This article is interesting but very naïve in is approach. First of all what he describes it is not a business model but part of the value proposition, and more specifically the value discipline. Yes, I&#x27;m using the Treacy Wiersema model[1].<p>So for instance saying that the low cost competitor couldn&#x27;t afford to spend a little more on quality is dead wrong. If the customer you select values cost over quality (I&#x27;m not even looking into customer intimacy, the third discipline he misses) the are willing to pay a premium upfront for a product that is affordable over the lifetime (Total Cost of Ownership). That&#x27;s why even in the volume market it is not always the one with the lower price to win. And different company could compete carving out a little different market.<p>Apple is for sure in the quality area. Tesla? My guess is that Tesla is in the Total Cost of Ownership, so totally different business model. Look how much they stress on the lower maintenance cost. Look at the direct distribution model that cut the costs down. Look at the free recharge at their supercharger network. Look at the calculator on how much you save buying a Tesla.
Want more details? Their new battery factory will produce battery also for competitors to get to a scale big enough to reduce price. They open sourced their patents so other company will use their technology de facto increasing the consumption of component they need (lowering the price) and doing R&amp;D with them.<p>Another aspect, Tesla is pretty much a vertically integrated company, even in a market where sourcing component and sharing platform is common, they produce a lot in house (e.g: the batteries). This is common when you look for the lower Total Cost of Ownership (it&#x27;s in contrast with management mantra, all people that read just the first chapter of Traecy Wiersema book and not the next 19). On the opposite Apple outsource a lot even in a market where outsourcing is common. They do this to get the best component from the producer that happens to be able to provide it.<p>I know my analysis seems to be counter-intuitive, but if understanding and replicating Apple&#x27;s business model (or Amazon, Tesla, Southwest, Nordstrom) was easy and intuitive I guess there will be no more Apple. I&#x27;m not even saying that I&#x27;m 100% right, to be fair...<p>[1]<a href="https:&#x2F;&#x2F;hbr.org&#x2F;1993&#x2F;01&#x2F;customer-intimacy-and-other-value-disciplines" rel="nofollow">https:&#x2F;&#x2F;hbr.org&#x2F;1993&#x2F;01&#x2F;customer-intimacy-and-other-value-di...</a>