Innovation Strategy 4: Innovator’s Dilemma

Another Innovation thoery that I used for the Ford Vs Tesla innovation analysis was the Innovator’s Dilemma.

Ford is a large automobile manufacturing company. It sells its products and services in 148 countries in the world. Last year alone its revenue was $149.5 billion with close to 199,000 employees worldwide. Until recently, due to its scale, Ford appears to have taken the sustaining innovation route, as it makes good products better and re/sells them.

Ford has to take the Disruptive Innovation route if it has to avoid going the General Motors way (Berman and Knight, 2009). Ford has to stay relevant in times when it is being challenged by companies like Tesla Motors else “it would be get killed from below” (Lambert, 2015)

Until recently disruptive company like Tesla is catering to a small niche market of technology enthusiasts (CATO, 2014). Ford would do well to not appear sleeping in such small and niche markets.

Tesla’s sales are increasing year after year. Tesla, sold only 2,250 Roadster Models between 2008 and 2012, whereas Ford had sold 76,87,827 in that period in the US alone. Tesla model 3 has got 4,00,00 booking so far. If numbers are any indicator for Ford, then it would do well to innovate and cater to a niche market which Tesla is targeting.

Innovation is a long-term plan. Ford should listen to their customers, who sometimes are not speaking to them directly but have begun to communicate with companies like Tesla, their likes, and dislikes, to identify potentially disruptive innovation to embrace them (Christensen, 1997).

Reference:

Berman, K. and Knight, J. (2009) Why GM failed. Available at: https://hbr.org/2009/06/why-gm-failed (Accessed: 24 May 2016).

Lambert, C. (2015) Disruptive genius. Available at: http://harvardmagazine.com/2014/07/disruptive-genius (Accessed: 25 May 2016).

CATO, J. (2014) What Tesla can learn from an experienced niche auto maker. Available at: http://www.theglobeandmail.com/globe-drive/news/trans-canada-highway/what-tesla-can-learn-from-an-experienced-niche-auto-maker/article16781583/ (Accessed: 1 June 2016).

Christensen, C.M. (1997) The innovator’s dilemma: When new technologies cause great firms to fail. Boston, MA: Harvard Business School Press.

 

 

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