Big Data as Competitive Advantage: Tesla and IBM
This paper examines two distinct strategies for using big data as a source of competitive advantage. Using Tesla and IBM as case studies, the paper illustrates how companies can harness large datasets in fundamentally different ways. Tesla's approach involves passively collecting driving data through its Autopilot system to refine self-driving algorithms, giving it a head start over competitors in autonomous vehicle technology. IBM, by contrast, has positioned itself as a provider of big data infrastructure and analytics tools, capitalizing on the growing enterprise demand for data management solutions. Together, these examples demonstrate that competitive advantage through big data can be pursued either by exploiting unique proprietary datasets or by becoming a dominant supplier of data-handling technology.
- Introduction to Big Data and Competitive Advantage: Big data as a source of corporate competitive edge
- Tesla's Data-Driven Approach to Autonomous Vehicles: Tesla collects driving data to advance self-driving technology
- IBM's Strategy as a Big Data Infrastructure Provider: IBM sells tools to help enterprises manage big data
- Conclusion: Two Paths to Competitive Advantage Through Big Data: Contrasting strategies both yield competitive data advantage
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What makes this paper effective
- Uses two concrete, well-known corporate examples to illustrate contrasting strategic approaches to the same underlying technology trend.
- Draws a clear conceptual distinction between using proprietary data for product advantage versus selling data infrastructure to others — a meaningful analytical insight, not just description.
- Maintains a consistent focus on competitive strategy throughout, tying each example back to the central argument.
Key academic technique demonstrated
The paper employs comparative case analysis: two companies operating in related technology spaces are examined side by side to reveal how the same macro trend (big data) can be exploited through divergent business strategies. This technique allows the writer to reach a generalizable conclusion — that competitive advantage through big data is not monolithic — without overstating the evidence.
Structure breakdown
The paper opens by introducing big data and competitive advantage, then dedicates roughly equal space to each case study (Tesla, then IBM), before closing with a synthesizing paragraph that draws the comparative lesson. The structure is straightforward and well-matched to the argument's scope, making it an effective model for short analytical business essays.
Introduction to Big Data and Competitive Advantage
Many companies are making use of big data to gain competitive advantage. The ways in which they do so, however, vary considerably. Some companies exploit unique proprietary datasets to improve their own products; others position themselves as providers of the tools other businesses need to collect and analyze data. Two instructive examples — Tesla and IBM — illustrate how different these approaches can be, and how each can yield meaningful competitive benefits.
Tesla's Data-Driven Approach to Autonomous Vehicles
Tesla installed its Autopilot self-driving system on its cars in late 2015, even though the system was not yet fully activated. What this move accomplished was allowing the company to collect data on 1.3 billion miles of real-world driving. This, in turn, "allows Tesla's engineers to fine-tune the algorithms that control its cars' active-safety systems," which form the basis of fully autonomous driving (Edelstein, 2016). Other car companies are working toward self-driving cars as well, but are doing so without the benefit of this enormous dataset — which means that Tesla should, in theory, enjoy a significant technological competitive advantage when fully autonomous vehicles reach the market (Edelstein, 2016).
The implementation of this big data strategy is a work in progress. It will take years, and in theory the effort should remain ongoing even after Tesla's cars achieve full autonomy. The company is pursuing this project with an eye toward gaining and sustaining competitive advantage. It will be better positioned to develop safer and more effective self-driving cars than its competitors. When autonomous vehicles arrive in force, there will be intense competition for market share, but Tesla will have the ability to market its cars at a premium while securing strong early positioning — on the basis of this data-driven advantage.
Other automakers working on self-driving technology have not installed comparable data-gathering systems, and even if they do so now, Tesla will have done it first — giving it a larger and more mature dataset. It is possible that a larger competitor that sells significantly more cars per year could eventually overcome this gap, but with fully autonomous capability perhaps only a year or two away, competitors may not be able to close the data gap before market positioning has already been established.
References
Edelstein, S. (2016). Tesla's autonomous-car efforts use big data no other carmaker has. Green Car Reports. Retrieved February 21, 2017, from http://www.greencarreports.com/news/1108065_teslas-autonomous-car-efforts-use-big-data-no-other-carmaker-has
Versace, C. (2014). Talking big data and analytics with IBM. Forbes. Retrieved February 21, 2017, from http://www.forbes.com/sites/chrisversace/2014/04/01/talking-big-data-and-analytics-with-ibm/#7a0f0f974aa7
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