Competition & Strategy

Assignment-1 : 22/02/2020
Group-10
 Intensity of Competitive Rivalry
a. URL of the article

https://www.forbes.com/sites/greatspeculations/2016/01/04/should-tesla-be-worried-
of-competition/#3245d9664ebe

b. Name of the firm that took the Action

Tesla

c. The industry to which the firm belongs to

Automobile Industry

d. The rivals of the firm in question

Ford Motors and General Motors

e. The action taken by the firm

Tesla has a competitive edge in this market given its supercharger network and direct
selling model. Also, Targeting the mass market for electric vehicles with its Gen III
model.

f. Which force(s) does the action affect?

Intensity of Competitive Rivalry by increasing industry growth

g. How does the action affect the forces? Use quotations from the
newspaper/magazine article to support your answer

Tesla's supercharger network which hosts more than 3,000 superchargers in the U.S.
providing convenient charging options to its car users, definitely gives it a competitive
edge, given that no other player has been able to replicate this kind of network so
far. Tesla is the only automaker exclusively developing electric cars on a significant
scale and this gives it an edge over other automakers that also need to focus on their
traditional models. Further, this allows Tesla to have a direct selling model which
reduces overhead costs. Given the after-sales service requirements of traditional cars,
it is difficult for other automakers to adapt a direct selling model.
 Buyer Power – Backward Integration
a) URL
https://www.theguardian.com/business/2017/nov/14/tescos-37bn-takeover-of-
booker-given-green-light
b) Name of the firm that took the action- TESCO
c) The industry that firm that belongs to- Retailing.
d) The rivals of the company- ASDA, J Sainsbury, Morrisons, Costco, Aldi Einkauf
Gmbh & Co. Ohg, Carrefour, LIDL, Walmart, Amazon and Kroger.
e) The action taken by the firm:
Merger with Booker which is the food wholesaler and runs its own private label
and runs independent convenience stores and grocers.. As this will disrupt the
whole value chain.
f) Which force(s) does the action affect? :
This affects two powers in the industry. Firstly this obviously affects the
bargaining power of the buyers and secondly it also increases the competitive
rivalry between the conventional store owner and Tesco.
g) How does the action affect the forces? : :
Firstly this will affect the bargaining power of the buyers. Because now Tesco will
own both the supermarket and with the help of Booker stores spread across the
country, Tesco will have involvement in the small retail stores and grocers. This
will also increase the competitive rivalry between the small stores as now Tesco is
entering the small retail stores the fight with their capital and economies of scale.

This situation was very correctly said by analyst Clive Black ““If Tesco and Booker
can merge with unconditional approval, then the scope for further large-scale
consolidation cannot be ruled out.”