This reflects the high financial resources of the company. Moreover, the company currently is valuated at $700 billion (Hull, 2015). Valuable: The brand image of the company can be considered as one of valuable resources of the company. A VRIO analysis has been conducted to assess the resources of Tesla Motors. The resource based model discusses about the value generated by the company by using its resources and competencies. This as a result has made it quite attractive for the customers. However, the product line of Tesla Motors offers the customers with unique products that offer both power and electric driving, also without compromising on the aesthetic appeal. These companies are looking out for new ways to foster competitive advantage by developing new products with attractive value proposition.

Rivalry among firms: The industry consists of several well established firms like Volkswagen, Toyota, General Motors, etc. However, the convenience and value provided by a personal electric car cannot be matched, which reduces the threat for Tesla Motors. Threat of Substitutes: The direct substitutes for cars are public transport. Thus, Tesla has low threat from the new entrants. Threat of new entrants: The barrier to entry in the automotive sector is quite high, owing to the high capital investment that makes it difficult for smaller firms to enter in this sector. In order to reduce the dependence on the suppliers, Tesla Motors have established its own battery producing factory that allows it to achieve vertical integration in the supply chain, thereby achieving higher competitive advantage (Tesla, 2016b). The suppliers which provide high quality internal components therefore have a higher bargaining power over the car companies. Power of Suppliers: Most of the car manufacturers are dependent on the raw materials supplied by the supplier firms. This as a result allows it to gain higher returns. However, Tesla Motors have achieved a significantly high competitive advantage by developing technologically advanced electric vehicles which are not available from other companies in the industry. This as a result increases their bargaining power by reducing their switching costs. Power of buyers: The customers in the automotive industry have a large number of options available for them to choose from. The assessment of the five competitive forces has been discussed in this following section. The global automotive industry is highly competitive and is characterized by the presence of several well established brands. The industrial organizational model discusses about how the different factors environmental factors in the industry can impact the operations of a company. Industrial organizational model and resource based model Thus, globalization and technological development has resulted in organizational success. Furthermore, the globalization has also allowed the company to run its operations across different nations, thereby gaining access to a larger customer base. Tesla Motors have excelled in this area to develop electric cars that only runs of green energy but it also yields enough torque to attract the automotive enthusiasts. Technological changes in the automotive industry in the recent years have been on the grounds of development of electric vehicles to fight the increased pollution levels. In case of Tesla Motors, the company has emerged as a technologically advanced company that has indulged extensively into research and development to produce the most advanced form of electric vehicles and power storage systems. The globalization has allowed the companies to gain access to new market areas and foster diffusion of technologies and scientific knowledge, which can be leveraged to manufacture advanced products that can improve the overall standard of living of the customers.

Yips drivers of globalisation