MANAGEMENT INFORMATION SYSTEM

ASSIGNMENT 1: AN EMERGING IT INNOVATION IN THE AUTOMOBILE INDUSTRY

BOAKYE, LOUIS - 104295742

BOAKYE, LOUIS ASSIGNMENT 1 MIS

INTRODUCTION TO THE AUTOMOBILE INDUSTRY

The automobile industry is a widespread of various companies and other organizations engaged in designing, developing, manufacturing, marketing and selling of motor vehicles. The auto manufacturing market is a very competitive industry, especially for alternative fuel vehicles that has become very popular with the rise of environmental concerns. The automobile industry started in the 1890s, at that time the early car productions were horseless carriage. The United States had led the world in the automobile industry for many decades producing over 90 % of 32,028,500 cars worldwide.in 1980, the United States was over taken by Japan. Surprisingly China took over the automobile industry in 2012 with 19.3 million units of cars manufactured. The automobile industry has transformed over the years with the introduction of innovative technologies.

EMERGING TECHNOLOGY INNOVATION

The automobile industry as it is still remains competitive with brand new ideas being introduced regularly.one innovative technology emerging in the automobile industry is the electric car. Specifically Tesla is the leading pioneer of this technology. Martin Eberhard and Marc Tarpenning founded Tesla motors in the year 2003 and in the month of July. The company is named after a Serbian American inventor, physicist and electrical engineer Nikola Tesla. He has been best known for his contributions to the design and manufacturing of electrical based system. Tesla’s current headquarters is situated in Palo Alto, California, USA. In 2014 of January Tesla holds an estimate of 6000 plus dedicated employees. Some of tesla’s known partners are Panasonic, Daimler AG and Toyota.The current CEO of tesla motors is Elon Musk; He became involved with the company as an    investor. Elon assumed the office of the company as CEO and also product architect in the year 2004.With Elon Musk Tesla motors gained it widespread recognition in 2006 after the release of its first car the Roadster.The Roadster is tesla’s first production car produced in California between 2008 and 2012.It was officially revealed to the public on July 19,2006,in Santa Monica, California at an exclusive 350 person invitation only event at Santa Monica Airport in Barker Hanger. The Roadster which is also called Dark Star was a fully built integrated electric luxurious sport car of it era. It was the first mass production car for sale to the public to use lithium-ion battery cells and a highway capable all electric vehicle to travel more than 200 miles (320 km) per charge. The Roadster seized production in 2012 after its supply of Lotus Elise gliders ran out. Tesla had a contract with Lotus cars to be supplied with 2,500 gliders, which expired at the end of 2011.Through September 2012;Tesla sold more than 2450 Roadsters in 31 countries worldwide. In 2012 the last and remaining Roadster cars was sold to limited numbers only in Europe, Australia and Asia. The Roadster had an average range of 394 km (245 miles) maximum per charge and an average speed of 25 mph (40 km/h). It uses 135 wh/km (21.7 kwh/100 mi, 13.5 kwh/100 km or 490 kJ/km) battery-to-wheel, and. It could accelerate from 0 to 97km per hour (60 mph) in under 3.7 seconds and has a top speed of 201km/h (125 mph). The base price of the car was US$109,000 in United States and GB£86,950 in the United Kingdom and in continental Europe €84,000. In 2012 of June there was another breakthrough from Tesla motors with the production of the Model S. The model S is a full size, 5-door lift back, real motor, rear-wheel drive luxurious sedan designed by Franz Von Holzhausen, who previously worked for Mazda North America Operations. The model S which is also called White Star was earlier announced in a press on June 30,2008.In 2012 retail deliveries began in the U.S specifically on June 22.The first delivery of the model S in Europe was delivered to a retail customer on August 7,2013 and on April 22,2014 deliveries in china began. Deliveries of the right hand drive model for UK, Australia, Hong Kong and Japan has been scheduled at the end of 2014.

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BOAKYE, LOUIS ASSIGNMENT 1 MIS

Tesla announced the 60D, 85D and P85D dual motor all wheel drive variants of the Model S on October 9,2014.The P85D can accelerate from 0 to 60 mph in 3.2 seconds and has a top speed of 155 miles per hour. The 85D and the p85D can go for 275 miles per charge which. Upgrades and new technologies have been introduced to the vehicles manufactured in late September 2014, all new Model S are now equipped with a camera mounted at the top of the windshield and also ultrasonic sonar sensors in the front and rear bumpers which provides a 360 degree buffer. This equipment allows Model S to detect road signs, obstacles, lane markings and other vehicles. There is an adaptive cruise control and lane departure warning; this system will enable semi-autonomous drive and parking capabilitiesTesla Motors has also revealed another concept model called the Model 3 which is code-named the Tesla Blue Star. This will be Tesla’s affordable electric car with the price range of $35,000 to $40,000 and with a capable range of 200 miles (320 km). It is expected to begin deliveries by 2017.According to the chief designer of Tesla Motors this will be a standard electric car that will be made at affordable price ranges. Technology from the Model S will be introduced in this model.

BATTERY TECHNOLOGY

Tesla uses a different and innovative technology in building the batteries that power the electric cars they make. Tesla does not use single purpose and larger format cells as many cars do; Tesla uses thousands of lithium-ion 18650 commodity cells, which are cylindrical battery cells. These batteries are usually found in laptops and other consumer electronic devices we use everyday. These cells are designed to be cheaper and lighter than the standard cells. The battery components Tesla motors use in manufacturing the Model S and other Tesla vehicles’ batteries are currently supplied to them by Panasonic, a Tesla Motor investor. The prices of these batteries vary. The 60kWh battery would cost $12,000 while the 85kWh battery would cost $17,000.In the model S the batteries are tightly packed by a 0.25 in (6 mm) aluminum-alloy Amor plate into the base floor of the car, this is a different approach to how the Roadster’s battery placement which was in the trunk. Due to this approach a lot of space has been created in the Tesla Model S.As innovative as Tesla motors is, batteries could be swapped from underneath within 90 seconds.

TESLAR SUPERCHARGERS

Tesla Superchargers are the most advanced charging technology in the world, capable of charging the Model S 16x faster than any public charging stations. Tesla superchargers allow Model S owners to travel between cities along most highways in North America, Asia and Europe for free. Tesla Superchargers provide half a charge in as 20 minutes or less and are conveniently placed to allow owners to drive from station to station with minimal stops. Tesla stations are capable of delivering up to 120 kW of energy for free only for the Model S for now. It works by delivering DC power to the battery using special cables that bypass onboard charging equipment. Tesla plans to cover more stations in sunny locations with solar panel canopies.

TESLA ELECTRIC CAR IMPACT ON ITS VALUE CHAIN

IMBOUND LOGISTICSTesla manufactures its most important and primary component in house. Other components are produced and delivered in a timely manner from numerous suppliers, which are confidential partners. This process reduces the waiting period of some goods and services needed hence it enhances production efficiencies and effectiveness in the company’s output.

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BOAKYE, LOUIS ASSIGNMENT 1 MIS

OPERATIONS Tesla produces all its cars in northern California (Fremont). In this mega factory the manufacturing process is automated and highly innovative with multiple functional robots capable of producing an estimate of up to 83 vehicles per day. The production process is flexible and the robots are reprogrammable to adjust to demands.

OUTBOUND LOGISTICSTesla motors have many distribution channels, which consist of 18 countries. These distributions are tesla’s own stores, which plays a role in educating customers about electric cars and it benefits. They also have showrooms where purchase can be made as well as online purchases making it possible for customers to select preferred delivery destinations.

MARKETING AND SALESThe leading electric car company based in USA does not employ ad agencies and traditional marketing means in creating awareness of their products instead they developed a network of their on stores in high foot traffic and wealth’s district. The company uses many celebrities in creating brand awareness and in addition the company also uses web based short films and conceptualizing the car buying experience on popular platforms like YouTube.

SERVICEThe company offers direct in store services and their own service centers in Asia, Europe and North America. The company has built and expanded a free super fast charging station network for it customers. Tesla has also provided a 50,000-mile warranty policy to increase customer’s confidence hence reducing the production cost.

COMPETITIVE ADVANTAGE OF THE INNOVATION OF TESLA IN THE AUTOMOBILE INDUSTRY

The defined objective of tesla is to manufacture and sell the finest cars and services in the global emerging electric automobile market. Tesla remains the dominant leader in the electric car industry. The following below shows the companies competitive advantages in the automobile industry.

ONLINE PURCHASEThe company has made it possible for customers to purchase an electric vehicle conveniently online without a middleman or sales representative. This approach is new to the automobile industry, which has given tesla a head start in ecommerce in the industry.

SIMPLE APPLICATION UPDATESTesla cars are capable of being accessed by customers via easily accessible and user-friendly software’s and applications. Due to this, customers are able to update, upgrade and also fix performance bugs.

PERSONALIZATIONTesla provides a wider range and variety of customization during purchase according to customers’ preferences such as the choice of car seats, climate control, front panel displays, speed range etc. These options available create a near luxury customer experience during purchase.

QUALITY SERVICESThe company is able to diagnose and fix car errors and other mechanical problems within a day as a minimum time frame of service provided.

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BOAKYE, LOUIS ASSIGNMENT 1 MIS

CONCLUSIONThe intent of innovation is to ensure the continuous and improved existence of an invention, which will provide a steady flow of products and services giving a company a sense of direction of where its headed in the global market. The automobile industry is one of the industries that are on the edge of achieving a major change with the developments and rise in IT innovations; this will also have an impact on both the services and products provided by various segments in the industry. Tesla’s innovation is a disruptive innovation that has created a new market and value chain networks in the industry and this has led to a higher competition within the industry.

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BOAKYE, LOUIS ASSIGNMENT 1 MIS

REFERENCESHowell, L. J. (n.d.). Innovation in the automobile industry: A new era. Retrieved February 21, 2016, from http://pubs.acs.org/subscribe/archive/ci/30/i11/html/11howell.html

Z. (2015, April 29). Tesla’s Competitive Advantages — 5 Big Ones. Retrieved February 21, 2016, from http://evobsession.com/tesla-competitive-advantage-5-big-ones/

Seagul, D. (n.d.). Tesla motor's startegic analysis. Retrieved February 21, 2016, from http://www.academia.edu/7563935/tesla_motors_startegic_analysis

Katzor, E. R., & Donohue, P. (2014, June 26). What is Tesla's competitive advantage? Retrieved February 21, 2016, from https://www.quora.com/What-is-Teslas-competitive-advantage

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