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Disruptive innovation in Tesla

Income matters

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Table of Contents

Income matters.................................................................................................................................2

Disruptive innovation......................................................................................................................3

The case of Tesla innovation and ServiceNow............................................................................3

Effect of disruptive innovation in the development of busienss..................................................4

Blue ocean innovation.....................................................................................................................6

Nespresso’s strive for blue ocean innovation..............................................................................6

Effect of blue ocean innovation in the development of Nespresso..............................................7

Incremntal innovation......................................................................................................................8

Inremental innovation in the case of Netflix and Blockbuster (boiled frog syndrome)..............8

Effect of incrementtal innovation in Netflix and Blockbuster.....................................................9

Summary of Patch work..................................................................................................................9

Conclusion.....................................................................................................................................11

References;....................................................................................................................................11

Income matters
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Businesses grow and succeed in the current corporate environment for several reasons.

Some organizations are known for their products, others the services they offer, while others are

linked to brand loyalty and captivating marketing campaigns. This essay aims to analyze the

aspect of innovation and why it is crucial to successful organizations. The essay will analyze

innovation in organizations and delve into three referenced materials linked to innovation. Since

this is a patchwork essay, it will compile the several short analyses connected to innovation and

combine them to establish a union under the aspect of innovation.

For those who have a vague understanding of innovation, it can be defined as a concept

or process whereby a business chooses to conceptualize given products, services, processes, and

notions to the existing ones to find a platform that increases consumer purchasing capacities.

Several types of innovation can be incorporated into businesses to enhance (Purcell, 2019).

These types are usually linked to an organization's products, internal processes, workflows, and

business models.

There are several reasons why innovation is crucial for business practices and operations.

The "adapt or die" slogan seems to fit the above statement. If companies cannot adapt to the

ever-changing market environment, they risk a bankrupt state, leading to the overall demise of

the business (Purcell, 2019). In the last decade, the expansion of technological success has met

several surprises. Because of this expanded growth, businesses have been forced to adapt and

expand at an alarming rate.

Disruptive innovation

The disruptive theory is associated with incorporating innovation and technologies that

render expensive and sophisticated products and services accessible and affordable to a broader
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market. This form of innovation requires enabling technologies, an innovative business model,

and a coherent value network (Christensen, Raynor, & McDonald, 2015).

The case of Tesla innovation and Service Now

Tesla is an excellent example of a firm that has included disruptive innovation. Tesla has

made use of the existed platform to improve work performance appraisals. The employees at

Tesla are rated according to their performance. Elon Musk wishes to create a compelling and

innovative team that delivers the company goals on time (Kim, 2020).

To have a competitive edge in this new market, there are several aspects that Tesla must

consider. One of them is having innovative employees. When employees begin to show fatigue

signs, innovation tends to be the last aspect in their minds. This can affect the productivity of an

organization. Therefore, the employees of a firm are crucial in delivering the innovation goals of

a firm (Mazzei, Flynn, & Haynie, 2016).

One way to keep employees innovated is through work performance appraisals. The

employees at Tesla are rated according to their performance. Elon Musk wishes to create a

compelling and innovative team that delivers the company goals on time (Kim, 2020). It is vital

to note that one of the ways forward in connection to innovation is through a firm's ability to

measure innovation levels. These levels can be measured through leadership, performance,

experience, and level of expertise, to mention a few.

Problem-solving is a practical and mandatory skill set that employees in Tesla are

required to possess. Since promotions and bonuses are based on the rating system of employees,

it would be in the best interest of each employee to give 100% in their work (Aten, 20121). This

elevates the basis of innovation that these employees might incorporate into their work as
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individuals and teams (Stringham, Miller, & Clark, 2011). Grouping employees is crucial in the

firm. This is because employees can brainstorm and devise strategies and approaches that can be

used to achieve a competitive niche in the industry and market. Therefore, one of the critical

factors behind Tesla's success is effective teams.

Disruptive innovation can be linked to ServiceNow innovation activities in the form of

savoring surprises. Most leaders associate surprises with avoidable circumstances that pose

threats and risks to the organization. Leaders should view surprises as a strategic tool to enhance

business (Chemma, 2021). The embrace of surprises is linked tit e development and adoption of

new skills in the business environment in a competitive environment. ServiceNow has taken the

surprise of the digitization of their consumers as a strategy to develop platforms for effective

consumer interaction and support.

ServiceNow uses this form of innovation to reinvent customer support. Previously, the

firm used IT service management tools to manage customer service (ServiceNow, 2020).

However, they decided to incorporate technologies associated with these customer service

management tools to reinvent customer support through using ServiceNow's Customer Service

Management after the surprise of consumer digitization.

The firm incorporated existing AI and machine learning technologies to rethink customer

interactions. This would enable consumers to resolve every situation they could through self-

service while increasing customer satisfaction (ServiceNow, 2020). It involved digitizing

existing processes and innovating on Full-stack Customer Service Management, making them

one of the first organizations to go in such a direction.

Effect of disruptive innovation in the development of business

Overall, it can be seen that disruptive innovation helps the companies take advantage of

the ideologies and opportunities to mitigate the threats and encourage employees to develop and

make a breakthrough (White, 2020). From the perspective of encouragement, it can be seen that

the architectural innovation in the company structure can have a positive effect. However, there

is still hard to avoid unfairness in the judgment of staff performance. Moreover, when employees

begin to show fatigue signs, innovation tends to be neglected, which can affect the productivity

of an organization. Therefore, it is vital to deliver the innovation goals of a firm to the employees

of a firm are crucial in the process of implementing (Mazzei, Flynn, and Haynie, 2016).

Compared with other companies like Ford, Tesla has managed to achieve this technology has

spent several million to achieve the desired effect.

According to Kurznack et al. (2021), increasing innovation capital in connection to

acquisitions and partnerships is dependent mainly on factors such as the track record and

reputation of innovation, social interactions with stakeholders bearing resources, how the firm

generates credibility, its ideologies, and its level of persuasion. Moreover, it is necessary to be

reliable, and making use of Tesla's products and services should be based on effective

communication between the firm and the stakeholders, particularly the consumers (HBR, 2015).

The flow of communication enables the firm to satisfy the needs of the consumers. It is also vital

to supplement the employment opportunities in a changing environment.

Even though Tesla has used disruptive innovation to tap into the electric vehicles market

and ServiceNow has used existing technologies to devise ne ways to support and interact with

consumers, the notion of this form of innovation is still at the core of their decisions in

connection to enhancing business. Service Now has been able to create a large consumer base

where consumers get to interact with each other and the firm concerning ways to improve the use
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of their products. In turn, this has motivated employees to seek new ways to make work better

for their consumers. On the othr hand, Tesla has been able to develop a new market for their

products that has little to no competition and at the same time create a profitable consumer base.

Blue ocean innovation

Blue ocean innovation is a form of innovation with little competition and no barriers

standing in the way of innovators. It is associated with the market opportunities and options that

occur with new and unknown industries or forms of innovation.

Nespresso's strive for blue ocean innovation

Nespresso is an organization that has adopted this form of innovation. Nespresso is an

organization that provides a blend of several types of coffee machines to its consumers. The firm

has had difficulties achieving a marketing nice that enables it to succeed. However, innovative

efforts were applied to look for new markets and consumers, which proved to be fruitful as it

achieved market growth (Schifferstein, 2016).

The creation of new products such as Nespresso coffee machines with effective services

inspired the blue ocean strategy to tap into new markets. Another production activity linked to

the entry into new markets through blue ocean innovation is the establishment of biodegradable

pods for machines. The outcome was that the firm's machines could aid consumers to save

money by providing platforms for the brewing of high-quality coffee. This feat most would pay a

hefty price to acquire, with the innovative aspects of tapping into new markets in play (Kim and

Mauborgne, 2005).
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It was evident that the Blue Ocean strategy was based on the Nasoff growth matrix. This

strategy describes a new market containing an unknown market space for businesses with no

competition, no demand for products, and plenty of untapped potentials. The size and depth of

such markets should be considered in connection to the profitability growth of the firm. When it

comes to product development, Nespresso has had a great competition in the market. Here, the

market boundary is evident as competing companies determine product integration.

Market development has a crucial aspect of playing in this growth matrix. According to

Verhoeven et al. (2017), developing the market for one's products and services is vital,

particularly if several organizations offer products and services, implying their competing

organizations. Nespresso falls in this category. Lately, it has been plagued with limited demand

owing to competing organizations. The company was forced to adopt other innovative strategies

to acquire the existing demand. Porter's five forces and Ansoff's growth matrix are some of the

innovative approaches that the firm has incorporated. There are several pre-defined aspects or

boundaries that Nespresso has to consider, including the cost and design of coffee machines in

the existing markets.

Effect of blue ocean innovation in the development of Nespresso

Nespresso has proved itself an effective firm in creating breakthrough innovations that

keep it ahead of its competitors. Its ability to create an effective market space3 is an innovative

approach that enables the firm to establish new markets and consumers when the existing

markets present limited demand. This can make the market competition irrelevant in their bid to

achieve profitable growth and sales. The firm can transform its marketing approaches from

selling its products to companies and selling them directly to consumers (Fisk, 2019). Doing so
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enables the firm to increase its consumer loyalty creating a platform where the firm interacts or

communicates directly with the consumers to determine their needs.

By introducing new designs different from existing coffee machines, such as

transforming coffee machines into coffee capsules, Nespresso sets itself apart from its

competitors. This innovative approach should be based on aspects such as research from

consumers' perspective to determine the designs they see fit and effective development of these

machines, among other aspects (Brem & Maier, 2016). They have done so by converting the

coffee machines into coffee capsules that are lighter and more effective in producing quality

coffee. The blue ocean innovation enables the firm to increase its consumer loyalty creating a

platform where it interacts or communicates directly with the consumers to determine their

needs.

Incremental innovation

As for incremental innovation, it can be regarded as the improvement and optimization of

companies in making progress on the existing products. According to Docherty (2016),

innovation shall be the key component for the business to improve, or it can easily become the

"boiled frog." In this part, the case of Netflix and Bluster will be compared and analyzed to see

the importance of innovation in maintaining the position in the existed market.

Incremental innovation in the case of Netflix and Blockbuster (boiled frog syndrome)

The importance of innovation in the existing market can be seen as the key factor in

differentiating from competitors. The Blockbuster and Netflix firms can be seen as an example in

this study. The lack of innovation is clear in the case of Blockbuster in that if they had adopted a

digital platform, they would have increased their consumer base while reducing facets such as
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the purchase of fixed assets, which increased the costs and debts associated with this firm (Satell,

2014). Blockbuster's failure to respond to the gradual changes in the market in adopting current

technologies took part in the decline of the company. This phenomenon is known as the boiled

frog syndrome.

Effect of incremental innovation in Netflix and Blockbuster

Most of the factors that led to the failure of the Blockbuster company were linked to

innovation. The first one is mentioned above, which is the failure to adapt to new technology. In

the twentieth century, VCDs and DVDs were the main sources of entertainment. However,

streaming technology was introduced at the beginning of the twenty-first century (Ash, 2020).

The Blockbuster company failed to integrate this technology in its operations, making it lose

several consumers.

Incompetent leadership also failed to identify and capture the business opportunities that

could propel the firm forward in the new technological age. Netflix proposed to sell its firm to

Blockbuster, but the CEO refused, not knowing that this deal would revolutionize the dying firm.

There was poor strategy formulation. Statistics show that Blockbuster had two years when it

realized its profits. This shows that their strategy to compete with other firms was ineffective and

might have led to its demise.

Compared with Blusters, Netflix has succeeded in using incremental innovation in

optimizing its products to meet the needs of the public. In that way, incremental innovation has

been the key factor for the companies, especially in a high position to keep making progress in

the long term.

Summary of Patchwork
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As for the significance of architectural innovation, it enables companies to grow. Suppose

a business wants to grow and be more successful, specific strategies must be adapted to achieve

this goal (Purcell, 2019). Even though it will be a slow path to achieving this goal, these

businesses can choose to move along the current path, expanding as they perfect the existing

commodities and business models. Tesla has relied on acquisitions and partnerships to acquire

innovative measures. It is vital to note that this process takes a shorter time and is more

expensive (Taylor, Shirouzu, & Lienert, 2020).

As for the significance of radical innovation helps organizations differentiate their

operations and activities from the competition. The basic understanding of innovation is doing

something different in one's space. Nespresso has had to incorporate the slow path strategy to

attain its competitiveness over the years. If a firm uses innovation in its products, its objective

should be to develop or update the products until they are distinct, creating a competitive niche.

If organizations use innovative processes, they base their actions on saving time, money, and

other resources to offer them a competitive niche in areas where other firms would be stuck in

their systems.

The significance of incremental innovation has benefited Netflix in the existing market,

which changed their processes in the core of their industries to disrupt the status quo. Stalwarts

also fall in this category of innovative measures connected to a competitive niche (Delong,

2011). Netflix is an example of such an organization. It has been operational for decades and

continues to succeed in its industry. This success owes continuous reinvention and innovation. It

is vital to note that an organization cannot maintain its competitive niche without incorporating

innovative strategies. Blockbuster has shown that I neglected to incorporate innovative ways into

their business models, thus making it unable to adapt to a changing technological environment.
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This caused it shut down in two thousand and seventeen. Therefore, firms' innovative measures

are crucial in developing brand and consumer loyalty and market growth for businesses and

should not be taken lightly.

Conclusion

Overall, the innovation can be making progress in using the existing resources, including

the staff and the relationship. As for the effect of innovation, it can be seen that disruptive

innovation can help the companies make use of the existed resources in the existed market, the

blue ocean innovation can enhance the companies to expand its business in the new market, and

the incremental innovation can ensure the companies to maintain its position in the market with

high competition. More precisely, the organization shall develop new strategies since the lack of

change in the status quo no longer works.

The success of trying something new offers firms can be an adequate reward to the firm

and its staff. However, one should not overlook that innovation spearheads differentiation

regarding having different products from the competition. This is a powerful aspect in an

industry or market that is oversaturated. Even though delivering value in services and products to

the customers should be the main focus of an organization, using strategies that stand out, thus

creating brand identity and business strategies are warranted.

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