Compare and contrast strategies
Outline the resources, core capabilities and strategies of Tesla, General Motors and Waymo.
The primary objective of this task is to explain and outline the resources, core capabilities and strategies of Tesla, General Motors and Waymo. General Motors Company is an American multinational company that distributes the vehicles to the customers in all over the world. General motors’ reached a market share of approx 17.6 % in 2017 as it is ranked among the leading automobile manufactures globally and Tesla held approx 0.4% market share in the United States. On the other hand, Waymo has also considered an autonomous car development company that was established in 2009. Lastly, the paper also explains the operations and activities of Tesla that is well known automotive vehicle company. The report explains that how Tesla can capture the entire share of the market. More detail of the task has been detailed below.
There are ample of strategies used by Tesla, Waymo and General Motors Company to gain competitive advantages. Some of the strategies that are used by these companies include following:
Tesla was incorporated in 2003 by Martin Eberhard and Marc Tarpening. It is an American multinational company that specializes in electronic vehicles, solar panel manufacturing, and energy storage. Some of the strategies that have been adopted by Tesla are discussed below.
Direct selling strategy: Tesla uses direct selling strategy to gain competitive advantages in the international market. It does not adopt the approaches of franchise dealerships. The company prefers selling their products directly to the customers through self-owned showrooms across the world. They believe that this direct selling method helps in product development and expansion. The company has showrooms, service facilities, and service plus centers. Internet selling is also done by the company to attract and retain a maximum number of customers in the global market (Bilbesis and Kesse, 2017).
Supply chain management strategy: It has been analyzed that Tesla business model is quite different from the other automobile manufacturing companies because it has own entire supply chain from manufacturing to distribution. This strategy is used by the company to reduce the cost of the company and it is worth noting that company’s supply chain management strategy analyzes and focuses on a long-term growth strategy including inventory management, distribution, and production management (Dutta, 2017).
Generic strategy: It has been stated that Tesla focuses on the generic strategy to beat the competitors in the international market. By using a generic strategy such as differentiation, the company has been able to meet the long-term requirements of the business. This strategy helps the firm to differentiate its products from the competitors (Tansel, 2015). By using differentiation focus strategy, the firm emphasizes the uniqueness and effectiveness of its products and services and long with this, the firm uses this strategy to set the appropriate prices for the products in the global market. The organization is investing the amount in research and development to develop and introduce new products that satisfy the needs and demands of the customers in the global market (Panmore, 2018).
The strategies of general motors’ have been detailed below.
Corporate level strategy: The Company uses corporate level strategies to attract a maximum number of customers in the international market. This strategy helps the company to cope up with rivalries in the competitive market. The corporate level strategy includes growth strategy, diversification strategy and stability strategy (Britannica, 2018). The company uses cost leadership strategy to increase and enhance the sale in the global market (General Motors, 2018).
Market penetration strategy: It has been noted that General Motors Company also uses market penetration strategy. This strategy helps the company to increase and enhance the sales in the current market (Panmore, 2018).
Waymo is an autonomous car development company and subsidiary of Google’s parent company Alphabet Inc. It has been found that Waymo uses pricing strategy to set the appropriate prices for the products in the international market. The firm focuses on the prices of Uber to beat the competitors in the market. It has been found that Tesla, Waymo and General motors’ companies play a significant role in today’s competitive market. The different strategies are used by all these companies to overcome on the competitors in the current market. Tesla uses direct selling strategy, supply chain strategy and generic strategy whereas General Motors Company uses corporate level strategy and market penetration strategy. On the other hand, Waymo uses pricing strategy to distinguish its products from the competitors.
Resources and capabilities play an empirical role to attain long-term mission and vision of the company in the international market. Tesla uses effective and unique resources and capabilities in the workplace. The resources include human capital, financial resources, production plant, charging stations and service centers. Besides this, two types of resources are used by the company such as tangible and intangible resources. The tangible resources include labor, capital, land, and intangible resources include reputation, brand equity, and firm’s culture. Along with this, core capabilities of the company include brand management, public relations, powertrain development and public relations. The core capabilities help the company to identify and analyze the market segmentation and pricing of the competitors.
On the other hand, General motor Honda Company uses various resources that include financial resources, organizational resources, physical resources, technological resources, intangible resources, reputational and innovation resources (Sharma and Sharma, 2017). It has been found from the various analysis that supply chain management is one of the significant core capability of the firm. Besides this, engineering team, technology, leadership and large-scale operations are involved in the core capabilities of General Motors Company. By using effective and unique core capabilities, the firm has been able to know and analyze the opportunities and threats of the market. In addition, these core capabilities also help in identify and analyze the plans, policies, and strategies of the competitors. By using core capabilities, General Motors Company has been able to increase sales and profitability in the competitive market. The organization also attains innovation with the help of core capabilities (?iutien? and Thattakath, 2014).
General Motors’ strategy
The core capabilities of Waymo(Google) include a technical and managerial process that integrates diverse technologies, resources, processes and know how to create unique and effective offerings to the customers and gains competitive benefits to the firm. It has been noted that core capabilities are unique and effective for the long-term survival of the business. The organization uses advertising resources, tangible and intangible resources. Mainly, the organization focuses on the intangible resources such as human resources, brand resources, technical resources and customer resources. It is revealed that core capabilities lead to competitive benefits in the global market (Denning, 2014).
It has been found that Tesla’s vehicles are manufactured and produced at its factory in California, and Fremont where the huge majority of the vehicle’s factors are also made. As the company continues to explore and flourish its product line. The company’s production plan is also put to increase and enhance to a rate of 500,000 vehicles a year by 2018. To generate an entire sustainable energy ecosystem, the firm also manufactures a unique and effective set of power wall, energy solutions, powerpack and Solar roof and utilizes to manage and handle renewable energy generation, storage and consumption. It has been noted that the company continues to make products affordable and accessible to attract more and more people in the global market. Tesla held about 0.2% of the care and light truck market in the United States (Statista, 2018). The current market share of the company further indicates that the firm can get largest benefits in the next 5-10 years.
Along with this, the organization is well known for designing and creating the alternating current electric system that is still the predominant electrical system used around the world today. The company also created the Tesla oil that is still used in radio technology. Furthermore, the firm uses centralization organizational structure in the workplace. The organization minimally supports the autonomy of its overseas and regional offices in the centralization organizational structure (Ottman, 2017). By using this organizational structure, the company can control on its multinational operations in the competitive market. The effective organizational structure helps the firm to capture the entire market share in near future. It has been analyzed that Tesla uses its effective and unique organizational configuration for further international progress and to develop competitiveness against the Toyota Motor Corporation, Honda Motor Company, General Motors’ firm and Nissan Motor Company. This organizational formation enables the firm to centrally control the development of the competitive benefits (Carlson, 2013). In this way, the company needs to capture market share in next 5-10 years in automotive industry. The core competency is one of the strengths for the firm. It will help the company to stand out against the competitors in the international market.
Moreover, the firm acquires strong investor’s partners in the recent years such as Panasonic, Toyota Motors, Google and Daimler. It will help the company to increase and enhances its profitability and outputs in the next 5-10 years. Thus, Tesla should capture largest market share in the competitive market. Furthermore, the Corporation is major supplier of car part for Toyota. It supplies various components of powertrains to Toyota, these are used in RAV 4 EV, the second generation car of Toyota. Thus, the firm can acquire largest market share in the coming years. The organization is also working for the invention of new and innovative technology for its cars. It is developing full self driving upgrade options in the marketplace. It will also help the firm to tap the global market in upcoming years. Due to unique image and goodwill, Tesla has been able to create faith, loyalty and trust among the customers. All these things indicate that Tesla should capture the largest share of the market in the next 5-10 years.
There are five factors of strategy diamond model that have been detailed below.
Arenas: This is first question of strategy diamond model a firm should answer is ‘where would the company be active?’ For answering this question is that Tesla wants to be a biggest player in automotive industry. Under Arenas, the company takes decision related to price, product, channel, geographic areas and market segments. It has been found that Tesla arena is universal professionals and their value chain is established to promote and emphasize the active and effective driving design philosophy.
Vehicles: Arena shows that how Tesla is going to compete with competitors in the international market. Vehicle is one of the significant parts of the strategy diamond model that help Tesla to make unique decisions related to products. Vehicle analyzes that how the company grows and expands its business operations and functions globally as it can use various methods such as joint ventures, partnerships, franchising and licensing. After the various analysis, it has been noted that Tesla uses dealer network to reach their target audience and to compete with competitors in the marketplace.
Differentiators: Many leaders assume and predict that differentiator strategy is about the challenging to be the best. Under differentiator, Tesla focuses on the differentiation strategy to build and develop a good reputation and image in the global market. The prices, quality, reliability and features of the products and services are needed to be considered by the company under this step. It is stated that Tesla focuses on the design and quality of the automotive products to sustain in the international market and to compete with rivalries in the competitive market.
Resources and analysis
Speed/Steps: It is noted that the speed of movement in the business is significant and this plays an empirical role accomplish the future objectives and targets. Tesla step are to enhance and increase the range of cars in established and developed countries globally. In new countries, the company establishes and maintains dealerships in the capital and gains rivalries benefits globally.
Economic logic: This question evaluates and determines if Tesla is making a profit based on being a lower cost or a high cost provider thus there is no wrong or right answer here. Tesla sets the premium prices for the excellent automotive vehicles. This stage provides ample of opportunities to the company to grow and expand the business in the international market (Rothaermel, 2015).
It has been revealed that Tesla is well known and popular for sustainable innovation. The company is well known for the environment friendly vehicle and energy products. There are ample of key trends that will direct impact on the automotive manufacturers, customers, wholesaler, retailers and drivers over the next decade. It is seen that various innovations would be done by automotive industry in the competitive market (Dievernich and Tokarski, 2013). These new and innovative trends can provide ample of benefit of General Motors Company. It is anticipated to see many new and quick improvements and innovations in vehicle fuel efficiency using diesel and petrol and many ultra-efficient hybrid vehicles. Emission cost will be reduced by the automotive industry. Along with this, electric vehicles are important and effective ways to reduce motoring costs, reduce carbon use in transport, decline global warming and improve air quality. Expect battery-powered vehicles to be 10% of the market by 2020.
Government intervention can also provide a great opportunity to General motors for making a attractive and dynamic image in the marketplace. The vehicles batteries will reinvent the electric grid and cars would measure people health and lives. All these invention will be done in near future by automobile industry and government. Apart from this, effective and advanced technology would be used by the automotive industry in near future (Leavy, 2014). The industry can change its process in upcoming years. All these things can provide a good option to General Motor Company to take various benefits in the international market. In addition, it is found that Tesla entails various weaknesses also that can provide various advantages to General Motor Company in near future. Tesla sets high prices of the vehicles therefore people are unable to buy the company’s vehicles. General Motors Company can set appropriate prices for automotive products to stay in the competitive market. It will also help to gain sustainable advantages in the marketplace. Tesla’s sales network depends on its limited network. Thus, General motors’ Company can provide wide network to the loyal customers in order attract target audience in the global market. All these future changes in automotive care industry indicate that General Motors Company can earn high profitability and revenue worldwide (Naumov, 2017).
The above-mentioned limelight event shows that how automotive industry is growing in today’s competitive market. The paper explains the strategies, resources and core capabilities of Tesla, Waymo and General Motors’ company. The above analysis shows that Tesla is one of largest companies in the automotive industry. It is concluded from the above mentioned analysis that innovative technology, unique supply chain strategy and direct selling strategy will help Tesla to be a leader in the future. Along with this, the organization also needs to focus on the growth level and corporate level strategies to enhance the market share in the near future. Future changes in the automotive industry and porter diamond model for Tesla Company have been explained in the task.
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