Tesla Model S

Running head: Business: TESLA MODEL S 1

TESLA MOTORS ANALYSIS-TESLA MODEL S

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TESLA MODEL S 2

Tesla

Tesla is a United States based motor vehicle company that manufacture electric vehicles.

The Company designs, develops and sells electric vehicles of high performance (Voigt et al.

2017).

Radical innovation or an incremental innovation

According to Norman & Verganti (2014), Radical innovation is defined as the extent or

the degree to which the innovation is totally new and totally different from already existing

products. Similarly, the radicalness of an innovation can be defined with regards to associated

risk. Some examples of radical innovations include the development of new products like phones

with much more different display resolutions, high memory capabilities as well as better and

much better and long-lasting battery. In the year 2015, Tesla innovated two vehicles which most

people were in agreement with regards to its remarkability. In fact, most consumers rated the

Tesla Model S vehicle as the best. However, though the model never posted profits at first,

people were sure that profits would soon follow. Tesla was the only existing auto manufacturing

star up in the US since the 1920s. It is conclusive therefore to refer to Tesla model S a radical

innovation because the two vehicles the company introduced were different from already

existing models. Tesla model S appeared totally new to the world and different from already

existing products. Incremental innovation involves only a slight change from the normal or

already existing practices (Norman & Verganti, 2014). Tesla Model S was a major innovative

idea and can be termed as incremental because the change was not slight but was rather robust

that took the whole world by surprise.

Competence enhancing or destroying

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A competent enhancing innovation is that kind of innovation that is built from already an

existing knowledge base in the firm (Norman & Verganti, 2014). For example, Pentium 4 from

Intel was built on the technology of Pentium III, from the same company. On the other hand,

competence destroying innovation is that kind of innovation that renders a company’s existing

competencies and ideas totally obsolete and irrelevant.

Tesla company innovation is built on its already existing innovation in the modeling of its

vehicles, therefore making it competence enhancing rather than competence destroying. In fact,

the modeling of Tesla Model S was done utilizing existing knowledge base of the company.

Is it a component or an architectural innovation?

A component innovation, also referred to as modular innovation, is that kind of

innovation that entails changes to components in a system without necessarily affecting the

overall design of the product (Norman & Verganti, 2014). On the other hand, architectural

innovation is that kind of innovation that entails completely changing the overall design of a

particular system. It also entails changing the way the components in a system relate to each

other, thus influencing the way a system operates. The Tesla model S car was designed with an

aluminum body and a total range of up to 300 miles per every charge (Nykvist & Nilsson, 2015).

The extreme changes that were made in the two models of cars completely changed the design of

the overall system. The way components in the newly introduced models interact with each

other. Therefore, conclusively, the innovation adopted by Tesla Company is architectural and not

component innovation.

What factors do you think influence the rate at which consumers have adopted (or will

adopt) the Tesla Model S?

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There are a number of factors which influence the rate at which consumers have adopted

Tesla model S. Some of these factors include that fact that the model has a strong aluminum

body. Additionally, Tesla Model S has a strong battery charge that can last up to 300 miles per

every charge. Similarly, Tesla model S has small cylindrical batteries well distributed in the car

system which enhances battery safety. These are some of the factors which customers find them

unique and attract them towards the use of the car model.

Where do you think electric vehicle battery technology is on the technology s curve?

The S-curve is a form of predicting production in an organization and entirely requires a

company to invest huge sums of money at the beginning of the production process in order for

the product to be efficient in the long run. According to Adner & Kapoor (2016), technology S-

Curve diffuse innovation because it leads to new ideas being tested which result in increased

efficiency and increased production in the long run. For Tesla Model S, the company has spent

huge amounts of resources with an aim that it unleashes something new that will try to

differentiate it from other competitors in the market. Because Tesla model S is an electric vehicle

and come as a new product to customers, it has not achieved much as far as sales volume is

concerned and therefore it is still lowly placed in the technology s curve.

Do you think Tesla Motors will be profitable? Why or why not?

In my view, Tesla Motors will be profitable because most of its products are not only

effective but are attractive to customers. Because of the fact that the company differentiates itself

from other firms in the industry by manufacturing high quality and environmentally friendly

vehicles, it is likely to break even and make more profits in the long run.

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References

Adner, R., & Kapoor, R. (2016). Innovation ecosystems and the pace of substitution: Re‐

examining technology S‐curves. Strategic Management Journal, 37(4), 625-648.

Norman, D. A., & Verganti, R. (2014). Incremental and radical innovation: Design research vs.

technology and meaning change. Design issues, 30(1), 78-96.

Nykvist, B., & Nilsson, M. (2015). Rapidly falling costs of battery packs for electric

vehicles. Nature climate change, 5(4), 329.

Voigt, K. I., Buliga, O., & Michl, K. (2017). Driving Against the Tide: The Case of Tesla

Motors. In Business Model Pioneers (pp. 187-198). Springer, Cham.

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