Disruptive Innovation
|
| Author | Content |
|---|---|
| Ridcully Jun 23, 2013 1:14 AM EDT |
I know little about the Tesla car and just how good it is in practical terms....but it certainly has "looks appeal". However, what Tesla is doing seems to me to be similar to what the Australian consumer is doing as regards purchasing on the internet. Australians are now buying enormous amounts using the internet and both Australian and overseas firms as the product source, simply because they can get better prices and savings often of well over 50% compared with the purchase price of the item off the shelf in an Australian store. Naturally, the big Australian store owners are screeching about lost sales......But instead of altering their sales paradigm to accommodate this new breed of Australian consumer, the store owners are trying to block the rights of the Australian consumer to purchase products as, when and where they choose. Disruptive innovation seems the correct term and it is remarkably similar to what Tesla is doing (or Android for that matter).....at least on the surface. Tesla has cut out the middle man and their cars have to be cheaper under those circumstances....But it disrupts the cosy system that the car makers and car retailers have had for a long, long time......I'm not surprised they don't like it....... The traditional paradigm of car marketing will continue if and only if the customers support it. This new method of sales is an attempt to get cars directly to the consumer but at a far better price. IF the Tesla is as good as it seems, we could be looking at quite a tussle, but my sympathies are with Tesla. |
| notbob Jun 23, 2013 8:14 AM EDT |
Selling direct is bucking an age old and well established institution in auto sales. Here's some info on the subject: http://www.valuewalk.com/2013/06/tesla-motors-vs-car-dealers... Auto dealers carry a lot of political power at the local level, the place where national politics originates. It will be interesting to see if Tesla prevails. History is not on his side. |
| Ridcully Jun 23, 2013 8:50 AM EDT |
Having read the article and from what I can see in it notbob, it's a cosy and lucrative arrangement between maker and dealers and to me, it smells worse than 5-day old fish kept in a tropical climate. Simplistically, Its advantage is that it gives the dealers a source of income while disadvantaging the consumers with higher prices. In some ways, that's similar to the situation that Linux disrupted and exactly what Tesla is trying to disrupt. Linux is now successfully challenging and in many cases, overturning the conventional closed source paradigm of marketing software. So, given the success of Linux, this will be a very interesting one to watch. |
| jdixon Jun 23, 2013 8:09 PM EDT |
> But instead of altering their sales paradigm to accommodate this new breed of Australian consumer... Here's the thing. Going out and finding these deals, making the payments, arranging for shipping, handling problems? All that takes time and effort. That's time and effort that worth money to the person making the transaction. Exactly how much money depends on the specific person, but it's always worth some money. That money is the Aussie companies for the taking. All they have to do is find and purchase that product for the consumer and handle the normal customer relations. But no, instead they'll try to shut down the town water system to control a leak. That said, Tesla's list price of $62K for the model S is over 3 times what I paid for my current 1 year old vehicle and way outside my price range. |
| Ridcully Jun 23, 2013 9:10 PM EDT |
@jdixon.....that's an excellent example using the town water system. :-) However, your comment on the price is a darn good one. I certainly would blink at the current cost. But....and it's a big but, when these things first hit the market the cost is always high. We bought a top line LCD tv about 4-5 years ago and I am sure it cost around $1000. But about 3-4 years ago, LED tv's began to hit the Australian market in a big way. So, due to concerns about power consumption, we have just replaced the LCD tv with an LED tv with bigger screen and far more capabilities.....cost $500, but originally, they were much, much higher in price. As the volume of market penetration increases, so too do prices drop and I'd expect to see the cost of the Tesla car drop dramatically to something the rest of us mere mortals can afford. |
| jdixon Jun 23, 2013 9:19 PM EDT |
> As the volume of market penetration increases, so too do prices drop and I'd expect to see the cost of the Tesla car drop dramatically to something the rest of us mere mortals can afford. We can hope, Ridcully. We can hope. Of course, various municipalities in the US are already trying to impose special taxes on electric or hybrid vehicles to make up for lost gasoline tax revenues, which pretty much destroys any incentive to buy them. |
| Ridcully Jun 24, 2013 4:31 AM EDT |
Quoting:Of course, various municipalities in the US are already trying to impose special taxes on electric or hybrid vehicles to make up for lost gasoline tax revenues, which pretty much destroys any incentive to buy them. I am amazed and horrified that "various municipalities" should do what you state they are doing......it's almost like Microsoft trying to impose royalties on Linux users using "mostly invalid" patents. I don't think that even dinosaur-like municipalities can prevent the march of innovation and progress though....sooner or later the dam bursts and they find themselves in an even worse position than previously. Again, there needs to be a paradigm shift in how the municipalities deal with income and its disposal. As an aside, I understand that a new storage battery has about tripled the most conventional battery available at this time. I saw the article a few days ago.....sorry, cannot remember what the heck it was. |
| jdixon Jun 24, 2013 6:12 AM EDT |
> I am amazed and horrified that "various municipalities" should do what you state they are doing... Government avarice knows no bounds. :( http://www.foxnews.com/politics/2013/06/09/states-look-to-ta... http://usnews.rankingsandreviews.com/cars-trucks/best-cars-b... http://www.usatoday.com/story/money/cars/2013/04/28/hybrid-t... There are lots more hits if you Google electric hybrid taxes, but these are from relatively mainstream sites. And it seems to be a bipartisan effort. |
| Bob_Robertson Jun 24, 2013 8:59 AM EDT |
> And it seems to be a bipartisan effort. Of course. There is evil, and there is stupid, and then there is this magical "bipartisan" which is both evil and stupid. |
| BernardSwiss Jun 24, 2013 8:11 PM EDT |
How much of that is a reflection on how the municipalities are -- and are not -- allowed to collect taxes? I believe that here in Canada, cities and municipalities are pretty restricted in their power to establish taxes, and thus raise revenue, and consequently the lion's share of tax revenues actually go directly to the provincial and federal governments -- who must then be persuaded to let appropriate funding trickle back down to the cities and municipalities. And in the past couple of decades, the federal government has shuffled off many fiscal responsibilities onto the provinces, who have in turn off-loaded much of their fiscal burdens down the chain to the regions, cities and municipalities. In which case, anything that reduces municipal revenues is a real problem -- as they have few options for making up the difference. But that's Canada -- maybe it's different in the USA. |
| jdixon Jun 24, 2013 9:16 PM EDT |
> ...maybe it's different in the USA. These appear to be state initiatives, BernardSwiss. They only limits they have on taxation are in their respective state constitutions. |
Posting in this forum is limited to members of the group: [ForumMods, SITEADMINS, MEMBERS.]
Becoming a member of LXer is easy and free. Join Us!