Elon Musk Case Analysis

982 Words 4 Pages
AN ANALYSIS OF ELON MUSK’S EMPIRE

INTRODUCTION
Elon Musk has revolutionized the technology industry with his environmentally conscious business efforts. Although his ventures often show massive potential and growth, there are some downfalls that make it uncertain to invest in.

CHALLENGES
Reliance on the fossil fuel industry. Musk follows an aggressive agenda towards renewable energy, and this reflects in his ventures. Tesla broke into the automobile market by introducing zero-emission battery powered electric vehicles. It has invested in The Boring Company and its own battery factory, and has recently also acquired SolarCity. By addressing environmental concerns such as fossil fuels and climate change, Musk has been able to differentiate
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He sees these environmental challenges as opportunistic as he continues to break into different industries with a differentiated position. This could be the emergence of disruptive technologies towards renewable resources.

VALUE
Although Tesla has a shorter history, significantly smaller sales, and virtually no history of profits, it is valued higher than other American car makers. The main reason for this is its focused differentiation strategy. Through its strategy, Tesla provides:
Innovation. Tesla is known for its constant improvement on its unique product features.
Prestige. Although it is working to appeal to a mass market, current models still command a premium price that secures a level of prestige.
Superior Performance. Initial positive reviews for Tesla’s earlier models gave credible value. However, there were significant incidents that have hurt Tesla’s credibility to an extent.

Value is not necessarily based on past performance, and Tesla is a prime example. The auto industry is dynamic and ever-changing. Tesla has promised not only a well-performing car but a complete metamorphosis in the auto industry by creating affordable, sustainable transportation. Consumers value Tesla for its future
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Not only is it the most ludicrous out of all of Musk’s ventures, its long-term goal does not directly align with the goals of his other firms. To successfully reach Mars, SpaceX must invest in resources that can not necessarily be utilized throughout other firms.
Although it has garnered a lot of public interest, it comes with costs that would provide nominal benefit to Musk’s other businesses. On the other hand, Tesla’s new battery factory directly benefits Tesla’s automobile manufacturing. By divesting in SpaceX and getting rid of its specialized asset costs, it would increase the confidence of investors.

CONCLUSION
Because of the visionary nature of Musk’s empire, it is safe to be wary of investments. Disruptive technology will always be uncertain to an extent and can lead to consumer distrust. However, Musk has consistently shown his commitment towards his ideas. Investment is about being able to commit to future endeavors, and Musk has shown that his ventures are committed to revolutionizing the

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