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Teslas Gambit Aug 2014 tcm9-82244 PDF
Teslas Gambit Aug 2014 tcm9-82244 PDF
Teslas Gambit Aug 2014 tcm9-82244 PDF
| Tesla’s Gambit 2
discussions with other companies on com- responsibilities spread across legal, R&D,
mon standards and its will-not-sue pledge operations, and individual divisions, consis-
suggest a degree of collective self-interest, tency of IP strategic intent, let alone sub-
but the company has not made any broad- tlety, is hard to achieve.
er promise to help its rivals. In contrast, a
patent pool—such as the one created a de- Inconsistencies in IP strategies can pose a
cade ago to foster radio-frequency identifi- significant risk. Consider Kodak. The com-
cation (RFID) technologies—falls clearly in pany turned to aggressive licensing to stem
the collective camp. losses and help finance its digital transfor-
mation away from film. While that val-
The Overall Verdict. Assessing Tesla’s move ue-extraction strategy provided short-term
using the five dimensions of our IP strate- relief—between 2003 and 2010, Kodak
gic-intent framework reveals how working generated more than $3 billion in IP reve-
between the extremes of sue and share can nue—it may have undermined its long-
significantly enhance an organization’s term strategy, which depended on forging
competitive advantage. partnerships with the very companies it
was accusing of patent infringement. In
Could Tesla have gone further? If its strate- the language of our strategic-intent frame-
gic intent was solely to eliminate barriers work, Kodak’s desire to create long-term
and drive innovation, it could have done relationships was out of sync with its
more, such as devising a copyleft-type li- short-term value-extracting activities. (See
cense or abandoning its patents. But Tesla the exhibit.) Then-CEO Antonio Perez ac-
also has a business to run, so it took a more knowledged this contradiction in the Wall
measured step. Street Journal in 2010. In 2012, Kodak
sought bankruptcy protection (from which
it has since emerged).
Syncing IP and
Business Strategy Given the growing strategic importance of
The broader point is that companies in IP, it’s essential that business leaders re-
general need to be taking a more subtle think their approach—seeking to avoid the
and strategically aligned approach to their perils of inconsistency and chart a subtler
IP. Yet given the fragmented governance course to enhanced competitive advantage
structure for IP in most organizations, with between the extremes of sue and share.
Strategic Tactical
Open Closed
Collective Independent
Share Sue
| Tesla’s Gambit 3
In our experience advising clients, the IP fluent in the arcane intricacies of patent law
strategic-intent framework creates a com- to think strategically about relationship-ori-
mon language that helps senior managers ented versus transactional initiatives, closed
identify and explore a broader range of stra- versus open innovation, and the rest. The
tegic options, assess and ensure the internal framework helps support the critical conver-
consistency of their IP strategy, and break sations needed to ensure that IP strategy is
down the barriers among siloed IP stake- internally consistent and supports the com-
holders. Senior executives do not need to be pany’s overall business strategy.
Elizabeth Cimaroli is a partner and managing director in the firm’s Chicago office. You may contact her
by e-mail at cimaroli.elizabeth@bcg.com.
Michael Deimler is a senior partner and managing director in BCG’s Atlanta office. You may contact him
by e-mail at deimler.michael@bcg.com.
Emily Kos is a principal in the firm’s Chicago office. You may contact her by e-mail at kos.emily@bcg.com.
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advi-
sor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all
regions to identify their highest-value opportunities, address their most critical challenges, and transform
their enterprises. Our customized approach combines deep insight into the dynamics of companies and
markets with close collaboration at all levels of the client organization. This ensures that our clients
achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please
visit bcg.com.
| Tesla’s Gambit 4