Tesla Inc.: Strategic Partnerships for Growth
(10 pages of text)
Case (Pub Mat)
In 2018, California-based Tesla Inc. (Tesla) seemed to be gaining momentum after a series of setbacks in the production of its mass-market Model 3 car. Tesla's partnership strategy, guided by founder and chief executive officer Elon Musk, had been key to its success, yet Tesla did not appear to be succeeding as a stand-alone firm. It continued to command a small portion of overall vehicle sales, it had not mastered mass-production techniques, and it had not solved its sales dilemma by receiving permission to bypass the car dealership network in the United States. Tesla would continue to need partners for growth even as the nature of its partnerships changed. The challenge was to determine Tesla's partnership strategy in the short to medium term.
The case has been designed for use in an undergraduate- or graduate-level course on strategy or entrepreneurship. Specifically, the case can be used to define the competitive advantage of a firm, analyze how firms attract and harness resources and capabilities to implement their strategies, and review the pros and cons of partnerships with other firms. The case focuses on how a new start-up establishes itself in a competitive industry by leveraging strategic partnerships to grow. After working through the case and assignment questions, students will have developed their ability to do the following:
- Outline Tesla's partnership strategy.
- Define the benefits and drawbacks Tesla and its partners experience when partnering with each other.
- Explain how Tesla trades off asset specificity for other benefits such as speed to market and lower investment costs.
United States, Large, 2018
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