Global Team Assignment (gta)
Future Challenges / Recommendations (604)
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- Technology and Cost Reduction (146)
- Cooperation with International Automobile Manufacturers (153)
- Improvement on Marketing Strategy (174)
- Developed Country Competitor – Tesla (4456)
Future Challenges / Recommendations (604)Quality and Innovation (131)Despite its leading status in electric car sector in China, the battery defects of BYD cars is still a big concern when the consumers make decisions on purchasing cars from BYD. It was claimed by the Japan car manufacturers that the battery technology of BYD is considered the old technology utilized by Japanese 30 to 40 years ago. As such, how to better use the derivative technologies or the inventions to improve the functions of the car becomes a significant issue for BYD. In the recent few years, BYD has been making efforts on improving its battery quality as well as the stability of the cars. The new S6 and G6 models tend to attract more consumers by promoting its battery with great quality and the overall safety of the car. Technology and Cost Reduction (146)The type of battery currently adopted by BYD is called “lithium iron phosphate battery”. According Anto Hirohikalu of Sohu Cars, the production costs for Lithium iron phosphate battery is quite high. A lot of battery manufacturers will use replacements to reduce costs.[Int] Plus, while the processing technology of lithium iron phosphate can be varied based on the battery to be produced, it is difficult to claim the patents over the processing technology. That being said, BYD is not able to share its research and development costs with the competitors who may want to be licensed with BYD’s battery technologies by charging royalties. BYD will have to bear these costs moving forward. Therefore, from the economic stand point of view, how to reduce their costs for the production of batteries is crucial if BYD would like to increase its margin on the sales. Cooperation with International Automobile Manufacturers (153)Although a pioneer of electric vehicles in China, BYD is primarily a local Chinese brand and faces the competition of international brands such as Tesla.[BYD1] In addition, the design and quality of BYD car models has not yet reached the competing level with other prestige brands such as BMW, VOLVO and TOYOTA. Therefore, if BYD wants to expand its business into the international market, the alliance with the international brands will effectively increase its name exposure to the next level and will be able to improve the confidence of the consumers on the quality of the cars when consumers are thinking about buying from BYD. In addition, the exchange and sharing of technologies with international car manufacturers will add new blood to BYD’s internal integration and the direction of future development. It should bring BYD new thoughts about its capabilities and competing advantages, which will help BYD’s growth moving forward. Improvement on Marketing Strategy (174)While the focus of its sales is in energy saving, BYD should also focus on which market segment it should concentrate on in marketing. It is not clear which market segment BYD positions itself to be in the Chinese market. While we are all fully aware that BYD is the leader in the electric car sector, the energy saving advantage did not bring BYD great profits in China. The Chinese consumers still pay more attention on the design and functions of the cars, especially for females. There are also a group of consumers who only chase after luxury cars, such as BMW and Mercedes. Unfortunately to say, environmental protection is not the main stream of thinking when consumers in China make purchase decisions on vehicles. If BYD limits itself to the group of customers who like the idea of energy saving and environment issues, it will be difficult to sustain and increase sales Therefore, BYD should review its marketing strategy and find out how to best promote its products in China or other countries. Developed Country Competitor – Tesla (4456)Introduction to Tesla (541) Tesla Motors was founded in 2003 by a group of Silicon Valley engineers who “set out with one mission, to prove that electric vehicles could be awesome” [Tes14]. Headquartered in Palo Alto, California, Tesla Motors has grown immensely in just under 11 short years of operation, from an initial round of Series-A funding between $7.5M to $10M dollars to a current market capitalization of $26.16B dollars. Today, the company employs roughly 2000+ people in 31 global locations, and they are continuing to expand their operations and global presence at a significantly fast pace. Their CEO is Elon Musk, a person who is highly regarded today as one of the most influential entrepreneurs in the last decade. In addition to Tesla, he is the CEO/CTO of Space Exploration Technologies (SpaceX), the first commercial company to dock with the International Space Station and return to Earth, as well as SolarCity, the leading provider of solar power systems in the United States, and the co-founder of PayPal, the world’s leading internet payment system[Tes14].
Tesla went public on June 29, 2010 in a landmark event. This was the first public offering of an American auto manufacturer in the United States since the Ford Motor Company in 1956; and the IPO surpassed all investor expectations. From an initial expected price range of $14-$16 per share, the companies first day on the market settled at $23.89, a 41% premium over initial expectations [Cow14]. Since that date they have not looked back; on March 29, 2014 Tesla's stock closed at $212.37 and a market capitalization of $26.16B; 10x their IPO value in just four short years [Tes141]. In 2006, Tesla began introducing their first prototype vehicle, The Roadster. By 2008, the company was in full production, and by 2012 had produced and sold nearly 2,400 Roadsters. At the same time they entered full rate production of the Roadster in 2008, Tesla announced their next vehicle, a game changing concept vehicle known as the Model S. Where the Tesla Roadster was a modified 2-door Lotus Elise converted from gasoline to fully electric, the Model S represented a radical design change in vehicle manufacturing; it was a high performance 4-door sedan, fully electric vehicle built from the ground up completely in house by Tesla with no outsourcing. The Model S incorporated highly unique and radical ideas never implemented before in a vehicle; and it has been met with tremendous consumer response. In just under two years of full-rate production, they have produced and sold 25,000 Model S vehicles globally [Joh14]. In 2013, the Tesla Model S has already displaced top selling luxury automotive brands such as BMW, Mercedes, Lexus and Acura as the top selling luxury vehicle, and the car was won numerous and prestigious awards, from the 2013 “Motor Trend’s Car of the Year”, 2013 “Automobile’s Magazine Car of the Year”, 2013 “World Green Car Award” to “Time Magazines Best 25 Inventions of the Year 2012” award [Tes14]. Following this prestigious product launch, Tesla is now following up the Model S with the Model X, a high performance fully electric crossover SUV that takes dead aim at the luxury SUV and Minivan market, and they are set to start delivery in 2014. Download 2.88 Mb. Share with your friends:
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