Assignment 2: Tesla Motors

American Company

Designs, manufactures and sells electric cars

How attractive is the electric car industry?
Very attractive. Tesla has influenced companies such as Honda (ex: Honda Accord) and Toyota (ex: Toyota Prius) to design, manufacture and sell their own version of electric cars. Buyers are interested in electric cars; thus, companies start to compete against one another in order to win buyers. This leads to prices decreasing. For example, Tesla originally manufactured luxury cars that started selling at $60,000. Now, they're planning on introducing an economy electric car that will start at $28,000. This makes it affordable to larger number of consumers who are interested in electric cars. As a result, Tesla is able to compete with Toyota and Honda, but had to drive their profit down as a result of buyers bargaining power. 

Is there a threat to electric cars?
Yes. Most consumers prefer owning an electric car because it saves gas money. Hint, if prices of oil go down, the benefit of owning an electric car (from an economical perspective) will not be strong enough. One can only wonder why Tesla's stock prices have been going down over the past few weeks....

 Bargaining power of suppliers?

Well... Tesla relies on Panasonic to manufacture the car's battery, a critical component of the electric car. Panasonic can easily drive Tesla's profits down if they raise the price of manufacturing Tesla's car battery. 

Threat of new entrants?

Hardly, unless you're a multi-million business with spare cash on hand.

Rivalry? 
Tesla was on a role before companies such as Toyota and Honda entered the electric vehicle market. Unfortunately, Tesla will have to somehow decrease their prices in the near future in order to stay competitive...or provide a better quality electric vehicles that outperform others in the market




Cost Leadership?
Can you afford to pay $62,255 for a car? Tesla doesn't compete on cost. 

Differentiation? 
They make the best electric cars in the world. Their Model D is the believed to be the fastest car worldwide, and it has autopilot! Their technology is always cutting edge in the electric car industry.   

Tesla follows a differentiation focus, by providing the best quality of electric cars that meets the needs of a specific target market within the car industry.



Value chain?

Inbound logistics: All the car designs is performed internally, in the United States, by Tesla's engineers

Process or Manufacturing: Tesla's parts are outsourced (ex: Panasonic manufactures the batteries). However, Tesla puts together the car inside their owned factories 


Watch "How the Tesla Model S is Made"

Sales and Marketing: All done by the one and only Tesla! 



 beautiful...

Their store in Santana Row, San Jose. They sell directly to consumers in order to have more control over their prices and have direct relationship with their consumers. 








Now it's time to discuss how information technology helps make Tesla a competitive company. 
Information technology a system that is made up of people and computers that work together to process and interpret information. It captures data, then transmits it in order to store it; then it retrieves the data with the request of people, manipulates it and displays it in a way that is understandable. Tesla uses information technology to support their operation internally and externally, with their suppliers and customers.