Report - Business Model - Business Case Document - Assessment Answer

Assignment Task

Introduction

Business Case for Toyota

The proposed innovation for this case document is about Toyota manufacturing company. The company has become world’s number one car manufacturing company for past few years. This success is attributed to the innovative practices of the company. To remain successful and competitive it is important for every company to innovate continuously (Boons & Freund, 2013). The proposed innovation for this case document is implementing incremental process within the plant.

Proposed Innovation

The innovation proposed here as a subject of business case is defining innovation as an incremental process. This simply means that the company will make small goals and will not take sudden leaps but will make things better on a daily basis. This can be called as implementation of Kaizen in the company. This will help in taking feedback from the ground level workers and thereby undertaking innovation to the entire process of manufacturing. It will make innovation a regular task within the company and not an occasional task (Bouncken & Fredrich, 2016).It will ultimately aid in proposing a million new ideas every year (Priem, Li & Karr, 2012). This small innovative process will also help the company to satisfy the needs of the customers and make principles the practice. In this manner this innovative idea will be beneficial for Toyota in getting competitive advantage and long-term gains. It will also enable Toyota to show its employees that they are valued and so are their ideas.

Possible business model to be used

Source: (He,2011)

The rationale behind selecting this business model is that this business model majorly focuses on core capability which is very important in case of Kaizen (Best, 2014).It will ultimately help in increasing the cost-effectiveness in the company. This will lead them to use waste material as well and thus utilising optimum resources for more production. This is something that is the ultimate objective of the company (Keupp, Palmié, & Gassmann, 2012).

Reasons to endorse and finance the idea

All the ideas that are proposed are not successful always and this is why it is to be made sure before investing into it that it is an idea that shall be taken into consideration. As far as the present idea is concerned, there are a number of reasons that enable an investor to endorse the idea. These reasons are given below:

1. The innovation will help Toyota in maximizing the returns in the long-run which will be very beneficial for all the stakeholders.
2. It will enable the company to use even the waste material and use resources scantly which will be a cost saving step for the company.
3. The invested amount is lesser than the returns (Grey, 2011), as per the calculation done in later parts of the report.
4. The most significant aspect of this innovative idea is that it is feasible, sustainable and will be achieved in viable time frame.

Upside gains

Upside gains denote the benefits and advantages that the new innovative idea is expected to bring to the company as well as investors. The upside gains of this innovative idea is given below:

1. This innovative idea will increase the profit of the company.
2. It will enhance the goodwill of the company in the market and will make it more competitive (Clauss, 2013).
3. This innovative idea has potential to enhance market share that too without much investment in terms of capital or infrastructure.
4. This idea intends to take opinion from employees and thus it will make them feel that they are valued and trusted.

Downside Risks

Like every innovative idea, this idea also has some risks. These risks are given below:

1. It may not be successful if the employees and ground staff do not take the idea seriously.
2. It may also fail due to the lack of principles (Capelllo, 2013).

Return on investment

Return on investment refers to the activity that helps in calculating the return that the company can expect out of the investment. Every project needs an amount to be invested in it and this investment is intended to bring return in future. It is usually calculated for next 5-6 years so as to ensure better return on it (Davenport, 2013).

It is also referred as payback and is the period in which a company gets back its invested amount. It helps the investor in deciding as to whether the investment shall be made in the idea or not. The table provided below lays down information of costs and returns for 4 years and on the basis of that payback period will be known.

A business model helps the company to idealise the proposed innovation. Toyota is a manufacturing firm and the business model to be used for a manufacturing firm is quite complex and have so many aspects. The model that can help in achieving the current objective of the business is given below (Leong, 2012)

Rationale and conclusion

The payback period as shown in the graph is very less and it depicts that the company will get returns even before the first year ends. This suggests that payback period is very short and thus the investment can be made in this project.

The business case document

The business case document draws the precise view of the proposed innovation in Toyota. It will focus on analysing the factors that help in solving the problems of the business using innovative ideas. The case document also stresses on the advantage of innovation and the strategic importance of the plan. The major aim of case document is also to analyse the project options deliver the recommended solution.

• The problem the innovation can solve

The problem presently in Toyota is that employees and staff do not take innovation as a regular activity. Toyota wants to have a system that makes innovation a regular activity and also to make all the principles a regular practice. But there is no such system that enables the employees to make it a practice. The new system of incremental change and Kaizen will solve this problem. This system will ensure that all the principles are followed as practice in the company and employees and ground staffs is giving their ideas on regular basis. In this way the new system will deal with this issue efficiently (Buliga, Scheiner, & Voigt , 2016 ).

• Benefits of the innovation

The innovation that the company has proposed will have a number of benefits. The innovation will be helpful for company in increasing the profit of the company. It will also enhance the goodwill of the company in the market and will make it more competitive. This innovative idea has potential to enhance market share that too without much investment in terms of capital or infrastructure. This idea intends to take opinion from employees and thus it will make them feel that they are valued and trusted (Grey, 2011).

• Strategic response or plan

The strategic response refers to the activities that will make the innovation a strategic activity within the organization. The strategic response for the project is provided in the table below:

• Project options analysis

The project options available are making Kaizen compulsory and take monthly feedback on it and other option is to observe it on a daily basis. The company will have to go for the option that is observing it on daily basis (Ames, 2008).This will ensure slow and steady change and will match with the strategy of the company.

• Delivery of recommended solutions

The option that will be chosen for this project is to observe slow and steady changes .To deliver this idea there are various recommendations which are given below:

• Making sure that all the employees and staff members actively participate in it because this innovation is entirely dependent upon them.
• To ensure that proper control measures are adopted by the company so as to continuously improve the system.