Mission, Vision and Stakeholders of Better Place: - Essay Example

? Mission, Vision and Stakeholders of Better Place: Etzion and Streuben de that the mainstakeholders of Better Place are Shai Agassi who is the founder and Chief Executive Officer of the company. Other stakeholders that Shai Agassi identifies are the employees of the organization, Renault-Nissan and the various governments where the project is found. As the founder of Better Place, Shai Agassi has extensive interests in the operations of the company. This is because he is the one who came up with the vision and the mission of the company, and as the founder of the company, he seeks to ensure that the company achieves the mentioned objectives. As the CEO of the company, Shai Agassi has very high powers. This is because he is charged with implementing the policies of the company. Another stakeholder of the company is government institutions that are charged with the responsibility of regulating the automobile industry. For example, upon its launch, Better Place was able to open branches in more than 25 countries. This included Israel, Australia, Canada, Japan, Denmark and the United States. Etzion and Streuben (2012) denote that these governments have a considerable high interest because of their desire to see an alternative energy, to oil. Oil is a very scarce commodity, and its prices are always manipulated by oil producing countries. To find a solution of oil will be of great benefit to the government, and this will help them in the growth of their economies. The interests of these governments in the operations of Better Place are also denoted by their action of giving tax breaks to Better Place. The government has high power in relation to influencing the activities of Better Place. Better Place must acquire operational license from the government in order for them to operate their activities. To satisfy their interests, there is a need of providing constant report to the government, highlighting the achievements and challenges that the company faces. Renault Nissan is a major stakeholder of the company. Renault-Nissan has a high interest with the company, but low powers. Renault-Nissan is the major supplier of electric vehicles to Better Place, and their interests are based on the desire of having knowledge on the financial capability of Better Place. Employees of the organization are also other stakeholders of the organization. They also have high interests for the organization, but with limited power. Their interests emanates from their desire to know the mission and vision of the company for purposes of helping them carry out their duties in an efficient manner. The vision of the organization is to find an alternative resource that can replace oil as the dominant energy. This is by developing electronic vehicles. The mission of the company is to provide an integrated variety of services which are aimed at reducing the industries dependence of oil. These services include charging spots and battery switching stations (Etzion and Streuben, 2012). Industry Analysis and Scenarios: Customers Bargaining Power: The prices of oil products are under heavy regulation from the government and oil producers. Due to this heavy regulation of the oil industry, customers are very sensitive to prices of oil products. Gasoline stations will therefore adjust their prices to attract customers to their stores. Adding electricity to this source of energy will give customers a variety of options in regard to energy use. Customers might therefore bargain directly with electricity companies, for purposes of seeking lower prices for energy use (Grundy, 2006). Threat of Substitute Products: There are a number of initiatives developed for purposes of improving the public transportation system. The competing and substitute products that Better Place faces are the bus and the railway system. For example, there is the development of the metropolitan system which can make it easy for the public transportation system to thrive. It is also important to denote that countries are now limiting the number of vehicles that can access the capital cities. This is for purposes of preventing environmental pollution. On this basis, new measures are geared towards supporting the emergence of electronic vehicles. Threats posed by entry of new competitors: The Electronic Vehicle Infrastructure requires very huge investments and a return to this investment is dependent on how customers have managed to adapt this new technology. On this basis, if electronic vehicles became a success, it will most definitely attract a number of new players into the industry. Better Place is the first company that tries to break this type of market and thus control the electronic vehicle infrastructure. If this market is penetrable, other players will enter the industry and will pose a threat to Better place. Intensity of competition rivalry: Competition within this industry is two sided. Suppliers of gasoline products are faced with the risk of losing their markets and being replaced by electricity providers. On this basis oil producing companies will be forced to develop new strategies aimed at countering the competition brought forth by electric producing companies. This might include developing hybrid technologies that might help to counter the benefits brought forth by electric vehicles. Majority of oil companies also own gasoline stations and they might use this as an excuse to form a barrier of entry against Better Place Company. Oil companies will also refuse to collaborate with Better Place for purposes of seeking to protect their markets and operations (Grundy, 2006). Bargaining Power of Suppliers: Better Place needs batteries for purposes of developing their infrastructure. There are more than 50 battery producers in the world, and Better Place can negotiate with these suppliers based on the huge quantities of batteries they seek to purchase. It is important to denote that Renault Nissan is one of the suppliers of batteries to Better Place and therefore Nissan has a high bargaining power because Better Place does not have the capability of freely choosing a battery provider. Resources and Capabilities: Better Place has tangible and non tangible resources. One of the tangible resources of Better Place is lithium. Lithium is a natural resource used for the production of batteries, and without it, it is impossible for Better Place to carry out its operations (Kim, 1999). It is estimated that 25% of the world production of Lithium is used for the manufacture of car batteries. On this basis, without lithium, the company won’t be able to develop rechargeable batteries. Rothaermel (2012) denote that the employees of Better Place are also another important resource for the company. Better Place has a variety of employees and they include engineers, accountants, sales executive and managers. For any company to thrive, it must have highly qualified and talented employees. Better Place has such kind of employees, and they play an important role in trying to meet the objective of the company (Rothaermel, 2012). The ability of the company to produce electronic batteries is an important resource for the organization. This technology makes the company to have a competitive edge over its competitors. It also makes it possible for the organization to develop an alternative to the use of oil in the automobile industry. The company has a strong financial background, with various sponsors coming out to sponsor its operations. For example, governments such as that of Denmark and Japan have given this organization some tax break and even offered to sponsor some of its activities (Rothaermel, 2012). One of the strengths of Better Place is that substitute products cannot effectively compete with the electronic vehicles produced by Better Place (Deffillipi and Arthur, 1998). This is because they do not have the technology that can be compared with that of Better Place. The technology of producing electronic vehicles is a very important strength for the organization. Due to this technology, Better Place has the ability to develop vehicles that do not emit carbon. This in turn preserves the environment. Various governments in the world are concerned with the preservation of the environment, and the emergence of this technology gives them the opportunity to initiate measures that will help in environmental conservation. One major weakness for Better Place is its heavy reliance of supplies from Renault-Nissan. In as much as this alliance ensures that the company is able to get constant supplies from Renault-Nissan, but the cost is very high (Rothaermel, 2012). This is because Renault-Nissan, as the sole supplier has a bargaining edge over Better Place in relation to the prices of its commodities and terms of the contract. Renault-Nisssan is responsible for supplying batteries and electronic vehicles to Better Place, and on this basis, it can charge whatever price it see appropriate (Cronshow, David and Kay, 1994). Business and corporation strategies Pisano and Teece (2007) denote that Better Place has a combination of attributes that makes it have an edge over its various competitors. For example, Better Place highly values innovation, without which it is impossible for companies to survive in the automobile industry. For instance, the company was able to develop a strategy in which customers are able to subscribe for purposes of purchasing a driving distance. This is a very unique strategy, which does not exist in the automobile mobile industry. This is because, people only refuel their vehicles and there is nothing like purchasing a driving distance. Pisano and Teece (2007) denote that this strategy was aimed at subsidizing the costs of the various electric vehicles. Because of this concept, Better Place was able to manage the operational costs of producing electric vehicles, and they were sold at 5000 dollars less of vehicles which were using petroleum/gasoline. On this basis, this strategy was able to give them a competitive edge over their competitors. For purposes of maintaining their competitive advantage, the company emphasizes on the use of two major policies that is cost leadership and product differentiation. Under cost leadership, the main goal of the company is to reduce the costs of electronic vehicles to a significant level. This will make the vehicles affordable, and accessible to all manner of people. To achieve this aim, the company also aims at sharing its production costs with that of its customers. This is by allowing customers to pay a monthly fee that covers the various electric costs of the vehicles. This includes charging of the electric batteries and battery switches. Better place also decided to allow customers to pay for the maintenance of their vehicles, capital costs and warranty problems. Through this strategy, Better Place managed to cut the costs of its product, making it a cost leader in the automobile industry (Claudine, Andrew and Benjamin, 2012). Another strategy that the company uses is the differentiation strategy. Better Place has the technology necessary to make it possible for the development of electronic cars. There is a need in the market, for the development of automobiles that have the capacity to replace oil as the power that drives their movements. The main difference between Better Place and other automobile companies is its ability to produce vehicles that do not use oil. This gives the company a competitive advantage over its competitors, because it acquires to satisfy the need of environmental conservation (Johnson and Kevan, 2011). Due to this technological innovation, the company is able to gain the first mover advantage into the market. This is because the company manages to capture and solidify the electronic vehicle market, making it impossible for new entrants to effectively penetrate this market. Another strategy that Better Place needs to employ for purposes of having a competitive edge over their competitors is controlling the procurement/supply chain. Under this strategy, the company needs to come with measures aimed at controlling and managing their supply costs. Renault-Nissan is the major supplier of the company, it has a superior bargaining power in relation to the price of its supplies. Better Place needs to look for multiple suppliers for purposes of limiting the bargaining power of Renault-Nissan (Johnson and Kevan, 2011). This will make it be able to acquire lithium and electric vehicles at an affordable cost, making it possible to achieve growth in its market share. Bibliography: Claudine, S., Andrew, F., & Benjamin, D. (2012). Sustainable Value Chain Analysis, A case study of Oxford Landing from Vine to Dine. Supply Chain Management, An International Journal, 17(1), 68-77. Cronshow, M., Davis, E., & Kay, J. (1994). On Being Stuck in the Midddle or Good Food Costs less at Sainsbury. British Journal of Management, 5(1), 19-32. Deffillipi, R., & Arthur, M. (1998). Paradox in project Based Enterprise, The Case of Film Making. california management review, 40(2), 125-139. Etzion, D., & Struben, J. (2012). Better Place, Shifting Paradigm in the Automotive Industry. Free Online Copy, 1-37. Grundy, T. (2006). 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