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Competitive Strategies and Government Policies: The Automobile Industry (Tesla Motors)

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Charles T.
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  1. Introduction
  2. Competitive strategies and government policies
  3. The automobile industry (Tesla Motors)
  4. Analysis
  5. Conclusion

Since the beginning of the last century, automobile companies have fought for control of a rapidly expanding market in what was a newly created automobile industry. Many companies existed throughout the years trying to find their place in the market, with three major companies remaining with the majority of the market share today (Wright, 2012). The decisions, mergers, and products that those three companies make, keeps them alive and competitive.

Fuel efficient and eco-friendly vehicles are among the recent consumer trends in the automobile industry. The risk to new carmakers entering the market is relatively high due to the high economic and political barriers that exist for carmakers. A recent example of a company that has succeeded in entering the market with a new product, however, is Tesla Motors. The car company is still in its infancy; however, they have designed and delivered several models of all-electric vehicles to the marketplace using a platform they created. The original models produced by Tesla Motors range from $50k-$110k, making the vehicles out of reach for the majority of consumers. According to their original business plan, they set out to build a sports car.

They would then turn their profits to building a more affordable vehicle that would be available to a larger consumer base (Gertner & Kratochwill, 2012). The company has so far completed two of their business objectives; therefore, it would be safe to conclude that the company will stay in the marketplace for the near future. New carmakers are rare in this market because of the ability and desire for current manufacturers to meet consumer needs. Tesla Motors is the exception, not the rule.

[...] Competition will always exist, except for the rare situation. Understanding the competition and taking the necessary steps to provide a more desirable product to the consumer, is critical. Obtaining market research on the target consumer group will help the company realize the trends and plan accordingly. Lastly, it may be necessary, at some point, for Tesla Motors to consider a merger opportunity with an already established company. Becoming a smaller product line for one of the big three manufactures would ensure Tesla's continued success and keep their product on the market. [...]


[...] Gertner, J. & Kratochwill, L. (2012). Why Tesla Motors is Betting on the Model S. Retrieved from http://www.fastcompany.com/1822809/why-tesla-motors-betting- model-s Lee Iococca Quotes (2012). Retrieved from http://thinkexist.com/quotes/lee iacocca Wright, R. (2012). A Brief History of the First 100 Years of the Automobile Industry in the United States. [...]

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