Industry and company reports.

Industry and Company Reports: Tesla
Name
Institutional Affiliation
Industry and Company Reports: Tesla
The automobile industry is highly competitive. Companies are forced to implement a variety of strategies to enable them to remain relevant in the market. However, a majority of the companies in the industry have identified the need to link with a particular clientele to help protect their market niches. For instance, a majority of the people are now going for eco-friendly vehicles because of rising environmental concerns. A typical case of a company producing eco-friendly cars is Tesla
Role of Generic Strategies to Tesla
Most of the automobile companies rely on dealer networks to help market their products. Conversely, Tesla pursues a differentiated selling strategy for its vehicles whereby customers can book its vehicles online without necessarily having to visit any of its dealers (Moritz, Redlich, Krenz, Buxbaum-Conradi & Wulfsberg, 2015). Evidence indicates that the generic competitive strategy adopted by Tesla is a game changer for the automobile industry (Mangram, 2012). The company’s generic strategy illuminates its focus on the use of intensive strategies that would help spearhead the growth of the firm. The intensive growth strategies have also been instrumental in enabling Tesla consistently improve in popularity as well as the company’s profitability. Tesla’s generic strategy has played a key role in enabling the firm to maintain a competitive advantage amongst its peers in the industry.

Consequently, its corresponding intensive strategies have been instrumental in supporting organizational growth and hence enabling the company to increases its sales and profitability.
Life cycle and competitors
The automobile industry has already reached its maturity phase. The current phase forces a majority of the firms to engage in fierce competitions, price and promotion wars to remain relevant in the sector. Consequently, a majority of the firms are investing their resources in research to support differentiation as well invest in dynamic architectural vehicle designs to boost their sales. Moreover, the ability to customize products for consumers has given companies the chance to gain the confidence of their customers, in particular for those that wish to have a unique product in the market. Other companies such as General Motors, Toyota and Ford have also chosen market segmentation and repositioning strategies in a bid to gain the confidence of their customers (Cheong, Song & Hu, 2016). Thus, firms are identifying ideal strategies that would help them market their products at the highly competitive stage of growth.
Strategic group analysis
The automobile industry is highly competitive. Various players in the sector offer customers with a wide variety of vehicles for luxuries and convenience purposes. Nonetheless, the market in which Tesla has positioned itself is quite lucrative and very few firms are providing customers with similar models. In fact, most of those who venture in eco-friendly makes choose to venture in hybrid models. The major competitors include Audi, BMW, and Volkswagen, all of whom are trying to generate their niches using the plug-in models (Moritz et al. 2015). Thus, Tesla experiences minimal competition in the sector.
Five forces analysis: Tesla, General Motors and Toyota
The threat of new entrants- It is considerably low for Tesla. Companies would have to undergo intensive marketing to carve their niches. Consequently, the cost of investment is too high, and the returns are not recognized immediately thereby making it an unattractive sector (Rothaermel, 2015). The threat of new entrants for Toyota and General Motors is low. The existing firms have already identified their clientele, which would make it unattractive1 for new entrants.
Bargaining buyer power- It is moderate because Tesla has entered into partnerships with companies such as Toyota and Daimler. As a result, the enticement for purchasing electric cars is considerably moderate. Buyer power for Toyota and General Motors is high. The consumer may opt for an alternative product, thereby making it impossible for the firms to market their products
The threat of substitutes- It is high for Tesla. When consumers consider the cost of gas-fuelled vehicles, they opt for the cheaper option. Thus Tesla has to go an extra mile to make its products attractive to consumers. The threat of substitutes for General Motors and Toyota is low. The most viable alternative would be to use public transport, walk or cycle, which are not convenient for users.
The power of supplier-the bargaining power of suppliers is high for Tesla. Tesla is reliant on suppliers to deliver relevant materials to make its vehicles. Failure implies that the firm would be incapable of meeting its responsibility. The power of suppliers for Toyota and General Motors are moderate because they dot rely on single sourcing as Tesla has to do.
Competitor power- the competitor power in the same niche a Tesla is still low. Most automobile firms produce gasoline-powered vehicles, which makes Tesla stand out amongst electric powered vehicles. Competition for Toyota and General Motors is significantly high. Firms must identify ideal strategies to make their products stand out in the market.
General company questions
Tesla identified that most of the consumers are moving towards the adoption of ecologically friendly cars. Thus, it chose to adopt a strategy that is more functional oriented to boost the performance of its sales. Particularly, differentiation is known to offer Tesla a platform upon which it has showcased its capacities to make electric cars. Tesla is investing a lot of its focus on ensuring that its key models succeed in the market. To this effect, it is forced to invest the most in R&D because its products require high capacity functionality just like other gasoline powered vehicles. The direction being undertaken by most consumers implies that Tesla’s intensive growth strategies are a good indicator to motivate investment in the sector. The company invests up to 18% of its revenue into new technology, research, and development (Mangram, 2013). The investments are considered as vital elements that propel the firm’s growth. However, for Tesla to grow into a household name as its competitors, it would have to consider market development strategies, diversification, product reviews regarding vehicle design, product prices and adopt a focus strategy. An adoption of the above methods would play key roles in enabling Tesla to increase its popularity and hence the company’s revenue.

References
Cheong, T., Song, S. H., & Hu, C. (2016). Strategic Alliance with Competitors in the Electric Vehicle Market: Tesla Motor’s Case. Mathematical Problems in Engineering, 2016.
Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), 289-312.
Mangram, M. E. (2013). Tesla Motors: A Balanced Scorecard Approach to More Effective Performance Management–Case Analysis. Journal of Strategic Management Education, 9(1).
Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S., & Wulfsberg, J. P. (2015, August). Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile industry along the open source movement?. In 2015 Portland International Conference on Management of Engineering and Technology (PICMET) (pp. 85-92). IEEE.
Rothaermel, F. T. (2015). Strategic management. New York: McGraw-Hill.