Is Tesla following a differentiator, cost leader or blue ocean strategy? Does this influence what type of firm they should buy?
Case Study: should Tesla buy blockchain company
Tesla is considering buying a company that has developed blockchain to facilitate autonomous driving. You have been asked by your Tesla supervisor to analyze if this is a good strategic move.
• Identify at least three of Tesla’s capabilities. What is Tesla’s core competency? Present a core competency statement for Tesla.
• How can buying a blockchain company build strategic value for Tesla through either building, sharing, or developing blockchain specific capabilities?
• Buying a company would depend partly on the financial health of Tesla. Evaluate the company valuation for Tesla using1) asset valuation, 2) earning valuation, 3) market capitalization
You may use financial as presented in the case or current financials.)
• Is Tesla following a differentiator, cost leader or blue ocean strategy? Does this influence what type of firm they should buy?
• Using a transaction cost – make or buy argument, explain under what conditions it would make
sense to buy the company? What are the other alternatives?
Recommendation: Should Tesla form a strategic alliance, joint venture, acquire or build blockchain
capabilities in house. Briefly defend your answer on your analysis.