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Discussion Thread 5

Discussion Thread 5

Q This discussion thread is worth 20 points and is available for one week. Before working on your posts, make sure you are clear about the expectations. Check out the Discussion Thread Grading Rubric Actions and the example of a good discussion question post. As a reminder, your posts will be evaluated based on the following two criteria. 1. Your understanding and application of course theories and concepts. To be successful in discussion, you must demonstrate your knowledge of course theories/concepts and your ability to apply these theories/concepts to discussion questions. It is thus important that you complete all the readings and gain an appropriate understanding of the course materials. When participating in discussion, be mindful to closely base your arguments on the theories, frameworks, and concepts from the readings. 2. The quality of your ideas, arguments, and analysis. It is critically important that you support your ideas, arguments, and analysis with evidence and sound reasoning. Simply saying that you agree or don't agree with something without providing evidence of your rationale or the reasoning behind your thinking is just an unsupported opinion. Strategy is about research and fact-based analysis, and thus should be supported with data, factual evidence and logical reasoning. If your evidence and reasoning is based on course materials, clearly state so. If they are from external sources, please provide a link to the appropriate website. Discussion Questions "China represents a critical growth market for Tesla, and CEO Elon Musk talked up the company’s plans there on its latest earnings call in January. 'We need to bring the Shanghai factory online,' Musk said. 'I think that’s the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.'"(CNBC. Sep 18, 2019. “Tesla Shanghai factory won’t mass produce Model 3s until mid-2020, JL Warren says”) Read the quote above from Elon Musk and the Forbes article, China Clears Tesla To Begin Production In Shanghai Plant Actions . Answer the following 3 questions based on theories and concepts in Chapter 7. Remember to provide evidence to support your arguments. Q1. What are the motivations associated with Tesla’s strategic move of starting local production in China? Q2. Which entry mode did Tesla originally use for China? To which mode is Tesla now switching? Why do you think Tesla is making this switch? Q3. What strategy do you think Tesla uses to compete in the global market (international, global, multidomestic, or transnational)? Do you think this strategy is a better choice for Tesla over the other three options? Why or why not? An update if you are curious how the Shanghai Gigafactory initiative has panned out... "While Gigafactory Shanghai was originally only supposed to produce vehicles for local demand, Tesla surprised itself with how fast it was able to ramp up production at the plant. The automaker achieved an annualized production capacity of 450,000 electric vehicles at Gigafactory Shanghai within two years of starting production at the new factory. It enabled Tesla to start exporting vehicles from the factory to other markets – reducing the exportation load out of Fremont factory, which can now focus more on local demand." ---- Electrek, Aug 10, 2021, "Tesla turns Gigafactory Shanghai into its new ‘export hub,’ and July numbers are showing it (Links to an external site.)" "The Gigafactory 3 in Shanghai accounted for about 45 per cent of Tesla’s global sales, according to analysts. The factory exported more than 26,000 vehicles in April and May, most of them bound for European and Asian markets, according to the CPCA." ---- Yahoo News, July 27, 2021, "Tesla banks on Shanghai Gigafactory 3, its ‘primary vehicle export hub’, to meet global demand (Links to an external site.)" Suggested answers - Tesla Actions Honor code You are expected to adhere to the Student Honor Code (view the complete Honor Code at Student Rights and Responsibilities) which is a commitment by students of Northern Kentucky University to uphold the highest degree of ethical integrity in academic conduct. You should not lie, cheat, or plagiarize to gain an academic advantage over fellow students or avoid academic requirements. To avoid any allegations of plagiarism, your should not claim someone else's work as your own, and you should cite sources whenever another person's ideas, models, text, graphs, figures, spoken word, photos or internet statements are used. Specifically, if you take more than five words directly from a source, you must use quotes and cite that quote in the text as well as include that source in the references. If you put information from a source into your own words, you must cite that source in the text and include the source in the references. Please read my policy on plagiarism and academic integrity in the syllabus. Course instructions and materials are for instructional use only. All other uses are strictly prohibited. Republication or reproduction of course instructions or materials is strictly forbidden. Discussion/quiz/exam questions or answers from this course must not be shared with any other individual who is not part of this course or on any other platform on the Internet.

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China is a significant market for the automobile industry, especially for electric automobiles. China is Tesla's second-largest market, and the automaker's business plan includes selling substantial numbers of electric vehicles in the country. The benefits of moving to China for Tesla are obvious and match nicely with its business model. China, for example, is a suitable location for localizing production due to its large consumer market, powerful central banking system, developed industrial production chain, and lithium-ion33 battery production capacity.