Elon Musk is having a moment. Tesla just delivered its first Model 3, the affordable model that he envisioned in his “secret” strategy some 11 years ago. He wanted to build a sports car, then build a more affordable car with zero emissions. He’s basically already there. The Model 3 has mostly rave reviews and a multiyear waiting list, which is quite a feat, even for an industry leader like Musk.
Tesla Shows How Traditional Business Metrics Are Outdated
The problem with market share.
August 08, 2017
Summary.
As Tesla continues to grow rapidly, many business analysts have struggled to quantify Tesla’s success based on standard metrics. In this piece, the author argues that these classic metrics, such as market penetration and market share, are fundamentally flawed when it comes to identifying new market opportunities and threats. He goes on to describe three key shortcomings of these traditional metrics, and concludes that rather than focusing on market penetration, analysts should start thinking about problem penetration: What percentage of your customers (or potential customers) who have a problem related to your product have addressed it with a viable solution and higher commitment?
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Strategic Thinking Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategic Thinking. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Make thinking on a bigger scale second nature.