Innovated and Sustainable Business Development Report 2022

Running head: INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 1
INNOVATION AND
SUSTAINABLE
BUSINESS
DEVELOPMENT
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INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 2
Executive Summary
Tesla is a company which belongs to the automobile industry. The company has
implemented some of the innovative ideas focusing on the development of the firm. All of
those ideas and approaches have been identified in this discussion. The study has shown
some of the critical areas, which determine the overall innovations implemented by the
company.
This report has focussed on value propositions, financial value capture, business
model, operation description and supply chain development of Tesla. On the other hand,
Tesla has used some tools and techniques such as business canvas model, porter’s five forces,
storytelling canvas, customer journey canvas, value chain analysis and core competencies of
it to manage its business. Applying different strategies and concepts on business
development, the organisation has managed to develop a sustainable business environment. It
has not only helped the firm attract a lot of customers but also affected the industrial
economy positively.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 3
Table of Contents
1. Introduction............................................................................................................................4
2. Business model description....................................................................................................5
3. Value proposition development.............................................................................................5
4. Business operations development..........................................................................................5
5. Supply chain development.....................................................................................................5
6. Financial value capture..........................................................................................................6
7. Competitive advantage...........................................................................................................6
8. Strategic Fit............................................................................................................................6
9. Identification and assessment of assumptions and uncertainties...........................................6
10. Phased development plan to address uncertainties..............................................................7
11. Selection of innovation tools and techniques.......................................................................7
11.1 Business model canvas...................................................................................................7
11.2 Strengths, weaknesses, opportunities and threats..........................................................8
11.3 Innovation readiness analysis.........................................................................................9
11.4 Porter’s five forces.........................................................................................................9
11.5 Storytelling canvas.......................................................................................................10
11.6 Value chain analysis.....................................................................................................10
11.7 Customer journey canvas.............................................................................................11
11.8 Core capabilities...........................................................................................................11
12.Candid and critical self-analysis.........................................................................................12
13. Conclusion and recommendation.......................................................................................13
References................................................................................................................................14
Appendix..................................................................................................................................16

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 4
1. Introduction
For business development, innovative tools and techniques are the keys to success.
Innovative tools and methods are those, which enhance the business by introducing new
business ideas and are needed to be implemented with proper planning. In order to generate
innovative ideas, weakness of the business should be identified and understanding this, and
plans must be considered as progressive and innovative in nature. Tesla is a US-based
automobile company, which specializes in the electric car and solar panel manufacturing
(Stringham, Miller & Clark, 2015).
This paper is based on the innovative and sustainable business development ideas of
the company. Further, business model, value proposition, business operation development
through improving supply chain development and financial value capture have also been
focused on the report. Tesla uses some techniques that are business model canvas, innovative
readiness and strength, weakness analysis, Porter's five-force model, value chain analysis,
customer journey canvas and ideas to develop business.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 5
2. Business model description
Tesla is a leading automobile company where vehicles and auto services are being
made to sell. Tesla's business model includes key partners, key activities, key resources,
value propositions, customer relationships, channels, cost structure and revenue streams. A
business model helps to understand the business priorities in a categorized manner. Tesla has
managed to decorate a well-maintained business model which has made the business easier
for the leaders (Perkins & Murmann, 2018).
3. Value proposition development
Value proposition development is a practice to serve customers with value quality
products that Tesla offers. Those value products are electric vehicles that Tesla sells near
about 55,000 units. This product is highly specialized for Tesla motors and superchargers, as
the vehicle can be charged in locations such as shopping centres, restaurants and Wi-Fi
hotspots. Tesla has addressed this issue of charging range to reduce high energy drainage of
electric vehicles. Along with that, the organization is focusing on making the products value
for money than any other company (Bohnsack & Pinkse, 2017).
4. Business operations development
Business operations development of Tesla involves the design of goods and services,
quality management, process and capacity design, layout design and strategy. Tesla appoints
operations managers to influence the cost, quality and resources. It will help to enhance the
work rate of the company in the long term perspective. This company focuses on the
innovative product design to target customers and also make those products available to the
customers through developing supply chains (Vörösmarty et al., 2018).
5. Supply chain development
Tesla follows direct sales, and it created an international network by building
showrooms and galleries around the world. There are several key suppliers of the company
such as AGC Automotive: windshields, Brembo: breaks and Fisher Dynamics: powers seats,
who had helped Tesla to gain advantage and that speed up the product improvement. Through
direct sale process, Tesla can successfully satisfy customers as it has 318 locations around the
world. Tesla also uses e-commerce to expand its supply chain in order to increase business
(Gianesello, Ivanov & Battini, 2017).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 6
6. Financial value capture
Financial value capture is a process to capture public investments. There are two
major types of financial value capture, such as Maximization and Minimization. As opined by
Strauss & Smith (2019), both of these values are important for a company based on the
situation. Tesla has used these values in a manner where they have got an excellent result for
the company. As the customers prefer a good deal at low prices. Tesla earned revenue
through automation sales $6,073,471 on December 2018 and cost of revenue was $4,658,517.
Gross profit of Tesla in 2018 was $1,442,900, and operating expenses were $1,029,364 by
maintaining a perfect balance between maximization and minimization concepts (Wang &
Kolodny, 2019).
7. Competitive advantage
Tesla has a few competitive advantages as it has larger supercharger networks that
other companies and there are a few competitors or entrant who would build a nationwide
network channel. Tesla has some advantages in its self-driving space, and it can be derived
from understanding its real-time data. Tesla's vehicle models are improved with the latest
artificial intelligence, which supports the vehicle to use advanced techniques that can provide
the extra level of driving security to the driver (Teece, 2018).
8. Strategic Fit
Tesla is having a significant number of strategies to innovate the business in a new
way and explore new opportunities. The market strategies, product development, market
development and diversification are the common areas where the company is investing lots of
time in it. As stated by Da Costa & Attias (2018), Tesla has managed to enhance its strategic
partnership with several active stakeholders. In this way, the organisation is getting benefits
with its entire strategic development progress.
9. Identification and assessment of assumptions and uncertainties
The company has managed to find out several risk factors that can affect business
progress (SEC, 2019). Credit risk of cash, Supply risks of essential ingredients that are being
used to create products. Fair chances are also there to create any sudden uncertainties, which
can create hurdles in the development of the organisation. Hiring well trained and appropriate
employees are one of the critical actions that are being handled by the HR department of
Tesla (Cugola, Margara, Matteucci & Tamburrelli, 2015).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 7
10. Phased development plan to address uncertainties
The phased development plan has been introduced to develop a product of proper
quality and to avoid any uncertain situations that can decrease the product quality of Tesla.
There are several phased development processes that have been implemented by Tesla, such
as Initiation phase, Definition phase, Design phase, Development phase, Implementation
phase, Follow-up phase. All of these phases are required to increase quality and the on-time
product delivery based on the demand (Securities and Exchange Commission, 2019).
11. Selection of innovation tools and techniques
11.1 Business model canvas
The business model focuses on several activities that are very relevant for Tesla
automobiles. The critical factors of the business model that are undertaken by the
management of Tesla are discussed below:
Key Partners
Tesla cars use
more than 3000
purchased
It has 350
suppliers
worldwide
Key Activities
It includes
designing,
manufacturing
and
development
Value
Proposition
Customer
satisfaction is
mainly observed
for a value
proposition.
Tesla offers
innovation,
customization
and brand.
Customer
Relationships
Vehicle services,
Financial
services
Customer
Segments
Products of
Tesla are
considerably
expensive for
that of
consumers
having average
purchasing
capacity. Hence,
the targeted
customer
segment involve
high net worth
customers.
Key Resources
Tesla’s property
Electric
powertrain
Battery
Motor
Gearbox
Control software
Channels
Tesla owns its
distribution and
sales channel.
The company
retains the
international
network of the
company-owned
showrooms as
well as galleries
in prominent
urban centres.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 8
Cost Structure
Variable expenses that include labour cost,
direct parts, manufacturing cost and material
cost
Sales and administration and research
development cost.
Revenue Streams
Automotive revenues generated from the
sales of tesla's vehicles.
Service and other revenues generated from
maintenance and repair services, powertrain
components of an electric vehicle.
Table 1: Business Canvas Model of Tesla
(Source: Tesla, 2019)
11.2 Strengths, weaknesses, opportunities and threats
Strength
 Consistent growth
 Accessible to the customer (Akakpo,
Gyasi, Oduro & Akpabot, 2018)
Weakness
 Government regulations impeding
the growth of the company
Opportunity
 Emerging scope of autonomous
driving stands to push up the stock
of Tesla by 22% leading to a $2
trillion windfall
Threat
 The future returns of Tesla may be
jeopardised with its products
remaining highly expensive. There
are also possibilities of lower gas
prices as well as increased electric
vehicle competition
Table 2: SWOT Analysis of Tesla
(Source: Thomas & Maine, 2019)
11.3 Innovation readiness analysis
Leadership support There is a change of leadership in Tesla, and
the organisational structure is conventional
and considers managerial focus and control
as well as operational expansion across the
global market

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 9
Organisation design Tesla has a U-form or functional
organisational structure which consider the
organisational function as the primary
defining factor.
Innovative practice Tesla undertakes serial innovation both in
its products and business practices. Tesla's
innovation has a disruptive impact
Table 3: Innovative Readiness Analysis of Tesla
(Source: Akakpo, Gyasi, Oduro & Akpabot, 2018)
11.4 Porter’s five forces
Porter's five forces are one of the critical methods, that is used to study the external
factors and their intensity of impact on the company. The model can be further distinguished
as follows:
Threats of new entrants (High): In the automobile industry, there are several new
entrants which can be a threat to Tesla. Thomas & Maine (2019) mentioned that the new
entrants could introduce new innovative ideas and methods to sell their goods. By this action,
the new entrants can challenge the business of Tesla.
Bargaining power of customers (Low): It is noted that prices of products and services
provide by Tesla are set with an understanding of its customers. However, from customer
perspectives, customers do not tend to enjoy a high level of bargaining power.
Threat of substitutes (High): It has been considered a high force, as the customers
can buy substitute products. Tesla tends to offer a great deal and better services in order to
retain the customers in a long-term perspective. It is noted that the presence of various
competitors in the sector, enables the customer to shift among brands, thereby increasing
threats for Tesla.
Bargaining power of suppliers (Medium): The suppliers are an integral part of a
company`s supply chain. With the presence of various automobile companies, suppliers tend
to bargain with buyers as companies. However, being a leader, Tesla, as compared to other
firms, has high control over its suppliers and tends to source goods at a mutually agreed price.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 10
Corporate rivalry (High): Each industry is having different concentration of the
corporate rivalry. The competition in the automobile industry is very intense as compared to
the other sectors. There are other companies that are challenging Tesla in terms of offering
better deals to retain their existing customers and target new customers (Hardman, Shiu &
Steinberger-Wilckens, 2015).
11.5 Storytelling canvas
Storytelling canvas is a tool that helps to achieve complex ideas into simple one as
communication simplifies complicated things. This canvas depends on ideas, goals, common
ground and support stories. Storytelling can influence audiences to get products from the
company that becomes proof and helps to reach the company's destination (Kernbach, 2018).
[Refer to appendix 1]
11.6 Value chain analysis
Value chain analysis of Tesla is an analytical framework that identifies business
activities in order to gain competitive advantages to the electric automaker. Tesla maintains
marketing and sales practices through online as well as direct process to supply its products
to the customers. Outbound logistics of Tesla involves warehouse and distribution of electric
vehicles, and it also produces solar energy systems and solar panels. This analysis also
encountered with complaint customer services in recent days (Mudambi & Puck, 2016).
11.7 Customer journey canvas
Customer journey canvas involves several stages such as pre-service period, service
period and posts service period. In the preservice period, the company can state down its
offers and channels to inform customers about its services. Through following social media
websites, customers get to know those kinds of information and spread that in their family
and friends.
The second stage of customer journey canvas, service period involves interaction
between customers and service providers that will impact on the whole service experience of
customers. The post-service period is the most important phase, as it is an evaluation of the
customer's experience that can help the company to improve their products (Maeno, Sawatani
& Hara, 2016).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 11
Preservice Period Service Period Post Service Period
Posting products online for
customer access to
information
Customer and seller
interaction is important for
the enhancement of product
features
Reviewing product on the
complaint
Table 4: Customer journey canvas
(Source: Tesla, 2019)
11.8 Core capabilities
Core capabilities of Tesla are that it has excellent engineering and technology
research that helps to provide high-quality electronic products. It has advantages on designs
and design building components of vehicles that include power electronics, motor and battery
packs that mitigates the high energy drainage anxiety (Wieland, Hartmann & Vargo, 2017).
12. Candid and critical self-analysis
I have discerned the emergence of the scope of strong competition in the electric
vehicles sector, and as such, it proves to be a credible threat for Tesla. The innovation of
Tesla becomes evident more so in the case of its business model. However, the company can
be held to be a pioneer in the electric vehicles sector.
13. Conclusion and recommendation
It can be concluded that the business model of Tesla is largely distinct than its rivals which
have ensured a niche segment in the relevant market. The value proposition of Tesla includes
the specialization of its products and a reduction in high drainage of energy. For the purpose
of business operations development, the company engages the operations manager for
focusing on the quality, cost, and resources. The higher price of the product, as well as
increasing competition in the electric vehicle sector, poses a threat to the company. The
Innovation Readiness Analysis indicates that the company has a thriving culture of
innovation. The company has a functional organisational structure and engages in serial
innovation.
It is recommended for the management of Tesla to enhance R&D in developing
electric vehicles and solar products in order to develop a competitive edge, along with
increasing customer satisfaction. Further, the organisation needs to invest more on crucial

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 12
management functions and focus on skill development of the workforce. On the other hand,
recruiting experts in the firm can also prove to be profitable and can help to organize training
sessions that will increase the sustainability of the business in a long-run.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 13
References
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and Management Strategies in Electric Vehicle Technology Advances at Tesla (pp. 57-
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Cugola, G., Margara, A., Matteucci, M., & Tamburrelli, G. (2015). Introducing uncertainty in
complex event processing: model, implementation, and validation. Computing, 97(2),
103-144. doi: 10.1007/s00607-014-0404-y
Da Costa, P., & Attias, D. (2018). Towards a Sustainable Economy (pp. 53-69). Springer,
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z

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INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 16
Appendix
Appendix 1: Storytelling canvas
Table 3: Storytelling canvas
(Source: Tesla, 2019)
Subject
Story of success of Tesla
electric vehicles, solar
panels and supercharger
that is situated at
restaurants and shopping
centres.
Goal
Success story of Tesla products attracts
more customers to buy their products.
Audience
Customers need is to reduce energy
expense of electric vehicles.
Before 1. Set the Scene 2. Make Your Point 3. Conclusion After
Before using electric
vehicles of Tesla,
customers thought
was, maybe this
product has no
satisfactory features.
After understanding
the customer's
need, Tesla should
set the scene that
would be convincing
to the customers.
Tesla's electrical
products and solar
products will help
customers to reduce
electric expenses.
After understanding
the success story or
online review, the
company can improve
its products.
After understanding
a success story and
good experiences,
another customer
will be influenced to
use tesla's electric
goods.