Tesla Motors: Global Business Strategy

This assignment examines Tesla Motors' global business strategy. Students need to analyze the company's international market entry strategies, its approach to innovation and its competitive advantages in the global electric vehicle market. Relevant concepts like strategic management, innovation adoption, and business models are crucial for this analysis. The final outcome should be a comprehensive assessment of Tesla's global strategy.

Running Head: INNOVATION 1
Innovation

INNOVATION 2
Part 1:
Introduction
In today’s competitive business world, there are various issues and challenges, which are
confronted by different organizations. For an organization, it is very important to overcome these
challenges for getting success. It can enable the company to increase its profits and market the
next level, if it can manage challenges in effective manner. This essay includes the discussion
about the innovative business, which was started by San Carlos in the year 2003 and how the
CEO of the company, i.e. Elon Musk has implemented various creative solutions to the issues,
confronted by the company. According to Schumpeter, entrepreneur is the person, who is always
ready to innovate and yield something new by the different processes of organization. San
Carlos, developer of the Tesla Motors was a real entrepreneur, who has incorporated various
innovative practices in its products and services. He recognized the needs and preferences of
people towards vehicles and cars (Anderson, Narus, & Narayandas, 2009).
Tesla Motors is an automobile organization in United States of America and it is also engaged in
producing the solar panels. The management of the company has implemented various
innovative ideas by introducing electric cars in the automotive industry. CEO Elon Musk
foresees his company as innovative, technology firm and independent automotive player. In
addition to this, Tesla Motors is aiming on providing electric cars at affordable prices to each and
every customer. In the year 2015 and 2016, Model S of Tesla Motors was the best-selling electric
car (Cobb, 2016). The mission and vision statement of Tesla Motors shows the nature of its
prominent electric automotive manufacturing business. Founded in the year 2003, Tesla became
profitable in the year 2013. This continuous growth and development indicate that the industry is
responding to the automobiles of organization and related products and services. Its visions
statement builds direction of Tesla for the growth of company (Chen, and Perez, 2015). With
enhanced popularity and strong image, organization is placed to get success in international
automobile industry. Entrepreneurship is the major source for the survival of business and CEO
of the company believed that this entrepreneurship developed the decision making process
creatively. This essay includes one of the major issues, which are faced by the Tesla Motors in
today’s business world. The company has implemented different solutions to deal with this issue
and explore new ways for enhancing its business operations. It includes the innovative business

INNOVATION 3
ideas of the management at Tesla Motors. Implementing new strategies and solutions assisted the
organization in regaining its brand image and enhanced its profits and revenues. Now, the
company is serving with its business operations in different areas of the world, like; Asia, United
States, Australia, Europe and Canada and it is headquartered is California (Fleisher, &
Bensoussan, 2015).
Problems Faced by the Business and how it found the Solutions
As discussed above, Tesla is making innovation its business operations by introducing electric
cars and solar cars. In its existence, the company has faced various issues, which affected its
growth in competitive business environment. One of the major issues, which are considered here,
is related to environmental sustainability and social impacts. Increased level of pollution has
enhanced the emphasis on automobiles. However, vehicles and automotive products are the
major reason behind environmental pollution. In today’s world, people are becoming very
concerned about the environment and other environmental practices. So, it affected the growth
and survival of the company (Hahn & Powers. 2010). At the same time, the company has faced
social and legal pressures to enhance the sustainability of its products and services and improve
its production method. According the survey conducted by Green Tribunal, the pollution from
vehicles is one of the major reasons behind high pollution levels. However, Tesla was very much
focused on the environmental and corporate social responsibility practices, but still it has
confronted issues related to environmental practices.
When the company has entered in the automotive industry, it was the major issue for all the
automakers. Adverse impact on environment was affecting the life and health of people and
other environmental factors. At that time, it was a great challenge to develop highly performing
economy without any environmental damage. This was the major reason, why Tesla has chosen
making investment in electric and solar cars (Moon, 2010).
Leading the arrival of more sustainable transportation system and innovation in this, Tesla
Motors has created a strong brand image in the automobile industry. Established in 2003, the
organization has grown to become the largest manufacturer of electric cars in the industry. As of
today, it has contributed over 50000 cars in road across the globe (Hill, 2013). By creating this
transportation system, Tesla Motors wanted to develop a transportation system, which is more

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sustainable and eco-friendly. It decided to work with the objective to prove that electric cars can
be far better than gasoline cars. The management of company state that organization should not
only focus on the profits alone, but also support the environmental and social welfare.
This is one of the reasons behind the innovation at Tesla (Hill, 2013). Under its innovative
practices, Tesla Motors has introduced its electric cars and grown to become largest
manufacturer of electric cars in the industry. Elon Musk has reported that the major objective
behind this new product is to provide a transportation system, which is very sustainable and
environmental friendly. These innovative cars can be charged at home and they do not need
refueling of gasoline unlike the vehicles, which are manufacturing by other automakers. Tesla
Motors was able to impress the customers. By introducing trailblazer electric cars for the market,
i.e. Tesla Roadster, the company was able to gain the attention of car lovers and transform the
situation of green car sector (Morschett, Schramm-Klein, & Zentes, 2015).
In this context, Musk stated that the major purpose of this electric car is to enhance the energy
promotion and attain this goal by reducing its adverse impact on environment. Tesla Motors had
implemented a campaign to promote its green transport system via electric cars. The company
was focused on removing the carbon emission by utilizing supercharger stations, which only uses
grid electric power via solar panels (Landrum, Gardner & Boje, 2014). Primarily, the company
has resolved the dependence of world on gas through revolutionary innovations in electric cars.
It has partnered with the SolarCity to offer the owners of electric cars an alternative to recharge
their cars utilizing the solar panels in their homes.
In this way, it can be stated that development of electrical vehicle segment gives an appropriate
instance of how the shift to economy based on the renewable resources will take place. It has
been seen that people were very satisfied with the cars, introduced by Tesla. In addition to this,
the designing of its cars models is very beautiful that most of the people want to purchase its
cars. Electric cars are cheaper and better than gasoline cars (Hill, Jones & Schilling, 2014). This
shift towards environmental sustainability assisted the electric cars to beat out the gasoline
vehicles in the automotive industry. There are so many practices, like; inexpensive
communication, appropriate information and data and development of environmental promotion
all over the world, enabled the customers in the market to learn about different commercial
polluters and redirect their environmental values in the purchasing decisions of customers.

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Thus, it can be said that CEO of Tesla Motors, Elon Musk has made efforts to resolve the related
issues and implemented solutions for both the environmental and organizational welfares. He
managed to resolve the issues via creative solutions. Company has considered the innovation as
the major way to enhance its performance. It has been engaged in the corporate social
responsibility practices to offer benefits to the environment and its people. An effective
entrepreneurship and management assisted the organization in regaining its position in the
automobile industry. Thus, Tesla Motors was able to come out of these issues in an effective
manner (Zott, & Amit, 2013).
Part 2:
In today’s business world, it is very essential to reform its organizational culture with innovative
practices as the companies are making efforts in expanding their businesses in the global
environment. When an organization plans to implement an innovation in its operations, then
there will be need of support from senior level management, but this support is not expected
from senior management only. Effective innovations can be generated by adopting a right and
effective organizational culture, where all the people can engage in the decision making process
and they are free to give their idea and opinions (Mosey & Kirkham, 2017). These innovations in
the organizations can lead them towards success or failure. Thus, there is the need for
entrepreneurs to take the innovation as a source by which they can find more opportunities for
new business operations in existing business environment.
Innovation is a term, which is used to define the new and creative things, which are implemented
with a specific objective. It can be adoption of changes in the business processes and systems.
The process of innovation includes categorization of the idea and opinions, which can be come
from the outside or inside the organization and recognizing these opinions for the business
processes, like; allocation and implementation of resources, decision making process etc. Each
and every company should understand that how they can gain the value by implementing
innovative practices, so it will be able to enhance the growth and position of company in industry
(Nykvist & Nilsson, 2015). The top management should understand that innovation is the major
way by which companies make efforts to deal with the market trends and make technology
advancement in the operations. It will assist the organization in beating the competitors.

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When an organization implements innovation, it is not necessary that they will be successful. By
the failure in innovation, the companies can understand that what processes and technologies are
not good and effective for the company. By analyzing this, the company can understand the
effective and appropriate innovative practices for value creation. An organization should
understand the innovation model that is introduced by Tidd and Bessant (2013). This conceptual
model is stated below;
The above given diagram shows the innovation model that is given by Tidd and Bessant. This
model examines the innovative capacity in the innovation culture of the organization. Under this
model, Tidd and Bessant stated that innovation is an important process that includes some steps
that can be resulted in the growth and overall growth of company. A firm can implement
innovation by following below-given steps;
Searching
This is the first step in the conceptual framework of innovation. A company can recognize
opportunities via finding the business opportunities by the process of environmental scanning.
This environmental scanning process assists the organization in identifying different
opportunities and threats, which are posed on organization (Tidd, & Bessant, 2013).
Selecting

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After finding the opportunities, company can select the areas, on which opportunities; it needs to
emphasize and to enhance. It will assist the organization in enhancing the operations, which need
development.
Implementing
Implementation of different ideas and opinions is very difficult because it includes making focus
on collecting the resources and knowledge and to implement the entire plan in uncertainty
situation.
Capturing
Companies can gain the value by implementing the innovative practices and systems via
analyzing the above steps of model. By this, the company can develop the knowledge and
resources and enhance it different ways.
Apart from this, organizations can use some other methods to capture the value through
innovation, like; sharing and storing knowledge, knowledge and IPRs, growth of dynamic
abilities and developing new and innovative technology (Tidd, & Bessant, 2013). These practices
for the organization are stated below;
Knowledge and Intellectual Property Rights
Knowledge and Intellectual Property Rights are the practices, which can be used by the
organization to capture the value via innovation. Utilization of knowledge and resources is very
important for the organization before implementing innovation (Radius, 2017). The innovation
will not be effective, if the company does not have knowledge about the market trends and
changing conditions. Organizations can gain the value by understanding different factors, like;
brand name, distribution channels, market positioning, assets, ownership of firm and the
regulations related to the intellectual property rights of the company. Moreover, it needs to
understand the outcome of implemented innovation (Radius, 2017).
Intellectual Property Rights are the exclusive rights of any organization, which needs a proper
security and safety. Organizations need to develop effective security solutions as IPRs assist
them in capturing the value from innovative practices. The management thinks that IPR can
provide the growth over its competitors. So, they should make protect the knowledge and

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confidential information and try to communicate them with other related networks for generating
new and innovative ideas. There should be revision of IPR, so new information can be attained
from internal and external stakeholders of company (Wieland, Hartmann & Vargo, 2017). It can
be an effective strategy for gaining value by having required knowledge and protecting the IPRs.
Storing and Sharing the Knowledge
Sharing and storing the knowledge is another practice, which can enhance the value of
organization through innovation. Companies can enhance the innovation by implementing
effective ways to information sharing. Organizations can do the knowledge management by
using different approaches, like; it can manage the information and data via Information
Technology advancements. It can introduce the intranet for communicating with the internal
stakeholders of the organization (Rothaermel, 2015). Under this, organization can make the
investment in technology for managing knowledge. It includes the improvement in the process,
culture and structure of company. In addition to this, the company can improve the skills of
employees by conducting training and development program, so that they can effectively manage
and store the confidential information of company. Knowledge storing and sharing is very
significant for the company because it enhances the innovative capabilities of the employees.
Development of knowledge sharing will have positive impact on the innovative skills of
company. For transforming the data can be done within company by developing process. It can
convert the information to material knowledge by recognizing the same data and information
(Saha, & Bhattacharya, 2011). The company can develop a familiar and supportive workplace
environment for the employees. The employees can take it as their benefits to share the
knowledge among all. Organizations can connect the employees via conducting the workshops,
seminars; it assists the organization in creating new knowledge. Via intranet, the related
information can be circulated among all the employees of company.
Thus, company can implement these processes to attain the significant value by the
implementation of innovative practices in the organization and its operations.
Development of Dynamic Capabilities
Dynamic capabilities can be defined as the abilities of the company to attain the innovation by
considering the needs and preferences of customers in today’s changing environment. With the

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changes in the business segment, so there would be need of changes in the organizational
capabilities, owned by the organization. The organization implements effective strategies and
managerial activities to make the capabilities more dynamic, possesses by the organization.
These managerial activities can be divided in three components, like; sensing, seizing and
transforming (Ologbo, Md Nor, & Okyere-Kwakye, 2015). Sensing is the capability to recognize
and evaluate the opportunities, which are available in the external environment of company.
Seizing includes the ability to utilize the available resources in the organization to capture the
value from these opportunities. In the last step, i.e. transforming includes implementation of
changes in the processes. For this, we can take the example of Intex was unable to follow the
revolution in the operating system of phones. There are so many companies in the industry,
which were able to understand the needs and expectations of the customers. This was the time,
when these companies have changed their capabilities (Wisdom, 2014).
Exploiting New Technologies and Intellectual Property (IP)
Technology innovation is one of the most common and important innovations, which can be
implemented by the organizations. It is not necessary that companies implementing technology
innovations will have financial benefits, but it can assist them in enhancing the capabilities in its
marketing and advertising processes (Okpara, 2007). They can improve the safety and security
by installing new and advanced technology, so it will be very difficult to theft and imitate the
confidential information and Intellectual Property Rights, like; licenses, patents, trademarks etc.
Installing new technologies in the organization can help in improving the technical skills and
capabilities of the employees, so that they can perform their tasks in effective manner (Sengupta,
2013).
Conclusion
From the above essay, it can be concluded that innovation plays an important role in attracting
the customer base towards company’s products and enhancing its growth and chances of success
in the industry. First part of the essay evaluates the issues that are faced by Tesla Motors in its
existence. The company has implemented different solutions to deal with the issues, which
enabled it in regaining more competitive advantage in the automotive industry. Furthermore,
second part of essay has stated different methods, which can assist the organization in capturing

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the value through innovation. It includes various practices, like; sharing the knowledge,
Intellectual property rights and implementing new technologies for enhancing the business
operations. These practices will assist the company in enhancing its performance. By
implementation of these practices, the companies can ensure the growth and survival in today’s
competitive business environment. Using IPRs can encourage the businessmen to take risks and
challenges for making investment in the innovation. It provides technological and safety ideas to
the company, which assists the organizations, which have less technologies. Thus,
implementation of innovation in the organization can entice the people towards the products and
services of the company as they always find something new and creativity in the products. By
implementation of above practices, the company will be able to enhance the chances of growth
and success in today’s business world. Thus, innovation is one of the major components for
enhancing the overall performance of the firm.

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