CASE : Tesla Motors: Disrupting the Auto Industry
Grant, Robert, M., 2016, Contemporary Strategy Analysis, 9th Ed, John Wiley & Sons Ltd.,
Case Analysis Guidelines
Case Questions:
What is the strategy of Tesla Motors? How does its business model differ from that of the leading automakers?
In the market for plug-in electric vehicles, how do the resources and capabilities of Tesla compare to those of the established automakers?
Explain the rationale for Tesla’s strategy. To what extent does this represent an optimal response to Tesla’s strengths and weaknesses relative to the established automakers?
Assess Tesla’s decision to make available its patents to other companies.
At the end of 2015, Tesla’s shares are trading at $240, giving Tesla a market capitalization of $30 billion (General Motors market cap was $54 billion). Would you buy or short Tesla’s shares?
Case Analysis and Discussion:
What is the strategy of Tesla Motors? How does its business model differ from that of the leading automakers?
The principal features of Tesla’s strategy
We can compare Tesla’s oval approach and configuration of activities, i.e. its business model, with that of other auto makers
How do the resources and capabilities of Tesla compare to those of the established automakers?The key advantages of the major automakers derive from their:
size and scale,
their range of technical capabilities,
and the fact that most of them have been involved in developing electrical vehicle technologies for much longer than Tesla
However, in the market for electric vehicles, Tesla does possess some distinctive resources and capabilities as: …
The rationale for Tesla’s strategyThe key to Tesla’s strategy is utilizing its relative strengths:
Tesla’s “top down” approach
Tesla’s ability to sustain its development and growth is the changing competitive structure of the industry.
The future growth in the market for all-electric vehicles
Tesla’s decision to make available its patents to other companies
Tesla’s motives
Tesla’s technology strategy
Tesla’s innovations in electric cars
What advantages might accrue to Tesla as a result of others utilizing its patents?
Would you buy or short Tesla’s shares?To assess Tesla’s prospects for profitably over the long-term you need to assess the following:
Will Tesla survive its development phase?
Will growth in the market for electric cars be sufficient to meet the optimistic sales projections that Tesla has made? In
Will cars powered by fuel cells displace PEVs?
Will Tesla be able to establish competitive advantage in the market for electric cars?
Conclusion:
You need to summarize your main ideas about the case given your responses to the above questions.