On the way to electric cars - a case study
of a hybrid electric vehicle project at
Volvo Cars1
Hans Pohl1 and Maria Elmquist2
1
hans.pohl@vinnova.se, VINNOVA, Swedish Governmental Agency for Innovation Systems SE-101 58 Stockholm,
Sweden and Chalmers University of Technology, Vera Sandbergs Allé 8, SE-412 96, Göteborg, Sweden
2
maria.elmquist@chalmers.se, Chalmers University of Technology, Vera Sandbergs Allé 8, SE-412 96, Göteborg,
Sweden
Several large actors in the automotive industry have tried to realise the paradigmatic shift from
internal combustion engine to electric propulsion, where hybrid electric vehicles (HEVs) can be considered an intermediate step. The Toyota Prius project is probably the most well-known example.
However, not all automotive firms have the resources to launch an initiative as radical as Toyota
did. Previous research on technological discontinuities and the management of radical innovation
provide some valuable insights but there are still few empirical studies available. The aim of this
paper is to provide an example of how a small auto maker can approach such a substantial
challenge to the whole automotive industry in a less resource demanding way. Based on a case study
of an HEV project at Volvo Cars being technologically and chronologically close to the Prius
project, it contributes to the growing field of innovation management research and practices.
1. Introduction
With a growing focus on the negative climate impact of
the emissions caused by vehicles propelled by fossil
fuelled internal combustion engines, automotive firms are
exposed to a strong pressure to challenge this more than a
century old technology paradigm. Most car manufacturers
are currently working on both alternative powertrains and
alternative fuel strategies. The need for more than incremental innovations is substantial. Previous research on
technological discontinuities (e.g. Olleros, 1986; Tripsas
and Gavetti, 2004; Tushman et al., 1997) and the management of discontinuous innovation (e.g. Christensen,
1997; Leonard-Barton, 1992; March, 1991; Tushman and
O’Reilly, 1996; Tushman and O’Reilly, 1997; Utterback,
1994) has provided valuable insights on how to organize
discontinuous innovation, but there are few examples of
how firms actually deal with innovations of a more discontinuous nature.
Toyota has set one example of a promising approach to
develop new hybrid propulsion technologies with the
Prius project. Previous studies describe a project driven
1
by a strong strategic vision of leadership in the area, a
huge budget to build all needed competences in-house
and a high degree of risk taking (e.g. Itazaki, 1999;
Magnusson and Berggren, 2001; Nonaka and Peltokorpi,
2006; Williander, 2007). Although the Toyota case is an
illustrative and highly relevant project to learn from, the
prerequisites for this specific approach differ from the
resource scarce conditions that usually reign in product
development projects in automotive firms. It is difficult
and maybe not even advisable for other firms to directly
copy the strategy and therefore a reflection on alternative
approaches could be useful, which is the purpose of this
paper.
This paper provides a detailed description of an alternative and, in most dimensions, considerably less
demanding approach. The Desirée project at Volvo Cars
was chronologically, as well as technologically, close to
the Toyota Prius project. Volvo Cars has been quite active
in the field of hybrid electric vehicles (HEVs) and the
studied project represents a critical phase (1997-1999) in
a series of attempts. The project was a focused R&D
effort with limited resources and support in the
This study is partly financed by R2DS Île de France and partly by Vinnova.
organization, breaking with the dominant design of the
combustion engine based powertrain, and the series
hybrid tradition at Volvo Cars.
The case is analyzed using the four core capability
dimensions proposed by Leonard-Barton (1992). The
paper provides some insights on how to manage innovations of a more radical nature, such as the type of discontinuity that a HEV represents. The paper is structured as
follows: First, previous research on radical innovations is
presented. Thereafter the hybridization challenge is outlined and exemplified by the Toyota Prius case. Then the
used methodology is described followed by the empirical
data from the case study. Finally the analysis is presented
and the insights from the case are summarized and discussed.
2. Managing radical innovations
2.1 What is radical innovation?
Innovation is often defined as the application of a new
idea to create a new product or process (e.g. Galbraith,
1982; Tidd et al., 2005). The degree of novelty is
described as incremental (new), really new or radical
(Garcia and Calantone, 2002) or as a continuum ranging
from incremental change (doing things better) to radical
change (doing new things) (Tidd et al., 2005). Other
authors propose to distinguish between the degree of
influence that the innovation has on existing products,
where sustaining technologies are those improving the
performance of a previously available product and disruptive technologies bring a different value proposition to the
market (Christensen, 1997). A complementary dimension
concerns the degree of system integration, ranging from
modular (component) innovation – where the linkages
between core concepts and components remain
unchanged – to architectural innovation where these
linkages are ruptured (Henderson and Clark, 1990).
2.2 How can firms deal with innovations of a
more radical nature?
Managing radical innovations is often described as problematic as it is inherently linked to risk and uncertainty
(Burns and Stalker, 1961; Galbraith, 1982; Birchall and
Tovstiga, 2005). Few empirical studies describe how
innovations actually happen in large firms (Sharma, 1999)
or how firms can build innovation capabilities.
The capability of the firm is considered to be its ability
to deploy the available resources as their main assets (Prahalad and Hamel, 1990). According to Christensen
(1997), an organization’s capabilities are defined by its
processes (methods for transforming inputs to higher
value output) and its values (criterion used for decisionmaking). Leonard-Barton (1992) describes the core
capabilities of firms as the set of knowledge that provides
competitive advantage. The four dimensions are 1)
employee knowledge and skills, 2) technical systems, 3)
the managerial systems that guide knowledge creation and
control processes and 4) the values and norms associated
with these processes. To avoid that core capabilities
become core rigidities, a dynamic perspective on
capabilities was introduced by Teece, Pisano and Shuen
(1997) where the need to systematically revise and
develop organizational capabilities underlined (Helfat et
al., 2007; Nonaka and Kenney, 1991).
Addressing mainly the knowledge and skills
dimension, innovative capability has been defined as “the
internal driving energy to generate and explore radical,
new ideas and concepts, to experiment with solutions for
potential opportunity patterns detected in the market’s
whitespace and to develop them into marketable and
effective innovations” (Assink, 2006:219). Assink (2006)
further argues that a way of developing this capability is
to enhance the absorptive capacity, i.e. the capacity to
recognize and understand external knowledge, assimilate
and apply it internally (Cohen and Levinthal, 1990; Lane
et al., 2006). Other authors have underlined the generative
aspects of innovative capabilities where values are
collectively recreated (Le Masson et al., 2006). Recent
literature on open innovation argues that to be innovative,
firms need to open up the innovation processes and work
beyond the boundaries of the firm (e.g. Chesbrough,
2003) since it is becoming impossible to develop all
knowledge in-house. Open innovation research even
argues that firms need to consider knowledge external to
the firm as being as critical as the internal knowledge (e.g.
Enkel and Gassman, 2007).
Relating to the technical system capability several
authors stress that the regular product development processes are inadequate for developing innovative products
(Leifer et al., 2001; McDermott and Colarelli O’Connor,
2002; Rice et al., 1998; Veryzer, 1998). A separate
organization, with dedicated teams, is often suggested for
projects dealing with potentially radical innovations
(Galbraith 1982; Govindarajan and Trimble, 2005; Quinn,
1985; Sharma, 1999; O’Reilly and Tushman, 2004). This
setup shields the project and allows freedom, speed and
experimentation. But separating the explorative activities
from the core business also leads to isolation and resistance against the resulting ideas (Birkinshaw and Gibson,
2004; Moss Kanter, 2006). Instead, others have underlined the need for a management system that encourages
learning and experimentation (e.g. Colarelli O’Connor
and De Martino, 2006; Eisenhart and Tabrizi, 1995;
Hatchuel et al., 2003). This difficult trade-off between
short term returns and long term capability building
(Bartezzaghi et al., 1997) has been described as
exploration/exploitation (March, 1991) and the
ambidextrous organization (Tushman and O’Reilly, 1996;
1997). Leonard-Barton (1992) argues that technical and
managerial systems are easier to change than knowledge
and skills. “The value embodied in a core capability is the
dimension least susceptible to change” (Leonard-Barton,
1992:121). She also stresses that the number of capability
dimensions being challenged relates to the degree of
misalignment of the project, which in turn relates to the
severity of the paradox of making use of the core
capabilities at the same time as trying to alter them.
3. The challenge of hybridization in the
automotive industry
3.1 Hybridization in the automotive industry
Several large actors in the automotive industry have tried
to realize the paradigmatic shift from internal combustion
engine to electric propulsion, but so far with limited
impact. About a decade ago, an intermediate solution, a
hybrid in a double sense (c.f. Geels, 2002), reached the
market – the Toyota Prius. As hybrid electric vehicles use
existing automotive knowledge and add new competencies, it is competence enhancing in Utterback’s terms
(1994). In comparison, a “pure” electric vehicle has a
clear competency destroying aspect, as it eliminates the
need for an internal combustion engine, which has been
dominant during more than a century.
Technological discontinuities occur at various levels.
Even though a break-through innovation can be characterized as radical in a retrospective it is seldom very radical when it first reaches the market. Changes at subsystem level dominate (Tushman et al, 1997), the
hybridization of the powertrain is one such example.
There is a clear parallel between the degree of
electrification of the vehicle’s powertrain and the
radicalness of the technological change. Perspective also
matters; for a supplier of hydraulic servos a shift to
electric servos might eliminate the business completely
whereas for the car manufacturer, the shift to electrically
assisted steering is just a small step in the improvement of
energy efficiency.
3.2 The Toyota Prius project
Late 1993, Toyota established the G21 project that
resulted in the market introduction of the Prius in December 1997 (Nonaka and Peltokorpi, 2006). In 1995 it was
decided to use a power-split hybrid topology; the Prius
uses a planetary gear to distribute the power between the
motors/generators and the Atkinson cycle engine (Itazaki,
1999). The initial production volume of 1 000 vehicles
per month was soon doubled, due to large order volumes
(Nonaka and Peltokorpi, 2006). Sales outside Japan
started in the year 2000 with the second generation Prius.
In 2007 Toyota had 75% of the US market for HEV passenger cars with five HEV models. The Prius accounted
for an accumulated total of over 800 000 units (GreenCarCongress, 2007). Since the introduction of the Prius
Toyota has grown steadily and is now approaching a position as the world’s largest car maker (OICA, 2007).
Toyota’s ambition was to be the first company commercializing HEVs (Itazaki, 1999). At least one thousand
Toyota engineers were involved in the Prius project
(Nonaka and Peltokorpi, 2006) and, with a strong support
from top management, resources were not a significant
restriction. The project management was situated in the
“red carpet room” (Itazaki, 1999:13) separated from the
rest of the R&D organization. The team members were all
young and dedicated solely to the project (Nonaka and
Peltokorpi, 2006). A strong focus on learning characterized the project (Williander, 2007) and the Prius was
designed from scratch, with a carte blanche to develop all
parts internally if necessary. It was decided that all hybrid
parts based on brand-new technologies should be manufactured in-house to retain the ability to understand,
evaluate and produce the basic technology within the firm
(Itazaki, 1999). Also, the G21 project strived for a minimum of prototypes and no back-up alternatives. “The task
was an extreme challenge for the senior engineers
appointed to the project.” (Williander, 2007:208) Very
intensive test driving took place around the clock during
the summer of 1997 to meet deadlines and use the test
vehicles more efficiently. The tests totalled five times
longer distances on the test course than other new
vehicles and involved approximately 100 test vehicles of
four generations (Itazaki, 1999). The project first had a
clear focus on technology viability, and changed focus to
cost reduction only after this goal was achieved
(Magnusson and Berggren, 2001).
4. Methodology
This paper builds on a case study of a HEV project at
Volvo Cars. The case study research method (e.g. Eisenhart, 1989) is in line with other attempts to increase the
knowledge on radical innovations. This case study is
mainly based on data from 14 semi-structured interviews,
lasting between one and two hours. To avoid or at least
limit the bias of retrospective sense-making (Eisenhardt
and Graebner, 2007), informants with different positions
in relation to the project were selected; from directly
involved and positive to quite distant and negative. Several hierarchical levels in the organization were represented, from workshop staff via the project team to line
managers and top management. Half of the informants are
still at Volvo Cars, others have retired or work at other
firms. Notes from each interview were submitted to the
informants for review and approval. The main complement was the ‘project archive’ - a CD containing project
documentation such as test reports, drawings, presentations, photos and press cuts.
In order to avoid the curse of success, top management wanted
to face future challenges at an advantage by developing core
technology, path-breaking vehicles, and new routines of
product development for the 21st century. Without a pathbreaking vehicle, it was felt that Toyota would be following a
steady path of incremental innovation, rather than moving
radically to a new level of existence. (Nonaka and Peltokorpi,
2006:93)
Table 1. Data sources
Informant category
Desirée team member or leader
Manager at Volvo Cars
HEV specialist at Volvo Cars
not involved in Desirée
Project archive
Reference
D1 – D5
M1 – M7
H1 – H2
CD
Using the theoretical framework, the results were systematically analyzed through an abductive analysis
approach, also referred to as systematic combining
(Dubois and Gadde, 2002). The analysis also draws on
knowledge from a number of other studies on product
development and concept development at Volvo Cars
which have provided the authors with in-depth contextual
understanding of the practices in use in the organization.
5. The Desirée project
This section is, unless otherwise stated, based on interviews as outlined in the methodology section.
5.1 Project initiation
Volvo Cars has a long-term and trustful relation with
Aisin, a Japanese supplier of, among other things, automatic gear boxes, partly owned by Toyota. The collaboration includes bi-annual strategy meetings, where Volvo
Cars and Aisin discuss current and future activities of
common interest. In 1997, at one such meeting, one of the
Volvo representatives noticed a product on display. It
turned out to be a power-split hybrid transmission proposed to Toyota for their Prius project, but not selected as
Toyota opted for an internal version of a power-split
device. Aisin and Volvo agreed to initiate a joint project
to test and demonstrate this power-split device.
A few months earlier, one of Volvo Car’s largest
efforts so far in the hybrid trajectory had been halted due
to costs. However, some people involved felt that Volvo
Cars had to do something in the hybrid domain. An
ambitious project manager was asked to organize a
project around the Aisin technology and an initial budget
was created. The project manager was not part of the
previous hybrid history at Volvo Cars and realized during
the preparation of the project that several engineers that
had worked with electric traction were strongly
committed to series hybrids. He also realized that
management was not yet ready for this new technology it was not possible to achieve a clear support at this stage.
To avoid lengthy discussions, he recruited only a part of
the existing hybrid competence to the project.
Furthermore, it was decided to make a pair of
demonstrators to convince the managers.
The Desirée project (Dual Hybrid Electric System for
Increased Efficiency and Economy) started in October
1997 and involved approximately 20 persons from
various departments. The objective was to develop two
demonstration vehicles with substantially improved fuel
efficiency. They should meet all regular emission and
safety requirements and, apart from the powertrain, only
contain standard components. Aisin was the main partner,
supplying transmission and motor drives, Varta supplied
the nickel metal hydride batteries and Bosch the engine
control module.
5.2 HEV demonstrator development phase
Two used vehicles, one S40 and one V40, were used as
platforms for the Desirée powertrain. Relatively large
batteries were selected, allowing for a certain range in
electric mode at lower speed. The vehicles were also
equipped with a battery charger (plug-in capability) and a
small, three-cylinder combustion engine developed especially for Desirée. Several other innovations stemmed
from the project (approximately fifteen patents), for
instance an electric air conditioning system, which was
installed but never made operational, as the fine-tuning
would be too time-consuming.
After the main components and solutions were
selected, and the system modelled and simulated, much
work was carried out in the workshop. Due to the tight
time and financial constraints, there was a limited use of
drawings. This relatively high degree of freedom required
high competence in the workshop and allowed a trial-anderror working method. There were few project meetings
and the people involved in the project often met around
the vehicles. The suppliers also participated, partly on site
in Gothenburg, for instance Aisin had two resident
engineers working with the project during approximately
one year. As the project was not in the product plan, some
departments were not at all represented, which
contributed to a reduced administration of the project.
Closely related to the trial-and-error approach was a
relatively large extent of testing. Apart from the obvious
measurements of consumption and emissions, a lot of test
driving in various environments was made. Among
others, a direct comparison with the Prius was made in
Japan, involving test drives with the two vehicles. These
tests indicated a slightly better fuel efficiency of the
Desirée with an energy efficiency improvement of
approximately 40% compared to the conventional
powertrain.
During the project, Toyota introduced the Prius. One
reaction from European automotive companies was the
argument that the Prius would never cover its own costs.
Another response was the intensification of the hybrid
development. The introduction of Prius made it possible
for the Desirée project to free-ride on the interest and
increased power-split hybrid knowledge that Toyota contributed to.
5.3 Project outcome
When approaching a relatively mature status, managers
and other internal stakeholders were invited to test drive
the Desirée vehicles, both as an evaluation of the vehicles
and as a demonstration of the technology. Their response
was positive. “I think the vehicle was very nice to drive
and it appeared to be qualitatively close to market introduction.” (M7). It was decided to present the Desirée at
the Geneva Motor Show in spring 1999.
The Geneva appearance resulted in a lot of attention.
Among the persons very interested in Desirée in Geneva
were several Ford managers. Directly after the Geneva
Motor Show, the Ford Motor Company acquisition of the
Volvo car division was announced. Among the reasons
mentioned for the transaction was the large requirement
for resources in new powertrain development, where large
volumes were considered necessary to carry the development costs. The Desirée project was noted during the due
diligence procedures and it was later decided that Ford
would lead the development of the full hybrid technology
based on the Desirée project while Volvo Cars would
focus on the industrialization of a light hybrid concept
called Integrated Starter Generator (ISG). Consequently,
the Desirée team was asked to hand-over the project
results to Ford in Dearborn. Part of this knowledge transfer was made through the writing of a HEV handbook,
summarizing the experiences from the Desirée project.
Another part was a meeting in Dearborn, where the core
Desirée team informed the Ford managers and engineers
regarding the project and its outcome. The Desirée team
noted that the Ford executives seemed amazed by the presented facts, especially that Volvo had produced these
concept cars using so little time and resources. “We were
quite effective, I guess.” (D2). The total budget for
Desirée was USD 3,6 millions. As a part of the Partnership for a New Generation of Vehicles (PNGV), Ford had
committed to launching a hybrid vehicle on the market
(The Detroit News, 2006). The PNGV contract also
implied demonstration vehicles and in the year 2000, Ford
presented a diesel-electric light hybrid using a similar
topology as the Volvo Car’s ISG concept. Estimates of
the total PNGV budget, including governmental and
industrial investments 1996-1999, give a total figure of
approximately USD 4 billions for the three participating
auto makers. HEV technologies account for the
dominating part of the governmental investment
(Commission on Engineering and Technical Systems,
Transportation Research Board, 2000).
The Desirée hybrid solution required close collaboration with Aisin, a supplier that Ford did not have the same
close relation to as did Volvo Cars, so they initially acted
as a gateway in their relation. Even though the objective
was to use the power-split device also in Volvo cars, the
Ford project had soon altered the dimensions in a way
that made it practically impossible to integrate in the
Volvo cars. Ford carried out their part of the hybrid
powertrain strategy with determination, targeting a small
SUV, the Escape model. The up-scaling of the Desirée
solution to work with this larger vehicle and the
elimination of the all-electric range capability caused
some problems but in the autumn of 2004, the first hybrid
Escape was launched.
6. Core capabilities – used or challenged?
Using the core capabilities framework (Leonard-Barton,
1992) the two, partly parallel, HEV projects are compared
and discussed below.
6.1 Employee knowledge and skills
In the mid-nineties, Volvo Cars and Toyota had a similar
knowledge base, dominated by internal combustion
engine related skills but, compared to other auto makers,
also a relatively strong knowledge in the domains of
battery electric vehicles and (series) hybrid electric
vehicles. For both firms, the power-split technology and
some other components such as the tractionary batteries
represented a challenge to the existing knowledge base.
Whereas Toyota opted for a solution focusing on the
power of the batteries, Volvo Cars selected a solution
closer to the series hybrid tradition with large
requirements also on the energy storage capacity of the
batteries. Toyota’s hybrid topology represents a larger
break from the previously dominating electrification
alternatives but is actually less radical than the Desirée
solution, if considering the degree of electrification as a
measure of radicalness. Both firms were quite confident
about their knowledge and skills but acknowledged that
the learning dimension of the HEV project was important.
6.2 Technical systems
Obviously, both firms had very strong capabilities in
terms of vehicle development. Considering the
powertrains, engine development was a dominating and
well functioning process as illustrated by the Volvo Car
project where a completely new engine was developed
within the limited project scope and the new type of
engine Toyota introduced in the Prius. Another important
capability was the methods for simulation and testing.
At a very early stage in the Desirée project, it was
decided to use existing vehicle chassis and conventional
components as much as possible. This was even used as a
marketing argument for the concept; claiming a 40%
improved fuel efficiency without using low friction tires
or any other specific measures to save weight or reduce
air resistance. Quite contrary, the Prius was designed from
scratch and the project team was encouraged to make use
of new technologies and design solutions.
6.3 Managerial systems
Even though, or maybe just because, the Desirée project
was not initiated and executed according to formal procedures, it was a quite normal project in terms of management. The project team had a relatively large degree of
freedom within the tight constraints of the budget and the
time schedule. Several additional factors contributed to
the positive and productive team spirit. One important
factor was the geographical proximity of the people, often
directly working together around the vehicles in the workshop, even involving the main suppliers. Another factor
was the “skunk” dimension of the project. Even though it
was not a top-secret real skunk project (Gwynne, 1997), it
was a project outside the product plan and outside the
mental notions of most people at Volvo Cars and elsewhere. A third factor contributing to the team spirit was
the tight time and budget frames, not allowing much
deviation. The market introduction of Toyota Prius also
influenced the Desirée project, as it both confirmed that
the chosen technology worked in practice and sharpened
the HEV competition among automotive firms. Toyota,
on the other hand, used the Prius project as a vehicle to
develop and test a new type of project management,
including co-location of the project team in a separate
room.
Another managerial difference was the extent of external networking. Whereas Volvo Cars based a lot of the
core hybrid issues on knowledgeable suppliers, such as
Aisin and Varta, Toyota decided to develop all core HEV
technologies in-house.
Both projects were carefully documented but whereas
the knowledge produced in the Prius project appears to
have been further developed in other Toyota initiatives,
the knowledge generated in the Desirée project was not
systematically exploited, at least not inside Volvo Cars.
Both companies seem to have succeeded in integrating the
results from the two relatively isolated projects with the
main operations, however in very different ways.
6.4 Values and norms
Both Volvo Cars and Toyota have much faith in the
firm’s R&D capabilities, with the common standpoint that
almost all challenges can be handled with technology
improvement. The Prius project had a high status through
the direct top management commitment and large
freedom in terms of methods and budget. The clear role
for the Prius vehicle in the Toyota vision also contributed
to its status. On the other hand, Desirée was a rather low
status project, with a skunk character, small resources and
challenging some of the dominating values in the firm.
For instance, at this time, few considered the green
dimension to be an important aspect of premiumness
(Williander, 2006). Also, decisions were mainly guided
by legislation, especially in California, and as the
Californian zero emission vehicle (ZEV) mandate became
less demanding, projects with a clear ZEV dimension
(like Desirée), lost some of its support.
Toyota used the Prius project to change values and
norms. This strategy appears to have been successful at
least in terms of branding. The Prius has assisted in linking the Toyota brand to high-tech and environmentally
sounder products. When designing the Desirée project,
another strategy was chosen. The main instrument to
change the values and norms at Volvo Cars was the
extensive test-driving exercise with key stakeholders. As
this resulted in the managerial decision to put forward the
technology as one of the key messages at the Geneva
Motor Show, this strategy also worked quite well. However, when Ford Motor Company acquired Volvo Cars,
management did not fight for a continuation of the powersplit HEV technology development at Volvo Cars.
7. Conclusions
This paper set out to reflect on an alternative approach to
the very demanding strategy applied by Toyota in the
Prius project. An analysis of how the HEV projects
related to respective firm’s core capabilities highlighted
several similarities but also some key differences. The
Desirée project was designed to maximize the use of the
firm’s existing core capabilities while the Prius project
seems to have been rather the opposite, as it challenged
all four dimensions. However, although being a risky
strategy, it also seems to have been a successful initiative
to develop new capabilities and reduce the core rigidities
of the firm. Today, Toyota is deploying its new
capabilities at many levels and has a full spectrum of
hybrid vehicles on the market, while Volvo Cars still does
not have any HEVs on the market.
An interesting difference is that the Desirée project
emerged from the organization while Toyota applied a
clear top-down strategy, highlighting the importance of
top management support when aiming at challenging core
capabilities. This is in line with Leonard-Barton (1992)
who argues that values and norms are the most difficult
core capabilities to change. Since the Desirée project
objective was concept development and demonstration, it
did not radically challenge the values and norms of Volvo
Cars. However, in hindsight, this also reduced the potential impact of the project, for instance in terms of foreseeing the demand for environmentally friendlier cars. It is
possible that the Desirée project could have gained more
long term impact in Volvo Cars if the setup had been different, but given the lack of a clear top management support it seems that the strategy not to challenge the organization on its core capability dimensions was rather wise,
thus succeeding in surviving and achieving its goals.
The case study indicates that it is possible to manage
development of rather radical technologies with only limited risk exposure and small resources, thus giving some
contrasting insights to the much exposed Prius case. The
transfer of the results to Ford Motor Company and the
market introduction of a power-split based Ford Escape,
confirms that the Desirée project succeeded in its mission,
even though some team members would have preferred
leading also the industrialization phase of the HEV technology.
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