Question

3.2 The founders had no experience making cars, but realised car companies now outsourced everything, even styling. Manufacturing partners were ready to be connected with; a 'fab-less' car company was possible" (Musk, 2015). (15) From the above statement, do you feel Tesla made a good decision to outsource some of its services for its production purposes? Justify your answer.

Answer 1

Yes, I think that outsourcing some of the major services and work to specialized manufacturers was the good decision of Tesla as far as the production process is concerned. The reason being, in outsourcing, there exists an agreement between the company and some specialized contractors or companies that are capable of performing main activities for the company. Due to outsourcing, the company can take advantage of specialized manufacturing partners who are specialized and experienced in a particular field. Outsourcing can provide several advantages to the company including no extra cost of maintaining staff, procurement raw material and controlling and monitoring, and the best quality services. The burden of the owner or CEO will get somehow released and they can focus on more core activities of the business. Many companies fail due to no skilled workers and staff but outsourcing is a way to gain advantage from specialized companies who eventually become partners.