From Daimler AG (the German company which manufactures the Mercedes brand beside other things) Professor Herbert Kohler (VP R&D and sustainability) presented the company’s approach to Innovation at the Mercedes-Benz Museum.
They have several Innovation Excellence centers around the world. Their Innovation Centres are located in North American on the West Coast, in Yokohama in Japan, Shenzhen & Beijing in China, Bangalore in India. In some centers they employ over 800 staff, like in Bangalore. This has grown dramatically for them with an increasing focus on in-car IT solutions but also research into different driver behaviours and requirements in various cultural settings. On the West Coast of America they are tapping into trend spotting, design and the creative talent, as well as learning from California’s environmental requirements for the rest of the company. Daimler strategically positions their Innovation Centers close to their largest growth markets. In North America they shipped over 300,000 units in the last financial year. In China they have achieved substantial growth, with cars produced there adjusted to local needs. The company is focusing on new trends around autonomous driving and the connected car. Their operational R&D plans look two years ahead and their long-term strategic plans ten years and beyond. All of this information is part of Daimler’s future analysis, strategic decision-making unit, which also has a monitoring and networking arm to ensure they don’t miss key trends and stay ahead of the curve. Daimler employs over 120 different nationalities in their Innovation teams, rotating staff in and out of international R&D facilities to cross-pollinate between the teams.
They not only focus on product innovation but also on business model innovation. Their Car-to-Go concept – hire an electric car, try-before-you-buy model – is hugely successful. The concept was launched in Austin, Texas, where they didn’t originally anticipate such a big take-up of this business model. This model is now being rolled out in other parts of the world. Daimler’s electric car concept is quite different from the Toyota or BMW approach – i.e. hiring vs. selling electric cars. With mainstream car buyers who are still not sure about the electric care concept, this may be a good market entry model. For Daimler it is proving hugely successful.
Also note, that Daimler Benz produced the first commercial vehicle in 1887. With their Formula 1 cars they are very successful experimenting with new materials, efficient motors and other world beating innovations. Those innovations are flowing directly into the latest car models.
Author: Martin Knoche, Business Innovation Group at Callaghan Innovation (Stuttgart 5. June 2014)