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Tesla Motors And Giga-Factory Case Study

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Tesla Motors & Giga-Factory A Cost Leadership Strategy Re-defined From A Niche Differentiator To A Broad Cost Leader By Amol Powale – EMBA03 – Roll No. emum06160328 Tesla’s vision was to create the best alternate fuelled car that can be used practically in a premium Luxury segment with Model S & X. With its Giga-Factory established, Tesla’s cost of production cannot be matched by entrants and established competitors. The cost to setup plants and equipment and the technological expertise are barriers enough Tesla to maintain its cost leadership. Tesla Coupled with Giga-Factory, it’s mass market car Model 3 intends to do just that to provide a mass-market car and maintain cost leadership through economies of scale. Introduction of Lithium-ion Cells Giga-Factory Tesla is gradually shifting its strategy from being a niche player to mass player following blue ocean strategy. After creating a …show more content…

Tesla has not historically employed a cost leadership strategy; one can observe that their plans are to become one broad cost leader in the entire Electric passenger vehicle segment targeting Middle class rather the premium luxury segment. The focus is all shifted from A Niche differentiator to a Broad cost Leadership strategy. Fostering an Ecosystem around Electric Vehicles would help only Tesla. More the Suppliers lower the cost would be and more widespread the technology with diminishing incentives for innovators. So Tesla needs to see the right time to Milk the EV Cars as being a first entrant before the market becomes total oligopoly in

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Cars are the most important products in the modern lifestyle. Whether it’s going to work, school, the mall, or even your friend’s house, it’s likely that you will be using a car to get there. As you all know, cars can have drastically different prices and look drastically different as well. I’m sure everyone here has a car, and I’m also sure everyone here will be buying another car in the future. Whether you want a car that can fit a large amount of people, or a sports car that can go extremely fast, an electric car will almost always be the best option for you.

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If Tesla goes into other countries ' markets, its marketing team may be conservative. So its marketing plan will be more careful and will require more time to run the program. In this way, Tesla can ensure appropriate returns and stable growth rates. Because it takes a long time to make a marketing plan, it will delay the entry of Tesla into new markets. In addition, if Tesla launched marketing plan is conservative, it will reduce the competitiveness of Tesla and make it difficult for the local people

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The firm is a multinational enterprise, with offices in 10 different countries and car stores in some 25 countries. Its main product line is the Tesla electric cars, currently consisting of three models: the Tesla Model S, Model X and Model 3. The Model 3 was launched in 2017 and is aimed at the lower spectrum of the EV market, whereas the model S and X are high-end cars serving the ‘premium’ segment. 
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The vision of Tesla is ‘to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles’. Based on the mission and vision, the company’s strategy was determined. Tesla’s strategy is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model. (Musk,

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Existing brands of electric cars include Chevrolet Volt, Model S Tesla, Nissan Leaf and Ford Focus. These vehicles have revolutionized the motor vehicle sphere because they are environmental friendly. It is important to note that vehicles release toxic carbon emissions into the atmospheric environment which in turn lead to pollution. Thus, to help curb this menace, electric vehicles should be part of our future.

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