Innovation

ORGM5000 Strategy, Change and Innovation

Executive Summary

In developing digital technology market, companies are getting engaged in generating a new source and grabbing new opportunities. This study discusses the business model of Udrew by identifying the challenges and value proposition of the company. Currently, Udrew uses design thinking technique as a business model for understanding and identifying the innovative solution. For determining multidimensional solutions, different business model are also identified which help in overcoming the Udrew organization challenges and increasing value proposition. This research study also includes some recommendations which will help the Udrew Company in increasing the business performance as well as reducing challenges and issues.

Background and discussion on organizational challenge and value proposition

Background of Udrew

Udrew is a one-stop shop which provides a small building planning and endorsement projects such as pool, sheds, driveway, walls, and fence, etc. Tom young is a founder of Udrew and he is a geotechnical analyst, system designers, and structural draftsman. Udrew provides helps to owners of the house in making their interactive, smart building plans and helps in getting instant approval for building a plan from local government councils (Udrew, 2017). At the same time, it also helps home owner in redesigning by building a plan or structures for their existing properties like walls, fencing, pools and shed, etc. Moreover, Udrew uses unique and effective technologies to plan a small building draft as well as also help in getting faster approvals for those structures.

Before planning and getting approval for plan, Udrew also verifies the project plans i.e., whether a plan meets the code of conducts of latest national and local building. On the other side, the company provides support and help to home owners by saving their time by planning small building projects and reduce the stress of owner in terms of dealing with local consultants like builders, architect, suppliers, etc (Udrew, 2017). The existing strategy used by Udrew is a motivational strategy which helps in motivating the designers of the company by providing training to the designers and employees in a relation of drafting a best & small building plan. The key issues which Udrew faces while planning small building projects or to get fast approval is related to CEO of Curtin, a local firm.

Udrew’s organizational challenge

The organizational challenge which Udrew Company is facing is related to the globalization of products, change in technology, and increase in the level of trust of government and stakeholders, cooperation from government, etc. But at the same time, the company also faces a challenge in managing its operational function related to continuous innovation, providing training to employee’s timely, motivating employees for enhancing their skill as well as focusing on research and development initiatives. These all challenges are somewhere creating or developing difficulties for the company in achieving its organizational goals and objectives.

But on the other hand, the new organizational challenges which company might face in relation to the satisfaction level of customers and maintain the level of trust in stakeholders. The stakeholders of the company Udrew is competitors, suppliers, investors, employees, and customers, etc (Udrew, 2017). The other technique is Affinity diagram technique which is used by a researcher to develop a design concept by collecting different data from different sources. This technique helps in doing and understanding the analytical thinking as well as intuition.

Udrew’s Value proposition

Udrew gains its value proposition only by developing a trust among the stakeholders towards the new technology which Udrew uses for targeting its customers as well as for developing an effective building plan. The analysis study helps in identifying Udrew current value propositions which are referred as a strategy or way which Udrew uses for providing a fast approval to the good building plan. In concern to it, design thinking process is used as a business model by the company in order to identify the technological applications by meeting the customers need, local government rules and regulations, saving time and cost, etc.

In addition to it, Maxwell, Joseph A (2012) also stated that for revising the value proposition, it is necessary to identify the cost efficiency, risk, customize product, time requirement and so on. The customers are targeted by Udrew by segmenting the customers on the basis of home owners, third party professions and local government councils (Udrew, 2017). While revising the value proposition, it is identified that prototyping technique is useful for business for understanding and experimenting with different designs.  This different design is evaluated on the basis of innovativeness as well as requirements which customer demands.

Business model

Design thinking techniques

Design thinking is defined as an innovative and effective technique which is used and implemented by Udrew designers in order to develop the best building plan which satisfies the customer demands and requirements. This design thinking technology is widely used by designers as it helps in providing multiple solutions to the problem like to mitigate the business challenge of developing or increasing key stakeholders trust. Razzouk et al., (2012) also stated that this design thinking technique also provides support to designers in developing a plan or to discover a new opportunity by considering and maintaining a logical thinking, intuitions, and reasoning.

This design thinking technique develops an effective structural framework in relation to understand customer’s requirements and also to identify the new opportunity by developing a new solution which provides them benefit in both aspects. At the same time, the process of design thinking includes five-step process i.e., empathize, define, ideate, prototype, and test (Carlgren et al., 2016). In addition, the use of design thinking technique help the company in managing organizational challenges efficiently as well as helps in adding value proposition.

In respect to this, Xu et al., (2017) stated that for meeting an organizational challenge, companies using design thinking method for understanding the customer requirements and linking them with the current challenges. This technique used as a method for identifying the organizational problem in different aspects. On the other side, the value proposition of company is developed by redefining the business model which is used by Udrew. In simple words, design thinking helps in revising and focusing on value proposition by targeting more audience.

Alternative business models

In contrast to existing business model, use of affinity diagram technique helps the researcher in reaching to collected data as well as helps in analyzing the problem from different angles. On the other side, Reutlinger et al., (2014) also stated that an affinity diagram is used as a tool which gathers a large amount of data in respect to ideas, opinions, and issues. This diagram technique also helps in organizing the data in groups based on their natural relationships. In simple terms, affinity diagram is considered as one of the management and planning tools and technique which helps the company in gathering and organizing the data output.

Walker, Anthony (2015) also described that using affinity process will help the Udrew designers in developing their thinking in terms of encouragement of new patterns. Mostly, this affinity diagram is used as a business model when there is need to develop & generate group ideas and opinions through Brainstorming. In this business model also, there are five steps that are need to be considered by the designers and researchers of the company such as generate ideas, display ideas, organize ideas into a group, create header cards and draw a finished diagram.

By using affinity diagram, it will be easier for Udrew to overcome its organizational challenges by generating an idea which helps in understanding the requirements of people like stakeholders (Kamal, Mohammad Arif, 2012). In other words, each individual has separate ideas and thoughts like stakeholders which company need to consider which developing any building plan. In concern to it, affinity diagram helps in understanding the requirements of stakeholders and helps in collecting and sorting a data into a group of ideas. This ultimately reduces the challenge for the company of meeting the requirements of its customers efficiently.

Additionally, this diagram would also help in developing a trust relationship among stakeholders towards technology and also manage financial challenge as well as help in modifying the company’s culture to a large extent. But at the same time, Varma et al., (2016) prototyping technique are also used is used by the organization as it is iterative development technique which helps in building a quick design by involving the stakeholders and customers in the process of designing. The use of prototyping technique in an organization is just as a business model which helps in developing a scaled-down model for developing a building plan. Moreover, the use of this technique helps in mitigating and eliminating the risk and challenges which company faces in terms of training employees, encouraging and motivating the employees, continuous improvement and so on.

Porter’s Fives Forces Model

Threat of new entrants (Low)

In construction industry, threat of new entrants is low in comparison to other industries. This states that in Australia, economics of scale of this industry is appeared on a negligible level because pricing strategies of the construction players is mostly the same (Tansey et al., 2014). In this industry, the products and services which are offered are tends to be indistinguishable as well as interchangeable.

Threat of new substitutes (Moderate)

The threat of substitutes in construction industry is at moderate situation because alternative companies uses different techniques and methods which tends to create a constant threat. In Australian construction industry, there are chances of threat for local companies from the foreign construction companies who are generating more deals for building a huge infrastructure projects in Australia.

Bargaining power of buyers (High)

In construction industry, the bargaining power of buyers is considerably high in Australia. In this industry, buyers (project owners) have choice of large numbers of construction companies who offer similar services (Safa et al., 2015). In concern to it, this diversity of companies provides a benefit to the buyer to consider the company which offers the best services at considerable price.

Bargaining power of suppliers (Low)

The power of suppliers in construction industry is tend to be low as there are both large numbers of players and suppliers in this industry and they develops a contractual relationship for timely supply of goods and services like machinery, building raw material on time. Under this industry, the products (machinery, raw materials) are highly needed by the companies for which company’s compromises with the change in the cost or switch the suppliers (Han, et al., 2012). This situation of switching suppliers provides the benefits to large companies in comparison to smaller companies who cannot afford to switch the suppliers or cost.

Industry Rivalry (High)

In Australia, there is a high intense and diversify competition in the construction industry as there are large numbers of players in this industry. In this industry, the competition level between the big companies and small companies is high because large companies are effective to manage the big projects efficiently by facing the challenges and using pricing strategies to bid the cost for projects. In contrast to it, small companies may not able to manage or deal with big projects effectively.

PESTEL analysis

Political factor In developed countries like Australia, the public spending on infrastructure construction is expected to decrease. The political system of Australia is liberal democratic in terms of taxation policies and government influence. In Australia, civil infrastructure is increasing concerns towards the sustainability and this somewhere leads to development of economy (Song et al., 2017). However, the involvement of politicians in construction projects develops issue of corruption mostly in government projects.
Economic factor The economy growth of the Australia is high as there is high use of technology and infrastructure development creates a development for the economy. The economy of Australia has increased GDP growth rate by 0.8 in second quarter of 2017 which is higher than the first quarter of GDP rate i.e., 0.3 (Trading economics, 2017). The construction industry is one of the major points behind the increase in the economic development. In addition, the change in market demand has increased the change in the inflation and price fluctuation which affects the Australian economic future growth and development.
Social factor The increase in the population of Australia is due to the change in the standards of living o public in urban and rural areas. The trend to develop a new infrastructure has raised the demand in the urban and rural areas of Australia and this result into positive impact on the environment and society.
Technological factor In Australia, the use of new technology for future growth and development is rapidly increasing as construction industries are using those materials and equipments and technology which harm less to environment and society (McKenna et al., 2015). In other words, Australia technology support provides the benefit in terms of managing supply network, increase in satisfaction level. The use of modern technology is playing vital role in changing the environment, sustainability of the economy by providing a innovative products and services.
Environmental factor In Australia, environment sustainability is major factor which is considered during the construction of any projects as development of economy somewhere affects the environment in terms of traffic, pollution, etc.
Legal factor Legal factor is major factor which affects the business practices of industries. Every country has own legal rules and regulations which every industry needs to follow. Similarly, in Australia, there are some restricted rules and regulation which construction industry need to follow like rules for labor and employment, rules for trade and industry, etc (Kremer and Symmons, 2015). In like manner, construction industry also need to consider the Australian legal rules such as construction license, approval for developing a building, etc.

Research

The research part explains the concept of design thinking method and its information is collected from the secondary method. Different authors have differed understanding about the design thinking. Likewise In the views of Johansson‐Sköldberg et al., (2013), design thinking is the methodology which is developed to solve the critical problems of the companies like UDREW and it is done through understanding the human needs from the use of brainstorming sessions, prototyping and testing method. In regards to this, Gottlieb et al., (2017) mentioned the five steps which are followed in the design thinking method which are empathized, define, ideate, prototype and test etc. This process contributes benefits to the company for achieving the right solution about the problems.

Another researcher, Liedtka and Jeanne (2015) believed that design thinking method draws the solution on the basis of logic, imaginations, intuitions and systematic reasoning etc. through this manner, the desired outcome will be gain under this method. Basically, design thinking is mainly depending upon the designer capability to match the design of the particular product as per the customer expectations and the current technology. At the same time, the thinking of designer is guided by the experts or with the perceive things from the surrounding. So, these influence the designers thinking. In a similar manner, Carlgren et al., (2016) also identified that design thinking is the art and sciences as it includes the systematic process which provides the relevant solution of the complicated problems. Thus, from this research topic, it can be depicted that designers thinking is the best-suited method for the Udrew to minimize their issues and challenges.

Innovation

On the other side, Deming et al., (2012) also defined affinity diagram as effective model and tool and technique which helps in collecting and organizing the data into the group based relationships. In oppose to it, Rao, Madanmohan (2012) depicted that this tool or technique is less effective for designing company as it will create more complication and issues rather than mitigating those issues.

According to Zhang et al., (2014), prototyping technique can also be used for experimenting and developing different designs by involving key stakeholders in the designing process. But, an involvement of key stakeholders affects the business performance as well as develops more challenges for the company. Sing et al., (2016) argued that use of prototyping technique help the organization in developing their value proposition because this technique encourages creativity, communication between developers and stakeholders.

Conclusion and recommendation

The above study concludes that design thinking technique is best and useful for Udrew in identifying and understanding the organizational problem or challenges as well as helps in redefining the value proposition. Udrew faces various issues and challenges which affects the business performance to some extent. This study also helped in determining the needs and requirements of customers from different perspectives in which the use of deigning thinking as a business model is effective and efficient in comparison to other model such as prototyping model, affinity diagram technique. This study discussed an alternative business model for providing the benefit to the company in terms of mitigation of challenges and issues. The use of the alternative model by Udrew support in revising the organizational challenge and value proposition i.e., the use of alternative model solution helps in adding value proposition to the organization system.

On the other side, the recommendation to the Udrew is that company need to focus on adopting more marketing and effective business strategy which supports the organization in mitigating the organizational challenges efficiently. The other recommendation to the company that company needs to adopt the business model which provides benefit like use of design thinking model in comparison to other two models. In addition, Udrew also needs to evaluate its performance on regular basis and provide training to its employees so that actual thinking, logical thinking and analytical thinking of employees get developed.

References

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