Managing Innovation In Business on Lotus Cars


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Innovation is basically defined as a new idea, device or method which company imply for gaining benefits from the market area.Lotus Cars is a British Multinational Company of United Kingdom that manufactures sports cars and racing cars. This company was eastablished in the year around 1952 and since than they are providing effective services and facilities to its loyal customers. Generally, the company designs and manufactures racing cars that are light weight and inbuilt with lot of features and characteristics. Company is operating its business worldwide and they are doing well. Auto-mobile industry, with the change in course of time has evolved and now they are touched every aspect of technology such as making a light weight car which can reached to its destination in quick time without any problem. Thus, this is the main reason why this topic was chosen as determining the innovative process in this industry will be very helpful in getting proper information related to the evolution of this auto-mobile industry. According to the survey conducted in the year around 2014 it has been analysed that Lotus Cars is ranked 50 according to the IQ Score (Automotive Brands Ranked by Digital IQ Score, 2018). Purpose of Lotus Cars is to manufacture best cars which incorporates all the features that comforts an individual who is driving the car. Thus, the company wants to pioneer in one of the renowned racing competition i.e. Formula racing. As a result, Lotus Cars is manufacturing cars considering the factors required for the same. Structure of Lotus Cars is similar like other companies who are dealing in manufacturing industry. For instance: they have a General Manager under which five departments are included and these are manufacturing centre, research department, personnel department, financial department and marketing department. Thus, it can be said that Lotus Cars follows a hierarchical structure for performing its activities. Present report will include overview of the company along with its innovation history. Other than this, firm's existing innovation, performance and capabilities are also being explained in this assignment. Lastly, the latest position of the company in market area is included in this report.

Main Body

The Organisation and Industry Overview

The Organisation and its Innovation History

Lotus Cars is an automotive company which was found in the year around 1952, by Colin Chapman. Firm mainly manufactured sports and racing cars and its headquarter in Hethel, United Kingdom. Company is operating its business all over the world and they are gaining benefits from them as well. Lotus Cars was previously owned by DRB-HICOM. During their initial years company was formed by the name Lotus Engineering Ltd. By two engineers Colin Chapman and Colin Dare.

Lotus Car's first factory was situated in behind the railway Hotel in Hornsey, North London and it was an old stables. Later in around 1954, Team Lotus split from Lotus Engineering and they actively manufactured cars for formula one racing from 1958 to 1994.

Innovation is basically define as something which is original and is more effective as compared to previous things. In relation with Lotus Cars its innovation history is explained below for better understanding:

Lotus 1948 - 1950's

1948 Humble origins: In this year, founder Anthony Colin Bruce Chapman built their first trials racing cars. In order to make this car, they used only power drill and with the help of skill of elementary panel beating. Their first car wyas 1930's Austin Seven based special later known as mark 1 lotus, registered as OX 9292. Chapman work experience in British Aluminium played a significant role on the evolution of Lotus ethos i.e. “performance through lightweight” and this helped them in making lightweight sports cars.

1950 Chapman's 2nd trials Car: This car was a perfect presentation of state-of-the-art and it was first lotus car which was unused on roads. In the year around 1950, this car was sold to Mike Lawson and later won the Wrotham Cup. By the year 1954, company was Lotus Cars came into being and by manufacturing mark 8 they gained overnight success.

1960 The mid-engine principle: Lotus Cars have developed this engine with the focus on ruling the automotive business sector. Chapman adopted this mid-engined layouts for Cooper race cars. Throughout this decades many company grows gradually like in the year 1962 they developed four races and one road car. 1963 was for The Cortina and Formula 1 success. In 1967, The legendary Cisworth-Ford DFV V8 engine was made which dominated the Formula 1 race over a decade. 1967 production of Seven S4 begun and is designated as Type 60.

1970's Heritage: This year was for Elan Sprint and more Formula 1 racing cars that added more glorious to the company. In 1971 a new engine was developed named Type 907 road engine. The Texaco Star was manufactured in 1973.

1980's Heritage: Lotus Cars has developed on racing front and on road cars as well. They have made modifications in their engines and developed strengths to strengths . Many cars were manufactured such as Esprit turbo with new suspensions and a 210bhp 16-valve turbocharged with 2.2 litre engine.

1990's Heritage: In the year 1993, Lotus Cars owned Bugatti ownership and with the change in course of time company have significantly worked on designing and making more convenient for customers.

2000's Heritage: New generation of Elise was launched with improved performance in terms of styling, handling and quality. In 2003, a glorious era comes to an end as company thought of rolling off Lotus Esprit form the production line marking. Many cars were manufactured in this decade such as The Sport Exige GT3, The Lotus Sport Exige etc.,

2010's Heritage: Lotus Cars returned to Formula one after a long gap of 15 years. Other than this for on road cars company worked on sound technology and implemented next generation intelligent pedestrian warning system along with HALOsonic sound synthesis system.

Therefore, with the change in course of time, company has developed a lot in terms of designs, engines and comfort. With every decade they have developed strong engines which can be used in Formula racing cars and won them too. Till now Lotus Cars comes under the best manufacturing cars in the world.

The Organisation Existing Innovation Performance and Capabilities

In relation with Lotus Cars, with the change in course of time they have made lot of innovation in its cars. As in earlier times their vehicles use to be heavier and bulky but as the time passed they have made lots of modifications in their products can company now is known for manufacturing best light weight racing cars in the world. Therefore, lotus cars on a regular basis is incorporating many features such as HALOsonic sound synthesis system and with the help of these features company is manufacturing sports cars Exige GT3 etc., In order to know the performance of companies SWOT analysis is done and it will provide better understanding:

Strengths: Lotus Cars manufacture cars by targeting customers who are true drivers and love to drive cars. Company's biggest strengths is their light weighted cars which provides better facilities as compared to low power cars. Most of their cars are hand built and this gives high precisions to the product. Other their this, Lotus Cars have a strong presence in motor sports and Formula One. In addition to this, light weighted cars are adding glorious history to the lotus Car history (SWOT analysis, 2018).

Weaknesses: Main weaknesses of Lotus Cars is their highly dependence on engineers for designing engines and other activities. In most of the companies in some of the countries are restricted because of which company's customer base is affected. Other than this, some of their cars are high at cost because of which consumers are moving towards other firms for fulfilling their needs and requirements.

Opportunities: As Lotus Cars is highly active in Formula One race which is providing them with an opportunity of enhancing its brand image in front of customers. Other than this, their unique feature of making cars light weighted so that it can run fast. As a result, most of the racers are using their cars in these races.

Threats: Interdependence on engineers can delay manufacturing process because of which company can face issues or problem in delivering complete manufacturing good.

Other than this, company also manufactures electric vehicles which was established by Lotus Engineering and this group was totally dedicated to hybrid and electric vehicles. Their first hybrid concept car was Evora 414E that usually covered 300 miles and 0 -6 MPH in 4.4 seconds. Organisation's engineers have kept their focus on electric propulsion while manufacturing this concept car. In terms of its glory and award Lotus Cars was awarded the Queen's Award for Enterprise for its contribution in International Trade.

Lotus Cars is know for its unique designing and performance. Company is standing in three distinct pillars of competence and these are its lightweight structure, efficient performance and driving dynamics. In their latest models they have incorporated similar engineering integrity. Sports cars that are developed by this company are thrilling the souls and creating wonders and because of this Lotus Cars are highly praised for providing dynamic advantages. In reference to this, engineers have played a crucial role as they have raised the bars for the organisation.

Lightweight designing and not compromising its efficiency is the major key guard of this company. Thus, they are focussing on designing myodels which can light in weight but effective at the same time. While manufacturing cars company has a blend of enshrining hybrid and technology of electric vehicles according to its range of capabilities. Most of the companies in order to manufacture goods seeks into different governmental policies but Lotus Cars has steeped into a policy of lightweight structural composition and integration. They have engineers who are experts in filed of composites and finite lightweight metallic structures. This is assisting companies in manufacturing best quality racing cars and most of the cars have won Formula 1 races as well. For example: for series-hybrid cars they have Range Extender Engine all in aluminium, mono-block, 1200 cc, three cylinder, 47 horsepower, four-stroke engine. These engines are small and light weigh near about 56 Kg i.e. (123 lbs) mostly having three cylinders with no detachable cylinder head. Other than this, their first model which was made and named Mark 1 Lotus which was heavier and gradually they started making cars with aluminium which is perfect for Formula 1 racing cars.By keeping concept of light weight in the minds company manufactured all new in-house designed V8 range of cars which weight around 170 kg (375lbs) and just 612 mm (24.1 inches) long.

Both the images are showing the modifications and changes which company have done through out the decades in their cars. Gradually Lotus Cars is thinking of making cars with the help of carbon fibre. This will make car more light in nature and provide the better experience to its drivers.

Now a days world market is looking for a secured platform where without decreasing fossil fuel or resources they can manufacture best quality products. Company has focussed on 3D elemental construction, noise, vibration and harshness.

The Industry in 2018

Now a days world market is looking for a secured platform where without decreasing fossil fuel or resources they can manufacture best quality products. Company has focussed on 3D elemental construction, noise, vibration and harshness.
Both the images are showing the modifications and changes which company have done through out the decades in their cars. Gradually Lotus Cars is thinking of making cars with the help of carbon fibre. This will make car more light in nature and provide the better experience to its drivers.

Auto-mobile industry is one of the multi-billionaire industry across the globe and large number of companies are trying to gain competitive advantages by sharing a huge market share. Other than this, commercial firms who are dealing in this sector are performing their activities so that better services and facilities can be provided. Since, auto-mobile industry was established it has gone through various changes from its size to its features. For example: Companies who are dealing in this sector has now focused more on passenger's safety and environment friendly cars. Further to understand the same porter's generic model is being explained:

Threat to new Entrants: In relation with auto-mobile industry, there is a low chance of new entrants as for establishing a new company it may require a large number of funds and managing this for a fresh firm can be difficult. There are some categories for which investments are required and these are manufacturing facilities, distribution networks, selecting eligible candidates who are skilled enough in performing the task (Threat of new entrants, 2018). Therefore, it can be said new entrant cannot survive unless a new brand with innovative idea has come up in the market. Other than this, there are several factors that are to be considered by new companies such as high import taxes imposed by regulatory bodies. Henceforth, Lotus Cars does not have of think in this relation as their brand image is providing the firm with competitive advantage.

Bargaining Power of Suppliers: For most of the companies who are dealing in this sector have low bargaining power of suppliers. Moreover, it depends upon the size of the industry and based upon the labour, raw materials required for manufacturing a product. For instance: Lotus Cars have a large number of suppliers as a result, they can persuade to different suppliers in order to get better raw materials for manufacturing their product (Supplier Power, 2018).

Bargaining power of Buyers: In relation to this, bargaining power of buyers is moderately higher because whether buyers are small or medium they can switch to another brand if price are not according to the budget of the customers. Therefore, in terms of Lotus Cars if customers are not getting appropriate results than they can shift to some other companies for purchasing cars which can fulfil needs and requirements of consumers (Porter's 5 Force, 2018).

Threat from substitutes: According to current market environment many alternatives are present for the modes of transportation and because of the hike in fuel prices people are considering more on pool transportation such as taxis, buses, trains and planes (Threat of Substitutes, 2018). Therefore, in relation with Lotus Cars threat of substitute is higher because their there are many commercial enterprise who are dealing in the same sector such as BMW, Rolls Royce, TESLA, etc., thus, by implementing new and innovative ideas these firms can give tough fight to these organisation.

Rivalry among competitors: In this context, competition amongst firms is very strong because there are many recognised organisation who are dealing in the same sector. Basically, rivalry between companies in this sector is based on features, pricing strategies, design and quality of products. Thus, Lotus Cars have great competitors for instance BMW, they are manufacturing both luxury as well sports cars moreover, can give a tough fight to this organisation.


From the above report it has been concluded that innovation in a company is essential for providing new and vibrant products to its customers. Lotus Cars, in recent times is one of the leading company that manufactures sports cars on road cars as well. Throughout their journey they have faced many ups and downs but innovated powerful engines which are the part of glorious history of Formula 1 racing. First for manufacturing cars they used heavy metal and but later they switch to aluminium which justify their concept of lightweight. But now the company have shifted towards making cars that are made of carbon fibre. In years company has developed by making innovation on a regular basis.


Books and Journals

  • Tidd, J. and Bessant, J., 2014. Strategic innovation management. John Wiley & Sons.
  • Brown, K. and Osborne, S. P., 2012. Managing change and innovation in public service organizations. Routledge.
  • Ngo, L. V. and O'cass, A., 2013. Innovation and business success: The mediating role of customer participation. Journal of Business research. 66(8). pp.1134-1142.
  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
  • Schiuma, G., 2012. Managing knowledge for business performance improvement. Journal of knowledge management. 16(4), pp.515-522.
  • Cheng, C. C., Yang, C. L. and Sheu, C., 2014. The link between eco-innovation and business performance: a Taiwanese industry context. Journal of Cleaner Production. 64. pp.81-90.
  • Frankenberger, K. and et. al., 2013. The 4I-framework of business model innovation: A structured view on process phases and challenges. International journal of product development. 18(3/4). pp.249-273.
  • Schneider, S. and Spieth, P., 2013. Business model innovation: Towards an integrated future research agenda. International Journal of Innovation Management. 17(01). p.1340001.
  • Ritala, P., Hurmelinna-Laukkanen, P. and Nätti, S., 2012. Coordination in innovation-generating business networks-the case of Finnish Mobile TV development. Journal of Business & Industrial Marketing. 27(4). pp.324-334.

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