Running Head: CASE STUDIES 1

Case Studies

Institution

Name

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 CASE STUDIES 2

Chasing Tesla Case, The Economist June 5 2020

Amazon will develop a fleet of light trucks/vans that are electric, and because of the

enormous economic incentive for Amazon and their scale of purchases, they will grow

through trial and error testing the most reliable light commercial vehicle. Their learning by

doing will be ahead of everyone in the electric light commercial vehicle fleet market bar

UPS, FedEx. They will have the best global supply system for parts, assembly because that

is their business – the world’s very best global supply-chain system is what they do, and

Covid has given them a considerable demand surge that has made the company fabulously

cash-rich to go and buy innovation in electric LCVs. Plus, they can sell the cars on their

system and maintain them at their workshops that support their vehicles. Oh, and do they

have an established brand name to use “Amazon” or “Amazone”?

1. From a global supply chain perspective, how can you compete against such a rival in

the U.S. market for LCVs?

To compete with Amazon, I need to look for ways to have a better supply chain which is far

better than that of amazon. First, there is a need to know that Amazon has an already established

global supply chain. First, there is a need to form coalitions with other companies to have a data-

driven connected fulfilment network. The formation of a coalition makes it easy to make a better

brand and brand experience that will make it easy to compete with Amazon. For instance, a

company with a better supply chain can make a coalition with another that supplies better car

equipment to ensure that they compete with amazon. It is through a coalition with another

company that I will be able to make each brand scale the business to a higher level to compete

with a giant company such as Amazon.

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 CASE STUDIES 3

Another important thing to note in Amazon has better fleet management. In order to compete

with Amazon, I can harness power from third-party fleets. The use of third party fleets is likely

to increase the flexibility while still providing the desired results. Since Amazon has will be

using electric light commercial vehicles, there is a need to deploy a fleet that will be capable of

handling last-mile delivery and enterprise, which will offer a way to keep their existing

customers and promise a better experience.

Tesla is going to do great in the high premium market for cars and pickups. The market

has said yes. But how will Tesla compete in the midrange $30-$50000 market against

quality branded competition who have most of the components of their cars made in China

(batteries, motors) and India (bottom frame, wheels, suspension) and they add their

western software, interiors, the paint job in the U.S.? They then have manufacturing and

marketing access in India and China as well?

2. Describe the Tesla supply chain that can compete against that.

The vertical integrations and moving to domestic manufacturing will be likely to make it

possible for Tesla to compete against the mid-range market. Tesla supply chain is making it

quickly revert to the manufacturing model popularized by the automobile pioneer. With the

use of vertical integrations, the company is likely to quickly res[pond to the consumer

demand while potentially lowering the cost of the components. The formation of the Tesla

Gigafactory manufacturing facility, which is located in Neda and which produces Lithium-

ion battery packs for the electric vehicles and stationary systems from raw materials, is a

clear sign that the supply chain for Tesla is looking to further expand the vertical integration

hence making the company lower the company’s dependence on external suppliers. One of

the benefits of vertical integration of the supply chain is that there will be an increase in the

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 CASE STUDIES 4

raw material in its vehicles hence minimize their reliance on overseas suppliers and reduction

of the production cost hence a competitive advantage to the midrange markets. Tesla supply

chain is also moving to the international market. The construction of the Gigafactory 3 in

shanghai is a big step towards competing for the international markets such as China and

India. The company is also looking to the construction of more Gigafactory to other locations

in order to harness more markets.

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