating any threats from the competitors. Similar market research is applicable in the case of launching an innovating product.
In the case of Volvo, the Vehicle-to-Vehicle communication model can be a success to the customers. This is because travelling by road in a safe manner is a part of life requirement of an individual. People involved in the driving of cars can benefit from such a technology because the communication with the car can keep them aware on road. As stated by Aaker and Biel (2013), due to the ability to communicate with every car, the chances of accidents can reduce. Thereby the aim of the Transportation Departments of the countries can be fulfilled. Hence, the political barriers can be less in this regard. However, there may be certain risk factors that may arise due to the launch of the product. One such risk factor is the handing and the maintaining of the car (Johnston & Marshall 2016). Due to its expensive nature, the car needs high maintenance. The use of latest technology can cause problems for most people. Hence, due to this, the risk factor of the product is high. Based on these criteria, the manager of Volvo can set the price of the product. Owing to its cost of manufacture and the use of latest technology, the price of the cars owning this device can be high. This can create opportunities for future growth as wealthy people can afford the car. However, the cause of the environment also needs to be considered before launching the product. With more updated vehicles on road, the chance of pollution may increase. Hence, it is necessary to maintain the emission of pollution from these vehicles.
After the analysis of the required development of the product, it can be recommended that the managers and manufacturers of Volvo can find out a suitable manner by which they can make the vehicle emit fewer pollutants. This can help in the proper sell of the product. The cost can be brought down so that middle-income people can afford to buy this car. Although Volvo manufactures luxurious items, the reduction in the price of the cars can help customers from every social status to benefit the unique item. An easy to use technology can help to mitigate the risk of machine breakdown and reduce any chances of a product recall. These solutions can help Volvo to launch V2V communication cars successfully.
Conclusion
Thus, it can be concluded that every business needs to innovate itself in order to maintain its competitive advantage in the market. In the case of Volvo, the development of Vehicle-to Vehicle communication can help it to increase its profitability. However, the risk involved in the marketing of the vehicle is high. This can be mitigated with proper marketing strategies and market evaluation. Thus, the success of this innovative technology can help Volvo as well as the people and other vehicles on the road. This is because the technique can help to reduce accidents on road. The solutions provided can help to increase the market sales of the product.
Reference List
Aaker, D. A., and Biel, A. 2013. Brand equity & advertising: advertising’s role in building strong brands. Psychology Press.
Börjesson, S., Elmquist, M., and Hooge, S. 2014. The challenges of innovation capability building: Learning from longitudinal studies of innovation efforts at Renault and Volvo Cars. Journal of Engineering and Technology Management, 31, pp. 120-140.
Drucker, P. 2014. Innovation and entrepreneurship. Routledge.
Foley, A., Tyther, B., Calnan, P. and Gallachóir, B.Ó., 2013. Impacts of electric vehicle charging under electricity market operations. Applied Energy, 101, pp.93-102.
Johnston, M. W., & Marshall, G. W. 2016. Sales force management: Leadership, innovation, technology. Routledge.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Köhler, J., Schade, W., Leduc, G., Wiesenthal, T., Schade, B. and Espinoza, L.T., 2013. Leaving fossil fuels behind? An innovation system analysis of low carbon cars. Journal of Cleaner Production, 48, pp.176-186.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Nwankwo, S., Hamelin, N., and Khaled, M. 2014. Consumer values, motivation and purchase intention for luxury goods. Journal of Retailing and Consumer Services, 21(5), pp. 735-744.
Storey, D.J. ed., 2016. Entrepreneurship and new firm. Routledge.
Volvo.com. (2017). Welcome to Volvo. [online] Available at: https://www.volvo.com/home.html [Accessed 9 Aug. 2017].
Wagner, A., Ortman, S. and Maxfield, R., 2016. From the primordial soup to self-driving cars: standards and their role in natural and technological innovation. Journal of The Royal Society Interface, 13(115), p.20151086.
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