Managing Innovation in Business

This document discusses the management of innovation within a firm and explores the future of the automotive industry. It analyzes the innovation requirements for Tesla and provides insights on building future innovation capabilities.

Managing
Innovation in
Business

Table of Contents
EXECUTIVE SUMMARY:............................................................................................................3
Introduction, Purpose of the Report & Structure.............................................................................1
The Future of the Industry 2020 and Beyond..............................................................................1
The Organisations Innovation Requirements 2020 and Beyond.................................................2
Building the future Innovation Capabilities for the Organisation...............................................4
Conclusion.......................................................................................................................................8
REFERENCES................................................................................................................................9

EXECUTIVE SUMMARY:
The current project is based on management of innovation within a firm which is a vital
process for managing and developing innovative idea with an organisation. Innovation forms out
to be vital and important aspect of any firm that leads enhanced level of capabilities and strength
in business environment. Apart from this, under current file a discussion about the future of
industry is also made which consists analysis of autonomous vehicles, electric vehicles and
emphasised use of internet of things. Apart from this, an implication about the Organisations
Innovation Requirements 2020 and Beyond is also made with the help of SWOT analysis model.
The aim of every organization is to establish their business and bring the changes
continuously so that it can be sustain in competitive market and attain the higher profitability.
Different planning and strategies are formulated by management by understanding financial and
market position which can help to develop a business and manage all workings. TESLA is large
size auto mobile company that is bring changes in their products by introducing innovation.
The organization is planning to introduce new innovation as Autonomous vehicle,
Internet of thinking and connectivity that will help to capture high market share by influencing
number of customers. This report is going to understand that how organization is increasing
future trend and capabilities by introducing new innovation.

Introduction, Purpose of the Report & Structure
Management of innovation comprises of effective planning and process to cope up with
possible threats and come up with new business plans and ideas for turning these innovative
ideas into a vital action plan to make them reality (Biemans, 2018). The current assignments is
based on Tesla company which is a multinational automotive corporation operated by Elon
Musk. The main headquarter of Tesla Plc is situated at California, U.S. Further, the Tesla
company is famous and well known for its range of electric vehicle and aim at promoting clean
energy (Tan, 2020).
Further, the main purpose of current investigation comprises of future of automotive
industry in 2020 and beyond along with analysis of organisation innovation requirements. Thus,
main purpose of current investigation is based on analysis of need and importance of innovation
for an automotive industry through having discussion of future of industry . Beside this, the
structure of current assignment comprises of concussion about the future of automotive industry
along with analysis of organisational innovation requirements of Tesla with the help of SWOT
analysis. At last, an action plan is also included in the current assignment which is focused on
Building the Future Innovation Capabilities for the Organisation.
The Future of the Industry 2020 and Beyond
The automotive industry is one of the most fast growing and most innovative industry
and the advancement of technologies like use of robotics, artificial intelligence and internet of
things is shaping the future of automotive industry towards enhanced growth and development
(Top 10 Automotive Industry Trends & Innovations: 2020 & Beyond, 2020). The future and latest
innovation and trends which are seen in automotive industry in 2020 and beyond which is
shaping the innovation and development level of companies like Tesla are evaluated and
analysed as follows:
Autonomous vehicles- The future of automotive industry comprises of self driving
vehicle which are autonomous and includes use of artificial intelligence with the main aim of
minimizing the need of human driving and looking towards poised transformation in daily
transportation routine (Kerzner, 2019). Thus, automotive vehicle is reflecting the future of
automotive industry that mainly comprises of vehicles that can drive itself from starting point to
predetermined destination with minimum human efforts and making use of viable vehicle
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technologies like sensors, adaptive control active steering along with anti lock braking system
and GPS navigation technology. Thus, Tesla company also needs to put emphasis on coming up
with some new models and vehicle based on autonomous technology to offer a much speedy and
convenient vehicles for its customers.
Electric vehicles- The another trend and factor that forms the future of automotive
industry comprises of more incline and emphasis on electric vehicle which is based on the fact
that use of fossil fuels is not good for environment. Further, now customers has also become
more aware and conservative thus, electric vehicle has become a vital part of future in
automotive industry (Guerra Guerra, 2018). Apart from this, it has been also observed that the
use of fossil fuel and other forms of traditional fuels also lead an enhanced pressure in the pocket
of costumers, thus, electric vehicles has become a vital part of future of automotive industry
which emphasis and focus on the much clean energy by the same time also meting the need and
expectation of customers. Thus, Tesla company is also coming up with new and more better
models of vehicles based on use of electric batteries to cater the needs and wants of customers
along with facilitating use of much cleaner energy to conserve and safe the business
environment.
Ensuring safety for customers through Internet of things- It is also a latest trend and
feature of automotive industry that aim at enabling a secure communication between vehicles
and leading a much better infrastructure for automotive industry. The use of internet of things
has become vital future trend as it is something that is providing solution to all traffic related
issues by solving issues of traffic congestion and also reduces the pollution and energy
expenditure through leading a better fleet of management (Ottosson, 2019). Thus, at present
companies like Tesla are aiming at developing more sensing technologies in there vehicles along
with facilities like automate payments for fuels and tolls to provide a much more efficient and
convenient vehicle to meet the demand and expectation of customers.
The Organisations Innovation Requirements 2020 and Beyond
To have analysis about the current organisations Innovation Requirements 2020 and
Beyond it for Tesla company and automotive industry use of SWOT analysis model is made
which facilitates effective information about the current strengths and weakness of a company
along with analysing present opportunity and threats to have better implication about the
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innovation requirement (Gómez Montoya, 2018). The SWOT analysis of Tesla company is
provided as follows:
Strengths Weakness
 Tesla company is involved in
manufacturing of most energy efficient
cars which makes use of renewable
energy like solar and electric power.
 Apart from this, Tesla is also a major
suppliers of car parts to other
companies like Toyota which also
positively contributes in enhanced
profit and sales (Baldwin and Curley,
2020).
 Existing of strong investors and
partners is also a core strength of Tesla
which supports and leads to more
effective innovation and creativity by
Tesla.
 Apart from this, Tesla is also very well
known for providing safest and fast car
that leads to attract a larger number of
customers.
 Week distribution system based on the
strategy of limited manufacturing
capacity is the biggest weakness of
Tesla company.
 Limited and time taking innovation in
models and design of vehicles as
compared to much dynamic changes in
prevailing business environment is also
a weakness of Tesla company
(Ottosson, 2019).
Opportunities Threats
 Enhanced opportunity are provided
with the increase in de mad for electric
vehicles as customers are becoming
more concerned towards environment.
 Further, induction of autonomous
ventricles and internet of things as
future automotive industry is also
 High level of competition present in the
automotive industry is the biggest
threat for Tesla Company that is
hampering and reducing its sales and
performance (Guerra Guerra, 2018).
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leading enhanced opportunity for Tesla
to increase its sales and growth.
 Implication of more effective
marketing strategy and effective online
with the help of online and digital tool
is also leading enhanced opportunity
for Tesla plc (Kerzner, 2019).
On the basis of above SWOT model it has been analysed that the high level of
competition along with limited manufacturing capabilities are the main issues faced by the Tesla
company (Tiwari and Buse, 2020). These issues has lead to reduction in the sales and
performance of the Tesla along with a hampered manufacturing system. Thus, as Organisations
Innovation Requirements 2020 and beyond for Tesla companies required to focus and emphasis
more on recent trends and innovation going on within the Automotive industry. The main
Organisations Innovation Requirements identified for Tesla company is based on emphasising
more on producing Autonomous vehicles to attract larger number of customers by the way of
coming with more innovate and exclusive products for its customers based on use of Artificial
intelligence and Internet of Thing (Tan, 2020). Apart from this, having and leading a more
effective promotion and marketing strategy can be taken as Organisations Innovation
Requirements for Tesla to have improvement in sales and performance.
Building the future Innovation Capabilities for the Organisation
TESLA, is larger size auto mobile American company that manufactures electric vehicle
by using new technology and features which attracts large number of customers and attain the
profitability. This is important for all organization to analyse the position of their business in
competitive market and bring changes in their strategies which can help to operate and regulate
the business effectively. The management of selected organization is responsible for managing
all functions and activities who formulate different planning and strategies which are important
and develop their business efficiently (Lee, Suh Roy and Baucus, 2019). The management
conduct the market research and get information about customer's needs which helps to provide
kind of products and services so that higher profitability can be maintain. In the auto mobile
there are many competitors of organization which has create the problem in running and
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arranging the activities, so that changes are introduced by management which can help to
manage all functions and attracts large number of customers which provides higher competitive
benefits.
The organization To know the future abilities of organisation by building future
innovation capabilities Porter's five force model has been used that are as explained:
Porter's five force model - Porters five forces model helps in determining the strength
and weakness of the industry. It helps in finding out the strategy of the company and helps in
finding out the long term profitability of the firm. It is a powerful tool of understanding the
competitiveness of the industry which give the benefits in the future (Murmura, Bravi and
Santos, 2020). It helps in taking the advantage of the strong position in the organisation and
helps in improving the weak position .It helps in identifying the power that lies in business
situation and weather the new products and services are profitable to the company or not. Porter's
five forces models are:
Threat of New entrants - New entrants put pressure in the current organisation to gain
market share. Barriers to entry reduces the threat of new entrants, if barriers are high the threat is
reduced but if the barriers are low the risk of new company in the given market is high. Market
which are profitable help to attract new entrants which gives profit. TESLA is manufacturing
cars in auto mobile industry where it has been analysed the threat of new entrants in this sector is
low. By innovating autonomous electric vehicle and using IOT it will grab the attraction and
encourage them to buy the products (Tanev and et.al., 2019).
Threat of Substitution - It helps in examine the number of competitors, helps in
comparing the prices and quality and help in determining the lower cost. The customers might be
willing to switch from one another if they feel the prices provided by the company is high. The
threat of substitution in context to TESLA is high cycle, motor, rickshaw could be used by
customers in case of charging high prices. By innovating autonomous vehicle at lower cost it will
increase the capabilities and future profitability (Reimers, Dorn-Gomba, Mak and Emadi, 2019).
Competitive Rivalry - It helps in determining the competition in the market place and
helps in finding out the competitors existing in the market. Competition become high when there
are less suppliers of the product and when the consumer switch to another competitors who is
offering less cost. The main competitors of TESLA are Volkswagen, Aston Martin, Rolls Royce
and any others who are also manufacturing electric cars. In upcoming future period, the
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organization will capture high market share and profitability as it is bringing innovation in their
cars. The organization would gain higher productivity as it will provide road safety, solve traffic
congestion by introducing autonomous cars.
Bargaining power of buyers - Buyers demand lower price and the quality is high from
the producers when their bargaining power is strong , by this the firm earn lower revenue as the
prices are low and when the quality is high it helps in raising up the cost . This is important for
organization that their customers will be satisfy so they could make more decision to buy
products. Due to increasing population in American country and other places population is
increasing where customers are demanding luxury items. By innovating new model it would grab
the attention of their customers and run a business effectively. Moreover, by using IOT this will
help to improve the road safety and reduce pollution that ensures customers, organization is
offering better quality of products (Tomzcak and et.al., 2019).
Bargaining power of suppliers - It helps the suppliers to driven up the cost of inputs. If
the company has fewer supplier of an industry more the company would depend on the supplier.
Supplier has more power and take the advantage during trade. Sometimes the company keeps it
cost lower to enhance the profit. Suppliers are those people who provides raw material to
organization. As TESLA is planning to introduce autonomous vehicle by using innovation needs
better quality of raw material where should be good relation with suppliers. There might be high
threat of suppliers which can create the challenge for organization to bring innovation and attain
the higher profitability.
Therefore, by using Porter's five force model future capabilities of TESLA has been
analysed that will provide high competitive advantages in changing environment. By using
innovation as Autonomous vehicle and internet of thing, organization will develop their business
and influence large number of customers.
Use of action plan that will help to complete innovation by formulating different activities:
Identification of problem: In this stage TESLA has found the problems as their sales is
reducing due to products manufacturing activities are taking too much time and it is producing
limited products. Due to changing demand customers are demand more innovative products that
difficulties are facing by organization (Wang, 2019).
Strategic thinking: This is the important stage which should be use by organization for
the purpose of solving problems and increasing business performance by getting an optimum
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solution through getting new ideas and new technology. In this stage, management of chosen
organization thinks deeply and planning to bring the changes in their existing products that can
help to attracts the large number of customers.
Brining innovation and new technology: Herein, management of TESLA thinks to
bring the Autonomous cars and IOT facility that means self driving cars and providing road
safety from any incidents which might be happen while driving (Khaligh and D'Antonio, 2019).
These are unique change which are still not come in the market, will help to provide more
satisfaction to customers and deliver good value of organization.
Training to staff & management of function: Once, innovation has been decided by
management then next stage is providing training to employees so they can adopt the changes
and manage the all functions and activities effectively. This can help to increase the performance
and develop a business in competitive environment. If organization is not able to provide the
training and learning programme to their staff then many difficulties have to face by organization
as employees might be refuse to accept changes. But, management of chosen organization are
highly skilled who motivated employees to bring innovation by filling their demands.
Arrangement of funds: For brining innovation and new technology funds are needed
that is being arranged by management which can help to operate a business and attain the higher
profitability. The management of TESLA, are going to arrange 60% funds from its personal
assets and rest 40% will be arrange from bank loan that will help to implement the all planning
and strategies effectively.
Introducing new product : In this stage, TESLA will launch the new electric car model
with Autonomous driving and IOT technology after implementing all changes which will help to
attracts the large number of customers and develop their business effectively (Morus, 2019). The
management of such organization will manage and organise all activities and functions in
changing environment so that it can attain higher profitability in upcoming future trend.
Therefore, above mentioned action plan will complete the activities within 2 years that
will be start from 2021-22 and would be completed in 2023-24 by going through all stages. The
Gantt chart will help to perform all functions and action plan that covers different stages of
running activities. These all activities and proper implementation of innovation in chosen
organization will be a good opportunity for their business as becoming leading organization in
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automotive industry. This will help to capture high market share and brand image by introducing
new model and providing training to staff.
Conclusion
On the basis of current assignment a conclusion can be made innovation is important and
vital for all business organisation as it lead to enhanced competitive strength along with
manufacturing and delivering of more exclusive product. Further, innovation is also vital to
enhance the creativity and overall competencies of a firm. Beside this, a summarisation about the
Future of the Industry 2020 and Beyond could also be made by current investigation. The Future
of the Industry 2020 and Beyond is based on and comprises enhanced use of artificial
intelligence to come up with Autonomous vehicles. Apart from this, a conclusion can also be
made that use of internet of things and other sensors are also enhanced and taken as as Future of
the Industry 2020 and Beyond to provided much convenient and better products and services for
customers.
Apart from this, it has been also observed through current assignment that SWOT
analysis provide an effective tool and model to evaluate about the Organisations Innovation
Requirements by the way of analysing the current strengths and weakness of a firm along with
emphasis on prevailing opportunity and threat. A summarisation can be made that vehicles which
are fast and based on use of renewable energy leads out to be more strength for organisation
where as slow manufacturing system is a big threat for an organisation. Apart from this, high
competition level is taken as a big threat which can be resolved and overcome with the help of
regular and effective innovation. It has been also analysed and observed that the use of
Autonomous vehicles and Internet of thing are offering enhanced growth opportunity and areas
for success for a firm. At last, a summarisation can be made that use of action plan is made by
firm to effectively implement and lead out an innovation in reality which comprises of detailed
information about the strategic planning, financial needs and all other aspects to bring a project
into reality.
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REFERENCES
Books and journals
Baldwin, E. and Curley, M., 2020. Managing Innovation in the Digital World. De Gruyter.
Biemans, W., 2018. Managing innovation within networks (Vol. 7). Routledge.
Gómez Montoya, D., 2018. OI innovation: Corporate business model for managing innovation
(Doctoral dissertation, Maestría en Ingeniería).
Guerra Guerra, A. ed., 2018. Organizational transformation and managing innovation in the
fourth industrial revolution. IGI Global.
Kerzner, H., 2019. Innovation Project Management: Methods, Case Studies, and Tools for
Managing Innovation Projects. John Wiley & Sons.
Khaligh, A. and D'Antonio, M., 2019. Global trends in high-power on-board chargers for electric
vehicles. IEEE Transactions on Vehicular Technology. 68(4). pp.3306-3324.
Lee, J., Suh, T., Roy, D. and Baucus, M., 2019. Emerging technology and business model
innovation: the case of artificial intelligence. Journal of Open Innovation: Technology,
Market, and Complexity. 5(3). p.44.
Morus, I. R., 2019. Nikola Tesla and the Electrical Future. Icon Books.
Murmura, F., Bravi, L. and Santos, G., 2020. Process and Product innovation in the Eyewear
sector: The Role of Industry 4.0 Enabling Technologies for Managing Consumer
Health.
Ottosson, S., 2019. Developing and Managing Innovation in a Fast Changing and Complex
World. Springer Books.
Reimers, J., Dorn-Gomba, L., Mak, C. and Emadi, A., 2019. Automotive traction inverters:
Current status and future trends. IEEE Transactions on Vehicular Technology. 68(4).
pp.3337-3350.
Tan, S.F., 2020. Managing Innovation: Technology, Consumer and Sustainability Perspective,
and the Challenges. In Leveraging Consumer Behavior and Psychology in the Digital
Economy (pp. 205-216). IGI Global.
Tanev, S., and et.al., 2019. Lean and global technology start-ups: Linking the two research
streams. In Managing Innovation (pp. 199-239). World Scientific.
Tiwari, R. and Buse, S., 2020. Key Issues in Managing Innovation in a Global and Digital
World: An Introduction to the Festschrift in Honor of Cornelius Herstatt. In Managing
Innovation in a Global and Digital World (pp. 1-13). Springer Gabler, Wiesbaden.
Tomzcak, K., and et.al., 2019, April. Let Tesla Park Your Tesla: Driver Trust in a Semi-
Automated Car. In 2019 Systems and Information Engineering Design Symposium
(SIEDS) (pp. 1-6). IEEE.
Wang, D. S., 2019. Association between technological innovation and firm performance in small
and medium-sized enterprises. International Journal of Innovation Science.
Online:
Top 10 Automotive Industry Trends & Innovations: 2020 & Beyond. 2020. [Online] Available
Through:< https://www.startus-insights.com/innovators-guide/automotive-industry-
trends-10-innovations-that-will-impact-automotive-companies-in-2020-beyond/ >.
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