TESLA MOTORS Case Study Solution
Tesla Case Study
Tesla is a renowned name in vehicle manufacturing.It has got a strong position in the U.S car industry, and the company has one of the highest growth rates in the US. It has a worth of more than $20 billion dollars just less than the half of Ford. Tesla is a public company and is working towards developing the green environment of the world by producing electric cars. The important general environment factors which should be considered are the social, technological and legal factors. These factors will result in positive impact on the industry and political and economic factors will bring negative impact on the industry.
The technological advancement and internet influence the vehicle industry in the US.Over the last years, advancement in technology has taken place within the industry, including the computerization of cars and introduction of electric cars that prevent drivers from accidents and allow automatic driving. Technological advancement also helps the company to improve its car parts and minimize the cost of production. The social factors are also influencing the automotive industry as increase in environmental concerns and emphasis on the eco-friendly vehicles result in the demand for the product keeps to increase day by day.The legal factors have also influenced the growth of Tesla as many rules and regulations are being made for reducing pollution.Such rules and regulations are forcing companies to incorporate the new methods of green business.
However,the political and economic factorsare causing negative impact on the industry.
Political factors includegovernment’s interference in theelectric car market. Thegovernment receives a sum amount of tax onselling oil and petrol and if people start switching to electronic care then this would cause a decline on the buying of oil and will result in a loss to the government.The economic conditions such as the decrease in oil prices would result in the drop of demand for electronic powered vehicles.
Porter Five forcesare a tool for assessing the attractiveness of the industry.The threat of new entrants is low, bargaining power of buyers is moderate, the threat of the substitute product is high, bargaining power of supplier is moderate and the competitive rivalry is high.The industry showsopportunities in the future for the new entrants in the electric vehicle market due to technological advancement which is minimizing the cost and helping to enhance the electronic car parts. (See Appendix 1)
The two biggest competitorsfor Tesla are General Motors and Ford Motors. These two companies have entered in producing electronic powered cars through a strategic alliance. However, Tesla has been mainly engaged in producing electronic powered cars since its establishment.It has the competitive edge due to its supercharger network and direct selling model. The General Motors has announced that it hasstarted working on developing electronic powered cars and the cars would be launched in the year 2022. Whereas Ford Motor Company has started to invest in producing electronically powered trucks by the amount of $15 billion..............
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