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