Benefits of the Open Innovation Experience to Fiat - Case Study Example

FIAT MIO Student Name: Student Number: Course: Instructor: 23rd April, 2016 Benefits of the open innovation experience to Fiat As an entity that sourced for ideas from various quarters, including participants, Fiat stood to gain tens of thousands of ideas. To start off, the mere fact that participants serve as the main people who give a nod of approval for a prototype to be deemed successful pegs its success on the fact that the concept is customer driven, hence the customers feel like they are part and parcel of the developments at FIAT. FIAT MIO, loosely translating to My FIAT is basically an open idea that points to the specific brilliance that is crowd sourcing of ideas from customers, then using the tenable ones to develop a more agreeable concept of a car that will finally be given a nod for production. This means that besides saving on production costs since FIAT merely produces a car whose concept is customer driven, the company gets an edge in marketing as more customers think of the whole company as something whose product they contributed to creating, hence enhancing loyalty. Loyalty, more often than not, translates to higher sales. Secondly, FIAT has a choice when engaging its customers directly at the mapping scenarios stage. This is due to the fact that at this formative stage, the company gets to gauge the market reaction, and can tell whether there is going to be a good reception or not. As such, it has choices on whether to stop the project or continue working on it. This means that data collected from customers on how the prototype may be improved actually creates a possibility for the company, to tailor products according to customers’ needs. This, in addition to stemming runaway costs associated with adjusting prototypes developed without customers’ nod, helps to bring up a relationship with customers to improve the market share. Customers are likely to favour companies that appear to have their interests at heart. With a market share of 21% in the Brazilian market, FIAT is guaranteed a steady growth in numbers of customers, hence an even bigger market share ahead of its closest competitors. In preparation of such activities as the Auto Show in Sao Paulo, FIAT organized with various journalists to have multiple articles circulated in the print media and reputable websites. This means that despite the campaign itself, the company gets to assess varying opinions from multiple sources, even from those who cannot attend the motor show. Articles like The Car of the Future and the Future of the Car elicit responses on what customers think about cars in the future. However, and more importantly, responses and reactions from various quarters, automotive engineers and other car specialists included, may serve as a premium way of gaining ideas without necessarily having to carry out extensive market research that is very expensive. For instance, car enthusiasts and critics are known to offer criticisms of prototypes even before they are manufactured should they come across articles that are meant to be read by the wider public. This means that FIAT may have leverage to start out in a guided manner. The costs associated with advertising a car that is breaking into the market are high. When using a motor show to start out on introduction of a car to the market, a plus includes the fact that advertising costs are generally reduced greatly, hence making it an easier campaign later on when the final product is out and ready for the market. Equally, such an introduction makes customers more comfortable with what they have an idea on. They know what to expect, hence are less likely to treat the final product with a lot of caution. This means that more customers will purchase faster since they already have a broad concept on what the product, in this case, FIAT Mio, is all about. For FIAT, this translates to a faster movement of their product off the shelf, so to speak. The customers are also part and parcel of the development plan since they are among a group of people, besides the designers and vehicle specialists, who get to have a feel of what the final product will be like. To them, this translates to more convenience since they get to be part of the process of product design. Their valued input makes them feel more involved in the final product; hence give them a feel-good nature and confidence around the final product. In doing so, the customers also come to the realization that Fiat has, albeit gradually, come to a point of successfully finding a channel through which better communication with the customers may take place. There are more than just car enthusiasts that attended the FIAT Auto Show in Sao Paulo: Part of the congregation was made of designers and representatives from various car manufacturers. This was so because FIAT thought of the show as an open one where even other car manufacturers would be allowed to be part and parcel of those who contribute to the design and final concept of the prototype. To be fair, the designers were allowed to benefit from what they sourced in the show. This means that, even the other designers and car manufacturers, includes the people who auto tune their own cars, benefitted immensely and may feel more obligated, a next time, to contribute more towards achieving a well thought out prototype that involves just more than the usual engineers expected to design a car. In all, both FIAT and the attendees at the Sao Paulo Auto Show managed to benefit from the whole procedure. While this turns out to be more than just a cheaper way of introducing a concept car to the market for FIAT, it equally benefits the attendees a great deal since they get more than they expected. They now feel more accepted as part-designers, hence creating the notion that besides contributing to the design of the prototype, they get to actually having their suggestions put under consideration. This means a lot to them, hence contributing to their loyalty to FIAT. The two form a partnership whose bond is difficult to break since each one of them benefits mutually. The tactical approach to allow other auto manufacturers to lift the ideas they got from the show is also a new one. As pioneers of such an aspect of crowd sourcing, FIAT can brag of having a hand in expanding the marketing aspect to include allowing competitors to contribute to and benefit from a huge pool of ideas. This type of tactic is uncommon in various industries since most competitors are wary of their opponents and will never dare to share any of their ideas. Read More