T?sla is a rising champion in th?
automotiv? industry and this pap?r focus?s on analyzing what mak?s T?sla grow
so significant in th? short amount of tim? and its strat?gy to comp?t? in th? v?ry
Automotiv? industry is a r?d oc?an fill?d with strong
comp?titors. T?sla which is a n?wcom?r in th? industry and just found?d in 2003
?nt?r?d a nich? ?l?ctric car mark?t which has big pot?ntial in th? futur?
In th? curr?nt ?l?ctric car
industry som? of th? strong play?rs such as BMW, Toyota, Volkswag?n hav? th?
upp?r hand du? to th? long ?xp?ri?nc? in th? automotiv? industry, compar?d to
th?m T?sla is still v?ry n?w.
Hug? car manufactur?r lik?
Volkswag?n hav? also start?d producing ?l?ctric car which is ?-Golf, an ?l?ctric
v?rsion of VW Golf. Volkswag?n announc?d that it is
going to doubl? th?ir production capacity in
th? VW factory in Dr?sd?n. Production will gradually incr?as? from 35 to 70 v?hicl?s
a day starting in March 2018, th? automak?r also announc?d. Th? plant in Dr?sd?n
will add a s?cond shift to accommodat? this chang?.
(Lamb?rt and Lamb?rt, 2018)
According to Voigt, Buliga and Michl (2017), until th? y?ar of 1990s, most big play?rs in automotiv? industry saw
no big n??d to d?v?lop ?l?ctric
v?hicl? t?chnology, larg?ly du? to low oil pric?s and facil? ?nvironm?ntal
polici?s. By th? turn of th? mill?nnium, som? car manufactur?rs, for instanc?
GM, mad? initial att?mpts to introduc? ?nvironm?ntally fri?ndly v?hicl?s, such
as th? Ch?vrol?t S-10 ?l?ctric. Such proj?cts mostly fail?d, du? to a lack of
mark?t driving factors.
significant among th?m was th? lack of good p?rformanc? batt?ri?s and r?charging
stations. How?v?r, som?
of thos? proj?cts
cars such as th? Nissan Altra, and hybrid cars such as th? Toyota Prius and th? Honda
Insight found a good position as th?
adopt?rs. Th? high?r sal?s numb?rs of hybrid cars compar?d to pur?ly ?l?ctric cars
w?r? larg?ly du? to th? high?r p?rformanc? of th? hybrid’s int?rnal combustion ?ngin?,
th?s? w?r? abl? to r?duc? th? bigg?st disadvantag? of ?l?ctric v?hicl?s which
is its short trav?l rang? on on? charg?.
During a short p?riod of tim?
compar?d to its comp?titors, T?sla
has don? much mor? than any oth?r car manufactur?r has. On? of th? proofs
can b? s??n from a data obtain by McCarthy from Statista (2017) about T?sla
dominat?d th? Unit?d Stat?s ?l?ctric v?hicl? sal?s shar? bas?d on unit in th? p?riod
of January until Jun? 2017.
Figur? 1. US ?l?ctric V?hicl? Sal?s
Shar?; Sourc?: McCarthy, 2017
In Nov?mb?r 2017, T?sla launch?d
its n?w g?n?ration two roadst?r. T?sla want?d
to cr?at? an ?l?ctric roadst?r which can b?at gasolin? sports car. H? claim?d th? bas? mod?l will
do acc?l?rat? from 0 to 60 in 1.9 s?conds and
th? top sp??d will b? abov? 250 mil?s p?r hour. Th? Roadst?r has a 200kWh batt?ry pack and a
620-mil? rang? ?v?ry charg?, or ov?r 1,000 kilom?t?rs. (J. Hawkins and Warr?n, 2017).
S?cr?t for its Tr?m?ndous Growth in a Short Tim?
Th? T?sla’s Co-Found?r,
Martin ?b?rhard notic?d that p?opl? did not buy hybrid cars such as th? Toyota Prius just to sav? mon?y on gas, but it is b?caus? th?y
car? about positiv? ?nvironm?ntal impact by using th?
car, th?y ar? shifting to mor? th? ?co-fri?ndly lif?styl?. T?sla’s found?rs cam? to b?li?v? that th?y
could b?gin by addr?ssing this pot?ntial in th? nich? mark?t s?gm?nt and only subs?qu?ntly addr?ss th?
mass mark?t through mor? affordabl? ?l?ctric cars. If any T?sla could hav? a
chanc? on th? mark?t, it first had to r?ach ?arly adopt?rs, in ord?r to mak? ?l?ctric
v?hicl?s d?sirabl? to th? mainstr?am. T?sla’s busin?ss mod?l was th?r?for?
primarily trigg?r?d by an ?m?rg?nt d?mand for high-p?rformanc? ?l?ctric v?hicl?s. At th? sam? tim?, th?
found?rs ?nvision?d th? company’s ?volution towards mass-producing cost-?ff?ctiv?
Buliga and Michl, 2017)
Growth Driv?r Analyz?d with VRIO Fram?work
What can b? said, how?v?r, is that during short p?riod of tim?
compar?d to its comp?titor, T?sla
has don? much mor? than any oth?r car manufactur?r has.
is a promising n?w company in ?l?ctric v?hicl? industry. W? can prov? it by
looking at its uniqu?n?ss and its comp?titiv? advantag?s by using th? VRIO fram?work.
VRIO is us?d to ass?ss th?
situation insid? th? company and its r?sourc?s,and
which part of it has possibl? pot?ntial for improv?m?nt. Th? tool which
is call?d VRIO fram?work was originally d?v?lop?d by Barn?y, J. B. (1991).
VRIO fram?work is on? of many fram?works or tools which can b? suitabl? to id?ntify
what mak?s succ?ssful growth of th? company.
Costly to Imitat?
Products (?l?ctric Car
Sal?s T?am and Proc?dur?
Manag?m?nt of T?SLA
Tabl? 1: VRIO
Fram?work on T?sla’s R?sourc?; Sourc?: Author’s own illustration
Valu?: T?sla’s r?sourc?s ar? all valuabl?. T?sla’s production plants can
produc? high t?ch ?l?ctric car and ?ffici?nt batt?ry. This batt?ry which is
produc?d with th? h?lp of Panasonic’s t?chnology ar? abl? to chang? th? way
of curr?nt common industry which still h?avily r?ly with fossil fu?ls, its cl?an ?n?rgy products can b?com? p?rf?ct with improv?d t?chnology and solv? ?n?rgy d?mand probl?ms for th? ?ntir? world. Th?ir
sal?s proc?dur? is s?ll and produc? by ord?r. Du? to high d?mand, th?y n??d to
incr?as? th? production plant capacity.
Rarity: T?sla’s high ?nd t?chnology such as batt?ry which is pat?nt?d and ongoing R and also production
plant to d?v?lop innovativ? and improv?d alt?rnativ? ?n?rgy
products such as cars and batt?ri?s can b? consid?r?d rar?.
Imitability: It is costly and difficult to imitat? T?sla’s uniqu? t?chnology,manufacturing
str?ngth, R&D capabiliti?s and it is not ?asy to find th?
C?O which has l?ad?rship skill lik? ?lon Musk. T?sla has sp?nt hug? amount of r?sourc?s and ?ffort to r?ach this curr?nt stag? which is going to b? difficult to copy by oth?r comp?titor in th?
Organization: T?sla’s utilization of its batt?ry ?ffici?ncy
and th? intangibl? r?sourc?s lik? th? corporat? cultur? l?ad by th? C?O ar?
good ?nough how?v?r th? production plan and sal?s t?am ar? not fully organiz?d
y?t, as w? all know th?y hav? probl?ms with supply and d?mand of th? ?l?ctric
cars. In th? futur? wh?n th?y ar? as big as Volkswag?n or Toyota, th?y can b? a
r?al giant in this industry and th?y can mass produc? th?ir ?l?ctric car. T?sla’s strong l?ad?rship, organizational cultur?
and practic?s ind??d mak? th?
company capabl? to obtain sustain comp?titiv? advantag? by ?xploiting opportuniti?s in th? alt?rnativ? ?n?rgy s?gm?nt. To
sum up, th?ir products and manag?m?nt cultur? ar? sustainabl? comp?titiv?
advantag?s but th?ir production plants and sal?s t?am n??d to b? improv?d.
1.2 T?sla’s Busin?ss Mod?l
Proposition : T?sla off?rs som?thing mor? than th? comp?titor can off?r which is
Luxury ?l?ctric car with high p?rformanc? (high sp??d, long batt?ry lif?, fast
charging, infrastructur?s such as charging stations distribut?d in various
K?y Partn?r and Activity : Panasonic and T?sla has partn?r?d
sinc? th? b?ginning of 2017, th? partn?rship aims to produc? n?w batt?ri?s which ar?
slightly larg?r siz? in siz? than th? on?s it has b??n using in ord?r to incr?as?
?ffici?ncy and low?ring th? cost. (F?hr?nbach?r, 2017)
R?sourc?s : T?sla
Gigafactory, T?sla with th? h?lp of Panasonic plann?d production rat? of 500,000 cars p?r y?ar
High T?ch R?s?arch and d?v?lopm?nt in Silicon Vall?y.
Custom?r R?lationship: P?rsonal
Assistanc?, strong ?ngag?m?nt
Custom?r S?gm?nts: Nich? mark?t for th? ?l?ctric luxury car
Chann?ls and R?v?nu? Str?ams: T?sla has Onlin? stor? in th? t?sla
w?bsit? for th? custom?r in ord?r to purchas? th? car, acc?ssori?s or ?v?n
appar?ls. T?sla gain?d th? r?v?nu? str?ams for th?s?.
2.3 T?sla’s Strat?gy Obs?rv?d
by Port?r’s G?n?ric Strat?gy
Port?r’s G?n?ric Strat?gy
d?scrib?s how a company pursu?s comp?titiv? advantag?
across its chos?n mark?t scop?. Th?r? ar? cost l?ad?rship
(narrow/focus or broad), and diff?r?ntiation (narrow/focus or broad).
2 Port?r G?n?ric Strat?gy; Sourc?: Author’s own Illustration (using Port?r’s G?n?ric
Strat?gy Canvas cr?at?d in 1980.)
From what is look lik?, T?sla’s g?n?ric
comp?titiv? strat?gy is using diff?r?ntiation strat?gy (Initially it us?s
narrow or focus diff?r?ntiation and now it is starting to mov? to broad diff?r?ntiation
strat?gy). T?sla has a big comp?titiv? advantag? by d?v?loping ?l?ctric cars and
also luxury ?l?ctric cars which diff?r?ntiat? th? company from oth?r firms in
th? automotiv? industry.
T?sla’s ?l?ctric cars ar? also has a
hug? comp?titiv? advantag? b?caus? th?y ar? using ?l?ctric as th? ?n?rgy sourc?
which is mor? ?nvironm?ntal fri?ndly t?chnology compar?d to combustion ?ngin? t?chnology
in ordinary cars
By using this Port?r’s g?n?ric strat?gy
to obs?rv? T?sla’s mission, w? can s?? that T?sla is abl? to attract pot?ntial
custom?rs ?sp?cially th? guys who ar? int?r?st?d in ?nvironm?ntally fri?ndly
products. Initially, T?sla us?d to choos? diff?r?ntiation focus as its g?n?ric
strat?gy b?for?, th? company focus?d on th? uniqu?n?ss of its products which ar?
?l?ctric cars and th? batt?ry. It also sp?cializ?d as th? ?arly adopt?rs in th?
mid to luxury car mark?t. As this pap?r
is writt?n, T?sla has grown tr?m?ndously and it has pot?ntial to r?duc?
production costs. T?sla’s Port?r g?n?ric comp?titiv? strat?gy will possibly shift
to compl?t?ly broad diff?r?ntiation. Th? d?clining production costs aft?r doing
mor? sal?s until it pass?s th? br?ak?v?n point and g?t profits. In addition to
that point, T?sla’s incr?asing brand popularity which attracts mor? inv?stors
and buy?rs will op?n a n?w door for th? company to produc? ?l?ctric cars in
high?r quantity and broadly targ?t custom?rs in th? automobil? mark?t.
According to Block and Harrison (2014), th? incr?asing growth of ?l?ctric cars during th? b?ginning phas?
will hav? a lot of chall?ng?s
th? cost of v?hicl?, v?hicl? mil?ag? b?tw??n charging, v?hicl? maint?nanc?, batt?ry lif?, availability of charging stations, charging duration, infrastructur?, standards,
and p?rmitting, and also public
knowl?dg? and ?ducation. Th?s? ar? what T?sla has b??n d?v?loping
in a short tim? and k??p on improving.
As it is writt?n abov?, T?sla is a
rising champion in th? automotiv? industry, sp?cializ?d in ?l?ctric car
manufacturing. T?sla us? broad diff?r?ntiation as it is strat?gy and utiliz?
As w? can s?? from th? Valu?
which is off?r?d by T?sla, it off?rs pr?mium
quality ?l?ctric car with high p?rformanc? (high sp??d, long batt?ry lif?, fast
charging, infrastructur?s such as charging stations distribut?d in various
locations. T?sla has strong k?y r?sourc?s partn?rs
and will obtain mor? in th? futur?. Som? of th? chall?ng?s which T?sla n??ds to
ov?rcom? right now ar? such as th? production capacity to fulfill th? d?mand of
th? batt?ry and th? cars from th? mark?t.
Ni?uw?nhuis, P. and W?lls, P. (2015). Th?
global automotiv? industry. 1st ?d. W?st Suss?x: Wil?y, pp.12-13.
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on ?l?ctric v?hicl? sal?s and futur? proj?ctions. R?tri?v?d S?pt?mb?r 26, 2015,
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Voigt, K., Buliga, O. and Michl, K. (2017). Busin?ss
mod?l pion??rs. 1st ?d. Switz?rland: Spring?r Int?rnational Publishing,
Hawkins, A. and Warr?n, T. (2017). T?sla’s n?w s?cond-g?n?ration Roadst?r will
b? th? quick?st production car ?v?r mad?. onlin? Th? V?rg?. Availabl? at:
Acc?ss?d 1 Jan. 2018.
F. and Lamb?rt, F. (2018). VW is doubling its ?-Golf ?l?ctric car production
following strong dom?stic d?mand. onlin? ?l?ctr?k. Availabl? at: https://?l?ctr?k.co/2017/12/27/vw-doubling-?-golf-?l?ctric-car-production-strong-d?mand/
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onlin? Statista Infographics. Availabl? at:
Acc?ss?d 19 D?c. 2017.
K. (2017). T?sla and Panasonic Kick Off Batt?ry Production at th? Gigafactory.
onlin? Gr??nt?chm?dia.com. Availabl? at: https://www.gr??nt?chm?dia.com/articl?s/r?ad/t?sla-and-panasonic-kick-off-batt?ry-production-at-th?-gigafactory#gs.DD9Lm9A
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