Teamwork 1 Tesla case - Group Case study #1 PDF

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Group Case study #1...

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30154 Technology and innovation management INSTRUCTIONS:   

Your write-up should be less than 600 words otherwise it will not be graded. A team representative MUST email your answer to the questions and then upload the file on the bboard platform (assignment 1 section). Please make sure to upload your answers before the time window expires. Please answer the assignment questions below.

ASSIGNMENT QUESTIONS: Despite a long history of electric engines, in 2018, the proportion of electric vehicles on the world’s roads is still quite small. However, analysts are predicting an unprecedented expansion during the next decade. 

For these predictions to become true, what conditions are needed? In answering this question, please refer to the theory of technology diffusion.

In order for these predictions to become true, there are few conditions to be satisfied, as to ease the purchase and the use of these new kinds of technologies. First, some government policies must be implemented, such as exemptions on car purchase taxes, road tolls and parking fees. Moreover, governments could provide subsidies to consumers and manufacturers of electric vehicles. The introduction of complementary technologies would also facilitate the spread of EVs, such as an increase in the availability of charging stations over the territory; many people are in fact reluctant to buy electric cars because of a lack of these, not having the possibility to recharge car batteries at home. From a technical point of view, the life of accumulators should also be increased in order to eradicate range anxiety, meaning the fear of running out of battery power. At the moment many countries are still in a phase where there are many uncertainties related to this product and only a few percentages of the population, the so-called innovators, are adopting the technology. However, thanks to the rapid progresses that have been made combined with the diffusion of complementary technologies such as charging stations, EVs will become increasingly easy to adopt, generating economies of scale and learning, and eventually leading to a price drop, which would subsequently accelerate their diffusion. 

Pick two of the different taxonomies of innovation seen in class. How would you classify Tesla’s cars (choose the model you like)? Please explain.

For this analysis, we chose Tesla’s mid-size all-electric luxury SUV – Model X. From a technical point of view, this technology represents a competence-destroying innovation,

since producing this model requires completely new abilities, especially when we talk about the design of the engine and the new software controlling the vehicle. Moreover, this is considered an architectural innovation, which entails changing the overall design of the system and the way the various components interact. We can say that this type of innovation is mainly technology-pushed, since the development of this electric car is driven by the progress of automation. Yet, it could also be considered a demand-pulled innovation due to the rising urgence to find more ecofriendly alternatives to traditional cars. 

Is Tesla likely to dominate the electric cars industry in the future? Why or Why not? Justify your answer by using the information included in the case.

In the past 15 years, Tesla Motor has outdone sales of electric cars, growing at an incredible rate. We believe that the company is very likely to dominate the EV market in the years to come. As read in the article, having so many charging stations, allowed Tesla to be one of the few cars able to drive long distances without the already mentioned “range anxiety”. Furthermore, their price/miles per charge ratio is incredible compared to the one of other electric cars. At first, Tesla was in the high-end market, while competitors offered way cheaper cars, but with their last sedan, Model S, the company is finally getting out of the niche market; reaching the mass market represents a crucial step to gain market share because it is the only way Tesla will be able to increase its sales volume. Another factor to be taken into consideration is Tesla’s high degree of vertical integration, which could represent in the long run an important source of competitive advantage. The problem is that producing everything internally is very expensive and has caused Tesla to burn a lot of cash (notwithstanding the growth in sales, the company loses money every year). This business model will be sustainable only if the firm will be able to expand its customer base....