Question

What is Tesla's innovation strategy? Does it rely on incremental or radical innovations? Dis­ruptive or architectural? What are the competitive implications of the firm’s innovation strategies?

Answer 1

Tesla's innovation strategy is clear like its mission, they want to share a premium market that will change the whole automotive industry by using no fuel engine and producing electric cars, helping the environment from the fuel pollutant emissions. As there is no competition in the market with this technology and customer are being attracted because of its modern luxury look, self-driven car features operated by the best software and an environmental saving cause. Tesla has already earned a good reputation and shares a niche market, although the co-founder of Tesla Elon Musk wants this car to be the future of the automotive industry.

Tesla is a radical innovation for some product like Model S. A radical innovation supplants an existing business model and replace it entirely. This is used as a competitive advantage, create a benchmark in the market. Attract customers who are interested in trying new experiments and want a premium product. Tesla is radical because it is producing such car that is self-driven, fully automated controlled by the software system, no fuel, and its costing. In this model, it has few radical innovations like a premium price, a performer, a convenient, and with supercharger network.

Tesla is not a disruptive innovation but an architectural innovation because this innovation can be seen in the product as well as in the other activities too. The innovation is being targeted to incumbent firms and links customers. The design system has been changed to give a new modelling look. The components are attached in a user-friendly way, so that customer can easily access and software implemented is also simple and advanced.

The competitive implication for Tesla is its approach, which is different from other car producing company. The firm has no competition till now as no company has launched an electric car. The company is enjoying this benefit but still, the automotive industry is large few Companies like Ford, General Motors are their rivals who are sharing a car segment with customer loyalty and reliability. Tesla is so much confident about the product that it does not do any promotional activity rather they aim in customer service. The belief of this is that " quality speaks" if the car is luxurious, premium, stylish look, advance with a new trend of technology, etc then the customer will be attracted naturally. This is the first company selling cars online as there no competition.

"Please upvote if you find this answer helpful, Thank you so much"