Full Answer Section

Here’s a more detailed breakdown of the reasoning behind this recommendation:

Rationale for Incremental Innovation

1. Lower Financial and Market Risk:

• Leveraging Existing Assets: Our company has a well-established product line, with a strong brand reputation and a loyal customer base. A discontinuous approach would require a massive investment in new R&D, manufacturing infrastructure, and marketing to launch a brand-new vehicle platform. Incremental innovation allows us to build upon our existing, profitable models. We can integrate IoT features into a current model, test the market, and refine the technology before a broader rollout, which significantly reduces the risk of a high-cost failure.
• Gradual Market Acceptance: Consumers can be hesitant to adopt radically new technologies, especially in high-cost purchases like automobiles. By introducing IoT features incrementally into a well-known model, we allow customers to become familiar with the benefits in a low-risk environment. This approach allows us to gather valuable customer feedback, educate the market, and build a positive reputation for our IoT offerings, which will pave the way for a wider rollout.

2. Strategic Learning and Agility:

• Real-World Data and Feedback Loop: Rolling out IoT features in a single model first creates a controlled environment for learning. We can collect real-time data on how customers use the features, what they find most valuable, and what issues they encounter. This feedback loop is critical for refining the technology and our service offerings. We can then apply these learnings to the broader product line, ensuring that future implementations are more robust and better tailored to customer needs.
• Faster Time-to-Market for Features: The fast-paced nature of IoT technology means that new sensors, software, and connectivity standards are constantly evolving. Designing a completely new product line would take several years, and the technology might be outdated by the time it reaches the market. An incremental approach allows us to rapidly add new features and over-the-air (OTA) updates to existing vehicles, keeping our products current and competitive.