In the modern day business, innovation plays a very important role. This helps companies in having edge over their rivals. It is also crucial that companies understand the need of the market and the innovation trend in the market before making investment in innovation. Tesla is one of the pioneers in innovation (Christensen, Raynor & McDonald, 2015).
It is necessary that companies calculate the value that the innovation is going to add to the product. This report showcases the use of innovation strategies and tools for analysing the opportunities, threats and impact that is going to get created by innovation made by the Tesla has been elaborated. It also describes about the impact of innovation strategy on Tesla as well as the strategy made by the company that responds to Artificial intelligence.
Organisation and its innovation trend
Tesla is an American Multinational firm established in the year 2003. It is specialised in the making of equipment related technology such as Solar panel manufacturing, Litium-ion battery energy storage and electric Vehicles. Solar panels are manufactured with the help of subsidiary company named SolarCity. Tesla sells the Tesla Model X, Powerwall, Model S, Model 3, Solar Panels, Powerpack batteries, Solar roof tiles as well as other similar kind of products. They aim to make electric cars for the general public i.e. at affordable prices. Tesla’s Model S was the world’s bestselling plug-in electric car in 2015 and 2016 with the fourth quarter sale reaching 200,000 units.
Artificial Intelligence is the future of the technology industry. Artificial intelligence is an intelligence that is showed by the machine in contrast to the natural intelligence demonstrated by any animal or humans (Hardman, Shiu & Steinberger-Wilckens, 2015). Transferring every technology on artificial intelligence is a major trend. Tesla has been working hard for developing cars that runs on artificial intelligence. Making of smart or driverless cars are one in the process. They are in a significant race to develop and market cars that are autonomous (Cox, 2017).
Various concepts and relationships
In innovation, there are many things that need to be understood. Some of them are:
It is crucial for organisations to make strategies related to innovation. This must be done based on the goals and objectives that company has made for it. Innovation strategies help the company in making a strategic alignment. This can be justified by the fact that there are many strategies made by the companies for its growth and long term development (Dongbin & Zhiyuan, 2015). The creation of innovation strategy will helps the company in moving forward in the direction where the other strategies are taking the companies.
Innovation strategy helps the organisation to have an edge over their rivals which is most important in the case of making of strategies. Innovation strategy assists the firm in making a continuous development over a sustained period of time (Catley, 2016). It cannot be possible that one innovation might differ from the other. It is crucial that companies before making any innovation thinks about the value that it will add to the existing product and it must create a road to where the company wants to reach in future (Mazzucato, 2015). Innovation strategy also aligns all the decision making to be focused towards the future needs of the company and its market base.
Innovation strategy is important as it helps the company in keeping every related stakeholder aligned towards making innovations. It is also essential as it protects the company from any kind of risk that may be generated during the innovation process. It also makes related people fully involved in the process (Mangram, 2012). It also helps the organisation in monitoring the progress from time to time with the help of key indicators while keeping strategic goals in mind.
Artificial Intelligence impact on Tesla
Tesla has been focused towards various kinds of innovation. There are many players in the Automobile industry who have invested a lot in different types of innovation trends. Artificial Intelligence is one of the most widely practiced innovation trend in various industries (Ceccagnoli & Rothaermel, 2016). Tesla has also invested a lot in building technologies that are automated and works without human interventions.
Tesla is a company that is highly depended on the advanced technology and hence making machines automated has large impact on their business. Their impact could be understood by the fact that when the machines gets transformed into automatic machines there are many organisational changes that are going on. Tesla will have to invest a lot in the technologies that makes machines smarter. One of the technology on which Tesla is working is Driverless cars. This is a technology that can give Tesla a boost in the market (Kammen, 2014). This is due to the fact that number of automobile manufacturers and companies from other sectors are working hard for developing this technology.
Internal impact of this innovation trend is that all the technology that used in the business of Tesla is getting automated and is moving towards artificial intelligence. The first impact of such transformation is that companies had to invest a lot in technology upgrading. The investment is also to be made in the development of product. Since the technology related to artificial intelligence is costly hence the company had to plan for their investments (Grimpe, Sofka, Bhargava & Chatterjee, 2017). Along with this they need to train their workforce and at the same time it also results in job cuts which may affect the environment of the organisation. Because of the fact that Artificial Intelligence impacts on the business operations hence policies are required to be built within Tesla.
Its impact can be understood by SWOT tool. In SWOT analysis, strength and Weakness helps in understanding the impact of Artificial Intelligence on the company.
Strengths
Weaknesses
Opportunities
Threats
Tesla follows relentless innovation strategy. They keep on investing in the innovation that is fast and disruptive. Such relentlessness in the innovation might lead to huge cash crunch for the company. Since they are new to the industry when compared with their other big competitors hence if any innovation gets failed then the chances of business failure may arise. This might lead to bankruptcy. But on the other hand this kind of innovation has also given them competitive edge over their rivals. With the help of artificial intelligence they are trying to build future cars that run on electric and are automatic (Nykvist & Nilsson, 2015). Tesla’s strategy always focuses on long term growth of the company as well as they aim to fulfil the demands of the customers in the future.
Their strategy also includes forging partnership with other automobile manufacturers. In the Case of Artificial Intelligence, they continue to work on their own technology at the same time they take help from their partners. Their semi-automatic cars are the first in this direction (Martins, Rindova & Greenbaum, 2015). This strategy has sometimes led company into the trouble. For example in the process of their testing of fully automatic car, due to technology malfunction there was death of test driver. This might have happened because of the fact that Artificial Intelligence is still at the research level there are larger chances that some failure can arise (Manyika & Sneader, 2018).
Organising innovation activities
Tesla must organise its innovation activities with more care and attention. They must look for the challenges that are confronting the innovation of Tesla and then only they must align their activities. Tesla must organise their innovation activities based on the resources and time they have (Dietterich, 2017). The disruptive innovations like Artificial Intelligence are harder to deal with as it may change the whole industry. First thing that they must do before actually making innovation is that they must do a market research. Secondly they must bring all their resources at common platform so that they could come up with the innovation as soon as possible (Ingle & Phute, 2016).
Innovation capability that Tesla must develop
Tesla must also focus on enhancing their innovation capability. The first thing that they must do in this regard is that they must add more investors in their pool. In the years to come they must also focus on finding new ways of innovation by working on advanced technology platforms.
Innovation initiatives that Tesla must pursue
Tesla should ask their base customers about their problems before making any innovation. This will help the company in creating value from their products. Tesla must take the help of all the Intellectual property rights so as to ensure that it captures value from the innovation (Heires, 2015).
Recommendation
There are several things that Tesla could do for ensuring the strategic alignment for addressing the Artificial Intelligence. Before moving forward it must conduct a market research about the situation of Artificial Intelligence in the industry. Strategic alignment could also be addressed by the help of giving training to the staffs about the use of artificial intelligence in the work process (Hurlburt, 2017). Tesla should also invest more in the big data analytics and data management as it is the base of Artificial Intelligence.
Conclusion
From the above based report it can be concluded that Tesla is a pioneer in the innovation. It has changed the industry because of the disruption that it brings through its products. Artificial Intelligence is a most common trend on which Tesla is working upon. Innovation strategy must always align with other strategies of the company. There are long range impacts of Artificial Intelligence on Tesla and it must take measures so as to reduce their effect. Tesla believes in relentless innovation strategy. It must add more investors in their pool so as to move forward with their innovation. It must focus on market research for understanding the initiatives that Tesla must pursue. This will help them in creating and capturing value from their innovations related to Artificial Intelligence.
Reference
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