STRATEGIC MANAGEMENT OF TESLA

STRATEGIC MANAGEMENT OF TESLA

Introduction and Overview of Tesla:

Tesla is one of the leading electronic vehicles in the world. Although the company was formed in the year of 2003, the company has secured it position among the best company in the automobile industry. Unlike other automobile companies, the primary products of Tesla happen to be electronic vehicles.

In fact it is considered one of the pioneers of electronic vehicles. Other products of the company are solar panels and power pack batteries. This essay intends to highlight the competitive advantage of the company and also point out some of the factors which care considered to the biggest drawbacks of the company.

Task 1: Competitive advantage of Tesla:

The stock cost of Tesla has seen a climb as of late as the organization is worries about its conveyance capacities and about expanding rivalry from carmakers who are exchanging their product offerings to electric.

With a market top as yet surpassing $50 billion, it can be anything but difficult to contend that Tesla’s value remains extremely swelled, particularly when you contrast it and those of GM and Ford which deliver 20 times more income (Dikmen et al. 2015, p.220).

In any case, there is preferred standpoint of Tesla which isn’t comprehended by numerous people: Tesla isn’t a common vehicle organization; it is an innovation organization building innovation stages. With these, it is situating itself to likewise turn into the main player in the vitality business and sharing economy.

Task 2: Analyzing the Internal environment of Tesla:

As per the views of Wieland  (2015, p.28) in order to analyze the internal environment of Tesla, SWOT analysis is used primarily.  It is important for the higher management analyze the internal environment because it has a direct impact on the service quality of the company. The SWOT analyses of Tesla are as follows:

Strength: the biggest strength of Tesla lies within their research and development department. This is due to the fact that, it is the continuous effort from the employees belonging from this department which allows the company to produce some of the most unique and high quality electronic vehicle.

The products of the company have always grabbed the attention of their clients. Although the company lacks a huge budget as compared to some of the largest automobile companies in the world, Tesla still manages to give their rivals a tough competition.

Weakness: it is a known facts an innovative employee are one of the most important assets of any given company. Therefore, an organization needs to look after the well fare and needs to nurture their creativity. However, it has been reported that the higher management of Tesla does not treats their employees in a professional way. This activity impacts the organizational culture in a negative manner. A number of employees have complained that they are facing the problem of racial discrimination (Stringham et al. 2015, p.100).

Opportunity: the quality of the electronic vehicle produced by the company is considered among the best in the market. The innovation behind the vehicle is also considered to be of top notch. Therefore, demand of these vehicles especially their latest car known as Model S is very high. This is great window of opportunity for the company.

Threat:  the reputation of the company witnessed a sharp downfall as the company is notorious for not filling the gap of orders. Therefore, this can be considered as a big threat for the company.  If this is not mitigated, the company has to restrain itself from making a satisfactory profit in the future (Martins et al. 2015, p.100).

Task 3: Analyzing the external environment of Tesla:

External environment analysis of Tesla:

Social cultural: In current days, various associations is winding up more mindful about environment. Tesla is one such association. Tesla urges their representatives to embrace the propensity for utilizing open transportation and less accentuating on the private vehicles.

the higher administration of Tesla likewise supports their representatives different physical exercises. Such examples of expanding natural mindfulness prompts expanding enthusiasm for green transportation have an exceptionally positive impact on the notoriety of Tesla.

In spite of the positive effect of natural mindfulness right now the enthusiasm for EVs is by all accounts slipping. Refinements in auto carbon outflow and execution notwithstanding the high cost for EVs among others are the reasons (Woźniak et al. 2018, p.24).

Legal: Government authorities around the globe are compelled to actualize strict measures against carbon discharge for the vehicles. This is maybe the greatest driving variable behind a dangerous atmospheric deviation and causes significantly more harm to the encompassing condition

administrative moves are a reasonable sign for the need of elective innovations like electric vehicles. In August 2009, President of United States declared a $2.4 billion allow program which was intended to make an electric vehicle battery industry in the nation.

Technical: With the progression of innovation, the general cost of assembling an Electronic Vehicle has been extraordinarily reduced. The Electronic Vehicle battery life expectancy has been increased, and key associations of the organization enable Tesla to join upper hands.

These will empower bring down costs and higher quality product. In expansion to the SLEPT examination it merits thinking about the statistic, worldwide and normal natural factors all together to have an exhaustive comprehension of the general condition.

Internal environmental analysis of Tesla:

Key resources: One of the greatest driving components behind the underlying achievement of Tesla is their imaginative culture. This culture set Tesla in a place to forces different licenses for Electronic Vehicles components. In truth the organization has been granted with in excess of 140 licenses and in excess of 200 licenses are holding up in the line.

Capabilities: The electronic vehicle planned by Tesla has dependably gotten consideration of their clients. Keeping in mind the end goal to outline, the primary preferred standpoint of Model S is that it gives bundling openings came about because of the smaller Electronic Vehicle control prepare.

Notwithstanding that the lodge is distinguished by a similar creator to be ample, however the raked rooftop line constrain on raise situate head room. Moreover, Tesla planned and built up its own framework since it exceeds expectations in both equipment and programming designing capacity (Grant 2016, p. 22).

Excellent Engineering: Looking Tesla from designing magnificence, the Model S body is light, on account of its all-aluminum development, yet solid and hardened. The front and back suspension are likewise for the most part aluminum.

At the back are expelled raise suspension interfaces that give the quality of forgings at much lower cost, while in advance are empty thrown front knuckles that measure 25 percent not as much as a regular knuckle of comparative quality. The electric engine sits between the back wheels, contributing enormously to the 47/53-percent front/raise weight conveyance.

Research and development department: the research and development department of the company supports the innovative culture of the company. The R &D department of Tesla is responsible to come up with some of the best electronic vehicle in the world.

One such example is the Model S which has been described above.  A large amount of capital of the company is allocated only for the R&D department in order to make sure that the department functions properly.

Task 4: Business Strategy of Tesla and risks Involved with it:

According to Donada (et al, 2016, p.20) Tesla is of the best manufactures of electronic vehicle in the world. One of the primary factors behind their success are their effective business strategies.  However, it is important to note that, with every strategy, there lays a hint of risk which if not mitigated, can hamper the effectives of the business strategy itself.

The concept of electronic vehicle was first introduced by none other Tesla. Although the product had the capability to reduce some of the basic problems of maintaining a vehicle and cause less damage to the environment, the biggest problem associated with it was its performance with context to traditional vehicles. Some of the initial models of the company had failed to meet the expectation of the customers as per their performance.

Also, coming up with an electronic vehicle was relatively a new idea for the company. Therefore, the R&D department had to struggle with it. The second strategy of the company is to make sure, that the price of their products had been kept under a nominal budget which could attract a large number of potential clients. However, while doing so, the company might have to sacrifice the budget they required to manufacture it.

Task 5: Challenges of Tesla:

Some of the biggest challenges of Tesla are as follows:

Unhealthy working environment:

Various workers of Tesla whined that they have treated with physical viciousness and they have likewise experienced the issue of bigotry and discrimination. This is on the grounds that the organization has haired a worldwide group. The higher administration of the organization itself, has over and again neglected to determine these objections.

In the time of 2016, Tesla design has let go a legitimate instance of provocation against the best administration of the organization. The architect known as AJ Vandermeyden She has guaranteed that she had been paid not as much as her male colleagues having a place with same occupation profile , unreasonably disregarded for advancements, and struck back against for raising worries about the organization’s autos.

A couple of months after the claim wound up open, the company let go her. In spite of the fact that the organization demanded in an announcement that the cases of the architect was foolish for the claim, Vandermeyden’s record recounts a comparative story to those previously mentioned guarantees about Tesla’s poisonous work environment culture.

On the ground level, particularly on the production line floor, the specialists need to confront enormous work weight which influencing the general strength of the laborers contrarily all things considered.

In any case, even in the wake of griping about the issue, the higher specialist of Tesla appears to stay unbending in their choice of compelling their laborers work hotly (Kwan et al. 2015, p.08)

Unfilled orders:

Tesla is notorious for their underperformance and making up over promises. This happens to be one of the biggest driving factors which are forcing them to lose even there most potential clients. Due to this act, a number of companies which was collaborating with Tesla are opting for renegotiating about their partnership with Tesla.

The latest offence about Tesla is that they have not able to fill up the order of the Model 3 which happened to be their first electronic vehicle. The management of Tesla claimed that this vehicle would have been a worthy rival for some other notable electronic vehicle in the world.

Since the year 2016, more than 500,000 had preordered the car. Unfortunately, it has been reported that only 30 people have so far received their order. This report alone shows the amount of unfilled orders of only a single project (Stringham et al. 2015, p.100).

Conclusion:

Tesla although considered to be reputable name in the automobile industry, due to its poor service quality towards their customers, the company is going through a phase of downfall. The primary reason of this problem the workforce of the company is relatively small.

Due to this fact, the company cannot respond to the large number of orders placed by their customers. Also the higher management of the company needs to make sure that the culture of the organization is free from any discrimination and the officials of the company are not biased towards to some their employees.

In order to finally conclude, it needs to be stated that the USP of the company is their innovation. This is perhaps the only factor which has earned the company a good reputation in the market.

Reference List:

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Woźniak, J. and Fill, K., 2018. Logistic Organization of Mass Events in the Light of SWOT Analysis-Case Study.

Kancherla, Y.D. and Daim, T.U., 2018. Technology Roadmap: A Roadmap for Tesla. In Infrastructure and Technology Management (pp. 347-366). Springer, Cham.

Stringham, E.P., Miller, J.K. and Clark, J.R., 2015. Overcoming barriers to entry in an established industry: Tesla Motors. California Management Review57(4), pp.85-103.

Kwan, N., 2015. Tesla Motors Quality Engineering Application and Implementation.

Hettich, E. and Müller-Stewens, G., 2017. Tesla Motors. Business Model Configuration, Case Study Update: From Tesla Motors to Tesla.

Stringham, E.P., Miller, J.K. and Clark, J.R., 2015. Overcoming barriers to entry in an established industry: Tesla Motors. California Management Review57(4), pp.85-103.

Kwan, N., 2015. Tesla Motors Quality Engineering Application and Implementation.

Dikmen, M. and Burns, C.M., 2016, October. Autonomous driving in the real world: Experiences with tesla autopilot and summon. In Proceedings of the 8th International Conference on Automotive User Interfaces and Interactive Vehicular Applications (pp. 225-228). ACM.

de Campos, M.F., Rodrigues, D. and de Castro, J.A., 2018, January. Replacement of NdFeB by Ferrite Magnets. In Materials Science Forum (Vol. 912).

Martins, L.L., Rindova, V.P. and Greenbaum, B.E., 2015. Unlocking the hidden value of concepts: a cognitive approach to business model innovation. Strategic Entrepreneurship Journal9(1), pp.99-117.

Wieland, H., Hartmann, N.N. and Vargo, S.L., 2017. Business models as service strategy. Journal of the Academy of Marketing Science45(6), pp.925-943.

Sharma, S., 2016. The Tesla Phenomena A Business Strategy Report.

Donada, C. and Lepoutre, J., 2016. How can startups create the conditions for a dominant position in the nascent industry of Electromobility 2.0?. International Journal of Automotive Technology and Management16(1), pp.11-29.

 

 

 

 

 

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