Question.2518 - Write a 500-word (two-page) paper using the Writing Style Guide (https://erau.instructure.com/courses/159630/pages/writing-style-guide) formatting. Include the following: Explain, briefly, the three strategic approaches to competitive advantages. Provide an overview of your selected company. Discuss which strategic approach your selected company uses and why they use that approach. Include a title and reference page and at least three references. Save your assignment using a naming convention that includes your first and last name and the activity number (or description). Do not add punctuation or special characters. Your paper will automatically be evaluated through Turnitin when you submit your assignment in this activity. Turnitin is a service that checks your work for improper citation or potential plagiarism by comparing it against a database of web pages, student papers, and articles from academic books and publications. Ensure that your work is entirely your own and that you have not plagiarized any material! "PLG1" in the activity name indicates a Turnitin assignment. Review the Writing Rubric for detailed grading criteria.
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Introduction Competitive advantage is any aspect that gives an edge to a company over its competitors in the industry. Competitive advantage is attained by using varied different strategic approaches (McGrath, 2013). Contextually, in this paper, three strategic approaches to competitive advantages are discussed as well as find the strategic approach used by Tesla. Three Strategic Approaches to Competitive Advantages As per Porter's Generic Strategies, there are three major strategic approaches businesses use to attain competitive advantages and these are differentiation, cost leadership, and response (focus or niche). The differentiation strategic approach incorporates the company to provide unique product or service features to its customers so that they can be attracted. The differentiation can be through innovation, as well as uniqueness in its product features, quality, design, branding, and customer service. The cost leadership strategy involves providing goods and services to the customers at the lowest price compared to that of its competitors, which has been so that a large customer base can be created and greater revenue amount can be generated. The companies are able to execute this strategy with the reduction of costs and an increase in operational efficiency. Moreover, the response strategic approach is the targeting of a specific customers group or a particular segment of the market so that the products and services are developed to meet their specific needs (Allen, Helms, Takeda and White, 2007). Overview of Tesla Tesla, Inc. has emerged as one of the most reputed and innovative companies in the world, which is mainly involved in offering fully electric vehicles, energy generation, and storage systems. It is engaged in the design, development, manufacture, and sale of these products as well as offers supercharger stations, vehicle service centers, and self-driving capability. On July 1, 2003, Elon Reeve Musk, Jeffrey B. Straubel, Marc Tarpenning, and Martin Eberhard founded the company, and presently it is headquartered in Palo Alto, CA. Presently, the Chief Executive Officer of the company is Elon Reeve Musk, and has around 127,855 employees throughout the world (Forbes Media LLC, 2023). Differentiation Strategic Approach of Tesla Tesla has been mainly utilizing a differentiation strategic approach compared to other strategies, which has been through the development of innovative products and features. The company has been making differentiation with the electric vehicle technology by developing high-performance electric vehicles with fast charging capabilities and long ranges that differentiate from other automobile companies that rely on internal combustion engines. The company has also differentiated its products with the development of advanced battery technology. Another major aspect of differentiation is the development of Autopilot and Full Self-Driving (FSD) features in its vehicles (Siddiqui, 2023). It also differentiates with its innovative design and user experience by offering over-the-air software updates and large touch screens among others. The reason Tesla uses the differentiation strategic approach is that it wants to redefine the automotive industry with technological leadership. It wants to attain market transformation by transforming from traditional automakers. It also wants to attain environmental sustainability as well as achieve a superior brand image (Shipley, 2020). Conclusion 3 Based on the overall discussion, it is apparent that differentiation, cost leadership, and response are the three strategic approaches used by companies to attain competitive advantages. It is found that Tesla incorporates a differentiation strategy with the development of innovative electric vehicles and other related products. The reason behind the use of such an approach is that Tesla wants to achieve market and technological leadership. 4 References Allen, R., Helms, M., Takeda, M. and White, C., 2007. Porter's Generic Strategies: An Exploratory Study Of Their Use In Japan. Journal of Business Strategies, 24(1), pp.69- 90. Forbes Media LLC. 2023. Tesla. Forbes, viewed 14 August 2023, https://www.forbes.com/companies/tesla/?sh=4343762648d4 McGrath, R.G., 2013. The End of Competitive Advantage: How to Keep Your Strategy Moving As Fast As Your Business. Harvard Business Review Press. Shipley, L., 2020. How Tesla Sets Itself Apart. Harvard Business Publishing, viewed 14 August 2023, https://hbr.org/2020/02/how-tesla-sets-itself-apart Siddiqui, F., 2023. How Elon Musk Knocked Tesla’s ‘Full Self-Driving’ Off Course. The Washington Post, viewed 14 August 2023, https://www.washingtonpost.com/technology/2023/03/19/elon-musk-tesla-driving/More Articles From Management
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