Analysis of Tesla’s Innovation Strategy and Influence of Leadership

Abstract

Tesla has attained a benchmark in the electric vehicle industry but it faced issues such as ownership protection rights, chip shortage and delivery delays. Tesla's real competitors are not new energy operators, therefore despite leading the capital market, Tesla is not in a stable position. The future of Tesla is restricted due to factors like capacity, market, finance and chip, hence Tesla needs to focus on its innovation ability and leverage its business model to promote development. Hence this research aims to answer the question -how effective is Tesla's innovation strategy and how do leadership and internal and external factors affect its innovation and performance? To achieve this aim, Tesla analyses its business canvas model, innovation framework and internal and external actors, as well as how it affects its innovation strategy and performance. The results show that Tesla integrated innovation in its business canvas model and created value for its customers, however it lacked focus on commercial costs and channels. Moreover, Tesla uses an incremental product innovation strategy, external and internal factors like market demand, creative culture, and leadership and team working supports the innovation strategy of the company.

Promotion Hurts Brand Personality and Consumer Responses

“…While emotional resonance and brand identification increase the effect of the message and change attitudes and purchase intentions, consistency with brand attributes fosters trust (Coelho et al, 2019;Sama, 2019). Case studies exemplify how shifts in brand personality impact consumer behavior, such as luxury firms transitioning to inclusivity, fast food restaurants targeting adventure-seeking youth, and automakers prioritizing innovation over reliability (DeAcetis, 2023;Radón, 2012;Chun & Nyam-Ochir, 2020;Qin, 2022).…”

A Comparative Analysis of Product Positioning Strategies in the Global Electric Vehicle Market: Insights from Leading Brands and Emerging Markets

“…Firstly, in terms of market positioning, Tesla, as a pioneer in the electric vehicle industry, adopts a direct sales model that distinguishes it from traditional car brands, coupled with its innovation in electric vehicle technology, i.e., by offering high-performance, high-tech electric vehicles (as all the models are shown in Table 1). Tesla has succeeded in attracting a large number of consumers who are in pursuit of new technology, high-end quality control and sustainable lifestyles, which has laid the foundation for its positioning in the premium market [6]. On the other hand, in terms of pricing, the Tesla Model S starts at around USD 94,990 at the end of 2023, while the Model 3, a relatively more popular option, also has a base price of around USD 42,990 [2].…”

“…On the other hand, in terms of pricing, the Tesla Model S starts at around USD 94,990 at the end of 2023, while the Model 3, a relatively more popular option, also has a base price of around USD 42,990 [2]. Additionally, Tesla employs a dynamic pricing strategy that constantly adjusts prices based on production costs and and market demand from quarter to quarter [6]. As a result, as Figure 2 demonstrates, Tesla's share of the global EV market is far greater than that of other brands, especially during the 2018-2021 period.…”

“…At the same time, Tesla is also emphasizing environmental responsibility with its innovative battery recycling program and solar product line. Through these measures, Tesla has not only reduced its dependence on fossil fuels but also enhanced its brand image and attracted consumers with a high concern for sustainability [6].…”

What We Can Learn from the Japanese Organizational Design and Leadership Model

“…No. Tesla technology is surpassing its rivals and Toyota must step up to meet these challenges or find itself in a smaller segment of the market share (Qin, 2022).…”