Managing Innovation in Business Assignment : Tesla

Managing Innovation
in Business

EXECUTIVE SUMMARY
This project report summarises the concept of innovation which means to create an
innovative idea in order to achieve all the business objectives. Various topics are discussed under
this report that includes future of automotive industry till 2020 and beyond, innovation
requirements of Tesla Inc. till 2020 and beyond etc. A detailed road map is also being formulated
for Tesla Inc. which is going to launch a new electric pick up truck in the automotive sector in
order to capture large market area. Various innovations that are going to be launched in
upcoming period in auto-mobile sector are also described in the below report. The road map
includes suggestions and reasons for the selection of one innovation, impact of the innovation
which is implemented by the Tesla Inc. in order to launch new electric pick up truck in the
market. It also consist information of research and development activities, required resources,
feasibility analysis, approval process, application of the new idea and review of the impact of the
new innovation. A Gantt chart for all the innovations that are going to be launched by Tesla Inc.
in future is also being formulated in this report.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
THE FUTURE OF THE INDUSTRY 2020 AND BEYOND.........................................................1
THE ORGANISATION'S INNOVATION REQUIREMENTS 2020 AND BEYOND.................4
FINDING THE FUTURE INNOVATION CAPABILITIES FOR THE ORGANISATION.........7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation is the process of generating new ideas which are used by business entities in
order to attain predetermined goals such as profit maximisation and customers satisfaction. If an
organisation is willing to make innovation in its existing products than various resources such as
skilled workers, finance etc. are required for this purpose. Main purpose of innovation is to
acquire large market share so that business can be operated in an appropriate manner (Chen and
Perez, 2018). Proper research is required to make modifications in the products because if
organisations are not having accurate information of market then it is not possible to successfully
implement the innovative idea. Effective planning and strategies are also the main requirements
of innovation process. The business entity which is taken in this assignment is Tesla Inc. which
is an automotive company and operating its business all around the world. It was founded by
Elon Musk, Martin Eberhard, JB Straubel, Marc Tartenning, and Ian Wright in July 2003. Its
production output in year 2018 was more then 245000. Its headquarters are in Palo Alto,
California and United States.
Main purpose of this report is to determine the importance of innovation for an
organisation to achieve all its organisational objectives. In this report various topics are discussed
including future of automotive industry 2020 and beyond, Tesla Inc.'s innovation requirements
2020 and beyond etc. Future innovation capabilities of Tesla Inc. are also covered in this project
report.
THE FUTURE OF THE INDUSTRY 2020 AND BEYOND
Automotive industry is the largest sector in the world which is contributing a large
amount in the national income of different countries such as US, UK etc. There are various types
of products like cars, buses, trucks and other motor vehicles which are manufactured by
companies operating in this sector. Auto-mobile industry was established in the year of 1860 and
since then this sector is running successfully. It is involved in developing, designing, marketing
and manufacturing activities of auto-mobiles. Enhancement of this industry is continuously
increasing and developing the economy of the countries (Archibald and Archibald, 2016). There
are various companies in this sectors which are operating their business in UK and other
countries. It includes Bentley, Land Rover, Lotus Cars, Rolls Royce, Lagonda, Aston Martin,
Tesla etc. Tesla is an automotive sector organisation which is planning to launch different
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innovations in the market in future period. It has planned to launch electric trucks, supercharging
networks and fully autonomous cars. It will take the industry on top because all of them will
increase overall profitability of the sector. Some of the innovations which are planned by the
companies of this industry are mentioned as follows:
Bentley is an automotive company which is manufacturing luxury cars and it was
founded in year 1919. This organisation is known for its designer cars. The company has
collaborated with Royal College of Arts and asked the students of second year to give
suggestions to Bentley in order to make innovation in future. Concepts of a few students are
selected by the company that are going to be used in future as innovation (Biemans, 2018). The
idea which is going to be implemented by Bentley in future is manufacturing and launching
driverless cars in smart cities and the car will be called autonomous cars (Future innovation of
Bentley, 2018). A first person view design for the car is as follows:
(Source: Autonomous Car by Bentley, 2018)
Rolls Royce is a luxury car brand which is known for its innovative techniques that are
used to make specific modification in its cars. The organisation is planning to launch a tailor
made car which will be based upon the specification of clients. The car will be manufactured
according to the demand of the customers and it is mainly for famous and rich personalities. The
directors of this company has decided a name for the car which is Rolls Royce 103 EX (Tailor
made cars by Rolls Royce, 2017). A 3 dimensional design for this car is presented as follows:
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Illustration 1: Autonomous Car by Bentley, 2018

(Source: Tailor made car of Rolls Royce, 2017)
Lotus cars is a sport cars manufacturing company which is operating its business
activities all around the world. The company has planned to change the stereotyped material of
the car body and will use carbon fiber (Future innovation of Lotus Cars, 2017). This will be
considered as an innovation idea as none of the other companies has used such material to
manufacture a car. A car which is made from carbon fiber is designed as follows:
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Illustration 2: Tailor made car of Rolls Royce, 2017

(Source: Carbon Fiber car by Lotus Cars, 2018)
All the above described innovations are going to be introduced by companies operating in
auto mobile sector and will take this sector to the next level (Carayannis, Sindakis and Walter,
2015). These innovations are very beneficial for this sector because it will increase overall
profitability of automotive sector.
THE ORGANISATION'S INNOVATION REQUIREMENTS 2020 AND
BEYOND
Tesla Inc. is a car manufacturing company which is supplying its manufactured cars all
around the world. This organisation was founded in year of 2003 by Mr Martin Eberhard, Marc
Tarpenning, Elon Musk and Ian Wright. The organisation's future is ambitious as it has planned
to launch various innovations in future so that profits of the company can be increased and
market share can be enhanced (Euchner and Ganguly, 2014). The company is better known for
its innovations. This organisation has planned to launch various new innovations till 2020 and
beyond. Some of them are described below:
Electric pick up truck: The directors of Tesla has announced that their electric pick up
trucks are going to be launched in the market in the mid of year 2019. The trucks will be based
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Illustration 3: Carbon Fiber car by Lotus Cars, 2018

on rechargeable batteries rather than petrol or diesel. As it is a new concept hence it can result in
enhanced profitability and market share of the company. The main objective of the company
behind this innovation is to replace the engines with electronic power trains (Electric pick up
truck, 2018). It will be very beneficial for the customers as their cost of using petrol and diesel
will be reduced. As it is a new product hence it will be advantageous for the automotive industry
because it will enhance market area captured by the sector. This idea is going to be achieved in
future by the organisation by increasing investment from outsider sources such as bank loan. A
design which is presented by Elon Musk for the pick up truck is presented as follows:
(Source: Electric pick up truck, 2018)
Supercharging network: Tesla Inc. has also announced to build a supercharging
network all around the world. For this purpose the organisation is going to launch supercharges
with innovative technique in which capacity of chargers will be increased. The main purpose
behind this process innovation is to turn Tesla into an energy organisation. As Tesla has already
announced to launch electronic cars and trucks and the directors of this company want that
energy and power for the charging should be produced by the company itself. Innovation in the
charging system is going to be made by enhancing the capacity to charge an electric vehicle
(Foss and Saebi, 2015). These superchargers are very beneficial for the users because the number
for the charging points will be increased after building the network. The supercharging network
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Illustration 4: Electric pick up truck, 2018

is also beneficial for the automotive industry as it will help to expand the business of whole
industry.
Fully autonomous cars: Musk who is the founder of Tesla Inc. has promised to make all
the cars autonomous before 2020. This will be a huge innovation in auto mobile sector. The
organisation have announced to add auto pilot hardware in all its cars. This innovation will
reduce the load of the driver to drive the car. The organisation has given a name to this autonomy
business project which is Tesla Level 5 autonomous driving (Future innovation of Tesla Inc.,
2018). Such type of cars will enhance the standard of living of its users by providing them tailor
made cars which can help them in enhancing their status. This innovation is also very beneficial
for the automotive industry because it will result in technological enhancement of the whole
sector as it will reduce work load of humans and technology will help to perform all the tasks
appropriately.
All the above described innovations are very beneficial for Tesla as well as automotive
industry because it will help the organisation to be more competitive in the market and increase
its profits. When the innovations will be launched in the market this will enhance the profitability
of whole automotive sector. The innovations are planned to provide good experience to the
customers of Tesla. The organisation is continuously making innovation in its existing products
for the purpose of capturing large market area. The innovations will help the automotive industry
to be more profitable as compare to other sectors.
Gantt chart:
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From the above Gantt chart it can be analysed that first of all the organisation is going to
focus on Electronic pick up truck, then supercharging network and at last fully autonomous
innovation. All of them are going to be completed in a specific time period which is decided by
the directors.
FINDING THE FUTURE INNOVATION CAPABILITIES FOR THE
ORGANISATION
Tesla Inc. has announced to launch different types of innovations in up coming period.
These innovations are electric pick up trucks, fully autonomous cars and supercharging network.
All the new ideas will be very beneficial for the organisation and the automotive sector. The
organisation required to focus on one concept at a time so that it can be introduced in the market
successfully and result in increased profits and sales of the company. A road map for Tesla Inc.
which is required to be followed for the proper implementation of innovative ideas is elaborated
below:
Suggestions: The organisation should focus on its innovation of “Electronic pick up
truck” because it will help to capture larger market share (Gassmann and Schweitzer, 2014).
Reason: Electric pick up truck innovation is suggested to Tesla Inc. because it will help
to increase its profits and sales with a higher percentage as it is a product which has not yet been
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introduced by any other organisation. Another reason for this suggestion is that it will help to
broaden the market area of Tesla Inc. by targeting logistic sector.
Impact of changes: When a new innovation is launched by a company than it is very
important to analyse the possible impacts so that appropriate strategies can be formulated to
attain success. As Tesla Inc. is going to introduce electric pick up trucks in the market then it is
very important for the organisation to determine the impact of the new innovation. Following are
some points that can be considered by Tesla Inc. to analyse impacts of changes:
 Research and development: While an organisations like Tesla Inc. are planning to
launch a new product in the market than it is very important for them to gather
appropriate information regarding customer's choices, preferences and market conditions.
All such type of data is collected by the research and development department of the
organisation (Tidd, 2014). Tesla Inc. is going to launch new electric pick up trucks in the
market for the purpose of capturing large market area. For this purpose the research and
development department of the company is required to conduct a research and collect
essential information. This will help to formulate appropriate strategies to successfully
launch new electric pick up trucks. Proper and effective research will result positively for
Tesla because it will guide the directors and other executives to make plans so that large
number of customers can be attracted toward the new electric pick up truck.
 Required resources: Tesla Inc. is going to introduce electric pick up trucks in the market
in order to broaden its market area. As it is a new products hence various resources are
required by the company. These resources are classified as intangible and tangible
resources. Intangible resources includes all the intellectual property rights like patent,
copyright, trademark and trade secrets. Goodwill is also considered as the intangible
resource for a company. Tangible resources includes technically skilled employees, funds
and other. If Tesla Inc. is not having sufficient resources than it is not possible to
manufacture and successfully launch a new product in the market. The directors should
arrange all the resources because it is the main requirements of an innovative product.
 Requirement of technical skills: If Tesla is willing to successfully introduce its new
electric pick up trucks than the managers needs to hire skilled employees with technical
skills. It is very important to recruit and select such individuals for the company who
have good knowledge and experience of working in the same field. Effective technical
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skills can help to manufacture such products that can grab attention of customers. As the
new trucks are different from other trucks that are manufactured by other companies
hence the employees needs to work hard. To perform all the tasks related to the
manufacturing process of pick up trucks technical knowledge and skills are the major
requirements. These are very important as work can be performed more effectively if
workers are technically skilled. Employees with such skills are more confident and this
confidence will motivate them to fulfil all their responsibilities properly (Schaltegger and
Wagner, 2017).
 Legal aspects and compliance: A particular act for all the business companies such as
Tesla is being established by the government which is intellectual property right act and it
restricts the entities from copying the concept of innovation of other organisations. As
Tesla Inc. is going to launch a new electric pick up truck in the market in future hence the
directors should make sure that organisation is not copying the idea of any other
company. Main responsibility of top executives of Tesla Inc. is patent their idea of
electric trucks as it is a new idea and patent is required to make sure that other companies
will not use this innovative idea.
 Cost of change: As Tesla Inc. is going to launch new electric pick up trucks than the
main requirement for this launch is monetary resources because it is not possible to
manufacture a product without sufficient funds. The directors of the company are
suggested to gather funds (Souto, 2015). An estimation of total cost that may take place
for the launch is as follows:
Particular Amount
Initial Investment 2000000
Expenditures:
Raw material
720000
New staff members 965200
Research and development 175000
Marketing 14580
Advertising 96500
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Balance 28720
Total estimated cost including cost of material, staff, marketing and other activities is
2882500. The directors of the company are suggested to arrange this amount for the new
innovation.
Feasibility analysis: In this step the research and development department of Tesla Inc.
will analyse the feasibility of the new electric pick up truck. In this stage of road map various
aspects are determined that the new innovation is beneficial for the organisation or not, it will
help to increase profits or not and it can survive in the market or not. All the members of
research and development department test the product to assure that it is manufactured according
to the requirements of customers. All the analysed factors are recorded in a report and this report
is presented in front of the top executives for their approval. It is required to implement the new
innovation (Talukder, 2016).
Approval process: A feasibility report is generated by the research and development
department of the company and it is presented in front of the top executives for their approval so
that innovation can be implemented. Board of directors analyse the report and than identify the
errors or problems in the report. If there is no mistake in the report than approval of directors will
approve the project and their permission will be granted to implement the plan of innovation.
The report is presented in a formal business meeting in which managers, board of directors and
other top executives are invited to analyse the overall report of the new business report. The
report is approved by them than the innovation is implemented in order to achieve organisational
goals.
Application of new innovation: When the directors approve feasibility report than the
plan for the innovation is implemented so that all the objectives that are related to the innovation
can be attained. As Tesla Inc. is going to launch a new electric pick up truck in the market and if
the feasibility report is approved by the directors than the innovation will be implemented. The
idea of electric pick up truck is very unique hence it will attract large number of clients for the
company and the business will be enhanced. This will increase profits and sales of Tesla Inc.
with a higher percentage. In application process various activities are performed by the company.
It includes marketing, promotions, manufacturing and other functional activities (Wu, Lii and
Wang, 2015).
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Review of the impact of the new innovation: When a change is implemented in a
company, impacts of that changes are also analysed as it helps to assess that implemented plan
has worked for the company or not. When the new electric pick up trucks will be launched by
Tesla Inc. in the market than research and development department will review its impacts.
Various aspects will be analysed by the division including its overall performance and the result
of the innovation that it is able to increase profits for the company or not.
All the above described steps are required to be followed by Tesla Inc. while launching
its new electric pick up trucks to give shape to the organisation. As Tesla is known for its
innovative nature hence it is very important for the company to make such innovation which is
easy to adopt by all its customers. If its is not adopted by the clients than company may have to
face high losses. The above described road map is required to be followed in order to
successfully launch the new innovation in the market. If the organisation is not able to implement
road map than it is not possible to achieve all the goals.
CONCLUSION
From the above project report it has been analysed that for all the business entities it is
very important to manage the innovations because it can help to successfully run the business. If
the business entities are not able to manage the innovation than it can affect their profitability
and market share. There are various that are continuously launching in the auto mobile industry
in order to increase profits. A proper market research is very important to successfully launch a
business project. If a business entity is not able to collect appropriate information of the market
than it is not possible to successfully establish the business. As Tesla Inc. is car manufacturing
company who is operating its business all around the world and it is known for its innovation.
The organisation is going to launch various new innovations in up coming period all of them are
very beneficial for the Tesla as well as automotive industry because it will result in increased
profits for both of them. A detailed road map is being formulated for the organisation which is
required to be followed in order to appropriately introduce new innovations in the market. The
road map include various steps like suggestions, reason for the suggestion, impact of the
changes, required tangible and intangible resources, feasibility analysis, application of the
innovative plan etc. Tesla Inc. is planning to launch various innovation in up coming years that
includes electric pick up trucks, supercharging network and fully autonomous cars etc. to launch
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all the innovations successfully the organisation is required to follow all the steps of of the road
map so that all the objectives related to the new business project can be launched in the market.
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