Issue:
Tesla is considering buying a company that has developed blockchain to facilitate autonomous
driving. You have been asked by your Tesla supervisor to analyze if this is a good strategic move.
Analysis: Include the following in your analysis:
• Identify at least three of Tesla’s capabilities. What is Tesla’s core competency? Present a core
competency statement for Tesla.
• How can buying a blockchain company build strategic value for Tesla through either building,
sharing, or developing blockchain specific capabilities?
• Buying a company would depend partly on the financial health of Tesla. Evaluate the company
valuation for Tesla using1) asset valuation, 2) earning valuation, 3) market capitalization.
• Is Tesla following a differentiator, cost leader or blue ocean strategy? Does this influence what
type of firm they should buy?
• Using a transaction cost – make or buy argument, explain under what conditions it would make
sense to buy the company? What are the other alternatives?
Recommendation:
Should Tesla form a strategic alliance, joint venture, acquire or build blockchain capabilities in house. Briefly defend your answer on your analysis.
For possible reference:
How Blockchain will Revolutionize Future Cars?
https://www.investopedia.com/investing/how-blockchain-will-revolutionize-future-cars/#:~:text=Using%20blockchain’s%20decentralized%20ledger%2C%20driverless,insurance%2C%20repairs%2C%20and%20tolls.
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