review session

Question 1

Key points: Tesla

Answer 1

1. Governments along with other external factors play a major role in stimulating demand for electric vehicles in various geographic markets. At the same time, Tesla faces production challenges in meeting growing demand, exacerbated by Covid-19.
2. The company is driven by a strong social purpose and plans to transform the society, but in the meantime is struggling to achieve profitability.
3. Tesla is trying to lower costs by gaining production efficiencies but hasn’t achieved enough scale yet. However, through diversification and creating synergies Tesla is successful in gaining economies of scope in multiple ways.
4. Early movers often become casualties in the market they create, paving the way for late comers to succeed. It’s unknown how long full electrification of vehicles will take to achieve in the U.S. and other geographic markets: it will depend on multiple external factors. In the meantime, Tesla needs to find ways to become profitable, gain market share and competitive strength to collect the benefits when the electric vehicle market matures.

Question 2

Key Points: Trip Advisor

Answer 2

1. TripAdvisor is losing its initial differentiation in providing travel reviews as there is an
   increasing number of travel information sources on the web.

2.- Complex relationship with other travel sites: interdependence on the one hand, competition on the other – coopetition.

3. TripAdvisor is suffering from reduced traffic and revenue in the Hotels division due to
   competitors trying to aggressively pull users directly to their sites, by-passing TripAdvisor as an intermediary.
4. For TripAdvisor, entering Experiences and Dining is a way to increase revenue and reduce
   risk related to hotels, while capitalizing on the existing user base
5. Going forward, attracting and retaining users is a priority in a highly competitive online
   travel space, as the size of the user base has a direct impact on advertising and other
   revenue on the site.
6. TripAdvisor is considering multiple options, including profiling users to offer personalized travel itineraries, which would create switching costs in a competitive environment and
   increase revenue per user when selling packaged solutions

Question 3

Key Points: Ocado Group

Answer 3

1. • Ocado is benefitting from the surge in demand created by Covid-19 in both of its divisions: the online grocery store for end-consumers and its ecommerce technology solution for business clients.
2. The two divisions have different cost structures and cash flow cycles. Similarly, the two corresponding industries in which Ocado operates represent two different environments, each with its own risks, although both are related to ecommerce
3. • Ocado has been an underdog for years and ridiculed for its failed IPO, but Covid-19 has increased interest in Ocado’s space and Ocado must be prepared to combat increasing competition.
4. • Ocado needs to decide what part of its business to focus on going forward and to what extent pursue international expansion.
5. There is uncertainty regarding post-Covid demand and whether the urgency for “brick-andmortar” retailers to enter ecommerce will still be there. Whichever route Ocado pursues, it must be done considering profit potential and risk mitigation.

Question 4

Key Points: Impossible Foods

Answer 4

1. • Impossible Foods is on a mission to switch consumer eating habits at a wide scale. In doing so, it needs to overcome established sociocultural norms and traditions tightly linked with eating meat that have been formed over centuries.
2. To accomplish its goal of wider reach for meat alternatives, Impossible Foods must ensure product attractiveness, as well as develop an effective marketing and distribution strategy.
3. While growing presence of its products is a priority, there are multiple ways to achieve it:
   by utilizing various distribution channels, as well as horizontal and geographic diversification
   -each carrying its own set of merits and risks.
4. The market of alternative foods is in its early stage of the industry life cycle, which tempts Impossible to ignore competition, since there seems to be room for growth for everyone. However, lack of competitive strategy now may hurt the company in the future when the market matures.
5. Whatever growth strategy Impossible Foods choses to pursue, it must ensure that supply can meet growing demand for its products to avoid the backlash and damaged reputation with partners.

Question 5

Key Points: AllTech

Answer 5

1. • Alltech finds itself upstream of the value chain in a saturated, highly fragmented
     animal feed industry, known for its low profitability and slow adoption of new products
     among players in the value chain.
2. Alltech is diversified into other businesses, which helps offset the risk related to its
   animal feed supplement division. Opportunities exist within each of Alltech’s business units, and Alltech needs to decide which of them to pursue and which to forego due to shortage of resources. In other words, it needs to find its long-term strategic focus
3. Alltech has decided to focus on the animal feed industry and to gain market power by
   actively pursuing downstream acquisitions, which carry their own risks and limitations.
4. The path that Alltech has chosen does not have to be the only option: it could consider
   focusing on other types of acquisitions in the same industry, developing its other
   business units or capitalizing on its core competencies in technology. Is channeling
   resources toward a tough, saturated animal feed industry best for Alltech’s future?