Innovation at Honda-Recycling of Rare Earth Metals - Case Study Example

Innovation at Honda- Recycling of Rare Earth Metals Name: Institution: Course: Date: Table of Contents Table of Contents 2 2.0 Organization and Innovation 3 2.1 Background 3 2.2 Innovation Description 4 3.0 Honda Rear Metal Recycling Plant 5 3.1 Innovation Structure 5 3.2 Advantages of the Innovation on Honda Operations 7 3.3 Honda Innovation Structure Challenges 8 4.0 Recommendations 9 5.0 Conclusion 11 References 12 1.0 Introduction The rising global changes in the market have led to increased need for competitiveness. In this case, organisations seek to develop strategic measures and approaches through which to increase their value for customer and preference over peers in the market. One such approach is the use of innovation in the organization. Innovation in an organization can be described as the process through which an organization devices and develops new approaches to offering services to their customers, as well as new systems and product features. The key role and strategic aim of an organisational innovation process is to increase customer value and as such create increased customer satisfaction (Porter, 2000). However, the process of innovation includes a change process. Thus, as any change process, organisational innovation faces a number of challenges, which at times limit its success. This report evaluates innovation at Honda Company. The first section offers a review of the organisational innovation and its description as well as how the organization operates and executes its innovation process, with an evaluation of the success and challenging components. Finally, the report offers a review of the recommendation that Honda can apply to increase its innovation success in the future. 2.0 Organization and Innovation 2.1 Background The Honda Company is a Japanese multinational corporation in the automobile industry. The venture operates in number of countries in Asia, Europe, USA, and Africa respectively. In its production line, the venture is attributed with the manufacturing of automobile vehicles, motorcycles and power equipments for the global market. Despite its global reputation, the venture continues to face market competition from peers such as Toyota, Nissan, and Ford among others on the global platform (“Honda Motor Company”, 2015). Therefore, in order to overcome this rising market competition, the venture had to develop alternative innovation systems as a means of mitigating the competition both in the short and long run periods. 2.2 Innovation Description The organisational innovation process was inspired by the growing need for sustainability. In this case, the automobile industry has faced a wide range of challenges especially in the management of its pollution effects on the environment. In this case, Honda sought to reduce the impacts of its rare earth metals used on the Honda battery on its vehicles. In this case, through a partnership with the Japan Chemical Limited, the organization established a mass production plant for extracting and recycling the rare eat metals from car batteries obtained from both Japan and global Honda Company distributors. In this case, through the mass production plant, Honda was able to reduce the wastage of the rare earth metals and instead recycled the products into its subsequent products. In the evaluation of an innovation, it is imperative to evaluate the nature and extent of the innovation in terms of the lifecycle. Osburg and Schmidpeter (2013) argued that an innovation has different stages and lifecycle stages such as early adopters, early majority, late majority, and laggards respectively. In this case, an evaluation of the Honda Company rare metals recycling reveals that the company is an early adapter in the market. In this case, the concept of recycling is a new technological concept In this case, technology developments in the market have allowed for the extraction of materials through recycling for further use in the industry. Moreover, an evaluation of the industry indicates that the majority of the industry stakeholders in the automobile industry are yet to adopt the recycling technology. Consequently, the analysis concludes that the Honda Company innovation on the recycling of rare earth metals in the automobile industry is an early innovation adapter. 3.0 Honda Rear Metal Recycling Plant 3.1 Innovation Structure The Honda Company rear metal recycling innovation is based on a partnership with the Japan Metal & Chemical Limited Company. In this case, the Honda Company is charged with the duty of collecting all the nickel-metal hydride batteries from the customers. In this case, the organisation operates through its global distributors and the agents. In this case, the organisation relies on its distributors and agents globally to collect the used and waste batteries form the customers. As such, the products are acquired through a backward supply chain, where the products are delivered back to the organisational regional centres. Once received by the regional distribution headquarters they are delivered to the joint venture recycling facility. Once delivered to the recycling facility, the Japan metal & Chemicals Company initiates the rear metals extraction process and finally delivers Nickel and cobalt products and chemicals extracted from the batteries (“Recycling Today”, 2012). The innovation flow structure is represented through the figure below. Figure 1: Honda Innovation on Recycling (“Recyling Today”, 2012) 3.2 Advantages of the Innovation on Honda Operations The development of the recycling plan has played a critical role in increasing the organisational global market reputation and competitiveness. On one hand, the innovation by Honda has served as its key aspect of reducing its vehicle production costs in the long run period. In this case, the plant allows the organisation to recycle the rear earth metals such as cobalt and nickel. Once the products are extracted, they are re-used in the manufacturing of the hydride batteries as well as other vehicle parts constituting their vehicles. As such, through using the recycled products, the innovation has allowed the organisation reduce its overall costs of production in the market. An evaluation of the automobile industry illustrates that one of the highest cost components are the direct production costs, incurred in the production process especially in the acquisition of the required metal materials in the production process. Thus, this has been a major contributing factor towards the high costs of vehicles in the market. Thus, an analysis of the innovation execution by Honda reveals that the innovation has enabled the venture reduce its production costs, product prices, and overall market competitiveness due to the provision of affordable vehicle brands as compared to competitors. The second rationale of the Honda rare earth metals recycling is the need to preserve the earth metals. In this case, in the case of the other organisations is the increased metal exploitation. In this case, for every new vehicle battery manufactured, there is the need to mine and exploit additional earth metals. The adoption of this process creates the risk of available resources. In this case, as Johnson et al (2004) noted, the automobile industry, has faced rising concerns on the potential for rare metals depletion through increased mining globally. This creates an environmental sustainability challenge for the industry. Based on this understanding, an evaluation of the Honda innovation reveals that the venture has created value for its customers as well as the society at large. In this regard, the innovation creates market sustainability through reduced need for metals extraction, a virtual that creates a societal balance in its production process. Moreover, the innovation allows for the proper disposal of the batteries upon their usage lifespan. As such, this plays a special role in reducing the environmental hazard of poor batteries disposal as the materials and the metals are non biodegradable, a virtual that would otherwise cause risks on the environment through pollution in the long run period. 3.3 Honda Innovation Structure Challenges Besides the high number of merits and gains that the innovation has offered for Honda, it has its share of challenges and limitations in its execution. On one hand, the innovation process is at its first introduction stage. In this case, since its inception in 2012, the innovation is yet to attain the long term aspired gains in the market. In this case, an evaluation of the innovation structure reveals that the success of the innovation is customer based. In this case, the operation of the mass production industry is based on the number of dead and spoilt batteries that the customers avail to the organisational. However, a review of the innovation process indicates that the venture is mainly organisational driven. As such, the innovation has lacked a similarly innovating marketing strategy to educate and influence the organisational customers to offer the dead car batteries to the respective Honda distributors globally. The second limitation in the innovation structure and execution process is on its limitation on nickel and cobalt. In this case, the mass production recycling plant is focused on recycling battery earth materials. Therefore, it is insufficient to cover the other metal materials in many other vehicle parts on its vehicles. Thus, although reducing environmental pollution, it is only achieves this minimally as other parts are unrecylced. Hence the core intention of the innovation on reducing environmental pollution and reducing the overall production costs remain unfulfilled completely. As such, there is need for the organisation to develop additional innovation process management systems and supporting innovations to enhance the innovation goals attainment. 4.0 Recommendations Based on the above analysis, it is evident that the Honda rare metals recycling innovation is a major milestone towards its market competitiveness. However, the innovation process has a number of challenges that should be addressed to allow for future market success and innovation meeting its overall market success as intended. One of the approaches through which Honda can enhance its innovations success s through developing supporting innovation systems on the customers end. In this regard, the evaluation has revealed that the innovation success is based on the response by the customers. Thus, the organisation should develop new customer sensitization and informative systems. Through such systems, the organisation would successfully influence the customers to volunteer and offer the dead batteries at a reasonable compensation fee. One of the potential approaches through which the organisation can sensitize the customers is through the use of advertisements (Abdussalam, 2014). On one hand, the advertisements could be through the mass media; through the TV and other mainstream advertisement approaches. In this case, one of the most specific approaches to allow for a large magnitude influence among the customers is through the use of celebrities. Celebrities are often the role models in the society. As such, the organisation should identify a celebrity who aligns with the organisational consumer base interest. The use of such a celebrity and role model will ensure that the customers will be motivated to recycle the materials as a customer based responsibility initiative. An additional approach through which the venture can ad6rtise and influence customers to offer the dead batteries is through offering a reward program. In this case, the organisation should develop a customer recognition program through which customers who offers the dead batteries are offered a loyalty program and often be among the first loyal customers to acquire discounts when such programs are rolled out. The adoption of such an innovative program would ensure that the customers feel as part of the initiative and such increase its success possibility exponentially. The second approach through which the venture can increase its innovation system is through expanding the recycling plant scope. In this case, the organisation should improve its recycling plant scope on a continuous basis. This should include research and evaluation of approaches through which to recycle other additional parts. As a result, this would reduce the overall metal and materials dumping upon their vehicles durability limit. As a result, it would also increase raw materials recycling efficiency, reducing the overall production costs in the long run period. 5.0 Conclusion In summary, this report offers a critical evaluation of innovation in organisations. The report theoretically focuses on innovation process, and how typical challenges can be overcome strategically. In this case, it reviews the Honda Company case study, which in 2012, innovated the first metal recycling mass production plant through a partnership with the Japan Metal & Chemicals Limited. The analysis concludes that the innovation has enabled the venture increase its market competitiveness through reduced cost of production and environmental sustainability. However, the venture faces challenges on the reliance on customers and the limited metal extracted respectively. Thus, the report recommends that the organisation should use the customer based marketing and expanded recycling of the different parts. References Abdussalam, P. K. (2014). Celebrity advertisement: key to marketing success. Indian Journal of Commerce and Management Studies, 5(1), p. 78. Honda Motor Company, (2015). Honda World Wide. Retrieved From < http://world.honda.com/> Johnson, R. W., Evans, J. L., Jacobsen, P., Thompson, J. R., & Christopher, M. (2004). The changing automotive environment: high-temperature electronics. Electronics Packaging Manufacturing, IEEE Transactions on, 27(3), pp. 164-176. Osburg, T., & Schmidpeter, R. (2013). Social innovation: Solutions for a sustainable future. Berlin: Springer. Porter, M. E. (2000). Location, competition, and economic development: Local clusters in a global economy. Economic development quarterly, 14(1), pp. 15-34. Recycling Today, (2012) Honda Motors, Japan Metals & Chemicals Establish Rare Earth Metals Recycling Project. Recycling Today. Retrieved From < http://www.recyclingtoday.com/article/honda-japan-metals-hybrid-metals-recycling-rare-earth> Read More