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Tesla’s Competitive Advantage

Tesla is a world-famous American company that produces electric cars and solutions for storing electrical energy. Today, it is one of the world’s best-selling manufacturers of electric cars. Additionally, Tesla has one of the best, competent, and visionary leader. Through his actions, the organization effectively unites, distributes, and concentrates efforts for the common good of the company [case memo, p. 6]. Due to the well-coordinated work of the manager and each employee, Tesla remains one of the most recognizable brands, loyalty to which people have formed all over the world [case memo, p. 6]. Tesla’s team can be proud of their results, hoping for a promising future because of the best competitive advantage – technological progress.

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In fact, Tesla automobiles are at the top of the current innovations. There are more programs in a Tesla car than in a conventional vehicle with an internal combustion engine [case memo, p. 8]. Every detail, even the smallest, is made with “conscience and with a pure soul.” The firm is actively moving in the direction of sensational, grandiose projects such as special batteries, Cybertruck, Roadster or Gen 3. Due to such technologies, Tesla could advance to a “larger market” [case memo, p. 9]. In general, the firm is constantly striving for noticeable improvements and updates.

Tesla likes to surprise people with a non-standard approach to developing, promoting its products. The corporation was one of the first in the industry to start working with chip manufacturers on prepayment. Due to a strong software division, the firm quickly adapted alternative chips for electric vehicles. More importantly, Tesla controls the production of its batteries from the beginning, the availability and “price/quality” ratio of which become a limiting factor for other manufacturers.

Tesla electric car is structurally simpler than a car and, for example, there is no complicated and expensive engine, gearbox, and fuel system in it. Nevertheless, Tesla does not just “hand over” its car but constantly improves and perfects it. For example, the part visible to users is, of course, the update of the electric vehicle software via WiFi and a smartphone application rich in functions. Tesla has become and remains the world’s first “mainline” electric vehicle: in the USA, it is already quite realistic to drive an electric train from coast to coast comfortably. With the uncompromising dynamics, sensitive controls, and assembled chassis of the Tesla model, it is not easy to compare with something else. Consequently, competitors stay in the status of contenders for the throne.

The form and image of Tesla’s RPV can be represented as follows. The most critical resource in the manufacture of unique Tesla cars includes simple but high-quality components that allow efficient electricity storage. Tesla’s key resources are those elements that would enable the company to perform key actions to implement the value proposition. Accordingly, it is possible to distinguish advanced technologies and developments, battery systems with long service life, design, hardware, and software. Tesla’s process is mainly based on the revolutionary aspects of the car market. The company develops autopilot technology artificial intelligence, sets record figures for electric cars and sells its vehicles not in salons but through a website. Therefore, if such moments remain an unattainable peak for many firms, this is the main “trump card” for Tesla.

The central and significant value of the business is the use and application of existing opportunities to the maximum while respecting and caring for the environment and nature. Constant self-improvement and continuous learning of new concepts and ideas are essential for this firm too. Tesla is not afraid to take risks and encourages its employees not to hesitate to practice cardinal, unusual solutions.

Moreover, the linkages consist of a progressive vision of the situation’s picture. Using specific resources, Tesla has a chance to implement innovative projects, and not be afraid to try and improve them thought existing values. In this case, resource is one of the significant parts, connecting related factors. Anyway, Tesla is a newcomer in the industry, but due to such element and perseverance, the company still introduce its innovative concepts to the market. Nonetheless, if one asks passersby what kind of electric car they know, most likely the answer will be “Tesla.” The organization has such a strong brand that its name is enough to outshine competitors.

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According to “The Process of Strategy Definition and Implementation Case Study”, Tesla’s strategy is “Emergent Strategy” [pp. 1-2]. Tesla adapts to certain circumstances, carefully analyzes them, develops special tactics and applies it in business. The manufacturer of electric vehicles created one of the most prestigious brands in the car market, becoming an ideal model. As a rule, the company’s fundamental approaches and tactical elements are built on some distinctive, unusual features. Hence, the main focus is on the own production, the development of machines from scratch, and a large power reserve.

The business copes with responsibilities perfectly due to a non-standard, progressive solution approach. The corporation does not use the services of advertising agencies, but at the same time, produces popular cars. Tesla changed the perception of electric automobiles as “clumsy vehicles” and did it alone. The corporation positions itself as “the company of the future,” and their cars are organically integrated into the infrastructure. The firm has managed to turn the traditional advantage of the luxury car market into a disadvantage – these are the sophisticated technologies behind their production. Tesla, on the contrary, focuses on the simplicity of its platform.

Thanks mainly to Musk, Tesla has a striking image and a good reputation. On behalf of the organization, Elon offered a significantly different product from what was shown on the market before, concentrating particular attention on innovations and advanced technologies. Tesla still actively building their ecosystem, deviating from the traditional sales model by developing their distribution network. Furthermore, the brand managed to gain popularity due to Tesla’s sales strategy. The automaker does not open classic car dealerships, and does not work with dealers. Most of the sales of Musk’s product are accounted for by people who were not interested in buying a car.

In my view, Tesla should proceed with the Gen 3 models. Firstly, Tesla will expand its production, occupying a niche in the middle segment. Secondly, it should be noted, that more people will be able to afford a high-quality fuel-free cars, thereby helping to preserve nature. Thirdly, electric cars at a “good” price will attract new customers and entice them from one brand to another.

Based on the Q.1 analysis, the following internal and external fit can be distinguished. The internal fit is the connection between Gen 3 and the availability of certain technologies at a “reasonable” price, creation of a unique design, as well as practice and experience working on similar projects. In this case, RPV implications – the need for new, progressive, innovative solutions taking into account a certain budget, about $35,000 [case memo, p.9]. Consequently, the linkages – changing views and visions on established aspects. The external fit is the linkage between Gen 3 and Porter’s 5 Forces, allowing to determine the competition’s level in the segment, develop a strategy for introducing the new product. In this case, Gen 3 will act as a substitute since budget electric cars are not new in the world of the automotive industry. Hence, the firm will have a larger circle of competitors.

According to “The Leader’s (Dis)advantage” case study, the advantages of Elon Musk, that could influence the success of a generation are “scope economies,” “input preemption,” and “reputation effects.” They are likely to contrast with such forces as “suppliers” and “buyers.” Suppliers are partners who provide Tesla with specific materials, resources and buyers, in turn, are changeable persons, but even their choices can be predicted. It should be emphasized that Elon is a genius, and the downside of great talents and achievements lies in an unnatural, changeable character. Musk has often shown his other side: impudence towards investors, journalists, and employees, audacious posts on social media, difficulties with the perception of criticism. Such behavior goes against humanistic vision, desire for positive change, undermining the leader’s reputation. Thus, Musk, as the company’s face, due to his eccentric behavior, can also undermine his “brainchild”, Tesla.

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