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Tesla and its flamboyant, and sometimes erratic, innovator Elon Musk have turned the more than a century old industry upside down in a mere 16 years. Traditional automakers are ill prepared to compete in today’s software-centered world. Unlike nimble Tesla, they are big, bureaucratic, slow to respond to customers, dependent on providing customer financing for unit sales growth, and culturally different from a software company. Tesla’s speed in innovation in the market for high-end vehicles is more like a Google or an Amazon than an automaker. And its soaring market valuation is a clear sign to all automakers that they’ll need to develop more innovative, Tesla-like business models in order to survive.’

Harvard Business Review. February 28, 2020

As per your Textbook –

‘Tesla’s cars had rapidly attracted a large and loyal fan base, and sales were growing at an impressive rate. However, designing and launching multiple major car platforms while building a large-scale battery company, a network of charging stations, and operating Solar City was a lot for a company to take on in its first fifteen years. This left some analysts scratching their heads. Was Tesla trying to do too much too quickly?’

Students are requested to read Chapter 6 Defining the Organization’s Strategic Direction of their textbooks. With the conceptual knowledge from Chapter 6 and your own research, answer the following questions.

Q1- How would you characterize competition in the Auto Industry? (250 -300 words)

Q2- What do you think are Tesla’s core competencies? Does it have any sources of sustainable competitive advantage? (350 -500 words)

Q3- What do you think Tesla’s (or Elon Musk’s) strategic intent is? (350 -500 words)

Solution:

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