Case 2: TESLA MOTORS 1-Being a relatively tiny start-up in an industry of giants has posed risks for Tesla Motors because operating an auto company requires an enormous amount of money for product design and development, factories, and distribution networks. But in some ways, Tesla's situation as a fast-growing startup with a visionary founder has also been an advantage. The company can concentrate on electric vehicles without lines of already-popular cars stealing management's attention. And as a young 3,000- employee business, it doesn't have to cover large numbers of labor and other expenses (for example in companies like Ford, General Motors, and Chrysler). 2-Tesla operates more like a high-tech firm, with employees attracted to the company to do something extraordinary. Elon Musk (The CEO) holds weekly meetings to review progress on each model and analyses designs. The factory where Tesla builds the Model S has a history of innovation. General Motors built the plant and operated it until the 1980s, when U.S. managers began to realize that quality initiatives in Japan were leaving them behind. GM arranged with Toyota to operate the plant jointly. That venture ended, and the plant closed. When Tesla purchased it, Musk was able to hire experienced auto workers from the community. To make 2,000 Model S Sedans every year, it needs only one-fourth of the space, so there is plenty of room to grow. Tesla also has built on its reputation as an electric-car innovator by making deals to supply its well- designed parts to other companies, including Toyota and Daimler, maker of the Mercedes-Benz. 3-Success will inevitably bring growth. Tesla is spending heavily to expand and staff its factory and network of stores, set up a service network, and build charging stations. It wants to pursue growth in Europe and Asia as well. The challenge will be to continue managing innovation as effectively in a bigger company. Moreover, they are open to outsourcing and acquiring new technology which is compatible with their ongoing ideas of using solar energy as a substitute for electricity and more energy efficient batteries for their cars. Q-1 Tesla is the first mover in production of electrical cars. What are three most important advantages they will have as being technology innovator (first mover)? (3 m)