BUSINESS COMMUNICATION SKILLS
ASSESMENT-2
NAME: ARVIND SUKUMAR
ENROLLMENT NO: 19174525
TABULATION
Executive Summary 3
Introduction 4
KEY ARGUMENTS: 5
ARTICLE 1 : (Downes and Nunes , 2017). 5
ARTICLE 2 : (Liu and Meng ,2017). 5
DIFFERENCES IN ARGUMENTS : 6
RECOMMENDATIONS : 7
CONCLUSIONS: 8
Executive Summary
The articles we are going to discuss & compare is about disruptive innovation.In this report. We will study & review the case of launch of new energy vehicles using two articles. We will discuss about the ideas. First, the key arguments of the authors of the two articles will be explained. Then we will focus on the differences by the two authors, showing the opinions. Then I will present my recommendations, based on the personal view, and what I have researched on this issue and later I will conclude it.
Introduction
I’m going to discuss about two different articles which are Is Tesla Really a Disruptor ? (And why the answer matters) written by Larry Downes & Paul Nunes. The second article is about Innovation model analysis of new energy vehicles : taking Toyota , Tesla & BYD as an example written by Jian -hua Liu & Khan Meng. Disruptive Innovation is a powerful way of thinking about innovation driven growth.Disruptive innovations a key to change the market for new products and a value for the network. People from small entrepreneurial companies and executives from well established companies mention disruptive innovation as their guiding star. Its a process in which a company takes a simple product or service from the bottom of the market and then the product or service reaches at the top in an intense way and take over the position of the other established competitor.When larger companies focuses on improving products for their customers, where as the small innovative start up companies deliver the product and service to the necessary customers at an affordable price which leads the company to move up in the market until it delivers the performance to the customers. In a competitive market which is global , dynamic & intense, the development of a new product , service and business model is the focal point in the competition.(Christensen.1997 , Hamel. 2000, Hill and Jones. 1998, Johnson and Scholes. 1997, Wheelwright and Clark. 1992). In innovations building some competitive advantages giving customers something in unique which the competitors lack.(Hill and Jones. 1998,166).The existence of Tesla motors in manufacturing technology-based cars, which act as substitutes for the fuel consuming cars has been reviewed as destructive by some scholars. In this case study we will compare and discuss two articles to get the original ideas and views on the Tesla’s innovation in the automobile industry and analyze innovation models of the new energy vehicles.
KEY ARGUMENTS:
ARTICLE 1 : (Downes and Nunes , 2017).
Downes and Nunes, (2017). The author states that entrance of Tesla in the automotive industry is not a disruptive innovation. Tesla’s model 3 is an electric car and the company has more than 500,000 pre-orders. The author says that the Tesla electric cars cannot be termed as disruptive because the product has been in the market for more than a decade, and hence its a continuation of an existing production. Therefore, this is not a new venture or a substitute to the fuel-based automobiles. The company is in debt and they are planning to borrow some money in addition to escape the manufacturing hell. They have the ability to upgrade the hardware and software, but if they don’t realise their potential the money would dry up.
Tesla open-sourced patents for electric cars in 2014 which insists more companies to enter into electronic car manufacturing business. Therefore, it reduces the chances of Tesla to create a market monopoly. Hence, the idea of disruptive innovation cannot be applied efficiently, because other famous car brands are engaging in manufacturing of electric cars.
ARTICLE 2 : (Liu and Meng ,2017).
Liu and Meng (2017). The author states that the Electric car manufacturing is a disruptive innovation. The author talks about Tesla, Toyota & BYD, as innovative models of new energy ,which possesses the ability to change the entire automotive industry. The development of new energy vehicle is innovation and it has a positive effect on innovation of enterprises. The new energy vehicles technology is dominated by large companies. For instance, the Toyota company has 50 manufacturing plants in 27 countries and serves more than 160 countries worldwide. Tesla, is a high tech company which has no background in the industry. It took 10 years for Tesla to make it into top 10 innovative companies in the world. Therefore, Tesla has innovative technologies that to promote the electric vehicle technology. Tesla shared its patent technology to other companies to promote the development of new energy vehicle technology.
BYD technology is a leader in China for new vehicle energy IT-power application,& it has three major high tech enterprises which gives the company a commanding stand in the low-end markets & public transportation sector.
DIFFERENCES IN ARGUMENTS :
(Downes and Nunes, 2017) In the first article the authors mentioned electric vehicle technology as a non disruptor innovation. They believed Tesla’s production of electric cars has been active for more than a decade, which in the end makes no sense to categorise the introduction of Tesla’s Model 3 as a disruptive innovation. On the other hand, (Liu and Meng 2017). mentioned them as disruptive innovation, because companies like Toyota and Tesla, produces innovative models based on new energy vehicles. Therefore, in the long run, the activity is considered to give competition to the producers of the fuel vehicles in the market.
(Downes and Nunes, 2017), states that Tesla has published its patent open for any firm to utilize it. This means that other companies can manufacture electric vehicles as Tesla does. .Liu and Meng (2017), says that the development of new energy vehicles is innovation & utilization of the modern technology. Toyota, Tesla, and BYD has an upper hand over other competitors. They argue that this move will create a market to these cars, due to the current global pollution. This gives them a higher commanding voice in the market, and thus considered disruptive.
(Downes and Nunes, 2017.), states that Tesla cannot change fossil fuel vehicle production to electric car completely. So this is not a new venture for fuel cars.The authors make a statement that the technology used is not cheaper nor better. Hence, it cannot convince the client base.Its a luxury model only a few individuals can afford the car. (Liu and Meng ,2017.), states that new energy is a high tech industry with development of its technology including battery, motor , electric control as representative of core technology development. Once the awareness is created about the advantages of the new energy vehicles, the market will move to electric new vehicles cars. Such a trend where the electric vehicle is released into public transportation and later into the market so consumers will know about it . In the long run, the new energy vehicles are expected to rule the market. Thus, these innovations are disruptive.
RECOMMENDATIONS :
The electric automobile industry is not a disruptive innovation. With an elaborate evaluation, the industry seems to have existed for long periods of time, with Tesla being the original producer of such technology (Roy, 2014). Despite the recent growth in the industry, the energy cars target the affluent population market, due to the high cost involved in the production process. Hence, the typical automobile market will remain unaffected, since the low-end market has not been able to access such assets. Thus, this cannot be said to impact the automobile significantly, since, for innovation to possess disruptive characteristics; it should displace the currents commodities and create a new market for its products.
The introduction of the energy cars represents a revolutionary innovation. Such a discovery introduces an improvement to the product that already exists in the market through modifying it to fit the customer expectation. For instance, Tesla did not bring in another form of automobiles. Instead, the company improved on the engine capacity, such that it attains adequate energy levels and permit the use of electricity in its operation. Hence, this can be said to be an improvement in the efficiency and fuel consumption of the regular cars. Therefore its effects into the market will not bring significant changes in the demand for fossil fuel cars.
The production companies should also consider the low-end clients rather than specialize in public transport and the high-end clients. The prices of the energy cars are high because the technology used is expensive (Danneels, 2006). For instance, the utilization of the cheaper technology utilized by BYD can ensure that all classes of clients are catered for and can afford these cars. This the ability of these vehicles to conserve the environment will be spread throughout the economy, thus facilitating the creation of an ecosystem that is not affected by fuel combustion pollutants.
CONCLUSIONS:
The articles has been analyzed ,the arguments held by two authors about the pros and cons on the new energy vehicles innovation in the automobile industry. (Liu and Meng 2017.), suggests that the technology is disruptive innovation and it will create an competitive effect on the sales of the big giant companies producing fuel vehicles. The authors state that the high costs technology being used as one of the drives chasing away other companies willing to enter into this market. On the other hand, (Downes and Nunes,2017.), states that Tesla’s electric car is not a disruptor, because the electric car has been in the market for the past one decade. It did not reach any milestone such aNetflix, who threw out their competitors in the movie business. So, the energy vehicles cannot imply impact on the sales and operations of the other automobile producing firms.
REFERENCE LIST :
Danneels, E. (2006). Dialogue on the Effects of Disruptive Technology on Firms and Industries. Journal of Product Innovation Management, 23(1), pp.2-4.
Downes, L. and Nunes, P. (2017). Is Tesla Really a Disruptor? (And Why the Answer Matters). [online] Harvard Business Review. Available at: https://hbr.org/2017/08/is-tesla-really-a-disruptor-and-why-the-answer-matters [Accessed 26 Oct. 2017].
Emerald (2005). Disruptive innovation! A special report. Bradford, England: Emerald Group Pub.
Liu, J. and Meng, Z. (2017). Innovation Model Analysis of New Energy Vehicles: Taking Toyota, Tesla, and BYD as an Example. Procedia Engineering, 174, pp.965-972.
Roy, R. (2014). Exploring the Boundary Conditions of Disruption: Large Firms and New Product Introduction with a Potentially Disruptive Technology in the Industrial Robotics Industry. IEEE Transactions on Engineering Management, 61(1), pp.90-100.
Yu, D. and Hang, C. (2010). A Reflective Review of Disruptive Innovation Theory. International Journal of Management Reviews, 12(4), pp.435-452.
Thomond, P. and Lettice, F., 2002, July. Disruptive innovation explored. In
Cranfield University, Cranfield, England. Presented at: 9th IPSE International
Conference on Concurrent Engineering: Research and Applications (CE2002).