Strategic Management of Tesla Motors †MyAssignmenthelp.com

Question: Discuss about the Strategic Management of Tesla Motors Company. Answer: Introduction The report provides a brief overview of the Tesla Motors Company and its external analysis and internal analysis. The external analysis of the company includes industry competitors, general environment and opportunities and threats of Tesla whereas internal analysis includes resources and capabilities information. Further details about the task discussed below: External Analysis Porters 5 forces The company has moderate threat of new entrants in the market as there is high capital investment in the automobile industry and no or very few economies of scale due to low production in volume. Apart from that, in order to excel in this business, the organizations expert needs to have optimum knowledge and experience about the products which all companies are incapable to have (Tansel 2015). Thus to which the company enjoys the power due to low threat of new entry. Moderate buyers power in the industry shows that the level of competition in the industry creates a moderate choice for the consumers in terms of price, design and functionality. Further this power is likely to increase with the increase in sale of electronic vehicles. Suppliers power in the industry is high as companies producing electronic vehicles are highly dependent on Tesla (Tansel 2015). Threat of substitutes is moderate as there are both hybrid and alternative fuel cars present in the industry. As the customers present in the industry are highly price sensitive and will immediately switch if they do not find the product different according to their expectations. Present opportunities and threats of Tesla Motors Opportunities As short term government supports the company in consumer incentives and research and development because of electronic vehicles industry growth stage. Also increase is oil and gas prices will also increase the demand of the products of Tesla in the industry. As the company produces electronic vehicles which runs without oil and gas due to which with increase in petroleum prices people will buy more EV (Liu, et. al., 2014). Threats The biggest threat to the company is regarding the doubt in the mind of customers regarding the price, design and its reliability on the electronic vehicles. as people normally rely on cars which run on petroleum so the company faces a threat in supplying the EV due to less demand and confusion in the mind of customers. Also the industry is connected with technological implementation in the product so the company faces difficulty in matching to the advancement present in the industry. Also many times the innovation impacts negatively on the satisfaction of customers. Lastly, lack of global charging infrastructure acts as a drawback for the EV of the company (Birk 2015). Thus, it is a threat which can reduce the growth of the company present in the target market. Competitive environment Competitors present in the industry are high, as there are many other famous firms are engaged in producing electronic vehicles in the country. Future it shall be noted that future rivalry is likely to increase with the implementation of innovative technology driven process in companies. Ford, Honda etc. are the main competitors of the company present in the market. Internal Analysis Talking about internal analysis it shall be noted that the resources and capabilities of Tesla motors helps the company in fulfilling the core competencies of the organization. Teslas core competency is to improve the motor-inverter and batteries. Licensing the drive propulsion technology and packaged battery system is another core competency for Tesla. In order to fulfill the core competencies the company used the powertrain technology and financing capabilities to achieve the target. The intangible resources of the company include its goodwill and innovative technology whereas tangible resources include reserves of the company invested in improving the parts of the vehicles (Linxweiler 2017). Value Chain Analysis Primary activities The company owns and operates two manufacturing plants in California and Nevada. Talking about supply chain, the company has 350 suppliers sourcing their products internationally and several in-house experts who monitor and maintain the quality standards and intellectual property. Operations: the operations are conducted with high degree of reliability for the design and quality of product present in the market. Distribution: the company directly distributes their product to the online stores. Further tesla loan program led the customers resale their vehicles to tesla at a reasonable value (Hill 2013). Marketing and sales: the key marketing objective of the company is to maximize the demand of the company and drive the customers to buy technology driven products. Also building long-term brand awareness is one of the objectives of the company. Services: the company pays stress on the satisfaction level of customers due to which they employed mobile technicians (Tesla Ranger) company owned service Centre (service plus) to solve the queries of customers. Supporting activities The company is focusing on procurement of product since 2010. They developed the Model X which aimed to initiate sale from Model S. The company heavily relied on technology and its development resulting to which they collaborated with technicians to create an identified product. Currently Tesla is employing around 6000 employees in more than 100 cities. Also the company continues to recruit new talents to support the growth plan of Tesla (Ross 2014). The general administration of tesla includes personnel and facilities cost. It includes sales and marketing activities, finance, HRM, IT etc. activities. Strengths of Tesla Exclusive electronic vehicle infrastructure is the biggest strength of tesla which enables the growth of the company. Also low marketing cost helps the company to save funds to create technological advancement in their products (Radius, 2017). High level of confidentiality helps Tesla to grow in the target market without giving the competitors a hint of their future strategies. Weakness of Tesla The company faces difficulty in retaining profits due to substantial increase in research and development expenditure. This is also one of the reason due to which the company faces loss in the market. Conclusion Thus, it shall be noted that Tesla motors is gaining the competitive edge by creating technological value in their product. Also Tesla faces difficultly in managing the innovative technology as well. References Birk, D., 2015. Tesla Motors, Inc. Market Analysis and Definition. Hill, J, 2013. electronic vehicle sale expected to grow globally to 1.8 miilion by 2023. Viewed on November 6, 2017 from https://cleantechnica.com/2014/08/12/electric-vehicle-sales-expected-grow-globally-1-8-million-2023/ Linxweiler, J.A., 2017. Sensitive Analysis of Tesla Motors, Inc. Liu, R., Wang, H., Xue, J., Xu, X. and Xie, Y., 2014. Capital structure analysis of Tesla Motors, Inc. Radius, 2017. Tesla Motors: achieving excellence and innovation overseas. Viewed on November 6, 2017 from https://www.radiusworldwide.com/knowledge/case-studies/case-study-tesla-motors Ross, P. 2014. Tesla research budget: spending as fast as we can. Viewed on November 6, 2017 from https://spectrum.ieee.org/cars-that-think/transportation/advanced-cars/teslas-research-budget-spending-as-fast-as-we-can-and-a-good-thing-too Tansel, A.K., 2015. Analysis of Tesla Motors Marketing Communications Strategy. Tansel, A.K., 2015. Marketing Report on" Tesla Motors".