EkaLore uses the Alien Invader framework to look at companies that seemingly come out of nowhere to dominate a market space. They come from another market or geography, confound their competition by not playing by the “rules,” and suck the most profitable business out from underneath their competition.
EkaLore’s framework employs multiple concepts to identify “Alien Invaders.” Those include having technology, know-how (process knowledge), people, and resources ($$$) to invade a new market rapidly. Tesla’s price reductions fit more than one of these concepts:
1) Attack the margins and cash flows of legacy competitors to reduce their ability to compete and disrupt business management processes.
2) Reduce the sales unit volumes of legacy competitors to reduce factory utilization and increase G&A allocated to the product or service lines.
3) Use a changed business model with distinct buying experiences, life cycle cost models, feature pricing, or packaging.
4) Use financial strength to invade rapidly developing or building a marketspace disruptive to traditional (legacy) enterprises.
5) Use new or unfamiliar technology to leapfrog existing market entrants. Avoid market obstacles, create unique value propositions, directly appeal to “tech savvy” consumers/enterprises for possible spending, and create new features/functions previously unknown in the market landscape.
6) Defeat barriers to entry, including regulatory, legal, or industry customs. (These include regulatory compliance, domestic content, tariffs, value-added taxes, and industrial standards.)
7) Use technology to significantly alter production/delivery processes, materially reduce costs (above gross margin such as production costs), improve perceptible quality, and reduce labor (factory, service delivery, or along the value chain to customer).
8) Challenge current market space competitors' assumptions for time-to-market launch, cycle time for product/platform/service updates/new products, time from launch to colossal scale, and product/service availability at scale and reach.
9) Reduce the need for specialized staff considered “vital” by competition. Not requiring specific staff reduces competitor advantages, lowers the time to penetrate marketspaces, and speeds availability at scale and reach.
10) Disrupt traditional patterns for distribution, service supply chains, local presence, and high labor content that slows value delivery to customers, increases costs of inventory for service increases middle-agent costs, and requires time to scale.
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