Tesla vs The World: Revolutionizing The Car Buying Experience


It’s beginning to look like Tesla Motors’ CEO Elon Musk’s vision of becoming the world’s first mainstream electric car manufacturer is coming to fruition.  “Tesla” has been the top buzz-word in the news covering financial markets for the past few weeks now, and it has not been losing any steam, especially following a 99% rating by Consumer Reports on its Model S.  Tesla stock has already soared by nearly 175% this year.  Due to Tesla’s successes, both investors and consumers are gaining more faith in Tesla and its products.  Along side its stock price, Tesla has also been experiencing increases in sales after winning Motor Trend’s Car of the Year Award, and introducing its own financing program in a partnership with Wells Fargo.

The successes of Telsa Motors is proving to be too much pressure for the conventional car dealership, indicated by a proposed North Carolina bill to ban Tesla Motors galleries in the state.  Unlike car dealerships that make their profits by purchasing their cars at wholesale prices from the manufacturer, and then marking up the prices for the ultimate consumer, Tesla uses a direct-sales method to get their consumers behind the wheel of their machines.  The bill, which has just passed the state Senate, would ban manufacturers from selling their cars without going through a dealer.  Now, if you want to purchase a Tesla car, you can go to their gallery showroom, meet with a representative, choose your configurations, and make the purchase on-site through their website. There are many reasons why these dealers might be pushing for the Governor’s signature on this bill, but I am confident that it has nothing to do with simply playing by the same rules that other dealers are playing by.  Currently, in North Carolina, it is already illegal for an automobile manufacturer to sell their cars without doing so through a dealer, so what would this bill change?  Under current legislation, Tesla still has the criteria of being considered as a car dealership.  The bill would declassify Tesla as a dealer, since it prohibits manufacturers from making sales “using a computer or other communications facilities, hardware, or equipment”.  Tesla is the only manufacturer that uses this as their sole method of selling cars.

Tesla’s products aren’t the only revolutionary aspect of their business.  This buying experience eliminates the need to sit at a dealership for hours, trying to get the price of a car down to a reasonable number, while the salesperson makes multiple runs to the coffee machine, AKA “the manager” during negotiations.  Instead, you go to the showroom, sit in the car, choose your options, and place your order.  Whatever price you pay at the showroom, is the lowest price you’re going to get. No haggling necessary. Is this simply an effort by conventional dealerships to rid Tesla of its competitive advantage, or is it a sign of their hope to have Tesla models in their own lots, and cash in on their growing successes?

Source: http://gma.yahoo.com/teslas-direct-sales-business-model-targteted-n-c-170402561–abc-news-money.html
Image:  http://global.networldalliance.com/new/images/article/tesla_2.jpg



High-Speed Internet: Is it Still High-Speed?

This past week Google announced that they are expanding Google Fiber to Austin, Texas. Google Fiber is Google’s version of high-speed Internet, which can download at up to 1000 Mb per second, and digital cable television service. This is 100 times faster than any other Internet provider. Google Fiber also gives you one terabyte of storage, which can be used to record up to eight HD TV shows simultaneously. Google provides you with a brand new Nexus 7, that you use as a remote to control your TV.

Google Fiber is currently only being provided in Kansas City, KS and Kansas City, MO. Future cities that will have Google Fiber are Westwood, KS, Westwood Hills, KS, Mission Woods, KS, Kansas City North, MO, and Kansas City South, MO. Google offers three prices for Google Fiber:

Google Fiber Network Box
  • Gigabit + TV: $120/month ($300 construction fee waived)
  • Gigabit Internet: $70/month ($300 construction fee waived)
  • Free Internet (5 Mb): $0/month (for at least seven years) + $300 construction fee

These higher Internet speeds would eliminate those irritating YouTube buffers and would speed up downloading/uploading files. However, are the benefits of Google’s high-speed Internet worth the cost? It is estimated that it cost Google $11 billion to install Google Fiber nationwide, 20 million homes. That comes out to roughly $550 per home. With Google waiving the $300 construction fee, it would take five monthly payments of the highest-priced service, Gigabit + TV, to pay for the installation of Google Fiber to a home. Google would not start making a profit until five months after installing the service to a home. That is a long time to make a profit. This could prevent expansion to other cities.

In order to receive support from city politicians and residents, Google will install Google Fiber to public institutions for free. Hospitals, schools, community centers, and libraries will get Google Fiber installed for free. The rollout of Google Fiber also creates jobs in the Austin area and creates economic growth.

But is Google Fiber really necessary? The current U.S. average Internet speed is 7.2 Mb per second. While 7.2 Mb is not ultra-fast, it is still quite fast. Should Google not be focusing on expanding Internet access globally? Google should focus their Internet operations strategy on providing access to areas where it does not exist. We can wait for Google Fiber until everyone has access to the Internet first.

Should Google be waiving the $300 construction fee? Is this a smart way to gain customers or is Google only increasing its own expenses? Why is Google only expanding Google Fiber from town to town and not expanding nationally at one time? How are other Internet service providers going to compete with Google Fiber and its amazingly fast speed? What would you do with download speeds of up to 1000 Mb per second? Overall, does Google have good product strategy and project management in regards to the rollout of Google Fiber?


Analyst: Google Will Spend $84M Building Out KC’s Fiber Network To 149K Homes; $11B If It Went Nationwide: http://techcrunch.com/2013/04/08/google-fiber-cost-estimate/

Austin Next City for Ultra-fast Google Fiber: http://www.businessweek.com/ap/2013-04-09/austin-expected-to-be-next-stop-for-google-fiber

Google Fiber: https://fiber.google.com/about/

Google Fiber Expands TV, Internet to Austin, Texas: http://www.abcnews.go.com/blogs/technology/2013/04/google-fiber-expands-tv-internet-to-austin-texas

Residents and Businesses Excited for Possibilities Google Fiber Brings: http://www.kxan.com/dpp/news/local/austin/residents-excited-for-possibilities-google-fiber-brings

US Internet Speed Lags Behind S. Korea, Latvia: http://www.abc15.com/dpp/news/science_tech/us-internet-speed-lags-behind-s-korea-latvia


New Honda, Perfect Fit or Flop?


Honda is rolling out a car that is specifically targeted toward women. The new Honda Fit She’s is currently available only in the Japanese market. This new car comes in a “pretty-in-pink” and “eyeliner brown” color. The decision to offer the car in the Japanese market was based on the country’s more sex-defined roles. As much as half of all Japanese women stay out of the workforce and those women who do, there is more of a divide in tastes than one might find in Western countries. The car offers features that include a special UV-blocking window glass so that women concerned about their skin don’t have to worry about wrinkles while driving, as well as, a “plasmacluster” climate control system the maker claims can improve skin quality.

U.S. and European auto industries are hesitant to release the vehicle into their respective markets because previously when manufacturers tried to target products directly to women this proved an unfavorable outcome for the auto industry.  Automakers are not necessarily ignoring the needs of women. Both Ford and General Motors, among others makers, consider features and attributes of new products looking for ways appeal to women and avoid aspects that men would notice.

Before the auto industry releases this vehicle into the U.S. market they must understand their customers. Applying Quality Function Deployment, women customers do not want to be a singled out market. Women’s needs can be satisfied by including features where men and women both benefit; for example, providing larger storage space to put purses or briefcases, and including a UV-blocking window glass in all cars because men need protection against skin cancer too. Outside of Japan, women car buyers want to be treated like “one of the guys.”


What sort of quality control should the U.S. adopt in order for this vehicle to be favorable among women? Do you think a car targeted toward women has the potential to be successful in the U.S.?