Strategic Analysis: Comparing Tesla and Uber's Competitive Strategies

This report provides a comparative analysis of the competitive strategies employed by Tesla, Inc. and Uber Technologies Inc. It begins with an overview of Tesla, examining its incorporation, product offerings (electric cars and energy storage), and market position, including its revenue and sales figures. The report highlights Tesla's strategic focus on lithium-ion batteries, supercharger network, software updates, and direct-to-customer sales model. It then explores Tesla's business model, tracing the development of its product line from the Roadster to the Model 3 and the impact of direct sales. The CAGE framework is applied to assess the company's potential for global expansion. The report then shifts focus to Uber, analyzing its incorporation, industry (transportation and delivery), and market impact, including its revenue and operational scope. Uber's strategy is examined, including its use of a mobile application, driver-owned vehicles, and various customer-centric services such as cashless transactions and discounts. The report explores Uber's business model, emphasizing its reliance on driver-owned vehicles and its application features. Finally, the CAGE framework is used to assess Uber's market share growth. The report concludes by providing a comparative perspective on the competitive advantages and strategic approaches of both companies.

Running head: COMPETITION ASSESSMENT
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Competitive Strategy

COMPETITION ASSESSMENT 1
Contents
Tesla, Inc....................................................................................................................................2
Tesla’s Strategy......................................................................................................................2
Tesla’s Model for Business....................................................................................................2
Tesla’s CAGE framework......................................................................................................3
Uber Technologies Inc...............................................................................................................4
Uber’s Strategy.......................................................................................................................4
Uber’s Model for Business.....................................................................................................4
Uber’s CAGE framework......................................................................................................5
References..................................................................................................................................6
List of Figures
Figure 1: Tesla Business Model.................................................................................................3

COMPETITION ASSESSMENT 2
Tesla, Inc.
Tesla was incorporated in 2003 as an American automotive and energy storage organisation.
The company manufactures electronic cars and energy storage devices. It had revenue of
US$7 billion in 2016 financial year. The worldwide sales of Tesla passed 200,000 cars in
March 2017, which makes it second largest pure electronic car producer in the world. The
CEO of Tesla is Elon Musk, who was one of the founders of the company. The reason for
selecting Tesla is that it has changed the electronic car market by their innovations. The
company uses lithium-ion batteries which have revolutionised the entire industry. Tesla has
gained reputation and appraisal from peoples for making electric car popular.
Tesla’s Strategy
According to Mangram (20102), Tesla’s strategy focuses on using lithium-ion batteries in
their vehicles, which revolutionised the automotive industry and gained them a competitive
advantage. The batteries hold more charge and provide high mileage, as compared to
competitor cars. The performance of Tesla batteries is unmatched in the electronic car
industry. The organisation also provides a huge network of supercharger locations that help
owners to charge their vehicles in between their trips. The company had established a strong
and distinctive value chain environment around its vehicles that motivate and provide better
user experience to its customers.
The quality and ability of the software used by Tesla is several levels above its competitors.
The company keeps updating their software with newer updates and keep it fresh. The
marketing team has created a unique reputation of the company that motivates customers to
own a Tesla car. The company serves their customers honestly, which increases their
customer satisfaction rate (Hardman, Shiu and Steinberger-Wilckens 2015).
Tesla’s Model for Business
The business model of Tesla has gained them the spot of second largest electric vehicle
producer. Following are the key part of their business model (Figure 1):
 The company prepared a high priced and a high-quality electric car for super-rich
customers called The Roadster (2008). The quantity of such car was significantly low
but its price was considerably high.

COMPETITION ASSESSMENT 3
 Tesla uses the revenue of Roadster and manufactured another electric car which was
for rich customers, called The Model S (2012). This car price was medium expensive,
and they manufactured a medium quantity of this car.
 After that, the company used the revenue of Model S to develop a lowered price
electric car for average customers, called The Model 3 (planned for 2017). The
objective of the company is to manufacture electric cars for average customers.
 The company has also adopted a direct to customer sales model which significantly
reduced the prices of cars by eliminating the middle man (Martins, Rindova and
Greenbaum 2015).
Figure 1: Tesla Business Model
(Source: Urban 2015)

COMPETITION ASSESSMENT 4
Tesla’s CAGE framework
According to Grant (2016), in order to become number one electric car manufacturers and
defeat other car manufacturer companies, Tesla is required to increase their global sales. The
company required to analyse the cultural, administrative, geographic and economic factors of
automotive markets worldwide. Tesla sell their cars in few of the developed countries, but
they are required to increase their global customers to gain a market advantage since the
demand for Tesla cars has increased rapidly in past few years.
Uber Technologies Inc.
Uber was incorporated in 2009 as an American technology organisation. The company
operates in transportation and delivery industry. The company has its operation is more than
632 cities and it had an income of US$6.5 billion in the fiscal year of 2016. The motive of
selecting Uber is that they have revolutionised the transporting industry by their online taxi
booking service. The company has gained an advantage over their competitors without
investing a large capital.
Uber’s Strategy
Uber provides the facility of booking a taxi by their mobile application. The drivers use their
own vehicles which reduce the expenses of the company. The company coordinate millions
of cars without investing billions of dollars. According to Cannon and Summers (2014), no
expenses in car maintenance provide Uber a competitive advantage. The company provide
services such as easy booking, simple cancellation, day and night booking and cashless
transactions.
The company hire highly skilled and talented mathematicians and coders to maintain their
algorithm. This allows them to attract many customers with high driving time. The company
provides constant offers and services to its customers, such as discounts coupons, free rides,
sharing of rides, simple procedure and facilities inside cars. The customers appreciate these
innovative approaches and services over simple taxi rides, giving Uber comparative
advantage (Cramer and Krueger 2016).

COMPETITION ASSESSMENT 5
Uber’s Model for Business
Uber provides a high standard of facilities in low price to its customers. According to Manjoo
(2015), their business model focuses on enhancing the number of customers and drivers. The
key elements of Uber’s business model include:
 The drives of Uber own their vehicles, which reduce the cost of investment and
maintenance expenses of the company. Uber provides the facility of renting a vehicle
to increase their market share. This method allows the company to increase their
market share in the worldwide transportation industry.
 Uber’s mobile application is packed with features and offers which attract many
customers. The application includes features such as fast transactions, vehicle
tracking, cashless transaction, and discount offers. The customers can rate drivers and
give a comment regarding their ride experience.
 Uber evaluate their data to decrease waiting period for taxi reservation and enhance a
number of transactions. Uber highly market their features and offers to enhance their
market share. This allows them in gaining a comparative advantage over their
competition.
Uber’s CAGE framework
According to research of Rogers (2015), the different economic, administrative, geographic
and cultural condition of countries, did not affect the business model of the organisation.
Uber drivers own their personal cars which avoid the maintenance expenses of the company
and the mobile application provide various services and offers to customers. The market
share of Uber has raised substantially in previous years. This approach expanded the business
of Uber in more than 632 cities while ensuring sustainable growth.

COMPETITION ASSESSMENT 6
References
Cannon, S. and Summers, L.H., 2014. How Uber and the sharing economy can win over
regulators. Harvard business review, 13(10), pp.24-28.
Cramer, J. and Krueger, A.B., 2016. Disruptive change in the taxi business: The case of
Uber. The American Economic Review, 106(5), pp.177-182.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.
Hardman, S., Shiu, E. and Steinberger-Wilckens, R., 2015. Changing the fate of Fuel Cell
Vehicles: Can lessons be learnt from Tesla Motors?. international journal of hydrogen
energy, 40(4), pp.1625-1638.
Mangram, M.E., 2012. The globalization of Tesla Motors: a strategic marketing plan
analysis. Journal of Strategic Marketing, 20(4), pp.289-312.
Manjoo, F., 2015. Uber’s business model could change your work. New York Times, 28.
Martins, L.L., Rindova, V.P. and Greenbaum, B.E., 2015. Unlocking the hidden value of
concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship
Journal, 9(1), pp.99-117.
Rogers, B., 2015. The social costs of Uber. U. Chi. L. Rev. Dialogue, 82, p.85.
Urban, T., 2015. How Tesla Will Change The World. Why But Why. Retrieved from <
https://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html >