Innovation in Tesla Motors: S-Curve, Product Lifecycle, Innovator's Dilemma, Blue Ocean and Red Ocean Strategy, and Porter's Five Forces


Added on  2019-09-30

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Running head- InnovationInnovation

1InnovationExecutive summaryThis study is conducted on Telsa Motors to get insight into the company's background, its competition, and the innovation. The study covers the S-Curve of the company, an analysis of product lifecycle, innovators dilemma model, blue ocean strategy and red ocean strategy and Porter's five forces in respect of Telsa Company. The study reveals the position of Telsa in the market and its strength against competitors. Introduction Telsa was founded by a group of engineers in 2013 to build electric cars and reduce the problem of emission at minimum possible level (Nykvist et al., 2015). They had a mission to build a car which is faster, better and fun to drive than other cars. The company's motto was to build a car tocut the use of fossil fuels and save the environment from emission and make a better future. The Headquarter of the company is in Palo Alto, California, the US and the CEO of the company is Elon Reeve Musk. The total revenue of the company was US$7.0 billion in 2016, and the net profit was US$-674.3 million. The value of total assets of the company was US$22.66 billion, and the total equity was US$4.75 billion in the same year. Currently, 33000 employees are working in the company. There are two subsidiaries of the company that is Solar City and Telsa Grohmann Automation. The company has main categories, i)Model S (sedan)ii)Model X (Sports Utility Vehicle)iii)Model 3, andiv)Energy (solar energy)

2InnovationThe vision statement of Telsa Motors: “to create the most compelling car company of the 21stcentury by driving the world’s transition to electric vehicles.”The mission statement of the company: “to accelerate the world’s transition to sustainable energy.”InnovationInnovation is a tool in the hand of the entrepreneur to develop a different product or process than the existing one and serve the customers in a better way and make them satisfied. Innovation is the need of time. Innovation may be of different types,i)Product: Develop an entirely new product or modify the existing one with significant newcharacteristics.ii)Process: Develop a new effective process of production to consume less time in production and deliver quickly to the end users.iii)Organization: Establish an organization based on new methods of business practices and relationship with other organizations.iv)Marketing: Marketing of product required promotion of the product, packaging, and designing of the product. Develop an innovative way to design, package and promote the product.S-Curve and InnovationS curve shows the adoption of innovation. It measures the ability of a company that how fast company is adopting the innovation (Cohan, 2017). This curve helps in describing the standard life cycle of innovation. The s curve helps in predicting the volume of production that requires a

3Innovationhuge amount of investment (money and resources) in the beginning. There are four stages of S curvei)Startup: In this stage of S curve product or service fight for survival in the market. The product in this stage requires funding because products in this stage do not yield a profit.ii)Growth: when the product is accepted by the customers in the market it started growing in the market and reached the stage of growth. Sometimes products do not survive in the first stage and reach the decline stage without completing its full life cycle. This type of products are a failure and needs unique features or ideas of marketing the product. In this stage, profit margin increases significantly.iii)Maturation: After the growth stage of S curve, products reach the next stage that is maturation stage. With the growth of the product, new competitors enter the market to gain profit in the market. Hence the profit margin declines in this stage, but it remains profit oriented product.iv)Decline: in this stage product faces the reduction in market share and profit margin decreases. Here product needs a significant strategy of marketing. The unique idea of promoting the product and also modification with unique features is required at this stage.

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