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Tesla Porter Five Forces Analysis - PDF

   

Added on  2021-06-14

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IntroductionTesla is an American automobile company that was founded on 1stJuly 2003 and is based outof Palo Alto California. It was established with the vision of manufacturing fully electric –vehicles. It is a successful car making company after Ford which was founded more than 100years ago. This company has 2 verticals which are automotive and energy storage andgeneration. Automotive vertical involves prototyping, engineering, designing, manufacturingand selling of electric vehicles while the other vertical involves design, manufacturing,installation, sale or lease of batter products, solar tiles, solar panels. This division also sellselectricity generated by its solar energy systems.Due to rising pollution and environmental compliance, electric vehicles will undoubtedly bethe leaders of future especially in a highly polluted cities like Tokyo, Beijing. There arecurrently more than 20 electric vehicles manufacturers and electric hybrid vehicles werealready launched by the automobile giants like Toyota, Nissan, BMW but they uses thegasoline. Sensing the demand and future, Tesla created the disruptive technology and usesinnovative lithium battery packs that are much more efficient and delivers high performanceas compared to the competitor’s products. Apart from it, It setups the entire ecosystem likeunique direct to customer selling business model, large number of supercharger stations aswell as ‘Gigafactory’ for manufacturing Lithium-ion cells for internal use as well to sell it toother electric vehicles manufactures. Tesla is highly vertically integrated company that havereduced its reliance on the suppliers (Stringham, Miller, & Clark, 2015).Tesla roadster was the first vehicle launched in 2008 that uses lithium-ion battery. This carwas a huge sit and sold heavily. Next was Model S. It also became the best car in its categoryhaving cutting edge technology. This car has proved that battery driven electric vehicles candeliver the acceleration as good as petrol vehicles. Apart from performance, this car hassuperior safety features, efficiency features, luxurious features, 17 inch touch screen driver
Tesla Porter Five Forces Analysis - PDF_1

interface and thus raised the bar for the electric vehicles of the 21stcentury. It launchedModel X in 2015 which is designed as safest and most capable sports vehicle. Aftercompeting in luxurious and cross over market, It then launched the Model 3 in 2016 which isa low priced car designed to cater to the needs of high volume markets. Tesla is a successfulcompany fulfilling its promise of delivering clean energy affordable cars recognizing andcreating the safe future for the planet.Porter’s 5 force model of the Automobile IndustryThreat of new entryAutomobile is a very capital intensive industry requiring a huge infrastructureExisting automobile companies have already established their market, brand andreputation making it tough for the new entrants to carve their niche in the market.Tesla is the 2ndsuccessful automobile company after a gap of more than 100 years inUS. First one is Ford.Therefore, unless the new entrant has cutting edge technology and disruptive ideas ofdelivering the cars in some innovative ways, it does not make much sense for thecompany to enter in this area (Kim, 2014)As a result, there is little threat of entry of new player in the industryBargaining power of suppliersMost of the components are easily available and sell by large number of suppliersAs far as batteries are concerned, there are limited number of suppliersFor charging infrastructure also, there are limited players
Tesla Porter Five Forces Analysis - PDF_2

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