Tesla is a 10-year-old company that specializes in electric power technology. The firm sells its powertrain components to other car companies. At the same time, it is selling a high-performance electric Roadster and the Model S and Model X luxury cars. The company is serving two customers at the same time, both with a focused differentiation strategy: high-end car buyers and car manufacturers with electric cars in their portfolio. This has a potential conflict – creating potential competitors for the end-user businesses who have deeper pockets and a wider reach, which could slow our growth to car buyers. However, your founder Elon Musk believes that electric cars should be available for everyone.

Analyze the situation. Which strategy do you think Tesla should pursue moving forward to align with Mr. Musk’s goals?

a. Choose to continue selling both cars and the technology to competitors.

b. Choose to sell only cars to end-user consumers only.