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11/4/2019 Tesla, Inc.’s Generic Strategy & Intensive Growth Strategies (Analysis) - Panmore Institute
Tesla’s generic strategy (Porter’s model) enables the company to maintain competitive advantage, and attract
early adopters in the global automotive market. The corresponding intensive strategies support organizational
growth based on increasing sales revenues from current markets where Tesla, Inc. operates. The matching of the
intensive growth strategies with the generic competitive strategy contributes to the company’s operational
effectiveness.
The generic strategy of Tesla, Inc. requires suitable strategic objectives to ensure competitive advantage. For
example, one of the company’s strategic objectives is to increase investment in research and development (R&D)
to develop new products that satisfy market demand for enhanced renewable energy solutions, such as batteries
for various purposes. Another strategic objective connected to Tesla’s generic competitive strategy is to
strengthen competitiveness by broadening its market reach to generate more sales and support brand popularity.
Product Development (Secondary Strategy). Product development is Tesla Inc.’s secondary intensive growth
strategy. In this intensive strategy, the company grows by developing new products that generate new sales. The
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11/4/2019 Tesla, Inc.’s Generic Strategy & Intensive Growth Strategies (Analysis) - Panmore Institute
rst fully electric sports car. This intensive strategy supports Tesla Inc.’s differentiation generic competitive
strategy by focusing on unique high-technology automobiles and related products that attract target customers.
In relation, a strategic objective for this intensive growth strategy is to maintain extensive investments in research
and development (R&D).
Market Development. Tesla, Inc. uses market development as a tertiary intensive growth strategy. This strategy
involves entering new markets to generate more sales and grow the global business. For example, the company
gradually expands its market reach worldwide by establishing new of ces and facilities. At present, the company
sells in only a handful of countries, but further international expansion is expected. This intensive strategy
supports Tesla’s mission and vision statements, which highlight global leadership in the automotive industry, with
energy solutions for the transportation and other sectors. The differentiation generic strategy enables market
development by creating unique products that attract customers when the company enters new markets. Based
on the market development intensive strategy, a strategic objective is to grow Tesla Inc.’s multinational business
by establishing alliances with other companies that make it easier to enter new markets.
Diversi cation. Tesla applies diversi cation, but only as a minimally signi cant intensive growth strategy. This
intensive strategy helps grow the company through new business creation. For example, the rm aims to create
new battery products for a variety of non-automotive applications. However, this intensive growth strategy
currently has insigni cant effects on the company’s nancial performance. Tesla focuses most of its efforts on
market penetration and product development to grow its automotive and energy solutions businesses. The
company can apply the differentiation generic competitive strategy to increase the likelihood of success in using
this intensive growth strategy. A strategic objective linked to diversi cation is to increase Tesla’s R&D investment
to identify new business opportunities. Another strategic objective based on this intensive strategy is to acquire
other rms or enter joint ventures to develop entirely new products.
References
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management: supportive concepts of information technology and work organization. Technovation, 14(2), 111-
120.
Dess, G. G., & Davis, P. S. (1984). Porter’s (1980) generic strategies as determinants of strategic group
membership and organizational performance. Academy of Management Journal, 27(3), 467-488.
Glazer, R. (1999). Competitive Advantage Through Information-Intensive Strategies. Handbook of Services
Marketing and Management, 409.
Merchant, H. (2014). Con gurations of governance structure, generic strategy, and rm size. Global Strategy
Journal, 4(4), 292-309.
Miller, D. (1992). The generic strategy trap. Journal of Business Strategy, 13(1), 37-41.
Musk, E. (2016). Master Plan, Part Deux. Tesla, Inc.
Ormanidhi, O., & Stringa, O. (2008). Porter’s model of generic competitive strategies. Business
Economics, 43(3), 55-64.
Parnell, J. A. (1997). New evidence in the generic strategy and business performance debate: A research
note. British Journal of Management, 8(2), 175-181.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and Management, 15(1), 11-17.
Tesla, Inc. – Form 10-K.
Tesla, Inc. – Solar Panels.
Varadarajan, P., & Dillon, W. R. (1982). Intensive growth strategies: A closer examination. Journal of Business
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TA G S : A U T O M O B I L E I N D U S T R Y , A U T O M O T I V E I N D U S T R Y , C A S E S T U D Y & C A S E A N A LY S I S , G E N E R I C
S T R AT E G Y ( P O R T E R ' S M O D E L ) & I N T E N S I V E G R O W T H S T R AT E G I E S , S T R AT E G Y , T E S L A I N C . ( T E S L A
M OTO R S I N C . )
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