Question

Research information about Tesla (Links to an external site.)Links to an external site. online and in the library, and then address this scenario: You are the CEO of Tesla and you have been asked by a new board member to characterize the structure (competitive, monopolistic competition, oligopoly, monopoly) of the market(s) you are in. Discuss how you would answer this question and your justification for your answer.

Answer 1

Market structures are critical to the functioning of a business unit. There can be many markets within a market and many market structures within the same market. Tesla, being more in to the automotive industry with solar energy as its base, is one of the very few companies to be able to enhance its researches and reach out to the market consumers. The type of market structure that Tesla exists in is the Oligopolistic market structure.

                           Oligopoly is the kind of market structure which has very limited producers and limited consumers. Like in the Oligopoly, Tesla also enjoys limited number of buyers in the market yet. This can be attributed to the slowly developing electric or solar vehicle market. The use of solar energy in the other spheres of livelihood has become quite common, however, the vehicle industry or the automotive industry is yet to fully endorse this change and implement the solar source or the electric source for their vehicles. Moreover, there are very limited competitors to Tesla, the electric automotive industry being limited yet, very less large-scale firms have invested in to this industry. Tesla also has a scenario where , in the market, there is very less possibility of production differentiation apart from the brand name. The quality of products in the market are non-distinguishable. Therefore, there is every possible of the products colliding with one another in the sense of market war. However, with the fast-paced movement of the people towards solar and other renewable energy sources, it is expected that more and more people are now intending to move towards electric run vehicles. Therefore, the market fir Tesla in future is very promising. This, however, must be taken in with out-most sincerity that this electric automotive market can bloom to its best when Tesla will start investing more in the medium range electric cars. And not only in the high range ones. If the electric cars can be afforded by the common people, there will be huge demand for such vehicles. Moreover, Tesla should also ensure to keep up the quality of their machines intact so that, a sustainable and renewable electric vehicle can be he future of automotive industry.