Tesla 's Long Term Success

948 Words Sep 28th, 2015 4 Pages
3. Develop a business model for Tesla, indicating future sales and profitability; what is your assessment of Tesla’s long-term success?
In oligopoly and more than 100 years old auto industry, Tesla has the competitive advantage in Electric Vehicles. There are great chances of Tesla’s Gigafactory will be the primary source for the world’s lithium battery requirements. Tesla is the only company investing heavily in electric charging stations and research and development in the automobile industry either in ICE or EV. Tesla cars are very expensive, production and deliveries are lower. Once production and sales are increased, manufacturing unit costs will reduce. In short period Tesla will not get profits assuming until 2017 due to its vast investments but, since, there is a prominent future for EVs, and Model 3 available in the market Tesla will get heavy profits and assuming other companies depends on it and Tesla will monopolistically lead in EVs and EV components. We can address this by Mapping Strategic Groups and Two Critical Assumptions.

Mapping Strategic Groups:
The competitive rivalry is strongest between firms that are within the same strategic group: The closer firms are on the strategic-group map, the more directly and intensely they are competing with one another. Tesla cars have competition from Toyota Hybrid car Prius and Nissan electric car Leaf. Since, Tesla lithium-ion battery cars run more than 200 miles, and it is the industry highest mileage ever car Tesla…
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