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1. Evolve luxury car models - continue to introduce innovative attributes to luxury models, in order to continue to apply its focus and differentiation strategy, not only locally but also globally.
2. Expand service and sales capacity - consider the growth company has to experience, specifically at operations in order to maintain the numbers and preference of customers.
3. Consider environmental affected countries - should consider countries with major concerns regarding pollution and where major population is totally conscious about ecological issues. This to obtain market and increase sales.
4. Gen III - would represent a great step for Tesla on the way to provide an affordable car to decrease the cost of switch. With this more people would be able to enjoy the innovative car.
5. How beneficial is to sell regulatory credits in excess? Need to keep an eye on the driver or objective to obtain regulatory credits because can be seen from two points of view, which can make the market to react on the contrary due to obtaining credits just to sell them and refinance themselves instead of doing to provide a better product.
Analysts at Barclays in particular do not think the drive will be smooth for Tesla. “Tesla will be dependent on strong Chinese demand. While we expect strong initial interest from early adopters in China, we see challenges to broader luxury market adoption,” analysts at the bank said.[Bla14]
Synthesis and Integration(After other sections written) (10 Pages)
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a) Comparison of candidate global strategies: compare the global strategy followed by each competitor, where they are similar, where they differ, which approach you prefer, and why. Indicate what each candidate might learn from the other, if anything?
b) Following and based on your global strategy comparison provide forward-looking recommendations for the next 5-10 years for each candidate, focusing if applicable on how trends/changes at the industry/firm level threatens their competitive position, and what each should do to sustain/improve their competitive position over the next 5-10years? Justify why your recommendations are feasible and compelling.
c) What does your study/analysis teach us about management in the global businessenvironment today?
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Comparison Analysis Core Competencies
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PESTEL
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SWOT
While comparing Tesla and BYD in their SWOT analysis, we found that there are a lot of characteristics in common for the two companies, including the first comer to the market, substantial investment in the R&D technologies, the huge potential in the market due to the environmental concerns around the world, the high production costs and the severe competition among other competitors etc. However, the image and reputation established by Tesla in the international market is a plus for Tesla for the future internationalization and for gaining support from the international resources. [Angel to send the graphs below to Phil ]
(Need to put this into graphic to read easier, color would help)
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SIMILARITY
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STRENGTH
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WEAKNESS
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OPPORTUNITIES
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THREATS
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BYD/TESLA
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*First in the local market for manufacturing electric cars.
* Venture start up building from ground up.
* No outsourcing
* Strong R&D capacity.
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* R&D costs are extensive.
* Not yet producing at optimum economy of scale.
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* the environmental protection awareness in the world.
* the first comer advantage in the electric car market (the creation of entry barrier to the other competitors)
*Increase of oil and gas pricing pushing for the demand of electric cars.
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* Rigid competition among international and Chinese car manufacturers.
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(Need to put this into graphic to read easier, color would help)
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DIFFERENCES
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STRENGTH
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WEAKNESS
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OPPORTUNITIES
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THREATS
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BYD
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* A local Chinese without much publicity to the international market.
*Strong battery industrial experience and basis which supports the manufacture of the electric cars.
*Strong government support for its development.
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* Defective battery products and constant maintenance issues.
* Competitions against the international brands.
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* Strong government support due to the air pollution in major cities in China.
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* Incompleteness of the new energy market.
* the un-established brand value.
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TESLA
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* MotorTrend 2013 Car of the Year (brand value)
*Without its own battery capacity.
*No special government support.
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* Financial profile. Currently trading at 130x. While this could be viewed as strength, if they miss margins, earnings or revenue… could have significant value destruction within market.
* High production cost based in the US.
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* Large international demand.
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* Achieving economy of scale at luxury pricing. Hard to maintain premium brand that is affordable to mass consumers.
* Loss of government subsidies.
* Product adoption. Legacy combustion engines have been in American DNA for hundred years. Sound and noise satisfaction that comes for most auto enthusiast non-existent in electric vehicles.
* Luxury brands crowding market space with alternatives. BMW has new I8, Mercedes, Lexus and Toyota leading in Hybrid.
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Resources and Capabilities
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Lessons Learned
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Word Count: XX,XXX
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Str08: , (Straubel, 2008),
Sta14: , (Starks, 2014),
Bla14: , (Blanc, 2014),
1
Appendix 1: Linear Strategic Management Process
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