Tesla’s Texas Gigafactory

Tesla’s Texas Gigafactory

Telsa will build a 4-million square feet Gigafactory near Austin, Texas to make the company’s Cybertruck and other models for the eastern half of North America.

A tax break of $14.7 million and a young educated workforce are the main factors that attracted Telsa to locate its second vehicle factory in Texas.


Video Spotlight: Tesla to build its next Gigafactory in Austin, Texas (July 23, 2020, Fox Business)


This post is based on the Manufacturing article, Tesla Tabs Texas for Massive Gigafactory, by Tom Krisher, July 23, 2020, and the YouTube video in the Spotlight. Image source: Aleksei Potov/Shutterstock

Discussion Questions:

1.  What kind of capacity expansion strategy is being undertaken by Telsa?

Guidance: It is an expand-early strategy.  By building a second vehicle factory in Texas, Telsa is able to achieve economies of scale, expand market share, and preempt competition in the electric/self-driving vehicle market.

2. What location decision factors are being considered by Telsa in choosing Texas to build its second vehicle factory?

Guidance: The factors include a tax break of $14.7 million, the young and educated workforce, the absence of corporate or individual income tax, and being close to its SpaceX rocket company.

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Walmart Health Clinics for Everyday Low Prices

Walmart Health Clinics for Everyday Low Prices

Walmart Health Clinics is expanding from Georgia and Arkansas to Florida.

The clinics’ healthcare services include primary care, X-rays, optical, dental, and hearing services.  Walmart has over 380 locations in Florida serving a robust base of 140 million customers every week.  Walmart is therefore well positioned to build out its Walmart Health sites adjacent to its Supercenters to offer low-cost healthcare services to Florida’s sizable 65 or older population.


Video Spotlight: Walmart is now expanding its health centers to Florida (July 24, 2020, Jack Yocom)


This post is based on the Business Insider article, Walmart is now expanding its health centers to Florida, by Dane Finley, July 24, 2020, and the YouTube video in the Spotlight. Image source: Shutterstock / kurhan

Discussion Questions:

1.  Is Walmart Health Clinics considered a well-designed service?  Explain.

Guidance: Yes, it is consistent with Walmart’s low-cost strategy.  Its location next to Walmart Supercenters will provide customers with additional values of easy access and convenience.  It offers a wide range of healthcare services that meet the needs of Florida’s sizable 65 or older population.

2. What are the key factors that Walmart considered in expanding its Continue reading

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For Starbucks, It’s About Location

For Starbucks, It’s About Location

April 7, 2020

In downtown Manhattan, Starbucks locations abound.  Within a four-block radius, coffee lovers can find a 30,000 square foot upscale Roastery, a new Starbucks Reserve, and several traditional Starbucks shops.

How can the coffee chain open so many locations nearby one another and not succumb to cannibalization?  Restaurant analyst, R.J. Hottovy, says it’s because people drink coffee multiple times a day and the various store formats meet different needs, ranging from a need for convenience to a desire for upscale ambience.


Video Spotlight: The World’s Biggest Starbucks Just Opened In Chicago | Line Around The Block (Nov 15, 2019, Food Insider)


This post is based on the Forbes article, Yes, Starbucks is everywhere—but expect it to keep opening locations, by Gary Stern, March 3, 2020, and the YouTube video featured in the Video Spotlight. Image source: Shutterstock / M. Unal Ozmen.

Discussion Questions:

1. What differing operations and service design strategies does Starbucks use at its various locations?  Why don’t the many stores cannibalize each other?

Guidance: Traditional Starbucks stores focus on a location/convenience strategy and speed of service, with a growing mobile app customer base placing orders for high-quality beverages before Continue reading

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