Tesla’s Model Y dominates EV sales but shares many features with the Model 3, creating internal sales shifts. From a product strategy standpoint, this is best described as:

Question

BlackTom AI · Accepted Answer

Topic at hand: evaluating how a single product line shares features and shifts sales within a company’s portfolio.
Option 1: Market penetration. This term refers to increasing sales of existing products in existing markets, often through competitive strategies or price promotions. In this scenario, the discussion is about internal sales shifts between two products, not about expanding into new markets or increasing overall market share. Therefore, market penetration is not the best fit here.
Option 2: Product mix breadth expansion. This describes adding new product variants to broaden the range of products offered, typically increasing diversity in the catalog. While Model Y and Model 3 share features, the focus here is on how one product cannibalizes sales of another within the same brand, not on expanding the breadth of products available. Thus, this option mischaracterizes the dynamic.
Option 3: Product line contraction. This would involve reducing the scope of a product line, perhaps dropping models to simplify the lineup. In the given case, there isn’t evidence of removing a model to streamline the offerings; instead, there is an internal shift where one model captures sales that might have gone to another. So, contraction isn’t the best descriptor.
Option 4: Cannibalization. This concept describes a situation where a new or updated product erodes the sales of an existing product within the same company. The Model Y sharing many features with the Model 3 and drawing some demand away from the older or existing model is a classic example of cannibalization, where internal competition shifts demand rather than expanding the overall market. This aligns with the described internal sales shifts.
Option 5: Brand extension. This involves leveraging an existing brand name to enter a new product category or market. While both cars carry the Tesla brand, the key issue here is the internal sales shift between two closely related product offerings, not entering a new category or extending the brand into a distinct, unrelated product line. Hence this option is less fitting.
In summary, the core idea is that introducing or updating a closely related product (Model Y) leads to sales moving from another product (Model 3) within the same company, which is the essence of cannibalization. Other options describe legitimate strategic concepts but do not capture this internal transfer dynamic as precisely.

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Tesla’s Model Y dominates EV sales but shares many features with the Model 3, creating internal sales shifts. From a product strategy standpoint, this is best described as:

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