preview

Tesla Case Analysis

Good Essays
Resources and capabilities that big automotive firms have that Tesla may be lacking
In the recent past, Tesla has been noted as a great competitor in the automotive industry. This is attributed to its three huge competitive advantages. Generally, the advantage lies in its ability to bring about innovative disruption in the industry. This include; a strong battery supply chain that is sustainable in itself, a supercharger network celebrated by the customers and a software system several leagues ahead of its competitors (Zach, 2015).
However, despite Tesla’s internal competencies and a reputation of building exquisite products, it still encounters lack of major resources and capabilities that its competitors own. Building a car takes years or
…show more content…
What does that tell us, Tesla may be having great challenges when it comes to resources and key capabilities? These include;
The focus of Tesla Company is on a niche in the automotive industry, which is building and selling electric cars. To a company like General Motors, the electric cars line of business is considered a side business, hence it only needs to study the patterns of Tesla’s cars then build on of its kind that will take Tesla out of business (Debord, 2015).
In addition, the economy is also working against Tesla as the gas and oil prices are dropping at a steady but positive way. This would render Tesla’s business unattractive, as people will be able to afford other types of cars other than the electric cars. Hence, the market economies may not be that favorable to Tesla as they are for other automotive sector market
…show more content…
As the business, people put it, to maximize the wealth of shareholders (Peavler, 2016). This could be done by pursuing more of an immediate reason that will realize the shareholders wealth maximization goal. However, this main reason may fail to be realized as most mergers depict negative results.
In the Tesla- Solar City merger deal, the main reason for the merging is for both companies to enjoy a platform for new channels of distribution and product integrations that will enable both companies realize a greater good in the end (Lambert, 2016). For Tesla, its aim is to gain the infrastructure and hardware that solar city has for it to integrate solar installations into the its home battery pack solutions.
Consequently, this move will cut down the potential costs that the company would have to incur in order to do solar installations in its home battery pack solutions hence making it easier for it to implement its goals as now, only a solar installer partner will be needed to affect this move. On the other hand, solar city is at the verge of launching new solar panels that are focused on increasing the value of a house (Lambert, 2016). Wow! What a lofty
Get Access