Question

Strategy at Tesla Looking at Tesla, let's address the following questions based on your readings of both the case and Chapter 7 in the text: Chapter 7 Questions: 1. Where is Tesla's line of cars in the product life cycle? a. What does this mean to Tesla from a financial/investment perspective? 2. Does Tesla represent an architectural or disruptive innovation? Please support your answer. 3. How might the competition be expected to respond? 4, Does Tesla operate on an open or closed innovation principle? 5. Is this the best approach? Please support your answer

Answer 1

1) Tesla's line of cars are in the introduction and early growth phase of the product life cycle. It implies that Tesla would need to continue to invest heavily into product development and marketing.

2) Tesla presents a disruptive innovation as it tries to replace internal combustion engine with electric propulsion in automobiles.

3) The competition would respond by making the internal combustion engines fuelled vehicles cheaper and more efficient. Also they would launch their own variant of hybrid and electric propulsion automobiles.

4) Tesla operate on a closed innovation principle wherein the software and technology powering the cars are not shared with the public and the developer community.

5) As of now, this is a better approach because the company is still developing its technology and if they make it open source, then the competitive advantage for the company would be lost.