The invention of the America automobile is commonly disputed, but it is evident that the creation of the automobile industry has made a significant impact on American history (Madden, 2003). The first automobile was made and sold by the Duryea brothers in 1895 (Madden, 2003). Since the creation of the first American automobile, the auto industry has seen numerous changes, and has evolved into an influential part of the American economy. Research has found that in the United States, the automotive industry makes up to 3.5 percent of its Gross Domestic Product (Hill, Menk, & Cooper, 2010).
Over the years, numerous changes have occurred and the auto industry has become a mature industry for consumers. A mature industry, defined as an industry with a saturated which has limited growth potential, and a low threat of new entries (Hill & Jones, 2014). While the automobile industry is viewed as a mature industry with barriers of entry, the 1980’s brought about much change to the auto industry (Holmes, 1993). The 1980’s brought about increased globalization, technological advancement, and environmentally conscious society. As a result of theses changes, auto industries have developed an opportunity for other companies to enter into the industry. One of the newest companies that have overcome the barriers of entry was Tesla Motors. While Tesla Motors is a fairly new company, who has the potential to revitalize the American automotive industry. This study intends to review Tesla Motors strategy and identify how the organization attains bargaining power, overcome threats, and rivalries. About Tesla Motors Tesla Motors is an electric car, manufacturer, designer, and distributer, known best for the development of the first electric sports car (Brito, 2014). Tesla Motors was develop by Martin Eberhard and Al Cocconi in 2003 to fulfill consumers desire to make an environmental contribution to the world (Hill, Jones, & Schilling, 2014). In the development and production of the Tesla, their focus was on transitioning from gasoline and tailpipe emissions to clean alternatives (Liu, 2014). Tesla operates more than 125 operating facilities, through out countries in North America, Europe, Australia and Asia. As a luxury car dealer Telsa focuses it’s marketing toward the middle and upper class of consumers (Liu, 2014). As a result of their findings the Tesla Roadster was created and produced in 2010 (Harryson & Keller). In addition to the development of the electric sports vehicle they also created and produce the Lithium-ion battery pack which account for a large percentage of their revenue. In 2011 stopped producing the Roaster and introduced the Model S sedan as an alternative to the Roadster. Rivalry As a new entry in the automobile industry, Tesla has the pleasure to compete against numerous automotive companies. In 2013 Tesla, out sold its luxury automobile competitors by more than 30% (Bullis, 2013), most because Telsa Motors is currently the only luxury electric vehicle. In the electric car industry there are 16 manufactures, and the market is spreading fast. As established auto manufactures enter into the electric vehicle by spending significant funding in Research and Development. Bargaining This section focuses on Tesla’s ability to be competitive by its bargaining power. It assesses their bargaining power of suppliers and buyers. Bargaining Power of Suppliers Like all other car manufactures Tesla requires a significant number of suppliers for parts in order to manufacture their automobile. The official list of suppliers is unknown, however …show more content…
As government regulations and incentives, and consumers continue to explore alternatives to gas operated vehicles there is going to be many attempts to enter into the industry, however the cost to enter is extremely high. Tesla experienced this early, in there quest to enter the automotive industry. In fact, Musk and other investors used $100 million dollars in production prep alone, and no car was created (Harry & Keller). Because BMW, Mercedes, Cadillac and others have the financial ability to fund this opportunity, so they are major threats to the electric vehicle automotive …show more content…
On a less generic level other substitutions include the increasing amount of car sharing corporations such as ZipCar, Car2Go, Enterprise Car Share, and FlexCar. Carsharing allows its members to access privately owned cars, without the responsibility of owning a car (Shaeen &
Over the years, numerous changes have occurred and the auto industry has become a mature industry for consumers. A mature industry, defined as an industry with a saturated which has limited growth potential, and a low threat of new entries (Hill & Jones, 2014). While the automobile industry is viewed as a mature industry with barriers of entry, the 1980’s brought about much change to the auto industry (Holmes, 1993). The 1980’s brought about increased globalization, technological advancement, and environmentally conscious society. As a result of theses changes, auto industries have developed an opportunity for other companies to enter into the industry. One of the newest companies that have overcome the barriers of entry was Tesla Motors. While Tesla Motors is a fairly new company, who has the potential to revitalize the American automotive industry. This study intends to review Tesla Motors strategy and identify how the organization attains bargaining power, overcome threats, and rivalries. About Tesla Motors Tesla Motors is an electric car, manufacturer, designer, and distributer, known best for the development of the first electric sports car (Brito, 2014). Tesla Motors was develop by Martin Eberhard and Al Cocconi in 2003 to fulfill consumers desire to make an environmental contribution to the world (Hill, Jones, & Schilling, 2014). In the development and production of the Tesla, their focus was on transitioning from gasoline and tailpipe emissions to clean alternatives (Liu, 2014). Tesla operates more than 125 operating facilities, through out countries in North America, Europe, Australia and Asia. As a luxury car dealer Telsa focuses it’s marketing toward the middle and upper class of consumers (Liu, 2014). As a result of their findings the Tesla Roadster was created and produced in 2010 (Harryson & Keller). In addition to the development of the electric sports vehicle they also created and produce the Lithium-ion battery pack which account for a large percentage of their revenue. In 2011 stopped producing the Roaster and introduced the Model S sedan as an alternative to the Roadster. Rivalry As a new entry in the automobile industry, Tesla has the pleasure to compete against numerous automotive companies. In 2013 Tesla, out sold its luxury automobile competitors by more than 30% (Bullis, 2013), most because Telsa Motors is currently the only luxury electric vehicle. In the electric car industry there are 16 manufactures, and the market is spreading fast. As established auto manufactures enter into the electric vehicle by spending significant funding in Research and Development. Bargaining This section focuses on Tesla’s ability to be competitive by its bargaining power. It assesses their bargaining power of suppliers and buyers. Bargaining Power of Suppliers Like all other car manufactures Tesla requires a significant number of suppliers for parts in order to manufacture their automobile. The official list of suppliers is unknown, however …show more content…
As government regulations and incentives, and consumers continue to explore alternatives to gas operated vehicles there is going to be many attempts to enter into the industry, however the cost to enter is extremely high. Tesla experienced this early, in there quest to enter the automotive industry. In fact, Musk and other investors used $100 million dollars in production prep alone, and no car was created (Harry & Keller). Because BMW, Mercedes, Cadillac and others have the financial ability to fund this opportunity, so they are major threats to the electric vehicle automotive …show more content…
On a less generic level other substitutions include the increasing amount of car sharing corporations such as ZipCar, Car2Go, Enterprise Car Share, and FlexCar. Carsharing allows its members to access privately owned cars, without the responsibility of owning a car (Shaeen &