Prepare a “Creativity and Innovation” assessment on the Alcoa & the Auto Industry Case Study. The

Read the Alcoa & the Auto Industry Case Study;
Identify and describe why their aluminum alternative was innovative;
Explain if or how Alcoa leveraged its creative resources (i.e., Horizontal Insight Model);
Discuss who or what was the catalyst for creative change in the organization’s strategy;
Identify and discuss a process, product, or service that Alcoa may or may not need to reset;
If a reset is necessary, formulate an innovative and or disruptive alternative as the solution;
Review and discuss Alcoa’s implementation plan and recreate their implementation plan from your innovative perspective (i.e., 3-Step Method, etc.,);
Identify and discuss which of Alcoa’s innovative characteristics align best with which strategy (i.e. traits, trends, fringes, etc.,);
Identify and discuss which Helix Model they align with most closely and the data analytics used to support their innovative strategy;
Identify and discuss which change management plan aligned with their strategy (ADKAR, Kotter 8-Step Model, etc.);
Identify and discuss the Alcoa’s implementation strategy (i.e., Four-dimensions of behavioral implementation strategies, buying innovation, outsourcing innovation, creating innovation, or starting an autonomous organizations).

FINAL EXAM – COURSE PROJECT

UNIV.3331 – Foundations in Creativity and Innovation

Alcoa & the Auto Industry Case Study

In early 2014 Alcoa announced that Ford’s F-150 pick-up trucks, the best-selling vehicles in the U.S., would use aluminum1 rather than sheet steel in the truck bed and cab. Starting with the 2015 model year, the F-150 would be the first mass-market vehicle to be built with major body construction from aluminum. Alcoa spent $300 million expanding its Iowa factory and planned another $150 million on facilities in Tennessee to meet the demand generated by the Ford contract.

The aluminum industry’s growing success in the automotive sector reflected the response of auto manufacturers to the increasingly rigorous fuel economy standards for U.S. vehicles and consumer preferences for high mileage vehicles. To meet those standards, automakers had begun using aluminum to reduce vehicle mass, allowing a smaller, more efficient engine to produce the same performance with increased miles per gallon. For example, the F-150’s switch to aluminum for 2015 was a major part of the savings of 700 pounds in vehicle weight compared to the 2014 model

But even with the announcement of the F-150’s aluminum body, Alcoa still faced significant challenges in selling to the auto industry. First, there was the problem of consumer perceptions. Car and truck buyers tended to believe that aluminum was not as strong as steel. Especially in the truck market, where Ford promised that its trucks were “Built Ford Tough,” beliefs in the vulnerability of aluminum could hurt sales. Ford had launched an educational campaign about the strength of aluminum, but consumer reactions were not yet known. Furthermore, the steel industry was expected to promote steel’s virtues to maintain its place as the material of choice of among carmakers and car buyers.

Adoption of aluminum by the auto industry also could be constrained by other factors. Aluminum was already more expensive than steel, and increased demand could drive aluminum prices even higher. Furthermore, automakers had long relationships with steel makers and for over a century had geared their production to steel components.

In addition, aluminum faced competitive threats from other materials. Steel makers were working on lighter alloys to compete with aluminum. Meanwhile, manufacturers of carbon-fiber based composites were touting their material as even lighter than aluminum and just as strong. Plastics manufacturers were also increasing their lightweight alternatives for specific automotive components.

Given these uncertainties, planners at Alcoa and other aluminum manufacturers faced a difficult challenge to forecast the potential size of the market for aluminum in the auto industry. Would other U.S. automakers follow Ford’s lead? Would aluminum vehicles gain a foothold outside the U.S.? How would steelmakers respond to losses in the auto market? Would carbon composites create a significant challenge?

For the Final Exam Course Project, you will:

• Prepare a “Creativity and Innovation” assessment on the Alcoa & the Auto Industry Case Study. The  assessment must be a minimum of 5 pages double spaced in APA format, to include a cover sheet, reference page, proper citations, and free of misspellings.
• Leverage the information contained in the Weekly Study Plans. Use the SuperSearch function on the OC LRC website to research alternative approaches, models, fringes, trends, etc., to support your assessment. This project does require that you conduct research outside the scope of the weekly study plans, articles, videos, etc.
• Be creative and innovative in your assessment and solutioning and demonstrate the knowledge you gained throughout the course.

To maximize your grade points, the following elements must be incorporated into your assessment:

• Read the Alcoa & the Auto Industry Case Study;
• Identify and describe why their aluminum alternative was innovative;
• Explain if or how Alcoa leveraged its creative resources (i.e., Horizontal Insight Model);
• Discuss who or what was the catalyst for creative change in the organization’s strategy;
• Identify and discuss a process, product, or service that Alcoa may or may not need to reset;
  • If a reset is necessary, formulate an innovative and or disruptive alternative as the solution;
• Review and discuss Alcoa’s implementation plan and recreate their implementation plan from your innovative perspective (i.e., 3-Step Method, etc.,);
• Identify and discuss which of Alcoa’s innovative characteristics align best with which strategy (i.e. traits, trends, fringes, etc.,);
• Identify and discuss which Helix Model they align with most closely and the data analytics used to support their innovative strategy;
• Identify and discuss which change management plan aligned with their strategy (ADKAR, Kotter 8-Step Model, etc.);
• Identify and discuss the Alcoa’s implementation strategy (i.e., Four-dimensions of behavioral implementation strategies, buying innovation, outsourcing innovation, creating innovation, or starting an autonomous organizations).

If you need help with APA writing style:

• Review APA writing styles at the OWL at Purdue website – https://owl.english.purdue.edu/owl/resource/560/01/
• You can also make appointments with the Odessa College Writing Success Center, which is located in Wilkerson Hall, Room 106. The Writing Success Center staff is also available in the LRC at night and in the evenings. Their contact information is – https://www.odessa.edu/current-students/student-success-center/tutoring/index.html

ANSWER

An Analysis of the Alcoa & Auto Industry Case Study

An Analysis of the Alcoa & Auto Industry Case Study

At the turn of the 2010s, many automobile manufacturers faced an increasing demand by producing highly effective vehicles that could manage several mileages while still maintaining low fuel consumption. The challenge fell on the manufacturers to come up with new and innovative ways to meet these demands. Automobile manufacturers began to use Aluminum to maximize performance while reducing the size of the vehicle parts. Engines and other body parts were made smaller and lighter, and the vehicles became more efficient. Alcoa signed a deal with Ford’s automobile manufacturing company in 2014, allowing them to manufacture track beds and cabins made from Aluminum rather than sheet steel (Rosenthal et al., 2014). In this period, the Ford F-150 pickup was the bestselling truck throughout the United States, so this move put the adoption of Aluminum on the radar of the auto industry. Despite gaining gradual grounds regarding the sale of aluminum parts to other vehicle manufacturers, Alcoa still faced numerous challenges because many people were still skeptical about Aluminum’s actual strength compared to other metals such as steel. The competition was quite challenging as steelmakers were also looking at developing alloys to make it stronger and lighter. With all these came the uncertainty of how the market would respond to Aluminum’s use in the auto industry. This essay will examine the Alcoa and auto industry case study. It will establish the measures put in place by the company to ensure the successful implementation of Aluminum in the automobile manufacturing market.

Aluminum’s use as an alternative to other metals is considered innovative on Alcoa’s part because it enabled the auto industry to improve its fabrication methods. Aluminum’s use improved motor vehicles’ efficiency because it significantly reduced the size and mass of body parts while providing high tensile strength to the cars. Richard Hanners reports that while doing a promotion back in 2015, an Aluminum associated advertisement said one of the significant advantages of using Aluminum as an alternative to other metals is that it provides a 15 percent reduction in total body mass while maintaining a high tensile strength (Hanners, 2017). In this regard, Aluminum’s use in the manufacture of motor vehicle parts was revolutionary and innovative. It set precedence for other metal manufacturers to follow. Rosenthal et al. report that Alcoa faced severe competition from other metal manufacturers such as the steelmakers working on developing alloys that would be lighter and stronger than Aluminum (Rosenthal et al., 2014). This competition only emerged due to Alcoa’s innovative Aluminum manufacturing and its incorporation into the motor vehicle industry.

Part of what has made Alcoa become a globally dominant force in Aluminum’s manufacture for the automobile industry is its ability to implement the horizontal insight business model. Barry Moltz defines the horizontal integration model of expansion in his business insider magazine as expansion through the acquisition of similar-minded enterprises or companies that manufacture the same products and serve the same client base (Moltz, 2019). Alcoa successfully managed to implement this method of expansion by strategically leveraging its innovations. It is common knowledge that Alcoa has always embraced innovation and technology. The depth of innovative knowledge, therefore, gives them strong bargaining power, which it uses to make acquisitions of competitors strategically and therefore remain dominant in the global production of Aluminum for the automobile industry. The main factor influencing Alcoa’s innovative change in its approach was forming an investigative team by Vince Adamo back in 2002 (Lock, 2017). This team discovered the reason for stagnation was that Alcoa’s focus was too narrow and suggested that the company look into processes more broadly and that the groups should engage practices in a more in-depth manner. The committee also discovered that the company was too focused on maintenance rather than production. As such, a shift of focus changed to production, which revitalized the company.

Change is always a process that needs to occur if a company is to stay relevant in any particular industry. Companies need to stay updated with trends emerging in the sectors, especially for Alcoa in the automotive sector (Tang, 2019). The major change thing that Alcoa may need to look into resetting is its operating structure. The company needs to do away with part of its executive to reduce expenses, which can then be used to improve production. This change will also serve to generate a more integrated working environment, which enables higher productivity. Only through the implementation of such changes will the company stay in shape to ensure continued growth in the industry. Alcoa rolled out a transformation plan back in 2014 during an investor’s retreat, aiming to build a highly competitive Aluminum business and expand its fabrication operations. The strategy was to shut down some of its operating bases while revamping its business models of operation. This was to include the sale of some of its assets, such as its aluminum shares, to improve Aluminum’s cost position. Alcoa also announced that it intends to cut down on the benefits that its employees will receive upon retirement, such as a pension, among others. The best implementation plan would be a three-step strategy that would begin by engaging the right people who understand Alcoa’s culture and, as such, would be able to create the right environment for the formulation of these plans. It would also entail selecting a select team of professionals who have worked at the company for a long time.  The right team creates a suitable environment for the transformation to occur. Secondly, I would develop attainable objectives such as the thinning of the executive branch to ensure a more integrated workforce. Lastly, I would ensure that these strategies are appropriately communicated right across the entire company to ensure that the whole workforce is in sync with the company goals.

Alcoa has been widely regarded as a hugely focused company on innovation as a means of expanding its position in the market. In this regard, it is evident that it is a company that is proactive and can be said to be action-oriented. This is an innovative trait that best matches the incremental innovation strategy. Jorge Lopez defines Incremental innovation is a creative strategy where a company or organization uses its existing technology to better the service provided to its customers (Lopez, 2015).  Organizations should always use data strategies to understand and develop their business strategies. The organization must always ask themselves questions such as how and whether the data used adds value to the company, the company’s critical data assets, and how that data collected can be managed.  Understanding one’s data strategies help in revamping the business strategies. The kind of analytical data used in Alcoa is big data analytics and marketing. This kind of data allows the company to understand potential audiences and various market segments better.

Some models are used to help companies with the process of managing change. These models enable the companies to organize their answers to problems and plan for any unforeseen future challenges that may come with change. The primary model that matches Alcoa’s core strategies is the ADKAR model developed by Jeff Hiatt (Tang, 2019). Its goals align with the goals that Alcoa seeks to attain at the end of its revitalization plan and are, therefore, the best fit. It first begins by creating awareness, then making the desire for the change. The organization is in charge of acquiring the knowledge that enables it to exert the shift and finally identify the mistakes committed and prevent them from reoccurring (Tang, 2019). Alcoa’s primary strategy involves all four dimensions of behavioral implementation strategies. The company, autonomously created in 1988, primarily manufactures Aluminum from bauxite, which the company mines. This feature reflects the creation of an innovation. The company then seeks to carry out research to improve the products that they already manufacture, which shows outsourcing innovation as the knowledge used is not it’s own. Finally, through acquisitions and merges with other companies involved in the aluminum business, we see a case of buying innovation. The strategy employed by Alcoa is, therefore, a cocktail of all the four methods presented. This essay successfully examined the Alcoa company and its management policies, as was earlier set at the beginning of the paper. We have looked into the company’s strategies for implementing change and how the said strategies align with the different innovation models. This paper concludes that all the plans need to be aligned with the company’s innovative structures to ensure a successful implementation.

References

Rosenthal, J., Gentry, B., Corte, T., Oldham Rogan, J., & Elias, J. (2014). Alcoa & the auto industry. Yale School of Management.

Hanners, R. (2017). Alcoa Overview-ASQ. P. 1-45

Moltz, B. (2019). Should You Expand Through Horizontal and Vertical Integration? American Express. Retrieved from https://www.americanexpress.com/en-us/business/trends-and-insights/articles/should-you-expand-through-horizontal-and-vertical-integration/

Lock, D. (2017). Make Effective Organizational Transformation: Alcoa Case Study. Project Management Articles. Retrieved from https://project-management.com/make-effective-organizational-transformation-alcoa-case-study/

Lopez, J. (2015). Types of innovation. Constant Contact. Retrieved from https://techblog.constantcontact.com/software-development/types-of-innovation/

Oberoi, M. (2018). Alcoa’s Transformation is Still a Work in Progress. Market Realist. Retrieved from https://marketrealist.com/2019/12/alcoa-transformation-still-work-in-progress/

Tang, K. N. (2019). Change management. In Leadership and Change Management (pp. 47-55). Springer, Singapore.