Nikola Motors: a case study in bundling as a market entry strategy

Abstract

Purpose: By introducing how a young entrepreneurial firm leverages bundling as a market entry strategy, this study aims to suggest a way that a relatively vulnerable startup can secure its position from a threat of resource-rich established competitors. Design/methodology/approach: The authors conducted a qualitative investigation into Nikola Motors, a Class 8 heavy-duty truck manufacturer based in Phoenix, Arizona. The analysis revealed the underlying mechanisms that allow a startup to effectively enter a market through bundling in the truck manufacturing industry. Findings: Nikola Motors Co. uses a bundled business model in commercializing hydrogen-power technology used for heavy-duty truck manufacturing. Instead of focusing on a single product, Nikola’s business model created an ecosystem surrounding hydrogen fuel-cell electric heavy trucks, including hydrogen fueling stations, maintenance service and leasing. By leveraging partnership with players in other areas, it overcomes the resource limitation as a relatively small firm. Originality/value: Startups seeking to disrupt markets with novel technologies risk losing their competitive advantage to imitation by more resource-rich established firms. This study examines a novel approach to a bundled business model that can be effective for relatively resource-poor new companies. It suggests practical implications on how firms which are relatively in a weak position compete with established incumbents.