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Incremental vs Radical Innovation

Often radical and incremental innovation differentiate in two major dimensions. The main feature of radical approaches is that organizations aim to create a new market. It is usually considered a risky approach since it involves a huge commitment of funds, time, and labor, often failing to meet expectations. By contrast, incremental innovation features minor improvements to ideas, products, and processes from which organizations can improve processes, enhance operation processes, increase quality and minimize costs (Kobarg, Stumpf-Wollersheim and Welpe, 2019). Such efforts maximize company goals and improve consumer relations by offering better products and increasing customer satisfaction.

Although the concept of an electric car is not unique to Tesla and began much earlier with Volta, Tesla’s unique value proposition was its innovation around business processes and critical performance components that focused on range, power, and comfort. Initially, electric cars were promoted around the narrative on the green economy, hoping they would identify with ecologically conscious consumers, but Tesla took a different approach and their first car, the Tesla Roadster, spoke to that direction (Kim, H., 2020). The Telsa Roadster was aimed at middle- to high-income earners who wanted a fun car experience; its green credentials were only a complementary advantage.

One of the latest examples of radical innovation is Tesla’s Business Strategy to build the best high-tech luxury brand. Tesla is an automobile company, yet the electric manufacturer is often considered a high-tech pioneer and ranked close to Apple and Amazon due to its innovative breakthroughs among investors. Currently, the company is ranked the 6th most valuable company globally, with an estimated market cap of $935 billion (Tesla Relations, 2021). Barely two decades in operation, Tesla had outperformed many competitors on various fronts and still inspires consumers with its sweeping changes in the automobile industry. The Telsa roadster features a 620-mile range, which is the current best in the industry by all comparisons. The company also boasts a wide network of supercharging stations across the United States and fast-expanding networks in overseas markets. A key aspect of Tesla’s advancement is its breakthrough technologies. Tesla is one of the pioneers of self-driving cars and is currently a level 2 for its autonomous driving technology (Kim, H., 2020). Tesla engineering is not about computer control systems, range, and mile. The key differentiating the Tesla brand is combining these unique features into a single package of a luxury performance that will inspire both target markets and retain existing Tesla customers.

The core technology behind Tesla cars has been around a lot longer, and in fact, historical analysis reveals that electric motor carriages pre-dates their Internal combustion engine counterparts. But Telsa’s ingenious breakthrough has been in its business process strategies and incremental technologies. And with more consumers shifting towards EVs, Tesla’s core problem remains range, but like many challenges before them, Tesla is yet to uncover this puzzle (Mukherjee and Ryan, 2020). In 2020, the automobile delivered a total of 500000 million vehicles, and the company executive expects an EV delivery growth rate increase of up to 50 percent annually (Tesla Relations, 2021). The new roadster is launched with a 620-mile range, and after the pandemic, Tesla is further enhancing its logistical infrastructure designing its core chips and partnering with critical suppliers to remove occasional delivery bottlenecks.

Before Tesla, the automobile industry featured electric vehicles, but most were either underpowered low-range vehicles or hybrid models like Prius, most of which were marketed for their eco-conscious focus. Tesla’s innovative breakthrough lies in its ability to deliver its customers their ultimate dream car. In many ways, Tesla’s success is a critical balance of incremental breakthrough in performance and technology advancement and radical innovation in its marketing and business strategy.


Kim, H., 2020. Analysis of How Tesla Creates Core Innovation Capability. International Journal of Business and Management, 15(6), pp.42-61.

Kobarg, S., Stumpf-Wollersheim, J. and Welpe, I., 2019. More is not always better: Effects of collaboration breadth and depth on radical and incremental innovation performance at the project level. Research Policy, 48(1), pp.1-10.

Mukherjee, S. and Ryan, L., 2020. Factors influencing early battery electric vehicle adoption in Ireland. Renewable and Sustainable Energy Reviews, 118, p.109504.

Tesla Relations, T., 2021. Tesla Investor Relations. [online] Tesla Investor Relations. Available at: <> [Accessed 2 February 2022].


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