Tesla Motors Case Study

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Any firm on any industry has to choose which strategy should follow Competition or co operation. Competition is zero sum game that means one firm will get all the benefit at expense of another. However, co operation is non zero sum game that mean all firms in the collaboration will gain some benefit. Tesla Motor strategic decision of opening patent portfolio is co operation initiative which aims to expand the electric cars and increase competitiveness of electrical cars industry firms. Following discussion shows competition and co operation depends on behavior of firms to assess Tesla Motor decision by use game theory approach. Furthermore, it shows value net model to create a framework of strategic actions of the company. Competition…show more content…
Ability to response in high speed is necessary strategic objectives. • Maximum use of resources: The ability maximum use of the firm’s resources in order to maximizes the productivity by design efficient processes. To reach maximum productivity by using efficient process lead to maximum level of performance. • Vigour and skill: multiple skills which help firms to reach high competitive level when compared with competitors. Co-Operation The benefits of creating co-operation between different firms can be recognized after period of time as outsourcing agreements, joint ventures and product licensing and. The collaboration is competition in different form. The aim is to create advantage in relation to companies outside the alliance while preventing a wholesale transfer of core skills to the partner. Co-operation can yield several advantages for the parties within the coalition such as: o No individual firms can provide all required resource to bring actual new product. In coalition the partners know that single firm has not all the resource and necessary skills. o Political concern can be assuaged by coalitions o Coalitions get partners opportunities to share risk and cost of the project. Game…show more content…
There are two kinds of game. In first one player interact according to certain rules for engagement. These rules come from trade agreements and contracts. In second type the players interact without any constrains from outside. Business can be considered to be a complex mix of both types of games. Basically the game theory is the interconnected of player’s decision, these interactions can occur sequentially or in same time. With sequential games, the players make alternative moves. Each player should think about how current actions will affect others in future. However, with same time games the players act at same time and each player should imagine the situation facing other players. Value Net Model Value net model is provide a scope to defined all interdependencies in the game and provide an opportunity to explore how the players of game might be changed or the game itself. Brandenburger and Nalebuff (1995) came up with the nation of the value net to show all players and the interaction relationship between them. Below figure shows the value net model clearly. FIGURE 4: Value Net
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