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Response to Perkins and Murmann: Pay Attention to What Is and Isn't Unique about Tesla

  • John Paul MacDuffie (a1)
Extract

Perkins and Murmann (2018) advance a provocative thesis, based on Tesla Motors, that ‘a well-funded company could develop a new electric vehicle (EV) from scratch and move it into production within 3 to 5 years. . . .’ This thesis of feasibility – indeed likelihood – of more new entrant EV automakers is at odds with my recent work (e.g., Jacobides, MacDuffie, & Tae, 2016; MacDuffie, 2013) which argues that automotive OEMs have been able to prevent extensive value migration to suppliers and new entrants due to their structural role as system integrators with the capabilities to manage a primarily integral product and organizational architecture. This role is bolstered by societal demands for OEMs to meet regulatory requirements for safety and handle legal liability claims. These structural features have helped automotive OEMs avoid the fate of IBM, which saw massive value migration, after introducing the modular PC, to Intel and Microsoft (suppliers of key components). These same features, I argue, will position these OEMs for continued centrality, forestalling a wave of successful new entrants despite many new, disruptive changes in technology and business models.

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References
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Chen, B. 2018. Stratégies et Management de l'Innovation de Rupture dans les Pays Emergents : le cas du Véhicule Electrique en Chine. Thèse de doctorat de l'Université Paris-Saclay préparée à l’École polytechnique.
Inside EVs. 2018. Monthly plug-in sales scorecard. Available from URL: https://insideevs.com/monthly-plug-in-sales-scorecard/
Jacobides, M., MacDuffie, J. P., & Tae, C. J. 2016. Agency, structure, and the dominance of OEMs: Change and stability in the automotive sector. Strategic Management Journal, 37 (9): 19421967.
Keith, D. R., & Rahmandad, H. 2018. Are on-demand platforms winner-take-all markets? (Working Paper), MIT Sloan School of Management.
MacDuffie, J. P. 2013. Modularity-as-property, modularization-as-process, and modularity-as-frame: Product architecture initiatives in the global auto industry. Global Strategy Journal, 3: 840.
Perkins, G., & Murmann, J. P. 2018. What does the success of Tesla mean for the future dynamics in the global automobile sector? Management and Organization Review, 14 (3): doi: 10.1017/mor.2018.31
Prenzler, C. 2017. New survey compares demographic of Tesla Model X vs. Model S buyer. Available from URL: https://www.teslarati.com/survey-model-x-owners-income-double-model-s/
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Management and Organization Review
  • ISSN: 1740-8776
  • EISSN: 1740-8784
  • URL: /core/journals/management-and-organization-review
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