Tesla Case Memo

Topics: Electric car, Automobile, Internal combustion engine Pages: 3 (484 words) Published: May 27, 2015

Business Strategy
Case Study-TESLA

Team 1: Nitin Majgi
Ben Kempenich
Nomi Lee
David Daar
Should Tesla move start to produce gasoline or hybrid powered vehicles? Competitors:
Tesla Motors has a focus of differentiation strategy, concentrating only on small group of people, who are rich and environmental conscious, attracted by stylish and beautiful looks of its cars. Because, it will be hard to reach out and compete with other auto-manufactured brands as common person would not go and buy an electric car with short-distance travel and weak charging network with the price more than $60,000. Tesla cannot adopt the low cost or hybrid strategies or gasoline powered, because it does not have the scale, capital and production capacity to compete on a cost basis with other car established manufacturers such as BMW, Mercedes etc. in that segment. Brand Dilution:

Also, Tesla attempting to make an entry into Gasoline and Hybrid space would lead to brand dilution because Tesla’s goal since it’s inception has always been to accelerate the world’s transition from gasoline powered vehicles to electric mobility with increasingly affordable electric cars. By making an entry into the Gasoline and Hybrid space, the brand that was built will be diluted and this can be detrimental to company’s profits. And actually, it is surviving on only due its product uniqueness design and leading edge technologies, which allows attracting people to buy their cars. Thus, this is a very suitable position for Tesla in current environment that gives a core competitive advantage.

Other Factors:
Tesla Motor’s has many opportunities, which were created by external factors in automobile environment. Obviously, one the most significant changes is customer awareness about benefits of having electrical car, especially during the substantial rise in the price of petroleum and increasing concerns about environmental...
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