Question

In: Economics

Pick one of the Tesla key products and write about the type of market structure it...

Pick one of the Tesla key products and write about the type of market structure it competes in. List the closest substitutes of this product and also find out their market share. Find out why this product is successful or unsuccessful.

Draw a conclusion about the success of the company and how you see it competing in the future.

Solutions

Expert Solution

Answer) One of the key products and segment of Tesla is Model X in electric vehicle,one of the top selling electric car,it is a SUV and competes with traditional vehicles,electric vehicles and hybrid vehicles,when we talk about market structure,we see an interesting aspect,it competes in perfect competition in terms of its competitors in all segment but when we look at electric vehicles only,Tesla is in a mini monopoly structure as it is in another words archtype of or associated with elctric vehicles,so it has access to loyal customers,learning curve capital(in valuation it surpassed Toyota) and reputation,so this dual structure is what makes it unique and something to follow,when we talk about completely elctric vehicles segment,we see Tesla as somewhere close to 30% market share with Renault-Nissan and Volkswagen lagging with close to 12% market share globally.Renault Zoe is a substitute with this product registering strong sales,when we talk model x,we find that it is indeed successful with record sales in many countries and propelling growth of Tesla,it had its bad moments as well but what is so unique is its technology with lightweight alumunium and falcon doors,it is like a model from future,what more is that company has adapted and looked and rectified some flaws,with demand for SUV ever increasing,this is a product which is bound to attract everyone 's attention,you could be one for green environment or person with love for something hedonic or futuristic,in a way it offers everyone something which is why it is successful.Company has recorded strong quarters and its valuation has surged multifolds overtaking Toyota in valuation and still it is young,with onus on generation next this is the future,as far as competition goes,I feel it will be challenged as demand for electric vehicles grow but its business model,its first mover advantage,learning curves and brand reputation along with charismatic CEO means it is bound to stay leader for forseeable future.

Answer is complete.Thank you!


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