Tesla Incorporation Case Solution & Answer

Tesla Incorporation

Inbound Logistics

Tesla inbound logistics are convoluted in storage of solar panels, raw materials and energy storage system for the production of roadsters and other vehicles. Tesla purchase the raw material from many countries of the world. The company knows the value of loyal suppliers and keeps its relations with them.

Tesla’s Operations

The operations of the company are divided into 2 parts. One is storage of energy and generation and other is automotive. In Automotive Operations Company, focus on the designs, manufacturing, rising and trades of the electric vehicles. Through this automotive part of operations, the company manufacture about half million of electric vehicles in the year 2020. In the other part Tesla store the factors which relate with the automobiles manufacturing, like raw materials, energy and solar panels.

Outbound Logistics

After the manufacturing of electric vehicles, the next step for the company is outbound logistics, which means now the company is moving towards distribution of vehicles in markets. The company distributes the electric vehicles and other manufactured products in the market of United States and 35 other countries.

Marketing and Sales of Tesla

Tesla follows the zero dollar marketing strategy in which no money is involved in marketing. Tesla completely depends on the word-of-mouth marketing. The company is not more oriented towards the promotions and advertisements. Tesla sales their vehicles through online as well as on market showrooms. Tesla increase the number of sales of newly manufactured automotive through previous roadster users.

Services of Tesla

In 2016, the services of tesla were terrible the customers were not happy with their customer care centre. They even do not give feedback to the customers through emails or phone calls. After the 2016 the company improve the services. Now the company offers the customers that they communicate directly with the executive of the company regarding any problem identified in the vehicles.

Secret Strategy Part 2

The Secret strategy of the Elon Musk centered on that the company has differentiation when we compare the Tesla vehicle with others. The strategy is also based on the product designs that how the products make more innovative. The distribution channels, manufacturing processes, all these factors are involved in the secret strategy part 2 for making the company more valuable in electric vehicles industry.

Markides Five Elements

Markides 05 elements model is used for understanding the strategy choices. From 05 elements model, we take the element of cost leadership and differentiation for explaining the strategy choice of Tesla.

Differentiation and Cost Leadership

For making products differentiate, tesla uses the unique approach. Tesla not manufacture the vehicles which are already in market but it focus on the gap and introduce a persuasive electric vehicle which attract the potential buyers towards the vehicles and increases their desire to purchase the electric vehicle from Tesla Corporation. The vehicles of Tesla have broad differentiation compared with other vehicles offer by competitors. The Tesla has a competitive edge in the electric vehicles. The Model S of tesla vehicle was completely friendly to the environment which grow the demand in the market. The costing of the vehicles which offer for mass market are also low with high differentiation, unique designs and advance technology.

Positioning of Tesla

The positioning of tesla is maintained by following the strategy of mono segment positioning. In which the company target sole segment of market and make the strong positioning in that segment.

In the industry of Electric vehicles the Tesla is fit in a good position state because the Electric vehicles of Tesla are highly innovative as compared to the other competitor’s gasoline models. The Model S of tesla is also in a huge demand in the market.

Tesla’s Open Source Strategy

After analyzing the whole case and understanding the strategies of Elon Musk, we can conclude that yes, the Tesla has open Source Strategy. This thing we conclude based on Elon Musk’s announcement, which goes viral on internet and especially in the automotive markets of United States. In his statement the CEO of Tesla in 2014 announce that the patents of the company are all belong to you, if anyone can want to use we can no problem we open up over strategy of manufacturing and publicly offer the patents of our organization which are competitive players for the Tesla. Elon Musk believed that the competitive advantage or innovation of Tesla is not depending on the patents or copyrights, the progress of the company is depends on highly innovative engineers which are loyal to Tesla. Most of the people on social media and markets value the Elon Musk for the Inner self of Open Source Strategy. On the other side, the other viewers states that this all is not good for the company because this same mistake was done by coca cola by issuing the technique of their beverages in public. Tesla also works with the Toyota for some years on huge automobiles manufacturing projects, but before introduction of electric vehicles, they both works individual. The open source strategy of Tesla not works negatively for the company yet today. Compare with Tesla the other companies which apply the strategy of open source face a lot of issues and their market shares also declined. Most the companies in United States comment on Tesla after viewing the patents that the company has strong intellectual property which not easily copied by others. To copy the patents of Tesla and rise their projects was not too easy for competitors because the Tesla is strong in many aspects compare to others in the market which discussed below.

• Elon Musk sheltered few initial patents in the centre of technology. Any competitor which trying to copying the patents of tesla they need to take care to avoid overstepping of Tesla’s patents.
• In autonomous and electric vehicles, Tesla is known as the market leader with a high rate of brand recognition in US markets. So the Tesla can openly compete with all those who rely on the patents of Tesla.
• Elon Musk rule its market by competitors for admittance the portfolio of copyrights….

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