The supply power of Chobani’s suppliers has minimal effects on Chobani as ingredients can be bargained from various providers. Due to its massive buying power, Chobani has more firm control over its supplier than the supplier has over Chobani. The greatest weakness Chobani faces is the buying power of its customers. They can dictate lower prices, change to a competing brand or lose interest if tastes evolve and if Chobani fails to meet and understand these emerging trends.
Tesla was found by Elon Musk in early 2000. Morgan Stanley calls Tesla, the world’s most important car company. The last successful American car startup was Ford Motors – over a hundred years ago. Tesla shouldn’t even exist, but it does. Let’s use Porter’s Five Forces of Competitive Model to understand how Tesla became one of the worlds most adored car companies. Tesla is a rare anomaly of a successful car company. There was intense competition amongst car companies when the vision of Tesla was born. Tesla’s unique roadmap of building an all-electric is what set it apart from the rest of the auto makers. Building a car, whether electric or gas, requires exponential capital. Tesla was unique in its efforts as it had both timing (battery technology had improved significantly), and access to immense capital. Also, a brilliant founder with a great vision. Its strategy of thwarting off new entrants into the market gives it a significant advantage as it has excelled in making long range batteries that is considerably better than any of its competitors. It has many patents on its battery technology and great economies of scale. Furthermore, it has already established a strong foothold by installing thousands of charging stations. Due to its great buying power, it can bargain the costs of supplies needed to make its all electric cars. It also owns its own battery manufacturing facility known as the Gigafactory. Ultimately, supplying itself with its own batteries. Suppliers have very little effect on Tesla as it can quickly switch suppliers due it economies of scale and needs. The buying power of Tesla’s customers to demand lower prices is very negligible as Tesla offers both a luxury brand and a more budget friendly model. Currently, there is more demand for Tesla cars than the company can produce.
Chobani and Tesla are two great companies that disrupted giant industries that had already established great economies of scale. The industries it disrupted failed to strategize and understand emerging consumer tastes and behaviors. Positioning is not just about carving a niche (Porter, 1996). A position emerges when a firm is both reactive and pro-active. When an industry fails to become pro-active, competing industries such as Chobani and Tesla can begin to capture existing and new market shares. Using Michael Porters Five Forces of Competitive model, both Tesla and Chobani will continue to remain dominant in their markets for years to come. However, when applying Michael Porters Competitive Model to both Chobani and Tesla using their own industries, it can be said with a great sense of probability that Tesla is much better positioned to dominate and gain more profit in the auto industry when compared with Chobani as it competes in its own industry.
Porter, M. (1996, November). What is Strategy.