SM9633: To enter foreign markets, the MNE must possess some sort of ownership-specific advantages. What ownership advantages give Tesla Motors competitive advantages over local electric carmakers in China to be successful?. International Business and Innovation assignment
Module / Subject / School:
SM9633 International Business and Innovation
Tesla was ranked by Forbes as the ‘World’s most innovative company in 2015.Tesla Motors is an automotive company, which was established in 2003 by a group of Silicon Valley engineers, including Elon Musk (founder of PayPal). On 7th March 2019, Tesla Motors signed an agreement with Chinese authorities to build a factory in Shanghai, China, this factory would be Tesla’s first outside of the US (BBC, 2019).
Based on the case of ‘Electric carmaker Tesla entering China’, students are required to produce a 3000 words (+10%) academic report to address the questions below by using academic theory and concepts. Answers MUST be adjusted and supported by sufficient self-collected research data.
Professor Dunning (1977) proposed the well-known ‘eclectic paradigm’, including ownership-specific advantages (O); Location advantages (L) and Internalisation advantages (I). Applying OLI framework, and using appropriate analytical tools, critically discuss and answer the following questions:
1a – To enter foreign markets, the MNE must possess some sort of ownership-specific advantages. What ownership advantages give Tesla Motors competitive advantages over local electric carmakers in China to be successful? (20 marks)
1b – What location-specific advantages is Tesla motivated to exploit from China, and why does Tesla Motors build factory especially in Shanghai? (15 marks)
1c– How could Tesla Motors effectively internalize its ownership-specific advantages (identified in part a) in China (e.g. protect and use its ownership advantages in the host country)? (15 marks)
- Overall word limit: 3000 (+/- 10%)
- The word count is to be declared on the front page of your assignment and the assignment cover sheet.
- Word limit exceeding +10% limit – 10% deduction of the mark.
- Falsified word count will be regarded as academic misconduct.
What we score:
Our Writer’s Comment
This assignment tests students on their understanding of the key theoretical concepts that underpin practices of the multinational enterprise (MNEs).
Based on the assignment requirements provided, here are some comments to help students score well on this assignment:
When working on this academic report, make sure to provide a clear and concise introduction that sets the context for the case study of Tesla entering the Chinese market. Begin by explaining the significance of the eclectic paradigm proposed by Professor Dunning (1977) and its components (Ownership, Location, Internalization) in the context of multinational enterprises (MNEs).
For Question 1a, critically analyze and identify the ownership-specific advantages that give Tesla Motors a competitive edge over local electric carmakers in China. Be specific in your analysis, providing evidence and examples to support your points. Make sure to link these ownership advantages to Tesla’s success in the Chinese market.
For Question 1b, discuss the location-specific advantages that motivated Tesla to choose Shanghai as the location for its factory in China. Consider factors such as market access, infrastructure, labor force, government incentives, and strategic considerations. Support your analysis with relevant data and academic sources.
In Question 1c, focus on how Tesla Motors can effectively internalize its ownership-specific advantages in China. Discuss strategies for protecting and leveraging these advantages in the host country. Consider factors like intellectual property protection, partnerships, and local market adaptation. Provide well-reasoned arguments and draw upon academic theories and concepts.
Throughout the report, ensure that all your answers are well-structured and supported by self-collected research data. Use appropriate analytical tools, models, and theories to strengthen your arguments. Be careful not to exceed the word limit; adhering to the given word count is essential to avoid any mark deduction.
Cite all the academic sources you use in your report following the appropriate referencing style. Plagiarism is strictly prohibited, so ensure that you accurately reference all information and data obtained from external sources.
Remember to declare the word count on the front page and assignment cover sheet to avoid any misunderstandings about the report’s length. Staying within the provided word limit showcases your ability to present information concisely and precisely, a skill that is highly valued in academic writing.
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