Assignment Example on Tesla Motors

Question 1: Examine and evaluate the Tesla product line across all five generic competitive strategies. Select the most relevant strategy and explain how it applies to Tesla.

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Response: The five generic competitive strategies include focus, differentiation, cost leadership, the threat of substitute products and established rivals in the market (Nandakumar, Ghobadian, & O'Regan, 2011). Tesla Motors used the focus strategy in its conduct of business when it designed electric vehicles that targeted a specific niche market. The management team under Musk understood the market dynamics by designing vehicles that satisfied the unique needs of the customers. The company had successfully built a strong brand and managed to position themselves in the market. Additionally, Tesla Motors used the differentiation strategy by making vehicles from the company more attractive and appealing than of its competitors. The company made use of innovative and creative designs that attracted and retained the attention of potential customers. Tesla Motors applied the cost leadership strategy by setting up the price that consumers would pay so that they could acquire the new models that had the latest technological developments. Tesla Motors also adopted different strategies that ensured the threat of established rivals and substitute products in the market strategies would not affect the number of clients interested in their vehicles both in the short-term and in the long-term. The management team ensured that innovative models were manufactured regularly and at the right intervals. For instance, assembly points were opened at different locations that helped meet the growing demands from the customers.

The most relevant generic strategy that Tesla Motors can adopt is to focus. This strategy will enable Tesla Motors to narrow down the competition within the industry by tailoring the assembled vehicles according to customer demands. The company has capitalized on being the best and most reliable producer of electric vehicles. The models by the company had special features and standard equipment that had not been installed in other vehicles.

Question 2: Does any part of Tesla's business strategy align the company to a "Blue Ocean" strategy? If not, describe the principles and practices associated with "Blue Ocean" strategies. If so, explain how that strategy was applied at Tesla.

Response: The new business strategy that Musk wants to adopt for Tesla Motors can be aligned to fit the Blue Ocean strategy which involves combining a low cost and differentiation approach towards the operations of the company. Combining both strategies enables an organization to create new demands for its products despite the high competition from other providers in the industry (Kim & Mauborgne, 2014). The company has also applied this concept in the past that contributed to its success as it penetrated the market in the first few years after introducing the electric vehicles. For instance, the differentiation strategy enabled Tesla Motors to separate itself as a regular manufacturer in the market, but one that invested in innovative technology.

Question 3: Can Tesla be clearly described as a "first mover"? Review the five conditions where first-mover advantages can be realized. Be sure to provide examples of such conditions at work at Tesla

Response: Tesla Motors can be described as a first mover due to its ability to establish itself in the vehicle manufacturing industry by being the best supplier of electric cars. Creating a brand and positioning it in the minds of the clients enabled the company to sells more vehicles than it had anticipated. Conditions, where first-mover advantages can be realized, including being a technology leader, controlling buyer costs and resources (Markides & Sosa, 2013). Tesla Motors enjoyed the industrial condition of lack of technological developments and became the only company that introduced the idea of having electric vehicles on the road. As a first mover, the company researched and developed ideas that helped transform the entire industry as its competitors started borrowing their idea. Additionally, Tesla Motors fulfilled the control of resources as a first mover in the market by outsourcing from different suppliers who manufactured the components and parts that were used in the assembling process. This created an avenue through which the company focused their attention and resources on developing innovative and creative ideas that pushed the sales of the firm. Tesla Motors fulfilled the condition of a first mover by controlling the buyer costs in the market. The company was the first in the industry to come up with the concept of electric cars and sold them at high prices. More firms invested in the same concept and lowered their prices so that they would attract the attention of customers, even though Tesla Motors had already maximized its profits during the time it was the only supplier in the market.

Question 4: Tesla's manufacturing strategy is to source some parts and components from outside suppliers. With that said, Tesla has retained control of the design, development and manufacturing in-house for key components or those that are proprietary. Is such intense control of manufacturing scalable, given the rapid advance of Tesla vehicle sales? Why or why not?

Response: Tesla Motor's intense control of the manufacturing scalable given the rapid advance of vehicle sales has enabled the company to retain control of the core business functions. The management team's ability to manage the design, development and manufacturing components has enabled the organization to focus on the mission and vision of the company which is the provision of the best and most reliable vehicles in the industry. Outsourcing some parts and components from outside suppliers gives the management team enough time to strategize on the core business functions. This shifts the burden from the management team to the external suppliers as they are under a business contract to provide the best parts and components. The rapid advance in Tesla Motors vehicles sales is a combined effort from the management team and the outsourcing companies that provide the components and parts that are later used in the assembly points in the organization.

Question 5: Examine and describe the concept of outsourcing value-chain actions within business operations. Such practices can have a strategic benefit in several ways. Of those strategies, identify one that can be applied to Tesla and provide an example of how that strategy is utilized at Tesla.

Response: The concept of outsourcing value-chain actions within business operations is one of the strategies that organizations adopt with the aim of reducing costs and improving the quality of production (Fratocchi et al., 2014). One of the ways in which Tesla Motors can have a strong benefit by embracing the outsourcing value-chain strategy is by specializing in some core business functions and outsourcing the rest from external parties. For instance, since the management team at the company has a strong innovative and creative team that comes up with sleek and unique designs that can be incorporated into the company, Musk and other leaders can focus on product differentiation. Product differentiation will position vehicles from Tesla Motors as the best in the market despite being more expensive than others. Therefore, Musk can invest in the marketing department which will help the brand and position the company as reliable in the manufacture of electric vehicles.

References

Fratocchi, L., Di Mauro, C., Barbieri, P., Nassimbeni, G., & Zanoni, A. (2014). When manufacturing moves back: concepts and questions. Journal of Purchasing and Supply Management, 20(1), 54-59.

Kim, W. C., & Mauborgne, R. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Markides, C., & Sosa, L. (2013). Pioneering and first mover advantages: the importance of business models. Long Range Planning, 46(4-5), 325-334.

Nandakumar, M. K., Ghobadian, A., & O'Regan, N. (2011). Generic strategies and performance-evidence from manufacturing firms. International Journal of productivity and performance management, 60(3), 222-251.