IB Business Management

I could put this on a number of board but think it's most appropriate here - showing a great example of diversification, allowing for a reference to the Ansoff Matrix - with Xiaomi looking at diversifying revenue streams, and exploiting its strong brand.

It also  highlights the extent to which China is trying to gain a dominant position in the electric car market.  

Does news like this damage the Tesla brand, or does it enhance the brand through clever contingency planning? It's an interesting question. Yes, the Autopilot system was faulty but for those car owners who haven't been adversely affected the recall is going to be installed 'at home' via internet technology and they won't lose access to their cars, unlike with a conventional motor car. 

iPhone maker Foxconn is investing in loss-making electric truck manufacturer Lordstown Motors, buying an 18% stake in the company for $170m. I'm not sure why it is doing this - perhaps it thinks that the market for iPhones is relatively mature and that a bet on faster growth elsewhere in a newer market might pay dividends.

That said, it is already involved in maunfacturing electric vehicles in Saudi Arabia, under the brand name Ceer, so perhaps it's hoping that there are spillover effects from this investment too.

An interesting example of diversification, with Chinese tech giant Xiaomi entering the market for electric cars. It will be interesting to see whether this is a successful move or not, and allows for consideration of where it fits in the Ansoff Matrix, the importance of branding and the importance of context. Whilst Xiaomi is a household name in China, the brand doesn't have much global traction.

An example of change in action, with this BBC article looking at the future for car dealerships, suggesting that new models of buying cars and the banning of new petrol and diesel car sales from 2030, meaning that staff will require retaining, and, in all probability, there will be fewer of them. 

Furthermore, instead of making an average profit of 7% per car, the dealerships are being squeezed by car manufacturers, with some - notably Audi and DS - looking to set-up their own directly-owned showrooms. 

However, existing dealers are confident that there is a still going to be a place for them in any future market.