Entering an era of ferment – radical vs incrementalist strategies in automotive power train development

Incremental improvement of a deeply embedded technology system has been a hallmark of the automotive industry for a very long time. Efforts to develop alternatives have repeatedly failed. This paper analyses how Toyota started to challenge this pattern in the late 1990s, by the architectural innovation embodied in Prius, the first mass-produced hybrid-electric car. This is followed by an account of how key competitors reacted by accelerating their incremental innovation efforts, in an era when concerns over fuel prices and greenhouse gas emissions increased demand for environmentally sound vehicles. The paper builds on records of patenting and performance of actually marketed models to analyse the unfolding technology competition. It also considers the most probable technologies on the market in a 10–12 year timeframe, and further explains how different technology strategies put competing firms in different positions in an era of ferment.

[1]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[2]  G. Lynn,et al.  Marketing and Discontinuous Innovation: The Probe and Learn Process , 1996 .

[3]  Marko P. Hekkert,et al.  Natural gas as an alternative to crude oil in automotive fuel chains well-to-wheel analysis and transition strategy development , 2005 .

[4]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[5]  Jeffrey K. Liker,et al.  Modularity as a Strategy for Supply Chain Coordination: The Case of U.S. Auto , 2007, IEEE Transactions on Engineering Management.

[6]  Christophe Midler,et al.  FROM TECHNOLOGY COMPETITION TO REINVENTING INDIVIDUAL MOBILITY FOR A SUSTAINABLE FUTURE: CHALLENGES FOR NEW DESIGN STRATEGIES FOR ELECTRIC VEHICLE , 2008 .

[7]  Alan Pilkington,et al.  Gales of creative destruction and the opportunistic incumbent: The case of electric vehicles in California , 2005, Technol. Anal. Strateg. Manag..

[8]  Jerald Hage,et al.  Profiles of leaders, followers, and laggards in programmable automation adoption , 1996 .

[9]  Akira Takeishi,et al.  Modularization in the Auto Industry: Interlinked Multiple Hierarchies of Product, Production, and Supplier Systems , 2001 .

[10]  John B. Heywood,et al.  Future fuel cell and internal combustion engine automobile technologies: A 25-year life cycle and fleet impact assessment , 2006 .

[11]  Jean-Jacques Chanaron,et al.  Hybrid vehicles: a temporary step , 2007 .

[12]  F. Geels Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study , 2002 .

[13]  Alan Altshuler,et al.  A. Altshuler, M. Anderson, D. Jones, D. Roos, J. Womack: The Future of the Automobile: The Report of MIT's International Automobile Program , 1988 .

[14]  Alan Pilkington,et al.  The electric vehicle:: Patent data as indicators of technological development , 2002 .

[15]  Thomas Magnusson,et al.  Hybrids, diesel or both? The forgotten technological competition for sustainable solutions in the global automotive industry , 2009 .

[16]  Alan Pilkington,et al.  INCUMBENCY AND THE DISRUPTIVE REGULATOR: THE CASE OF ELECTRIC VEHICLES IN CALIFORNIA , 2004 .

[17]  M. Tushman,et al.  Readings in the Management of Innovation , 1988 .

[18]  Jeffrey K. Liker,et al.  The Toyota way : 14 management principles from the world's greatest manufacturer , 2004 .

[19]  K. Clark,et al.  Innovation: Mapping the winds of creative destruction☆ , 1993 .

[20]  George Westerman,et al.  Disruption, disintegration and the dissipation of differentiability , 2002 .

[21]  Thomas Magnusson,et al.  Environmental innovation in auto development - managing technological uncertainty within strict time limits , 2001 .

[22]  Paul Andre Henri Francois Nieuwenhuis,et al.  The Death of Motoring?: Car Making and Automobility in the 21st Century , 1997 .

[23]  Henry Mintzberg,et al.  Strategy Formation in an Adhocracy. , 1985 .

[24]  R L Hodkinson THE FUTURE OF THE ELECTRIC CAR , 1995 .

[25]  Staffan Jacobsson,et al.  A Method for Identifying Actors in a Knowledge Based Cluster , 2000 .

[26]  Mikael Hård,et al.  The Cultural Dimension of Technology Management: Lessons from the History of the Automobile , 2001, Technol. Anal. Strateg. Manag..

[27]  Richard N. Foster,et al.  Timing technological transitions , 1985 .

[28]  S. Brusoni,et al.  Unpacking the Black Box of Modularity: Technologies, Products and Organizations , 2001 .

[29]  Marko P. Hekkert,et al.  Competing technologies and the struggle towards a new dominant design: the emergence of the hybrid vehicle at the expense of the Fuel Cell Vehicle? , 2006 .

[30]  James M. Utterback,et al.  Mastering the Dynamics of Innovation , 1996 .

[31]  M. Tushman,et al.  Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change , 1990 .

[32]  이찬영 Two Billion Cars , 2011 .

[33]  Henry Mintzberg,et al.  Strategy safari : a guided tour through the wilds of strategic management , 1998 .

[34]  W. Abernathy Innovation : Mapping the winds of creative destruction * , 2003 .