Blog Post #1

Tesla Might Finally Have Some Competition. From Ford. Neal E Boudette. January 15, 2021.

https://www.nytimes.com/2021/01/15/business/ford-mustang-ev-tesla.html

 

Summary:

In December of 2020, Ford Motor recently started selling the Mustang Mach-E which is a highly anticipated electric car. A Ford dealership in Arizona held a car buyer event which attracted customers who were driving luxury vehicles that the dealership rarely got as trade ins. Out of the 10 people who put down deposits for the Mach-E, 3 of them arrived to the dealership in Teslas.

The electric vehicle segment of the automobile industry has been dominated by Tesla but industry experts are expecting this to change due to the anticipation of automakers such as Ford who will begin selling models with more attractive pricing. There has recently been a leadership change at Ford Motors who has focused investments in electric and autonomous cars. Currently electric vehicles make up about 3% of global auto sales but this is expected to rise rapidly over the next ten years. It is also expected that electric cars could outsell gasoline powered cars globally by 2040.

Analysis:

Until now, I would argue that Tesla has created a sustainable competitive advantage because it has multiple sources of advantage. It has product excellence because no other automakers have tried to enter the electric vehicle market to compete with them so their product has been unmatched.  Tesla continues to provide products with high perceived value and effective branding as positioning.

Ford Motor is attempting a diversification strategy by introducing a new product (a more affordable electric car) into a new market segment that they are not currently serving (the electric automobile industry). This is considered a related diversification opportunity because the current target market and/or marketing mix is in the automobile industry. Ford Motor will be able to purchase from existing vendors for production, use the same distribution and/or management information system, as well as advertise to target markets that are similar to their current customers. Ford Motor’s product idea was to create an electric car that would be more attractive from a pricing standpoint and from a simplicity standpoint when compared to Tesla. This is a perfect growth strategy for Ford Motors and I am looking forward to how other automobile makers react.