Posted: May 25th, 2022

Opportunity In this specific case Lotus



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In this specific case, Lotus had the opportunity to build upon its brand image and name recognition by producing a brand-new sports car that would appeal to a certain segment of the population; some would say that it was enough of an opportunity that Lotus would likely suffer extraordinarily if it did not take advantage of the circumstances. The opportunity, however, was not something that was fleeting in nature, it could be approached in with a long-range goal and vision, but persistence would also have to be a key, as would creativity and innovation.

The Concept

The concept was to use the strengths of the Lotus name and company’s reputation in the automotive industry for building fine racing vehicles to mass produce a sports car that would be fun to drive, affordable (or at least not prohibitively expensive) while at the same time producing a vehicle that would be more lightweight than normal, have less drag and would also be esthetically pleasing. Creating such a vehicle would be a massive undertaking especially since Lotus had never attempted this type of project in the past. This type of undertaking would mean that a certain culture and environment would have to be in place in order to provide the optimal conditions for developing such a vehicle.


Factors that would have to be considered included; how the involved departments would communicate and make decisions, how any potential conflicts would be surmounted, and how individual and group roles would be decided.

A major concern would be the personal attitudes of the employees in each division and how they would work together to foster the creativity and innovation necessary to complete a major endeavor such as this one. One report justified the company’s approach, stating that “attackers dislodged incumbents when ballpoints supplanted fountain pens, when diesel electric locomotives prevailed over steam locomotive, when electro-mechanical calculators were displaced by electronic calculators, and when vacuum tubes gave way to transistors” (Day, Schoemaker, 2000, p. 9); each of these items were created through ingenuity and innovation on existing products, much like the Lotus idea of creating a vehicle that would be more affordable and appealing to the masses.

The case study shows that what the company means by innovation is that “Innovation must combine elements of knowledge, information and creativity. This means that engineers now and in the future need to combine individual and team working skills” (Case study 4, 2008).

In order to accomplish that innovation and put those skills to the test, employees from two different divisions (and some would point out, two different mindsets) would have to come together, work in collaboration with one another, and bring their particular strengths and weaknesses to the table, so that both divisions could benefit from the other. Each division has a role to play in order for the project to come to fruition. There are many potential conflicts between the two divisions, and of course between individuals who think along totally separate wavelengths, especially when attempting to undertake such and ambitious project. Even more disconcerting is the fact that this type of transition would mean a whole new mindset for all the employees.


Some of the barriers present in this project that could have inhibited the creativity of those involved include the fact that culturally the two divisions that were most involved in the process usually see creating a new product in two very specific, and very different ways. The engineers oftentimes provide an outlook on how the car can be manufactured in an efficient manner, while the designers oftentimes wish to create a vehicle that adheres to certain appealing lines and motions. From the Creativity for Innovation chart below (Exhibit A) we can see that individual attributes along with conceptual skills lead to organizational processes that lead to creative behavior resulting in innovation. The design division for Lotus displayed the risk-taking and originality that was complemented by the organizing, re-arranging and generating new ideas of the engineering department which together fostered an organizational process that provided creative behavior and led to the Elise product through innovation. Barriers would have been if the designers had not listened to the engineers regarding certain aspects of the construction of the vehicle. A good example of a specific barrier was when the visual identity of the automobile was threatened by the high drag factor and the engineers felt that there were only a few options open to the designers. However, “under the mediation of other team members a compromise was finally reached, and a spoiler added” (Case study, p. 175).

Another barrier was the fact that the in-house team was not necessarily the only group working on the design of the new vehicle; the lack of communication between the ‘higher ups’ and those working in the daily trenches could have had a devastating impact on the team’s work and morale.

As the study determines “it was fortunate for the in-house team that their idea was considered to be the most progressive, innovative and different — and more aligned with the key brand values of the company than the other designs” (Case study, p. 174).

One other area that could affect the company in an adverse way would take place even if the designers and engineers were able to collaborate on the project in an efficient and timely manner but the product proves to costly to produce. As one recent study determined “sustaining a business model requires a means to capture a portion of the value created from innovation” (Chesbrough, Appleyard, 2007, p. 58).

Generating Solutions

Sustaining the business model in order to capture a portion of the value created by the new product is a key factor in, and a primary purpose behind Lotus’ new vehicle. It would be incumbent on the company then to understand that there are many challenges regarding a project such as the one being undertaken, and that there should be some defining techniques used to generate solutions to those problems. In this area, Lotus may wish to take it’s time in addressing the particular issues that arise in problematic order. One expert writes that “the biggest challenge is to overcome the tendency to immediately come up with a solution” (Hicks, 2001). Hicks suggested that there are seven steps to solving problems. Those seven steps include; 1) identify the issues, 2)understand everyone’s interest, 3) list the possible solutions, 4) evaluate the options, 5) select an option, 6) document the agreement, and 7) agree on contingencies, monitoring and evaluation (Hicks, 2001). The method espoused by Hicks goes hand in hand with the Creative Problem Solving theory as used in the workplace.

Creative Problem Solving (CPS) is a technique developed in the 1950’s that is used for solving problems in the workplace. Though CPS is not as comprehensive in the steps taken as Hicks’ formula, it still seems to get the job done, and could be used effectively in the case of Lotus development of the Elise and its subsequent marketing efforts. The CPS method provides a way for the problem solver to solve problems through stages with specific steps. The first stage is to explore the challenge through fact, objective and problem finding (indentifying the goal through the relevant data and clarifying the problem(s) that needs solving. The second stage is to generate ideas on how to solve the problem and the third stage is to prepare for action by moving the idea into an implementable arena through a plan for action (Osborn, 1955).

The CPS seems a non-sensical and logical method for addressing problems, especially in the workplace, and would likely be used to a distinct advantage by Lotus. One of the current problems facing Lotus is that there is more demand for the Elis than what was anticipated. This is actually a good problem, in that it means the product is of highly quality and therefore pleasing to the masses. Using the CPS to come up with solutions would mean that Lotus will take its time in addressing the issue and that a productive answer would be arrived at in an efficient manner.

High Demand

High demand in the Lotus case is not the same high demand that Ford or Toyota can experience. High demand for Lotus means that “we’ve got a fantastic name. We’ve only got to find a maximum of 5000 customer a year” (Case study, p. 181). Yet, what if the demand was to remain strong, perhaps double, or triple the amount of vehicles that could be sold?

Would Lotus be missing out on a huge opportunity to grow their name brand, to sell more cars and to become a more substantial player in the market place? The scenario could be so strong that other new Lotus creations could benefit as well. It sure seems that a sound and strategic plan to take advantage of the current demand could be the harbinger of many good things to come.

Appropriate level

One method for determining whether the current demand is an anomaly is to conduct a market survey. One recent study found that “we now have more ideas than ever before about what constitutes quality in a survey” (Lynn, Erens, 2010, p. 295) while another study concluded that during the last few years there has been a considerable amount of attention to developing formal definitions, measurements, evaluations and improvements to surveys and their structures (Lynn, 2004). Using the gained knowledge and expertise of the past to conduct surveys and evaluations can be accomplished for at a relatively inexpensive rate, and such use of data gathering tools can help in determining the direction Lotus should take in the future. Determining an appropriate level of production to meet demand is a science that can be analysed through the use of both qualitative and quantitative studies.

A couple of interesting facts that emerged from the case study that should be addressed by Lotus, both came at the end of the study and both had to do with marketing the end product. The study quoted Tipler as stating “while other cars seem to have a clearer customer profile, it is not quite clear what attracts someone to Elise ownership” (p. 181).

This is a glaring example of why surveys are conducted in the first place; surveys are conducted so that companies like Lotus know exactly who their primary (and secondary) customers are in order to market the product more efficiently.

The second interesting fact also came from one of the individuals at the top of the Lotus food chain; the study quoted Julian as stating “we don’t want to get overly involved in marketing, market research and clinics, that sort of stuff, that’s a lot of hassle” (p. 181). Really? The people leading the company don’t wish to get involved with marketing or market research because that’s a lot of hassle does not make sense at all.

Entrepreneurial leaders are leaders who take charge and believe in themselves, their product and their employees. Perhaps a more transformational leadership emphasis for Lotus would help to achieve even greater things for the company. A recent article described transformational leaders as the individuals whose actions “motivate followers to do more than expected and act for the good of the collective” (Fu, Tsui, Liu, LI, 2010, p. 222). Transformational leaders expect their employees to pull together and perform a job not only for themselves but for the company as well. Additionally, Steven Case, former CEO and founder of AOL said that leaders should have three qualities including; perseverance, passion, and caring for people. Lotus leadership has already demonstrated some admirable traits, including perseverance. However, the passion for sales and marketing is missing from their leadership repertoire. Addressing the high demand for the Elise should be a top priority for management. Determining whether that demand is a long-term or short-term demand would prove quite beneficial to Lotus in making determinations concerning funding, new plants and new models.


Based on the above scenario, recommendations for Lotus include; 1) immediately hiring a marketing and research firm to determine the amount and strength of the demand for Elise, 2) develop a preliminary funding and financing model based on anticipated growth and demand for additional vehicles and models, and 3) develop an advertising campaign based on the current strength of the Elise model and the demand throughout the world.


Case Study 4: The Lotus Elise – Von Stamm, B. (2008)Managing Innovation, Creativity and Design, John Wiley & Sons – Chapter 11 (pp. 171-82)

Chesbrough, H.W. & Appleyard, M.M.; (2007) Open innovation and strategy, California Management Review, Vol. 50, Issue 1, pp. 57-76

Day, G.S. & Schoemaker, P.J.H.; (2000) Avoiding the pitfalls of emerging technologies, California Management Review, Vol. 42, Issue 2, pp. 8 — 33

Fu, P.P.; Tsui, A.S.; Liu, J.; Li, L.; (2010) Pursuit of whose happiness? Executive leaders’ transformational behaviors and personal values, Administrative Science Quarterly, Vol. 55, Issue 2, pp. 222 — 254

Hicks, T. (2001) Another look at identity-based conflict: The roots of conflict in the psychology of consciousness, Negotiation Journal, Vol. 17, Number 1

Lynn, P. & Erens, B.; (2010) The ESRC survey resources network, International Journal of Market Research, Vol. 52, Issue 3, pp. 295 — 302

Lynn, P. (2004) Measuring and communicating survey quality, Journal of the Royal Statistical

Society Series A (Statistics in Society), Vol. 167, Issue 4, pp. 575 — 577.

Nakagwa, L. (2010) Steve Case lecture outlines entrepreneurship, Ka Leo the Voice, accessed at, on June 17, 2011, 2011

Osborn, A. (1955) Applied Imagination, New York

Exhibit A

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