The author of this assignment reviews the Tesla’s business model approach and its strategy in the non-domestic German market. Tesla’s firm specific advantages are especially related to innovation of the vehicle, the battery and the infrastructure. Tesla Motors follows a product strategy entering from premium market and moving towards mass market. After starting with a high-price Roadster model Tesla launched the more affordable Sedan and a SUV model. In 2017 Tesla plans to launch its first mass market EV. Tesla shows a new value chain in the automotive industry by a deep of vertical integration from EVs manufacturing towards software, recharging network and battery manufacturing. Tesla entered the German market to export premium EVs. The Automaker also builds a charging network in Germany and prepares the market for its future mass production Model 3 coming in 2017. This work consists of three major parts. The first part deals with the theoretical background of international strategies for MNEs. The second part describes Tesla as a company and its strategy. The last part analyzes the competitive advantages of Tesla and shows how they are used to enter the German market. This work ends with a final reflection and a conclusion of the research.
Table of Contents
1. Introduction
1.1 Problem definition
1.2 Methodology
2. International Market Entry Modes
2.1 Overview
2.2 Advantages and Disadvantages
3. Tesla Motors Inc.
3.1 Tesla Motors – The company
3.2 Financial Situation
4. Corporate Strategy
4.1 Corporate Vision
4.1.1 Build a Sport car
4.1.2 Use that money to build an affordable car
4.1.3 Use that money to build an even more affordable car
4.1.4 Provide zero emission electric power generation options
4.2 Tesla`s Firm Specific Advantages
4.2.1 Electric Vehicle
4.2.2 The Battery
4.2.3 The Infrastructure
4.3 Additional FSAs
4.4 Location Bound FSAs
4.5 Non-Location Bound FSAs
5. Tesla’s Strategy in Germany
6. Conclusion
7. Bibliography
Objectives and Topics
This assignment evaluates the business model and international market entry strategy of Tesla Motors Inc. within the German automotive sector. It explores how a company without long-standing legacy in the capital-intensive automotive industry can successfully challenge established players by offering a holistic mobility solution rather than just hardware.
- Strategic analysis of Tesla's international market entry modes.
- Evaluation of Tesla's corporate vision and its phased product strategy.
- Assessment of firm-specific advantages (FSAs) including technology, infrastructure, and brand culture.
- Investigation into the specific challenges and opportunities within the German electric vehicle market.
- Critical review of the company's financial status and long-term sustainability.
Excerpt from the book
1.1 Problem definition
Nick Sampson, the CEO of Faraday Future, an automotive new start-up from USA, just presented his vision of future electric vehicle at the CES 2016 in Las Vegas and stated: “As an automotive company you don’t need a 100 year legacy in the automotive industry to define what’s the next generation of transportation needs to look and feel like.” (Faraday Future Inc., 2016)
The basic research question to be answered in this assignment is:
Is it possible to create a successful internationally transferable business model for electric vehicles without a long experience in the capital intensive automotive industry?
Summary of Chapters
1. Introduction: Defines the research objective and the central question regarding the viability of Tesla's business model as an international strategy.
2. International Market Entry Modes: Provides a theoretical overview of various entry strategies, distinguishing between non-equity and equity-based models.
3. Tesla Motors Inc.: Offers a company profile and evaluates the financial performance since Tesla's inception.
4. Corporate Strategy: Details the long-term masterplan and competitive advantages, including specific technology, battery innovation, and infrastructure ecosystems.
5. Tesla’s Strategy in Germany: Analyzes the market-seeking approach Tesla employs to expand in Germany through infrastructure development and targeted retail presence.
6. Conclusion: Summarizes the research findings, reflecting on the potential success and inherent risks of Tesla's disruptive business model.
Keywords
Tesla Motors, Electric Vehicles, Market Entry Strategy, Germany, Automotive Industry, Firm Specific Advantages, Supercharger Network, Corporate Strategy, Innovation, Business Model, Sustainability, International Business, Mobility Solution, Renewable Energy, Infrastructure.
Frequently Asked Questions
What is the primary focus of this study?
The study focuses on evaluating Tesla Motors' strategy for entering the German market and determining if their unique business model is viable in a traditionally established industry.
What are the core thematic areas discussed?
The core themes include international market entry theories, Tesla's product strategy, firm-specific advantages (FSAs), and the development of electric vehicle infrastructure.
What is the central research question?
The research asks if it is possible to create a successful, internationally transferable business model for electric vehicles without having a century of experience in the capital-intensive automotive sector.
Which methodology is applied in the research?
The paper utilizes a qualitative research approach, collecting data from academic books, reports, internet sources, and professional journals.
What is addressed in the main body of the work?
The main body covers the theoretical background of market entry, an overview of Tesla's company operations and finances, and a detailed look at their corporate vision and competitive advantages.
Which keywords define this work?
The work is characterized by terms such as Tesla, Electric Vehicles, International Market Entry, Corporate Strategy, and Firm Specific Advantages.
How does Tesla's vertical integration affect their business model?
Vertical integration allows Tesla to control their technology and sales processes completely, which guarantees high quality and margins but also requires significant capital investment.
What role does the "Silicon Valley" effect play in Tesla's strategy?
The "Silicon Valley" location acts as a location-bound advantage that helps attract highly motivated employees who share a vision of changing the world, which is a core part of the company's culture.
- Quote paper
- Andreas Kauerhof (Author), 2016, Tesla Motors Inc. Market Entry Strategy in Germany, Munich, GRIN Verlag, https://www.grin.com/document/354492
