Failed Strategy Analysis Essay

748 Words Jun 16th, 2013 3 Pages
Fisker Automotive Founded in 2007 by Henrik Fisker and Bernhard Koehler, Fisker Automotive started with nearly $200 million in venture capital from Kleiner Perkins Caufield & Byers, Palo Alto Investors and the Qatar Investment Authority. Using these funds the company built their first car the Fisker Karma, a 100mpg plug-in hybrid sports sedan that sells for $88,000. After being awarded a government energy loan of $529 million the company claimed to be ready to begin production and was in the process of designing new models. While having sold around 2,000 of its high-end cars and, due to the various recalls and production delays the company has fired nearly 75% of its employees, missed its first loan payment to the government, and is …show more content…
As a result, the complexity of the car caused time schedules to be repeatedly extended, and costs to skyrocket. It’s a big challenge to source and manage thousands of parts from many vendors, then bring them all together to a cohesive product. When the sources are few and far between, the mistakes of one supplier can halt the entire production line, costing thousands of dollars that the cash strapped company cannot afford. The situation leaves no room for mistakes, in an industry where mistakes are commonplace even for the well-established “Big Three” automakers (Dunne, 1986). In conclusion, the idea of a carmaker that doesn’t really make the cars just designs and assembles them, sounds like it could be a great idea, but in practice the parts that are outsourced cannot be new technology that is plagued with recalls and design flaws. An extensive evaluation of any sources needs to be made that includes; financial stability, capability, reliability, quality control, and audit processes, and then ranking these against other potential candidates so that the best choice is made and alternates are available. A new company relying on other new companies for major components seems to be the tale of the blind leading the blind, they are just not able go anywhere.

Works Cited
Bloomberg News. (2013, March 27). Bloomberg. Retrieved March 29, 2013, from www.Bloomberg.com:

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