Close and Open Source Adaptation and Innovation Cycle of Businesses

Innovation Cycle
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Innovation Cycle
The success of several firms, like Google, Apple, Honda, Amazon, Tesla, and more, may be attributed mainly to the innovative spirit that propels economic expansion. Innovations have molded the current market, and the market leaders in each industry are consistently characterized by their innovations. Being consistently inventive, however, is very challenging for a business. Today's businesses must be flexible enough to adapt to the rapid pace of technological and industry changes while still encouraging originality and innovation. It is essential to not only be able to produce original concepts but also to be able to capitalize on these concepts from a business perspective (Rothaermel & Hess, 2010). Different companies approach innovation with different approaches, and companies need to have a plan for how they will mix the many innovation initiatives they want to pursue.
Closed Source Adaptation in Apple Inc.
Since its introduction to the computer business a decade ago, Apple has consistently remained ahead of the competition. The brilliant marketing strategies it employs for its financial choices and considerations of effect have given it a tremendous edge, allowing it to dominate the sector and remain ahead of its rivals. Currently, Samsung, one of Apple's main rivals, is worth $61.1 billion, while Apple is valued at $1.3 trillion (Nik, 2019). The company needed a good reason to stumble into such a commanding market share. Since its inception, Apple has worked to set itself apart from its rivals. Apple goods have always been kept a secret until they are officially revealed to the public. The firm has received some negative headlines due to this, but it has also received more visibility. Customers seem to have a healthy amount of respect for the brand. Whenever a new Apple product is unveiled and made available, it nearly comes as a shock (Nik, 2019). Sales go up simply because more individuals are curious about the brand.
Furthermore, the company has strongly emphasized listening to and responding to its customers. Apple invests heavily in market research to better understand and meet consumer needs (Attar, 2018). Its advertising, marketing strategies, and product features are all informed by a deep understanding of the preferences of its target audience. This has also taught the firm to constantly phrase and display its messages correctly so they cannot be misinterpreted. Apple's commitment to innovation continues even after Steve Jobs's death. Even if the company's rate of innovation has slowed, the brand is still alive and well (Nik, 2019). The company's success reflects the iPhone 5S's 64-bit CPU and other technological advancements. Global Equities Research's managing director expressed optimism about the company's future with Tim Cook as CEO. Even with Tim Cook at the helm, most industry watchers expect Apple to maintain its dominant position in the IT sector because of Cook's propensity for bold moves.
Apple can maintain its high pricing while competitors like Samsung catch up to it in value and intrigue. Apple's dedicated consumer base continues to buy the company's goods even though they cost more than those of Samsung and other rivals. Apple stays ahead of the competition by constantly improving and introducing new product features. The exclusive nature of Apple's operating system, which can be used on no other devices, helps the company maintain brand loyalty. Additionally, many of Apple's devices are eligible for trade-in, providing loyal consumers the opportunity to save on purchasing a brand-new model (Marshal et al., 2016). Apple's advertising also convinces customers that they require the newest improvements when they are introduced. In this way, Apple can maintain its high prices for the foreseeable future.
Apple's worldwide supply chain is very efficient, which is why the company has succeeded. Furthermore, the Apple supply chain is notoriously complicated and shrouded in mystery. Apple guarantees that all its vendors keep their product details secret, adding to the mystery surrounding Apple's wares. When Tim Cook took over the firm, one of the first things he did was make some organizational adjustments to simplify the process (Marshall et al., 2016). By consolidating the firm's stockpiles in a single location, outsourcing production, cutting down on suppliers, and lowering stock-keeping units, he improved the accuracy and simplicity of demand forecasting, allowing the company to shift its emphasis to developing groundbreaking new goods (Attar, 2018). Although there are still obstacles to be overcome, this new model does help bring down production costs and enable the firm to concentrate on producing high-quality goods.
Open-Source Innovation in Tesla Inc.
Tesla is renowned for its open-source approach to innovation. It produces unique products, such as the Model S, which the company claims are the fastest and safest automobile on the road. Tesla is committed to transformative innovations, including developing sustainable, fast-charging batteries. This commitment to innovation is one of the critical reasons behind Tesla's popularity. To further foster industry-wide innovation, Tesla announced its Open Innovation Initiative in 2014. Under this initiative, Tesla has pledged not to pursue patent infringement lawsuits against companies that use its technologies in good faith (Livescault, 2022). Tesla's decision to share its technology in this way is rooted in the company's recognition that it cannot solve the carbon problem alone and that electric and alternative fuel vehicles currently represent a tiny percentage of overall car sales (Tesla.com, 2019). As such, Tesla does not view the electric vehicle market as highly competitive and believes that sharing its technology will not undermine its innovative capabilities.
Adopting an Open Innovation Policy by Tesla is crucial in addressing both the broader challenges faced by the electric car industry and the specific difficulties experienced by Tesla. Downes and Nunes (2017) note in their Harvard Business Review reports that, without significant advances, electric car batteries may remain at a disadvantage compared to gas-powered vehicles for another 50 years. Additionally, Tesla's battery technology is not currently superior to its competitors in terms of either performance or cost (dknab1892, 2018). To overcome these obstacles, Tesla and other electric car manufacturers would benefit from leveraging their unique competitive advantages while engaging in open innovation to facilitate knowledge-sharing and expedite development.
Innovation Teams and Collaborative Processes
At Tesla, the overarching aim is to remain at the forefront of technological innovation. Accordingly, the company emphasizes the importance of rapid invention in all of its endeavors. Tesla's culture fosters an environment where employees are encouraged to grow personally and professionally, ultimately contributing to the company's success. Employees at Tesla are entrusted with substantial responsibility and held to high-performance standards (Le, 2021). This reflects CEO Elon Musk's selective recruitment of competent and motivated individuals for whom formal education is not necessarily a deciding factor.
In addition, all workers, regardless of rank, are expected to treat their work as if it were their own. At Tesla, everyone works purposefully toward the company's goals. The success of Tesla depends on the success of its workers. The company has a set of core values and a set of policies that all point in the same direction, which is the path of continuous improvement (Le, 2021). Workers at Tesla are encouraged to put in long hours, use their brains, and take regular breaks when required to prevent burnout. Also, the company culture promotes teamwork and testing new ideas while maintaining a keen eye on the company's long-term goals. A productive work environment is the result of collaboration.
Furthermore, the firm depends on its unique core capabilities, and it has built a vast supply chain system that has assisted in the growth of these skills. The company's success is dependent on its ability to innovate. Partnership with Sotira to reduce vehicle weight (needed for an electric vehicle) and partnership with Panasonic to supply the firm with lithium batteries are two of this strategy's effectiveness (KARAMITSIOS, 2013). In addition, it has established research and development partnerships with companies like Panasonic, with whom it collaborates to develop advanced car batteries. Moreover, the firm s has partnered with Toyota, a well-known original equipment manufacturer. It also works with other automakers like Daimler and Toyota to advance EV infrastructure and exchange knowledge.
Innovation Technology Roadmap for Tesla Inc.
Environmental scanning is one of the methods Tesla uses to track industry developments and gauge interest in its electric cars. The rising usage of fossil fuels in daily life significantly influences the environment due to the carbon emissions released by vehicles running on these fuels. As a result, there has been a rise in interest in renewable car-power sources (Kancherla & Daim, 2018). Because of the benefits they provide, electric cars are becoming more popular. Most people choose to drive alternative vehicles like electric cars so that they may benefit from the usage of renewable energy sources and reduce their negative impact on the environment. The performance, affordability, and advantages of drivi...