Mgmt20132 The Making Investment In Assessment Answers

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You are required to write a 2000 word innovation strategy report to the board of your selected organisation. Your innovation strategy report must:

1. Succinctly introduce the selected organisation and selected innovation trend.
2. Succinctly define the following concepts and their relationships: the organisational environment, innovation trend, innovation strategy, innovation capabilities, innovation value creation and capture.
3. Succinctly describe how the creation of an innovation strategy ensures strategic alignment within organisations and why it is important.
4. Analyse the impact of the selected innovation trend on the selected organisation. You should apply at least one strategy tool to analyse the impact, opportunities and threats to the organisation.
5. Recommend how the organisation’s innovation strategy best responds to the innovation trend by answering the following questions.

• How should the organisation organise its innovation activities
• What additional innovation capabilities should the organisation develop
• What innovation initiatives should it pursue
• How should the organisation ensure that it creates and captures value from the innovation

Answer:

Tesla is an American Multinational firm established in the year 2003. It is specialised in the making of equipment related technology such as Solar panel manufacturing, Litium-ion battery energy storage and electric Vehicles. Solar panels are manufactured with the help of subsidiary company named SolarCity. Tesla sells the Tesla Model X, Powerwall, Model S, Model 3, Solar Panels, Powerpack batteries, Solar roof tiles as well as other similar kind of products. They aim to make electric cars for the general public i.e. at affordable prices. Tesla’s Model S was the world’s bestselling plug-in electric car in 2015 and 2016 with the fourth quarter sale reaching 200,000 units.

Artificial Intelligence is the future of the technology industry. Artificial intelligence is an intelligence that is showed by the machine in contrast to the natural intelligence demonstrated by any animal or humans (Hardman, Shiu & Steinberger-Wilckens, 2015). Transferring every technology on artificial intelligence is a major trend. Tesla has been working hard for developing cars that runs on artificial intelligence. Making of smart or driverless cars are one in the process. They are in a significant race to develop and market cars that are autonomous (Cox, 2017).

• Organisational environment: Organisational environment is considered as the factors or forces surrounding a firm that are affecting the operations, resources as well as performance (McKinsey & Company, 2018). In any innovation process, understanding of organisational environment is highly essential. This is because organisational environment sets the base for achieving success in innovation (Chen & Perez, 2018). In the process of incorporating Artificial Intelligence, understanding of economic, technological and social aspects is very essential.
• Innovation trend: It is the trend that is followed in most of the innovations done in various parts of the world. Making machines to take decide without interference of human is in trends. Tesla is also following similar trends.
• Innovation strategy: Innovation strategies are the strategies made by the company so as to develop any product. It is also crucial that company makes strategies for innovation so as to ensure that the chances of failure in the business do not arise (Stringham, Miller & Clark, 2015).
• Innovation capabilities: It is considered as the ability of the company to follow the innovation trend and make innovations as per the requirement. It totally depends on the resources that a company has at the same time the research and development facilities present with the firm (Firstpost, 2018).
• Innovation value creation and capture: It is referred to as the value that is created by the innovation for customers as well as shareholders (Davenport & Ronanki, 2018). Created value for customers helps the company to sell its products and services while created value for shareholders is in the form of stock prices as well as ensuring the future availability of investment capital for funding activities (Tidd, 2014). Innovation value capture is understood as the revenue that is generated for innovating organisation.
• Innovation strategy ensuring strategic alignment

Innovation strategy is important as it helps the company in keeping every related stakeholder aligned towards making innovations. It is also essential as it protects the company from any kind of risk that may be generated during the innovation process. It also makes related people fully involved in the process (Mangram, 2012). It also helps the organisation in monitoring the progress from time to time with the help of key indicators while keeping strategic goals in mind.

Artificial Intelligence impact on Tesla

Strengths

• Tesla has already started to invest in the AI which is the future of the technology industry.
• They have made a huge progress in the concept of Driverless cars.
• They have higher cash crunch hence they will not face much problems in the innovation process (Milosheska, 2013).

Weaknesses

• Has been poor in bringing some disruptive innovation especially the ones related to Artificial Intelligence (Chigurupati & Lassar, 2017).
• Till now they have used reactive approach towards AI.

• There are many new companies coming up in the industry, if Tesla is able to implement artificial intelligence in their product, they can easily gain competitive advantage over their rivals.
• It will give them opportunity in the other fields of technology also.
• It will enable them to gain new market space or capture larger part of the market (Eisler, 2016).

• Artificial Intelligence brings problems related to ethics like it might lead to job cuts as well as it might violate the privacy of some or the other stakeholders.
• Artificial Intelligence also brings the issues related to policies in the organisation as it might violate the core value of Tesla.
• Tesla’s innovation strategy towards AI

Organising innovation activities

Tesla must organise its innovation activities with more care and attention. They must look for the challenges that are confronting the innovation of Tesla and then only they must align their activities. Tesla must organise their innovation activities based on the resources and time they have (Dietterich, 2017). The disruptive innovations like Artificial Intelligence are harder to deal with as it may change the whole industry. First thing that they must do before actually making innovation is that they must do a market research. Secondly they must bring all their resources at common platform so that they could come up with the innovation as soon as possible (Ingle & Phute, 2016).

• It must address the social concerns that can be eliminated with the help of AI.
• It must also bring more openness in the innovation so as to speed up the innovation process.
• Hiring of best research talents can be crucial aspect for the company.
• Creating and capturing value

Recommendation

There are several things that Tesla could do for ensuring the strategic alignment for addressing the Artificial Intelligence. Before moving forward it must conduct a market research about the situation of Artificial Intelligence in the industry. Strategic alignment could also be addressed by the help of giving training to the staffs about the use of artificial intelligence in the work process (Hurlburt, 2017). Tesla should also invest more in the big data analytics and data management as it is the base of Artificial Intelligence.

Conclusion

Reference

Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive innovation. Harvard Business Review, 93(12), 44-53.

Chigurupati, A., & Lassar, N. (2017, January). Root cause analysis using artificial intelligence. In Reliability and Maintainability Symposium (RAMS), 2017 Annual (pp. 1-5). IEEE.

Eisler, M. N. (2016). A Tesla in every garage?. IEEE Spectrum, 53(2), 34-55.

Firstpost, (2018) Artificial intelligence will become an immortal dictator, says tesla founder Elon Musk

Ingle, S., & Phute, M. (2016). Tesla autopilot: semi autonomous driving, an uptick for future autonomy. International Research Journal of Engineering and Technology, 3(9).

Kammen, D. M. (2014). Solar energy innovation and Silicon Valley. Bulletin of the Atomic Scientists, 70(5), 45-53.

Martins, L. L., Rindova, V. P., & Greenbaum, B. E. (2015). Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal, 9(1), 99-117.

Milosheska, D. (2013). Tesla Motors, The reinvention of the luxury sports car industry. In Global Luxury Trends (pp. 209-223). Palgrave Macmillan, London.