Blueoceanstrategy1 x

Running head: BLUE OCEAN STRATEGY 1

BLUE OCEAN STRATEGY 4

Blue ocean strategy and porters five forces

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The electric cars industry

Following the rise, as tesla ltd launched its electric cars, entrepreneurs and individuals are increasingly entering this market by venturing into electric motorcycles’ production. The blue ocean strategy alludes to the simultaneous pursuit of product differentiation and low cost to open new markets and stimulate demand. The strategy entails capturing and targeting the uncaptured market spaces and hence make competition to be irrelevant. It is based on the view that the market boundaries are not provided and reconstructed via actions and beliefs. On the other hand, the Porter five faces of rivalry focus on analyzing an industry’s attractiveness and the probable profitability.

The blue ocean strategy and porter’s five forces have a strong message for the strategists in electric cars, including the invention will have multiple obstacles to overcome. As the enterprises are increasingly investing in these cars, the market faces a great challenge of close substitutes, which are electric motorcycles that are much cheaper and affordable to most clients (Boston, 2021). The invention does not target a market that has never been explored. There are diverse companies that have ventured into efficient cars that consume less fuel and emit zero carbon, meeting the goals of maintaining a cleans and healthy environment. Porters five force model tells clearly that the market’s likelihood of being flooded soon due to the increased numbers of firms and individuals interested in the venture. Hence, the profitability of firms investing in the sector is likely to diminish in the newer future. It would be significant to note that most clients regard electric cars to be a luxury and not a necessity as they come at higher selling prices compared to others (Foldy & Yang, 2021). Most of the clients may not afford to purchase these vehicles due to their high prices, which significantly leads to detrimental impacts on the motor companies’ sales endeavors.

Even though the blue ocean strategy would depict the electric cars market as yet to be explored with ample opportunities for growth and profitable it is worthy to note the competition in the automobile industry is quite stiff and giant companies already has set rule of the game. The ease with which clients can shift from electric cars to rival products is a key factor. The electric car development is quite simplified and can be easily duplicated. The technology can be implemented in petrol engine cars and may not remain a unique invention for a longer period (Keeler, 2020). The three tiers if non customers is applicable to the electric cars in diverse ways. Despite the electric car market still offer greater opportunities for the producers to reap huge profits in the short run as the demand may surge due to regimes encouraging their citizens to invest in these cars by offering those subsidies, as is the case in Europe. However, without these governments’ interventions, electric vehicles remain considerably expensive, which may change the developer’s mindset that there is no such huge market for cars worth the huge finances needed to support these ventures.

References

Boston, W. (2021, February 28). How Europe became the world’s biggest electric-car market—and why it might not last. Retrieved from https://www.wsj.com/articles/how-europe-became-the-worlds-biggest-electric-car-marketand-why-it-might-not-last-11614508200?mod=searchresults_pos4&page=1

Foldy, B., & Yang, S. (2021, February 24). Foxconn to build cars for electric-vehicle startup Fisker. Retrieved from https://www.wsj.com/articles/foxconn-to-build-cars-for-electric-vehicle-startup-fisker-11614169530?mod=searchresults_pos3&page=1

Keeler, D. (2020, August 22). Emerging and growth markets, August 22nd 2020. Retrieved from https://www.wsj.com/articles/emerging-and-growth-markets-august-22nd-2020-01599081555?mod=searchresults_pos6&page=1