managing innovation

1. Innovation Audit

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EXECUTIVE SUMMARY
Innovation is determined as generation of creative ideas and thoughts which will help the
business in developing new products and services. This report is based upon an auto mobile
organisation named Tesla, that is specialised in manufacturing of electric cars. This organisation
is popular in producing innovative products and is recognised as one of the top fast growing
technical industry. This report co0vers the innovative history of this company and the current
capabilities of this company. It also covers the future upcoming products of this organisation which
are Roadster 2020 and Model Y and the impact of external factors upon this.
INTRODUCTION
Innovation is defined as creative thoughts, new ideas, new imaginations in context of
method or a device. It is often viewed as an application of providing appropriate solutions which
helps in meeting new needs, present need of market and unarticulated needs. This report is based
upon American based auto mobile industry, named Tesla which deals with innovative electric car
at multinational level. This organisation is known for its innovative products which helped this
industry to achieve success (Bason, 2018). This report revolves around the innovation and
technology used by this enterprise to achieve overall business growth and development. It covers
the innovation history of this organisation and its existing level of innovation and capabilities. At
the end of the report, an innovation audit for Tesla is prepared which determines its future
capabilities.
OVERVIEW OF ORGANISATION
Tesla is an US based multinational business industry that deals with automotive and energy
organisation. This enterprise is specialised in manufacturing of electric cars and solar panel and
solar city subsidiary. It also operates various assembly plants and multiple production like
Gigafactory. This enterprise was founded in the year 2003 by engineers named Marc Tarpenning
and Martin Eberhead under Tesla motors name. This company name is a tribute for engineer named
Nikola Tesla.
Innovation History of Tesla
Tesla was founded in the year 2003 by American entrepreneurs Marc Tarpenning and
Martin Eberhard (Bei, 2019). This enterprise was developed with an aim to develop electric sports
car by using innovative ideas and resources. In 2008, this enterprise has luanched its first ever car

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which is a complete Roadster electric car. In tests by company, this car has attained 245 miles in
a solo charge, which ranges unprecedented for production of electric car. In additional tests, it is
shown that the performance of this car can be compared to gasoline powered sports car. The
lightweight body of a car was made out of carbon fibre (Tesla, Inc, 2019). This car produced no
emissions of taiplale and it do not use any internal engine of combustion. It was founded by Tesla
motors that it has attained the efficiency that was equal to 135 ,million per gallon.
In the year 2012, Tesla stopped the production of Roadster which concentrates upon its
new Model named S sedan and was acclaimed by certain critics of automotive industry for its
design and performance (Chen, Wang and Huang, 2019). In the starting of 2012, stations was built
by Tesla which were called Supercharges in Europe and United States. This was designed to charge
batteries quickly and at no extra charges by Tesla owners. In the year 2015, this automotive
industry has released the Model X, which was a crossover vehicle, that is, a vehicle that has feature
of sport utility but built upon car chassis.
This organisation also branched itself with solar energy products and Tesla bought the
company of Solar panel in the year 2016. In the year 2017, this company changed its name to
Tesla, Inc., for reflecting that it do not sold only cars any longer. The main reason Tesla continued
to research and head towards sustainable energy to produce its cars is because of company values
and beliefs that the faster the world stops relying on fossil fuels and heads towards renewable and
emission free innovation, the better. Also, Tesla not only manufactures cars but also a innovative
set of other products such as Powerpack, Powerwall and Solar Roof which allow consumer and
businesses to manage in a more efficient way their energy consumption and the reason behind this
is to make renewable energy more accessible and affordable not only in the automotive industry
but also in the everyday life of consumers. The company is constantly researching and working to
develop ways that are environment friendly that offer the same if not better than the competitors
who focus more on gasoline fuelled vehicles. By doing this, Tesla receives financial backing and
is well regarded not only by governments but by consumers that are looking to minimize their
carbon foot print.
Existing capabilities and innovation performance
Tesla is one of the innovative organisation which is specialised in developing electrical
cars which is of high quality. It is said that this organisation has certain elements which helps it in
becoming the top most innovator in the history of automotive industry. This industry understand

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the value preposition of early adopters of EV and acts in accordance. Out of the car makers, this
organisation stands out to understand that EV's are one of he sustaining innovation . On one hand,
all the other EV makers tout upon gas savings and benefits of environment, Tesla aims at
positioning its vehicles as a high aspirational performance cars which just happened to be electric
cars.
Around some years, this business entity can manufacture half of lithium batteries of the
world. Thus, over the time, this business can be positioned to become most advance battery maker
in the world (Cohen and Rozario, 2019). Through establishing as an aspirational brand, this
organisation can positioned towards intel of batteries and do not just make advance batteries but
this is capable to form a brand premium for the batteries that includes components like computer
chips and commodification. This organisation is currently trying to develop innovative pedigreed
by using artificial intelligence. This is utilised as a primary tool for manufacturing vehicles. The
strategy of Tesla with artificial intelligence had seemed to long term play and in the past years, it
has largely spend its gathering data from training and its neural networks.
At present, Tesla's strategy is to innovate its products by designing and developing
innovative processes and vehicles (Currie, 2018). In addition to this, Tesla uses innovation and its
processes through establishment of collaboration of R&D with some of the major companies. This
way, it helps in managing future development of its innovative techniques. This enterprise has
shown a high level of information technology innovation into certain aspects of EV businesses. It
has helped Tesla to develop even more as spin of IT but an player of auto mobile. Therefore,
Tesla's story is recognised as one of the singular bold innovative vision and it is based upon
thinking out of the box for ensuring that it stay itself in lap which is ahead of competition.
The current strategies of Tesla include Market penetration which the company uses as its
main growth strategy which involve increasing the sales of electric cars through aggressive
marketing which maximises revenue therefore enables the company's growth. This intensive
strategy allows Tesla to develop competitive advantage through market share growth. Secondly,
product development is another main strategy crucial to Tesla. For example, the solar panels and
the Tesla Roadster which is the first fully electric sports car in the world. This competitive strategy
enables Tesla to focus on high end technological advances products, this means highly investing

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in research and development to stand out from its competitors. Another strategy Tesla uses is
developing markets which means expanding on a global spectrum which enables it to become a
market leader in its sector and that is achieved by Tesla releasing unique products sought by the
consumer. The strategic goal of Tesla is to team up with other companies that facilitate its
penetration into different markets on a global scale. Diversification is a strategy that Tesla uses
but not significantly ass it is only used to help Tesla grow whenever a new product is created. For
example, when the firm planned to create new battery products. Tesla emphasizes more on
strategies like market penetration and develop innovative products as this is all what this
company's about to develop and flourish its automotive and energy solutions . Tesla has become
successful because of its innovation and because of it maps out it business strategies around
creating and developing the uniqueness of its products.
Industry in upcoming time
This enterprise keeps on innovating new products in market to stay competitive in market
and face the competition. Tesla has announced in 2017 that it will develop a new product named
Roadster which will be innovative and has advanced features. In upcoming time, this organisation
is coming up with Tesla Roadster 2020 which will be the first follow up towards the debut electric
car of this company. This upcoming super car will have the ability to go from 0 to 60 miles, as per
hour (Tesla's Future Products: A Look At 3 Vehicles The Electric Car Company Plans To Release,
2019). As per its name, this car will release in next year and it will cost around $200,000.
Another product which is going to introduce by this company is Tesla semi trucks that will
have the capacity to travel around 640 kilometres on charge of 30 minute. This truck will have the
capacity to go from 0 to 60 MPH in just 20 seconds and will haul 80000 pounds. It is expected that
it will cost $180,000. Another new innovative product which is about to develop by this company
is Model Y that was announced in March, 2019. This will be a compact SUV with having seven
seats around and has the capacity to travel 300 miles on full charge.
Although, this organisation has successful innovative ideas and innovation which helps it to grow
and develop in market. There are certain external factors which can affect this company and its
new innovative products. These factors are political, economical, social and⁸ technological which
are elaborated as follows-
Political Factors: The major market's political stability has the capability to make macro
and remote environment of Tesla which is favourable to generic competitive strategy of Tesla and

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it certain growth strategies, which is market penetration. In this analysation, this factor is
considered as an opportunity for upcoming products of Tesla as it will become easy for this
company to introduce its product in target market (Heinelt, 2019).
Economical Factors : This factor has also favourably affected the overall functioning of
Tesla as it is benefited from the low cost of battery. For instance, this factor helps in translating
the affordability if electric auto mobile products of this company. This helps to create an
opportunity for the new products of Tesla. Also, as this enterprise helps in improving the renewable
energy solution that has become popular.
Social Factors: This external factor acts as an opportunity for new products for Tesla such
as due to low carbon based lifestyles of people and their increased preference for the renewable
energy has created growth opportunities for its new products. Moreover, this company has an
opportunity to boost up its financial performance which is based upon increased wealth distribution
in the developing markets. This has increased the potential buyers population of this company's
compared to expensive cars. In this, Tesla can introduce these products at international level.
Technological Factors: Due to innovative technologies and environment, Tesla has an
opportunity to increase the technology and innovation of its products. Moreover, the increased
automation of business has become a trend which helps in creating opportunity for its new products
like Roadster 2020 and Model Y. Also, the developed popularity of online mobile system has
prompt the entity to increase such system in auto mobiles. This factor will be helpful for this
organisation to increase its sales and profitability with the help of innovative techniques and
features (Kafetzopoulos and Skalkos, 2019).
CONCLUSION
From the above report, it has been concluded that innovation is important component of an
organisation which helps it to develop products that helps in meeting customer's expectations and
demands. In this report, it has been concluded that innovation history of an organisation helps in
understanding the mistakes so that it can rectify in upcoming times. Moreover, an enterprise has
to keep updating its innovative techniques and solutions which will help it to achieve success and
development of its overall functions. It is significant for an enterprise to prepare itself for future
so that it can develop new products and services by using latest techniques. The organisation can
also consider macro environmental factors that can affect its business while developing new
product such as technological, social, political and economical. While Jaguar launched it’s new I-

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PACE electric SUV among other competitors adventuring in the field of electric cars. Tesla does
hold competitive advantages which makes it stand out from the rest, that being the fact that the
company has massively invested in the manufacturing of its batteries as well as the self driving
feature. However, the potential challenges are that these advantages may decrease . For example,
in terms of the battery it would of not been possible to deliver should the company have not
eliminated costs and building scale. Ideally, it should of been made possible due to R&D
breakthroughs which relate to core battery tech which means that cash rich automotive companies
may be able to balance their EV production, lowering down the battery cost and therefore strongly
competing with Tesla.