1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
german
3 years ago
15

When Tesla first launched their electric vehicles in the United States, they deviated from the norm in the automobile industry a

nd choose to not use franchise-oriented dealerships to sell and maintain their vehicles. Indicate if this was an example of forward or backward vertical integration and use Transaction Cost Economics to explain why this was a good or bad strategic decision.
Business
1 answer:
Damm [24]3 years ago
5 0

Answer:

The choice of Tesla is known as Forward Integration.

According to the principles of Transaction Cost Economics, this is a good decision.

Explanation:

Companies sometimes take over the operations/businesses that deal with the distribution and supply of their products and or services. This move is known as forward integration.

Traditionally, companies focus on production then bring in middle-men such as Franchise owners, wholesales, dealers, and retailers to distribute their merhandise to the end user. Whilst there are associated benefits with this model, it's been found that the interests of the middle men also generate considerable costs.

In order to competitive advantage, companies are modifying their business models such that end users can deal directly with them thus reducing the final price of their goods and or services making them more accessible and easier to purchase for the consumers.

Transaction Cost Economics refers to the various ways in which an organisation can be set up in order to manage or control the costs associated with its transactions. The goal of transaction cost economics is to reduce overall costs in order to optimize profits, stay competitive and maintain growth by managing and modifying organisational structures and business models.

The most optimized organisational structure/business model is that which is able to attain the highest efficiency possible by operating at the lowest cost possible.

Good or Bad Decision

The market for motor vehicles is an oligopoly.

Therefore, price is an important factor to consider. As a more recent entrant into that space, this is very crucial for Tesla.

Tesla is not only entering into a market dominated by giants, but is also tryin to modify the way people know to drive cars (at least in most parts of the world). Therefore, it is a great move that it is going with a Price Penetration Strategy. Thus by cutting off the Franchise-Oriented dealerships and selling directly, Tesla is able to retain control over the price of it's vehicles.

The whole essence of reducing it's costs is so that it is able to make its products available to the consumers as an alternative to fossile fuel powered vehicles at the lowest cost possible. Despite it's best efforts, there are still petrol powered cars that are at least $10,000 cheaper that what Tesla is offering.

Besides price, one major factor that influences the choice to go with hybrid or 100% of electric cars is that they are clean and very environmental friendly.

Cheers!

You might be interested in
Freight-in and purchase returns and allowance are not deducted from purchases to determine the net delivered cost of purchases.
AysviL [449]
Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.

The statement "<span>Freight-in and purchase returns and allowance are not deducted from purchases to determine the net delivered cost of purchases. " is true </span>
7 0
3 years ago
abares Corporation had these transactions during 2020. Indicate whether each transaction is an operating activity, investing act
scZoUnD [109]

Answer:

(a) Issued $50,000 par value common stock for cash = Financing Activities

b) Purchased a machine for $30,000, giving a long-term note in exchange. Financing Activities = Non-cash Investing and Financing Activity

(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000 =  Non-cash Investing and Financing Activities

(d) Declared and paid a cash dividend of $18,000 = Financing Activities

(e) Sold a long-term investment with a cost of $15,000 for $15,000 cash = Investing Activities

(f) Collected $16,000 from sale of goods = Operating Activities

Explanation:

The Cash flows related to raising of capital is known as Cash flow from Financing Activities.

The Cash flows related to growing and selling of Assets of the business is known as Cash flow from Investing Activities.

The Cash flow related to trade in Ordinary course business of the Company is known as Cash flow from Operating Activities.

7 0
2 years ago
A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is
Ira Lisetskai [31]

Answer:

Time ticket

Explanation:

A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a: time ticket.

A time ticket also known as time card is type of document used to record the amount of hours an employee worked during a pay period. Time tickets come in all different shapes and sizes like the traditional time tickets that are physical cards that are stamped with starting and ending times of employees work days.

3 0
2 years ago
Beginning January 1, Community Hospital had 150 inpatient beds. On July 1, the bed count was increased to 200. From January 1 to
Mamont248 [21]

Answer:

A=167.74

B 96.15%

C 95.43%

D 1.02 days

Explanation:

A)No of days in the year = 365

Total no of services days = 26106 + 35120 = 61226

Average daily census = 61226/365=167.74

B) Bed occupancy rate for January - June 3.

= Total number of inpatient days * 100/ Available beds * number of day

=26106*100/150*181=96.15%

C)Bed occupancy rate for July - December=

Total number of inpatient days * 100/ Available beds * number of day

35120*100/200*184 = 95.43%

D)

ALOS (Average length of days)=Total inpatient days /Total Discharges

61226 + 9601/59788 + 9588= 1.02days

7 0
2 years ago
Determine if the following situations describe a game or a decision. Indicate what specific features of the situation caused you
hammer [34]

Answer:

China chooses a level of tariffs to apply to American imports.

3 0
3 years ago
Other questions:
  • Quuizlet the two common methods of processing credit and debit card transactions are
    6·1 answer
  • New viewpoints and ideas are valuable to companies because it allows them to ______.
    13·2 answers
  • Which of the following is a low-interest loan to students with very high financial need? A.Direct PLUS B.Pell C.Gates D.Perkins
    15·2 answers
  • Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from
    10·1 answer
  • Which strategy works best to help people feel more comfortable in meetings?
    7·2 answers
  • Convergence property implies that on the delivery day,
    9·1 answer
  • The Fed increased the supply of US dollars at an average rate of 6 percent per year over the 1980-2005 period. Based on the theo
    12·1 answer
  • Regarding internationalization strategies in multinational enterprises (MNEs), in situations in which a company's products face
    7·1 answer
  • What sup i am newwwwwww
    5·1 answer
  • What does repurchase mean on shein.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!