Question

Question B1

In 2002, Musk sold his second internet startup, PayPal, to eBay for $1.5 billion. His first company, a Web software firm, was acquired by Compaq. Currently, Musk is the CEO of Space Exploration Technologies (SpaceX) and Tesla Motors, and also the chairman and the largest shareholder of SolarCity, an energy technology company. SpaceX, which builds rockets for companies and countries to put satellites in space, was the first private company to deliver cargo to the International Space Station. It’s reigniting interest in space exploration. Tesla Motors is the world’s most prominent maker of electric cars and is proving that electric cars can be green, sexy, and profitable. SolarCity is now the leading provider of domestic solar panels in the United States. Each of these ventures has transformed an industry: PayPal – Internet payments; Tesla – automobiles; SpaceX – aeronautics; and SolarCity – energy. (Modified from source: Kristoffer Tripplaar/Sipa USA (Sipa via AP Images)

Based on the above case, name the type of problems Musk deal with when developing these new ventures.

B2

In early 2020, Hong Kong was hit by a disease – Coronavirus. As more and more people were infected with Coronavirus, citizens had adopted the practice of wearing masks whenever they got out of their homes. Thousands of people lined up in streets and wait overnight for a chance to purchase masks for themselves and their families. The price of masks, when they were available, had increased from HK$1 a piece to HK$10 or even more. Mr. Wong was a restaurant owner. He was shocked by the situation and he wanted to help. He tried to purchase masks from sources all over the world but was unsuccessful most of the times. Through an old friend in Egypt, he finally found a mask manufacturer in Egypt – the Pyramid Mask (PM). PM agreed to sell a machine that can produce 100,000 masks per day to Mr. Wong. They could also supply all the raw materials that were needed to manufacture the masks. As Mr. Wong is not a technical person, PM even agreed to send an engineer to Hong Kong for 3 months to solve all the problems that were expected in starting a new factory. However, PM insisted that the products must be sold under PM’s brand name and Mr. Wong had to pay a fee.

Based on the above case, identify the approach Mr. Wong used to go international.

Answer 1

There are two different case studies and two different associated questions asked. I am answering the first case study question.

Question B1. Based on the above case, name the type of problems Musk deal with when developing these new ventures. (2 marks)

Answer B1.

Lets us categories the offerings developed by Musk:

1. Online (PayPal and Web Software Firm)

2. Space Exploration Technologies (SpaceX)

3. Electric Cars (Tesla Motors)

4. Energy Technology Company (SolarCity)

Problem 1: High-Value Proposition Business Takeover- Stronger businesses like eBay and Compaq on seeing the new high-value proposition offerings like "PayPal" and "Web Software Firm" are attracted to diversify or complement their existing offerings. This can put pressure on founders like Musk to choose from giving up ownership to bigger businesses or continue adding value to existing offerings. The same pressure can be witnessed when the development of other ventures like SpaceX, Tesla, and SolarCity is going on

Problem 2: Going against the Existing Leaders & Cartels- Existing players can form cartels to thwart the progress in new technology space. This is on account of higher investments required in developing new technology. For example, many combustible engine car players can group together to thwart the efforts of Musk to make its electric car offerings successful.

Problem 3: Goliath vs. David- Competing against NASA which is America's Space Exploration Agency is a humongous task. Not only to replicate but also go ahead through "SpaceX" requires a huge amount of funds, clear vision, the right talent, and equally interested investors.