Tesla: Why Innovate When You Can Imitate?

When and Why Tesla chooses not to innovate.

To innovate or imitate?

Innovation, or its antithesis, imitation, are both strategies that companies employ, for better and for worse; it seems clear from the divergence of views in strategic management theory that neither innovation or imitation are ultimately superior to one another.

Innovation and imitation are individually advantageous at certain points in time, contingent on environment, resources and capabilities. I propose the idea of strategic forks in the road, where managers must contend with the trade-offs between innovation and imitation with every strategic decision they make.

At each fork or strategic decision, imitation should be preferred when your organisation doesn’t have the dynamic capabilities to compete with more innovative firms, or when there is little value in innovating because the impact on achieving organisational goals are limited.

Innovation should be preferred when your organisation has a set of resources or dynamic capabilities that could position you to outperform your competitors in that particular arena and when there are large potential benefits in achieving organisational goals in doing so.