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Justification for Idea Paper

Introduction

Tesla Motors Inc. is a rising technology firm within the automobile world that has great opportunity for business expansion. In relation to entrepreneurship this company is looking at expansion of its market share both at the fronts of technology and automobile development. It is important that this company chooses its entrepreneurship choice wisely in order to survive in this highly competitive industry. Particularly, for this paper focus will be on business expansion of Tesla Motors Inc. as a technology firm in maintaining its unique competitive advantage within the industry. Competition is on the rise in automobile technology but Tesla Inc. has great competitive advantage through its energy efficient and environmental friendly innovations.

Rationale

Choosing between automobile development and technology development in automobile production is a tough decision to make (Sharma, 2016). However, considering the applicability of the technology Tesla introduced in its own models still faces stiff competition, it is important to rethink the business idea in ensuring its survival (Sharma, 2016). Most importantly, choosing the technological path is important for setting out its strategic success because it will have diversified its eco-friendly technology to various companies in the automobile industry (Sierzchula et al., 2012). Focusing on this first point is that Tesla will be able to take advantage of developing automobile parts for other automobile companies as its main business branch. Developing different innovative parts presents a diverse platform. The present environment for automobile consumption presents little acceptability of electric cars but in the long run Tesla might progressively work towards developing their own optimized electric car equally efficient and effective just as the gasoline powered automobiles (Bohnsack, Pinkse & Kolk, 2014). Therefore in order to maintain market leadership as a technology firm in automobile industry, it is important that works towards developing technology rather than competing against frequently fluctuating oil prices. Whenever oil prices decline auto consumers often present a behavior of preferring gasoline vehicles that present more advantage in diversity of function and efficiency. In order to stamp its authoritative reputation in the motor industry it is important it embraces technological innovation of diverse automobile parts.

Problem

The main problem that the above supported idea addresses is the stiff competition faced in the short term from declining oil prices. It is important to note that gasoline powered automobiles have a reputation of diversified functionalities and efficiencies than the electric vehicles (Sierzchula et al., 2012). Therefore whenever crude oil prices decline, consumer often prefer fossil fuel powered auto units that effectively serve different functionalities for automobiles. Additionally, Tesla faces the challenge of non-established reliability of battery life and the few stations of recharging (Grant, 2016). In relation to either refilling or gasoline or electricity it is much easier to refill gasoline considering that stations are largely available unlike the electric recharging stations that are very limited. Automobile users prefer the reliability of gasoline fuel rather than electricity due to reliability in all circumstances even for long distances (Grant, 2016). Affordability is the other problem at stake that threatens the competiveness of Tesla in the automobile world. Particularly, if the battery got spoilt or wears out, replacing it is a great challenge for auto consumers. Therefore whenever consumers consider the price implications of maintaining the Tesla electric model, they prefer to stick by the conventional gasoline powered vehicles.

Market

In the present world, great advocacy is been pushed towards attaining green technology and minimal carbon dioxide emission (Morrish, 2011). Therefore most companies are working towards developing automobiles that present minimal carbon dioxide emissions towards developing zero-emission units. Therefore considering that Tesla has already attained the threshold of minimal emission, it can easily develop automobile parts that enhance reduced emission by automobiles produced. Production of any automobile brings together units from different companies that customize and fit the design and functionality in different automobile brands (Morrish, 2011). Therefore embracing technology innovation for business growth presents a diverse market platform that covers wide in the automobile industry. Automobiles at all levels of functionality and purpose and effectiveness need zero-emission innovation which presents a great market opportunity for Tesla (Morrish, 2011).

Competition

Embracing this idea of technological innovation, it is a form of service to the automobile world. In the context competition this service of technological innovation presents the uniqueness of zero-emission and customization to the different automobile brands. Many firms in the automobile world have focused in producing highly efficient and effective parts and units but little has been achieved in the context of technological innovation. Subsequently, Tesla Inc. through the business idea supported in this discussion will be able to introduce technological innovation towards achieving production of ultimate green automobile technology (Sierzchula et al., 2012).

Additionally, its reputation creates a level of reliability in development of technological innovations and therefore companies would have great confidence working with Tesla in developing parts of that promote fuel efficiency and zero carbon dioxide emissions.

Company

Tesla Inc. vision is to create a modern age car company that will transition the world to electric automobiles while its mission is to accelerate a transition towards sustainable transport and energy. With reference to both the vision and mission, Tesla can be seen to be keen on being a compelling force in achieving alternative energy for sustainable energy uses. Therefore, the business idea of developing technologically innovative products and parts for other automobile companies is in agreement with its business vision, mission and priorities.

An added advantage of this business idea is that it will effectively provide a transition platform that will impact on the larger automobile industry rather than competing from the electric end of automobile industry. Therefore development of electric innovations will lead to integration of this technology with the existing technologies in the market and eventually grow its reputation as a technology firm. Comparing this business idea to IT software such as android, android poses a large impact on IT industry through selling its technology to technology firms and concentrates on developing software.

Innovation

Focusing on the innovative part of the business idea of embracing technological innovation, Tesla presents development of automobile parts that will introduce fuel efficiency and use of alternative fuels. Innovation is featured in the achievement of zero-emission through the developed parts (Grant, 2016). Additionally, consumers will be able to realize cost efficiencies with the reduction of reliance on fossil fuels with introduction of electric concept that will alternate with fossil fuel (Grant, 2016).

Tesla's incredible innovation isn't the way its autos get around. The idea of utilizing power to control autos isn't precisely another one, all things considered, and a few different automakers create electric vehicles. Or maybe, the organization's most important innovation lies in its business rehearses, which contrast essentially from those of other auto makers. Thus, Tesla's effect will reach out a long ways past the organization's main concern.

The auto organizations likewise invest a considerable measure of energy and exertion charming and pampering their tremendous systems of merchants. These are, as it were, their main clients, since they really buy the autos and are the sole way to reach retail clients. Tesla doesn't have merchants and offers specifically to customers through retail locations that it possesses. Each offer of a Tesla vehicle, at that point, speaks to lost edge for an auto merchant and a risk to extremely old structure in which vehicles are sold through merchants who keep up extensive parcels and stock. Speculators keep on backing Tesla with a grand market top of over $30 billion, which converts into a critical innovation premium.

Conclusion

In general, Tesla Inc. is a leader in technological innovation particularly in developing electric automobiles. However, it faces stiff competition in developing units that compete against the conventionally gasoline-powered units. Alternatively, Tesla can use its technological innovation brand to establish its impact in the wider automobile industry.

References

Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2), 284-300.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Morrish, S. C. (2011). Entrepreneurial marketing: a strategy for the twenty-first century?. Journal of Research in Marketing and Entrepreneurship, 13(2), 110-119.

Sharma, S. (2016). The Tesla Phenomena A Business Strategy Report.

Sierzchula, W., Bakker, S., Maat, K., & Van Wee, B. (2012). Technological diversity of emerging eco-innovations: a case study of the automobile industry. Journal of Cleaner Production, 37, 211-220.