Tesla Motors Competitive Challenges

DDBA-8511 Weeks 2-3, Group AClassical versus Modern

Robert Brown, Taft Bradley, Richard BaschMarch 13, 2016

Literature Synthesis: Weeks 2-3

2 Team 2-3 Bradley, Basch & Brown

• Literature Synthesis Overview– Disruptive Innovators

• Blue Oceans and Customer Innovation– Blue Oceans and Red Oceans

• Cirque du Soleil– Corporate Strategy and Military History– Customer Innovation

Literature Synthesis: Weeks 2-3


• Value Networks and Core Logic– Five Elements That Impact Change– The Framework of Core Logic

• Three Primary Concepts

• Evolutionary Challenges and Global Sustainability– Technology, The Earth, And Sociocultural Intelligence– Creative Destruction, Urbanization, And Industrialization

Literature Gaps: Weeks 2-3


• Blue Ocean Strategy “BOS”- Implications of Findings; Areas For Further Research

• BOS provides a systematic approach for identifying blue oceans – But requires significant business experience to Implement Strategy, limiting validity of the model

• BOS Approach to identifying product opportunities are unique – However Procedures are weak from a point of view of scientific reproducibility

• Scientific reliability difficult to assess-Lacks system to capture and manage ideas• Further research – Future research, especially surveys from companies having developed products applying BOS principles

would be beneficial

• Global Sustainability and Creative Destruction of Industries; Implications of Findings and Areas For Future Research

• Author Assumptions lack scientific support – Quantitative/Qualitative research missing to support the perceived problem• Future Research – Article would benefit from current research conducted on entire Industries as a whole to determine

environmental impacts do exist today• Results from research analysis would help to focus on the real problem. Current research would provide statistical data to be

used to measure and determine if proposed solutions were impactful

Literature Gaps: Weeks 2-3


• Customers as innovators: A way to Create Value Implications of Findings

• Customer’s as innovators can generate value to company• Redefinition of relationship between customer and company can be risky• Reduces R&D development cost for product development and innovations• Companies must recognize signs of industry migration to customers as innovators• Customer needs are met but can result in costly do overs for manufacturers.• Development tools are essential for customers to expand accessible markets and product innovations• Concept are very profitable in some industries but may not be a fit for all industries

• Similarities and Contradictions in Core Logic of Three Strategy Research Streams

• Three logics for three Approaches to Strategy- Core, Guerilla and Complexity• Strategic Logics Compared – Common principles and shared characteristics• Contradictions – Contextual • Contradictory Assumption about Strategy• Overall Implications

Original Research Topic – An Analysis of Tesla Motors


• Tesla Motors– Background and History

• Barriers To Entry

Original Research Topic – An Analysis of Tesla Motors


• Elon Musk, Blue Oceans, and Technological Innovation

– An Innovator’s Mind: Elon Musk• Four Key Life-Changing Innovations

– Technology, Innovation, Partnerships, And Disruption• The Single Largest Challenge Facing Humanity

Original Research Topic: An Analysis of Tesla Motors - Background


• Strategic Positioning & Competitive Advantages– Battery Pack

• Cost • Range

– Environmental Political & Legal Impact – Proprietary Technology– Supercharger Network – Software Superior To The Competition



Disruptor Threats to Tesla Motors1. Disruptor Companies, Small Electric multi-purpose (Golf

Cart Type) vehicles.2. 3 Dimensional Printer Technology.3. Online Universities and the Innovation Explosion.4. Electric vehicle and the Hydrogen Revolution.5. Rare Earth Minerals from China in politically unstable times.6. Fracking technologies.7. Low cost of oil. Saudi Arabia instability and Iranian

resurgence. Conventional energy system at risk.


Challenges to Tesla Motors1. General Motors Chevy Volt.2. German and Japanese Hydrogen automobiles.3. Dealership loyalty to traditional automobile

companies.4. Alternative Energies.5. Smart Grid delivery systems for Electric

Cars.6. Millennial Work Force. Attracting young

people to build a better future.



Tesla Sustainability Plan and Challenges1. Nevada Gigfactory to build new generation

batteries.2. Lessons from NASA and SpaceX3. Alternative Energies.4. Smart Grid delivery systems for Electric Cars.5. Millennial Work Force creating involvement

and dreams.



Environmental Impact Zero Cost for Zero Emissions?1. Lithium Mining very damaging to the environment.2. Building Electric Cars can consume more energy than

conventional gasoline combustion engines.3. Battery manufacturing produces toxic wastes.4. Battery exchange system not setup in America.5. Source power to charge Electric vehicles is still coal, oil and

natural gas.6. Tesla is working to create their own closed loop power

creation and battery recycling program.


Tesla Motors as part of Elon Musk’ Innovation Plan

Figure 1.1. Learning Supply Chain and Protection of Innovation. Preventing Exploitation of Logistics Members. (Parker, Zsidisin, Ragatz, 2008).


Capital PreservationTesla Battery

Nevada Factory

Tesla Provides Revenue Stability

Tesla Provides

Funding for Advanced Projects

Learning Organization.

Musk is creating his

own educational

system.

Self Funding, wholly

owned city by Elon Musk Organization

Sustainable Threats

Environmental Challenges

Creation of New Ideas

Sustainable

Alternative Fuel

Producer

Space Exploratio

n

In House Education

Global Supply Chain

Warning

Market Instabilities

Tesla Motors: Elon Musk Innovation Research


• Space X• Asteroid belt Mining.• Orbiting Plasma Energy

Collectors.

• Stem Cell Research.• Advance Genetics.• Medical Advances..

• Electric Cities• Hydrogen Fuel Cells.• Lithium Ion Batteries• Solar Farms• Gigafactory.• Recharge Stations.

• Virtual Employees. Artificial Intelligence Systems inter communicating.

• Virtual Employees.• Fear of AI dominance.

Artificial Intelligence

Sustainable Power &

Consumption

Multi-Planet Civilization.

Space Exploration

Human Genetics

Bibliography (NOTE: Annotated Bibliography in Speaker Notes)


1. Brooks, A., & Thesen, S. H. (2007, December). PG&E and Tesla Motors: Vehicle to grid demonstration and evaluation program.

2. Chen, K., & Shih, H. (2015). Research and Simulation of the Electrical Vehicle Based Dynamical System.

3. Christensen, C. M., Raynor, M., & McDonald, R. (2015). Disruptive innovation? Twenty years after the introduction of the theory, we revisit what it does - and doesn't – explain.

4. Govindarajan, V., Kopalle, P. K., & Danneels, E. (2011). The effects of mainstream and emerging customer orientations on radical and disruptive innovations.

5. Habtay, S. R. (2012). A firm-level analysis on the relative difference between technology-driven and market-driven disruptive business model innovations.

6. Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis.

7. Musk, E. (2014). I Hope Artificial Intelligence Is Nice to Us.8. Pinkse, J., Bohnsack, R., & Kolk, A. (2014). The role of public and private protection in

disruptive innovation: The automotive industry and the emergence of low-emission vehicles.9. Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming barriers to entry in an

established industry: Tesla Motors.10. van der Rhee, B., Schmidt, G., & Van Orden, J. (2012). High-end encroachment patterns of

new products.

Appendix


• Please note that the content for this presentation is also available in Word format in the accompanying document entitled “Classical versus Modern.”

• The following link was created by Bob Brown as a supplement to his portion of the original research topic regarding Tesla Motors:

https://youtu.be/6phiVEo6Nfs

https://youtu.be/6phiVEo6Nfs

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Tesla Motors Competitive Challenges