Tesla and Kodak: Business Strategy Coherence

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Table of Contents

Introduction
Tesla
Kodak
Conclusion
References

Introduction

Each business operates in a system in which the external and internal environment affects outcomes. However, while the external environment does play a role in corporate processes, the internal one is linked to one’s capabilities and unique features. Thus, companies focused on addressing internal elements reach strategic coherence. Strategic coherence highlights the phenomenon in which the company acknowledges its capabilities are implements processes and decisions that maximize them. On the other hand, incoherence is the phenomenon in which, instead of embracing corporate traits, culture, and values, companies choose to divert attention to other elements. In this paper, the contrast between Tesla and Kodak, namely, their strategic coherence and incoherence, will be discussed. The analysis will highlight how innovation, whose strategies, ideas, and policies are coherent.

Tesla

Tesla is an electric vehicle company that has significantly impacted the automotive industry. On the one hand, the brand is associated with the popularization of electric vehicles and high automatization. On the other hand, technological innovation, as well as effective market strategies, align with the organization’s strategic coherence. As mentioned prior, coherence implies understanding one’s strengths and capitalizing on them through maximization. Tesla is known for being innovative, which is why every car that the brand creates is highly automatic, technologically advanced, and has features that elevate the consumer experience. Moreover, Tesla is the biggest manufacturer of electric cars, yet the brand has a unique approach to distribution channels. The company only sells cars through its online platform and stores in which only Tesla vehicles are showcased (Chen & Perez, 2018). By doing this, the brand embraces its uniqueness and acknowledges that its products do not fit into the standard car market. The coherence of the decision aligns with the capabilities of the organization, which is to create innovative and niche vehicles.

Kodak

Kodak was one of the most prominent actors in the photography industry. However, the brand filed for bankruptcy in the last decade, highlighting its inability to adhere to new market standards and trends. One of the events that illustrate the brand’s incoherence is the process of introducing the digital camera. The project, while completed, was not introduced on the market for more than a decade after the invention (Sendstad et al., 2020). The company decided that consumers would be less likely to invest in their film equipment as well as not be interested in the lower quality images that were exemplified through the digital camera. Thus, instead of embracing their innovative nature and the innovative traits of the photography business as a whole, the company chose to focus on traditional ways. As a result, the incoherence of an organization that is centered around technological advancements led to its downfall.

Conclusion

Based on the comparison between Tesla and Kodak, it is inevitable that Tesla is the only brand out of the two with coherent business strategies. Namely, the organization’s capability, which is innovation and an original vision for the car industry, is embraced. Moreover, the potential is maximized through investments in technological advancements. Kodak, on the other hand, did not capitalize on its potential for innovation in the photography industry. As a result, the incoherence of the strategies aimed at minimizing chance and focusing on stagnation has adverse outcomes for the brand. The examples illustrate the importance of coherence during decision-making processes and corporate planning.

References

Chen, Y., & Perez, Y. (2018). Business model design: Lessons learned from Tesla Motors. Towards a Sustainable Economy, 53–69. Web.

Sendstad, L. H., Chronopoulos, M., & Hagspiel, V. (2020). Optimal risk adoption and capacity investment in Disruptive Innovations. SSRN Electronic Journal. Web.

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Tesla and Kodak: Business Strategy Coherence

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