Category: Tesla Motors

Analytical Essay on Tesla Motors: In-depth Analysis of Stakeholders Model

1 Introduction

Companies should either aligned with the changes in the existing competitive environment or react to such changes promptly, and anticipate actively with the changes in the customer demographics, potential new products or services, future technologies and hence recreate the industries (Tesla Motors, 2018). It needs to be really noted that the changes in industry are overall requesting answers from the organizations, and companies to focus on reshaping themselves and branch of the business.

1.1 Knowing Tesla Motors in brief

There are very few of the firms, who have been counted amongst domain who had incredibly changed themselves with the changing business globe. One of the few companies includes is Tesla Motors. Tesla Motors is recognized as one of American automotive companies founded in year 2003 with the public type in nature. We examined that research and development department of Tesla company is working in the area of energy to produce electric cars for consumers. The main founders of Tesla Motors are Martin Eberhard, Marc Tarpenning, Elon Musk, J. B. Straubel, and Ian Wright. Head office of Tesla Motor is situated in Palo Alto, California, U.S. presently; Tesla Motor is serving worldwide as mentioned in (Mangram, 2012).

Business setup of Tesla Motor is large and presently the strength of working employees are 45000 to well perform its internal and external operations in market to meet consumer’s obligations as per management standards. Management of Tesla Motors takes subsidiaries in the area of solar city, Tesla Grohmann and automation to accomplish their business goals. This research report has been carried within the context of Tesla Motors with the main focus of identifying the stakeholder’s view, stakeholder category, and recommendations.

The vision statement of Tesla Motors is stated as:

“To create the most compelling car company of the 21st century by driving the world’s transition associated with respect to electric vehicles”

The mission statement of Tesla Motors:

“Design of Tesla Motors is to sell high performance in environment, use the sources of highly efficient electric, in order to produce sports cars with no having compromises.”

Management of Tesla Motors cars is based on combine style, use the power or need more acceleration and handling with advance information technology that make them among the fastest and more energy-efficient cars on the roads.

1.2 Challenges and Industry Trends

In 2017, Tesla Company has the wide ride since year 2017. Company has been worth in comparison to the past years, passing the Ford and the Fiat Automobiles in the market capitalization as well as threatening of the General Motors. The company has the pitiful amount of the available cash. It is considered that carmakers which company has overall challenged in the market capitalization in the year 2017, Ford, Fiat Chrysler, and General Motors, have each of the war chests. FCA has amount of $25 billion and car, Ford has overall socked away to the closing of $40 billion.

Today, Tesla Motors is facing several challenges. It is considered that challenge is with respect to company’s acquisition of solar city. The second main challenge is that management should work in the area of research and development department to overall improve products or services quality in context of meeting consumer’s requirements.

Examined that management of company should need to face a challenge due to logistics. Tesla is running that transform into an acute shortage of car carrier that led towards delay in delivery. The management of Tesla Motor takes effective actions according to auto expert’s view. The duty of expert view is associated with respect to service delays as insignificant, as owners that accept the challenges of servicing a new type of car to meet consumer’s expectations (Savolainen, 2005).

1.3 Ongoing Developments

It is considered that company, Tesla has overall shifted narrative of auto industry. Research (Savolainen, 2005) has compared Google and Apple companies which has made the consumers which has believed that they are not buying into more in comparison to an isolated products. It has been explained that the market capitalization of Tesla has been $56 billion, whereas, Ford has been $42 billion and the General Motors have been $58 billion. It is considered that this is the main reason why company is playing an outsize role in the shifting of narrative of auto industry. Automotive industry is dynamically changing and becoming highly competitive since last couple of years. We observed that product segmentation for Tesla Motor is based on industry market. This industry market is in the form of power wall and power pack to fulfil consumer’s expectations. Management should need to improve type of segmentation for Tesla Motor in context of provided battery in industry market. This industry market is in the procedural lithium Ion, NCA battery and NMC battery (Weiss et al., 2012).

Figure 1 1 Tesla Global Sales Projections (Vu, 2019)

Tesla Motor work according to geographical segmentation to provide different products or services to meet consumer’s obligation. This geographical segmentation is in practices of North America, Europe, Japan and Asia-Pacific. Summary and facts analysis is based on main product or services of Tesla Motors. The main products or services of Tesla Motor are in the form of manufacturing electric vehicles and Tesla Energy by providing quality oriented services to meet consumer’s requirements. Production outcome recorded in year 2018 is 245,162 vehicles, worth of revenue generation is US $ 21.461 billion and operating income is US$ (0.388) billion and Net income is (0.976) billion. The worth of total asset is US $ 29.740 billion and total equity is US$ 4.923 billion recorded in year 2018.

2 Tesla and its Stakeholders: Relationship Efficiency

It is considered that Tesla company carries significant importance. In accordance to the consideration and analysis, it has been founded that the stakeholders do carry an immense importance. Management of Tesla Motors emphasize in the area to maintained regular and effective communication with its stakeholders. This is the key reasons that management of Tesla Motors are effectively communicates in context of internal and external stakeholders by proper organizing information to accomplish organizational goals within set time framework model.

Importance of stakeholders plays an active role within current business setup of Tesla Motors to accomplish their goals within set time framework model. Examined that the concept of key stakeholder is associated with respect to company performance; management of Tesla had to address its stakeholders to well perform business operations in market and meet consumer’s obligations by providing them quality oriented automobile services and also increase high competition in market (Chakeres & Vocht, 2005).

Presently, stakeholders are using theory that proposes that an organization is using effectively manage their human and physical resources and build strong relationship in order to sort or measure best performance of organization that neglect their current stakeholder relationship. This is the key reasons that management used importance of stakeholder to effectively run business operations and accomplish Tesla Motors goals (Van et al., 2010).

Research on Tesla and Stakeholder Model

It is considered that stakeholder theory is complemented by the graphical framework in accordance to Freeman’s stakeholder model (Vu, 2019). It is focused that most of popular management model are expressed with an adequate structuring of the organisation. The research has demonstrated preference for the narrative and visual knowledge amongst the practitioners overall prevailing prepositional model found in an academia.

Management of Tesla motor is using stakeholder model and theory to run its business operations. The outcome demonstrated that management of Tesla Motors used stakeholder theory. This stakeholder theory is based on three key components. These stakeholder theory components are in procedural of external, internal and used various classification of stakeholder to accomplish their goals and objectives (Nimsky et al., 2005).

The aspects of external stakeholders are society, suppliers, government, creditors and customers in environment. Internal stakeholders are in the form of directors, company secretary; use the sources of sub-board management, employees and employee representatives that lead towards classification of stakeholders helpful for business expansion. The key operative functional activities of Tesla Motors stakeholder theory work through under the strong consideration of internal stakeholders that have an operational role in the company. Hence the role of stakeholder’s is very positive in context of corporate governance of the company for expansion of business operations in different countries for increase high competition in market (Nimsky et al., 2005).

3 In-depth Analysis of Tesla-Stakeholders model

We examined that stakeholder analysis plays an active role in context to measure the current performance of stakeholder groups. In this report, investigator used Freeman’s model to known the current performance of stakeholder in order to determine and examining stakeholder groups, capacity and also willingness to threaten with the corporation (Muneer et al., 2015). This stakeholder groups are in the form of employee, owner, government and suppliers. According to present model stakeholder analysis is presented in the form of table is presented in figure 3-1

Figure 3 1 Stakeholder Analysis

3.1 Behaviour Analysis

Analysing the behaviour of consumers are important part of every corporate or company. They use the feedback of the customer or consumer in the form of written comments or verbal feedback and tries to analyse the sentiment of the consumer to read the gaps that can be filled with proper measures. The behaviour or sentiment analysis of different customers are important for a corporation or business as it clearly gives them a feedback about their products and what necessary amendments can be made to make customer experience better. Behaviour analysis of Tesla Motors is composed of three key components. These Behaviour analysis components has been discussed in the following section.

3.1.1 Corporative potential

The cooperative potential of Tesla is good enough to be leading the world business economy in its own related field. Tesla has never been a trend follower when it comes to business strategies or innovations. They started off with the most innovative concept of electric cars in the market and set a trend of new vehicle technology that could change the way motor vehicles are being operated in recent days. To fulfil these type of ground breaking concept, Tesla has prepared well with its corporate potentials so as to keep up with their vision and to compete its treat in the market.

3.1.2 Competitive threat

We investigative that competitive threat of Tesla Motor is very high in market as the innovation made by the company is extremely visionary and futuristic which all other vehicle manufacturing companies are trying to achieve to lead to foundation of modern concept and innovative Technology. Today, management of Tesla Motors are facing competitive threat from almost all other leading vehicle manufacturing companies such as BMW, Audi, Tata, Apple, Uber and many more added to that is Porsche Taycan (2019) one of the latest innovation from Porsche and Mercedes EQC (2019) from Mercedes in context of pricing, technology and other accessories. As all of the vehicle manufacturing companies are spending major amount of their budget for innovation and next-level technology such as fully autonomous technology, all of them are coming with something new and innovation to provide better consumer experience. These companies are actually collaborating with other software companies to compete with Tesla, however Tesla has also collaborated with Toyota for their future ventures.

3.1.3 Actual behaviour

The Outcome demonstrated that in context of Actual behaviour of consumers with respect to automotive is good in market. Mostly, People like Tesla Motors automotive to fulfil their requirements at affordable pricing. Quality of Tesla Motor is considered as good as compared to other luxuries cars to meet consumer’s expectations. This is the key reasons that Tesla Motors management wants to expand their business operations all around the globe and also increase high competition in market to meet consumer’s obligations (Savolainen, 2005).

3.2 Motives

Imperative aspects with respect to motives to meet consumer’s and management expectations are provided as below

3.2.1 Objectives

The main objectives of Tesla Motors are in stated as “in order to assess solar or energy expenditure with respect to workers during work shift in automobile industry. One of the key objectives is associated with respect to tesla Motors are based on automotive professionals are responsible for all stages of vehicle repair, ensuring that roadways are filled with safe and well-maintained cars, trucks and buses as well.

3.2.2 Stakeholder’s

Stakeholder’s are in form of involvement of government, owners, employee and suppliers to effectively run business operations in market.

3.2.3 Belief

Belief is to provide quality oriented products or services to meet consumer’s expectations.

3.3 Coalition

Coalition is in a form of automotive vehicles that present a remarkable opportunity to overall improve the ways of quality standards. Today, people want driverless vehicles that allow people to travel more easily and safely in environment.

4 Stakeholder Category Identification & Generic Strategic Program

Generic strategy program plays an active role in context of measuring the real performance of intensive growth of Tesla Motors. Importance of generic strategies program cannot be overlooked at any cost, typically in context to well perform internal and external operations in market. Examined that management of Tesla Motors is using generic strategies program in order to achieve competitive advantages against other firms in global automotive industry (Nurhadi et al., 2017). This generic strategy program of Tesla Motors is interlinked with respect to stakeholder groups. In this report this generic strategic program works under the strong consideration of government, owner, employee and suppliers in environment.

In current business analysis, management of Tesla Company focuses on generic strategy programs that reflect the company’s focus on using advance information technology to speed up their business processes in the area of electric automobiles that lead towards products the ways of competing against other general motors companies. Generic strategy program of Tesla Company with respect to selected stakeholders.

Stakeholder Type one is known as the term of strategy that is hold in environment. In this strategy type one work through under the strong consideration of owners. Potential cooperation of Tesla Motor is high to minimize potential threats that are low in state. Mostly generic strategies are holding in position to excel their automotive products or services all around the globe. Mostly decisions are centralized according to current market requirements.

Stakeholder Type second is identified as the concept of strategy that is swing in environment. In this strategy type the company works through under the strong consideration of suppliers. Potential cooperation of Tesla Motor is low in order to sort or minimize potential threats. Mostly generic strategies are swing in position to excel their automotive products or services all around the globe by providing quality oriented services to consumers.

Stakeholder Type third is known as the concept of strategy that is defensive in state. This strategy type is used in order to measure performance of working employees to accomplish Tesla Motors goals according to management requirements. We investigated that strategy used in defensive and its potential cooperation is low, whereas potential threat is high in state to accomplish organizational tasks (Muneer, Milligan, Smith, Doyle, Pozuelo, & Knez, 2015).

Stakeholder Type fourth is associated with respect to strategy that is offensive and need government involvement to accomplish Tesla motors tasks according to management requirements. This strategy type is used in order to evaluate corporate governance strategies to run business operations in market. We examined that the term strategy is offensive in type and need government involvement. Potential cooperation of government is high, whereas the level of potential threat is low in environment to run business operations in market.

5 Recommended Strategic Program

The following are defined as the key recommendations that are provided in the aspect of this research so that key outcome and the results could be obtained.

1. Implementation of the change within the workplace of Tesla is really necessary. It is considered today; employees are so much burdened with the work pressures that there is a need of considering the changes within workplace so that the productive outcomes can be extracted.
2. It is highly recommended that stakeholder groups still need to be improved according to develop generic strategies programs to meet Tesla Motors overall business performance in market. The outcome of this investigation demonstrated that government used offensive strategy in the area of promoting product fastest and used the sources of most energy-efficient electric car on the market.
3. Owner should need to work for more research and development program in context of innovative technology and improve their brand images.
4. It is highly recommended that management should need to use positive strategic partnership in context of supplier to provide quality oriented products or services to finished products in the area to maintain its quality to meet consumer’s requirements and increase high competition in market.
5. It is highly recommended that management should need to provide proper training and development programs to their working employees for overall increase their performance that directly impact on Tesla Motors performance in market. Employees are normally used for the concept of growing market, rising consumer sentiment and provide government support to excel Tesla Motors products or services all around the globe.

List of References

1. Chakeres, D. W., & Vocht, F. (2005). Static magnetic field effects on human subjects related to magnetic resonance imaging systems. Progress in biophysics and molecular biology, 87, 255-265.
2. Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20, 289-312.
3. Muneer, T., Milligan, R., Smith, I., Doyle, A., Pozuelo, M., & Knez, M. (2015). Energetic, environmental and economic performance of electric vehicles: experimental evaluation. Transportation Research Part D: Transport and Environment, 35, 40-61.
4. Nimsky, C., Ganslandt, O., & Fahlbusch, R. (2005). Comparing 0.2 Tesla With 1.5 Tesla Intraoperative Magnetic Resonance Imaging: Analysis of Setup, Workflow, and Efficiency1. Academic radiology, 12, 1065-1079.
5. Nurhadi, L., Borén, S., Ny, H., & Larsson, T. (2017). Competitiveness and sustainability effects of cars and their business models in Swedish small town regions. Journal of Cleaner Production, 140, 333-348.
6. Savolainen, A. (2005). Driving towards a better future. World Pumps, 2005, 56-59.
7. Tesla Motors. (2018). Retrieved May 01, 2019, from Electric Cars, Solar Panels & Clean Energy Storage | Tesla: https://www.tesla.com/
8. Van Vliet, O. P., Kruithof, T., Turkenburg, W. C., & Faaij, A. P. (2010). Techno-economic comparison of series hybrid, plug-in hybrid, fuel cell and regular cars. Journal of power sources, 195, 6570-6585.
9. Vu, H. (2019). toughnickel.com. Retrieved from https://toughnickel.com/industries/Tesla-Motors-Incs-organisational-performance-analysis
10. Weiss, M., Patel, M. K., Junginger, M., Perujo, A., Bonnel, P., & Grootveld, G. (2012). On the electrification of road transport-Learning rates and price forecasts for hybrid-electric and battery-electric vehicles. Energy Policy, 48, 374-393.

Analytical Essay on Tesla Motors: External and Internal Environment

Introduction

The use of strategic management in an organization has always been considered as something of prime importance because it eventually prepares an organization for its future by making relevant decisions. The use of strategic management tools and techniques eventually allows an organization to help understand the opportunities they have and the strengths that can be utilized to make the most of it (Cegliński, 2016). This report would essentially focus on the external and internal analysis of the organization named Tesla Motors.

Company Background

Tesla Motors is one such company that has revolutionized the way of engineering and innovation in the technological aspect. The company was founded by a group of engineers in the year of 2003 whose mission was to ensure that the world was able to accelerate towards the use of sustainable energy (Tesla.com, 2019). Tesla ensures the use of lithium-ion batteries for powering up their hybrid electric cars. The company believes in having a future that includes zero emissions and zero reliance on fossil fuels. The company has its headquarters situated in Palo Alto, USA and as of 2018, the company has generated a revenue of about US$ 21.461 billion (Tesla.com, 2019). Their products comprise electric vehicles with popular models such as Model S, Model X and others.

Industrial Background

In the year 2017, the global electric car market was valued at US$118,864.5 million and is expected to grow four times by the year 2025 (Hu et al., 2018). This particular industry is growing at a CAGR of 22.3% from the year of 2018 and is anticipated to maintain the same rate until 2025 (Hu et al., 2018). The demand for electric vehicles is continuing to increase because of the efficiency they provide. The electric vehicles are divided into three kinds and they are known as plug-in hybrid vehicles (PHEV), hybrid electric vehicles (HEV) and battery electric vehicles (BEV). Some of the best electric cars that are available right now belong to Tesla Motors and the models are Tesla Model 3, Tesla Model X and Tesla Model S.

1. External Analysis

1.1 Trends and Key Drivers

The understanding of the trends and key drivers for both present and future would be effective with the help of the PESTEL framework.

PESTEL Elements Trends and Key Drivers^

1. Political The political scenario of the USA can be considered as extremely complicated. The population is in favor of the use of electric cars but the government continuously mocks the use of low-emission vehicles. The government is inclined towards passing a law that is against the ‘Driving America Forward Act’ that eradicates all the chances of the Americans enjoying tax credits while using electric cars (Turrentine, 2019). In a situation as such, there is a chance that Tesla would be subjected to compound damage in terms of gaining and providing facilities associated with the use of electric cars.
2. Economic As per Bledsoe (2019), America is going back in the times and is ignoring the kind of improvements that can be instigated with the help of climate policy and EV cars. Due to the ignorance that has been presented by the economists and the political climate of the nation, the expected sales of the EV have been anticipated to remain stagnant for a substantial amount of time. The impact of the economic environment on the operations of Tesla is diverse. The government’s initiative to not provide a tax credit to people would affect their decision of buying an EV car. However, Tesla would continue to gain benefits from foreign countries and that might divert their attention towards focusing on the foreign market collectively.
3. Social The social stance always depends on the approach towards the kind of lifestyle that is appreciated by the people. The people in recent times are more appreciating the use of low carbon footprint cars and other major technological devices. The people have also been showing concern towards the use of renewable energy and Tesla has managed to do both. Thus, it can be implied that the company is favored among EV car users and non-EV car users as well.
4. Technological The foundation of Tesla is based on groundbreaking advancements and is considered for being one of the prominent ones to do so. The company has always been inclined towards the use of advanced technology, but mostly the ones that promote sustainability to abide by its mission and values. Meanwhile, they continue to grow with the help of lower carbon footprint embedded EV cars and the use of renewable energy for attracting consumers (Hardman et al., 2017).
5. Environmental In the recent light of events, there has been growing concern of people over environmental issues and the way it is degrading due to coping with the requirements of the world’s population. The recent trend that has been made mandatory for every organization to consider the concepts of the green economy, pollution, waste management, carbon footprint, and the emission of fossil fuel usage (Yang et al., 2017). Tesla Motors has always been inclined towards using sustainable means of work that allows innovation and its mission has always been the use of renewable energy as well. In this case, they are benefiting the environmental concerns of people.
6. Legal Complete compliance with the legal jargon of a country is extremely essential and Tesla Motors have been consistently doing that. They are popularly known for paying their employees right and make sure that have been able to assure compliance with the environmental laws of USA.

Table 1: Use of PESTEL Framework to determine the business environment and trends/

From the table above, it can be said that the key trends comprise of using advanced technology, keeping up with the lifestyle choices of the people, and at the same time make sure that eco-friendly measures are being used for the betterment of the organizational performance. The driving nature of the industry is completely dependent upon the political and economic scenario. Tesla has been successfully incorporating the use of sustainable measures since the beginning.

1.2 Power

According to Woo and Lee (2018), for the understanding status of the competitive environment, the use of Porter’s 5 forces would provide a decent idea. As mentioned by Hoelzlhammer (2018), the following is the five forces analysis of Tesla Motors:

The Five Forces Analysis

1. Bargaining Power of the Suppliers The bargaining power of the suppliers is extremely high in the case of Tesla because the technical parts required for the manufacturing process have high demand. The rise in demand has a tendency to provide the suppliers with all the power.
2. Bargaining Power of the Buyers The bargaining power of the buyers is medium in the case of Tesla Motors because of the balance of both high and low factors. However, due to the minimum existence of substitutes for electric cars, the bargaining power of buyers is medium. On the other hand, there are sufficient amount of brands that exist as another option.
3. Competitive Rivalry The competitive rivalry in this scenario has been considered to be medium because despite having an adequate amount of other companies trying to replicate the nature of Tesla cars, none of them have succeeded properly except a few. However, Competitive rivalry would increase in the upcoming years because of the changing preferences of majority of the automobile companies towards manufacturing EV cars.
4. The threat of the New Entrants The threat of the new entrants in this industry has been identified as low because of the barriers to entry that exist. Not every company has enough resources, ambition, engineering capability and environmental concern to use sustainable methods. Also, there are enough political barriers in USA which makes it even more difficult for other companies.
5. The threat of the Substitutes In the recent context, the threat of substitutes has been identified as medium, however, it is likely to grow in the upcoming years. The already existing automobile companies are the ones that are integrated towards making the use of electric cars popular. Some of the popular names include Mitsubishi, Ford, Chevrolet, and others

Table 2: Porter’s 5 Forces (Source: Created by the learner)

1.3 Attractiveness

From a thorough analysis that has been conducted, some of the key opportunities and threats are identifiable. The opportunities identified are:

• The use of technological advancement and keeping a track of the lifestyle changes that occur among the majority of the population
• The use of renewable energy continues to be a beneficial aspect for the company
• Have a professional and long term relationship with the suppliers to have a smooth operational flow in their business procedures

The following threats have been identified from the external analysis:

• The existing political barriers and the reduction of tax credits is a major threat to the company
• The foreign market has been identified to be more desirable than that of the USA because of the lack of consideration presented by the government

2. Internal Analysis

2.1 Core Competencies

The understanding of the strategic stance of the firm would be highly effective when its tactics and a significant range of core competencies have been identified. They have been detailed as under:

1. Resources- The key resources of Tesla Motors comprise of its human capital and the intellectual property they have. The company has always been successful in fostering substantial creativity among its employees and that is one of the reasons why their intellectual property is such an important resource. One of the biggest considerations here is their understanding of the recruitment policy and their knowledge of requirements from the suppliers. The company also has a stable relationship with its investors and that has enhanced its financial capability. One of the biggest intellectual properties they have is their electric powertrain that consists of battery pack, control software, gearbox, motor and other essential components (Monsellato, 2016).
2. Competencies- The key competences of Tesla Motors generate from their intellectual property. The ever-improving motor that consists of the inverter and battery is considered to be the core competences of the company (Moritz et al., 2015). They also gain their competences from their use of powertrain technology and their advanced vehicle design and manufacturing aspects.
3. Skills- The ability of Tesla Motors to focus on the needs of the stakeholders and replacing with substitutes that can enhance the possibilities of them being an advanced yet a sustainable company (Moritz et al., 2015). They have also maintained a long term growth strategy that would enhance the possibility of an effective relationship with proper inventory management as well.
4. Value Chain- The value chain of Tesla Motors can be considered highly efficient because as per inbound logistics as they include the use of renewable energy and scarce raw materials. The operations management of the company is highly efficient and has included automotive aspects to their cars along with energy generation ability or storage. The reliance on both physical stores shows their outbound logistics capability and at the same time providing accessories that facilitate the use of renewable energy using methods. In terms of their services and offering the company has incurred wide range of complaints about the product but at the same time has been able to help eradicate the issue as well.

Despite all of the advancements occurring for the organization, it can be said that the company is still lacking in terms of appropriate marketing and sales strategy. Meanwhile, there is also a requirement of improved customer service as well for the company to improve the nature of their services.

2.2 VRIN Analysis

The use of VRIN analysis would provide a sufficient overview of the internal capabilities of ASDA and make sure that all of that has been utilized effectively.

Resources Valuable Rare Imitable Non-Substitutable

Human Resources

Financial Resources

Supplier Management

Intellectual Property

Table 3: VRIN Analysis

From the analysis conducted above, it is evident that the company is equipped with a substantial amount of valuable resources that allow them to proliferate in their respective fields. Intellectual property, financial capability, and supplier management have always been the strongest aspects of the company. However, in terms of customer service and assuring the complete potential and maintenance of the product is something that the company is struggling with.

2.3 Competitive Advantages

As mentioned by Kraja and Osmani (2015), having a competitive advantage is considered to be extremely beneficial for an organization because it eventually provides a sense of superiority in terms of business situations over other companies operating in the same industry. Having a competitive advantage for an organization allows them to outperform many of its competitors. In the case of Tesla Motors, having a competitive advantage is extremely essential because of the growing demand and competition in the industry. In the words of Teece (2018), the competitive advantage of Tesla Motors lies in the following elements:

Intellectual Property

The intellectual property of the company is their biggest strength and has been allowing them to rise to prominence for years now. Some of their proprietary technology comprises cooling systems, electronic management systems, the proper use of software, customized motor design and adequate amount of environmental durability from their products (Teece, 2018).

Unique Design and Manufacturing

The company has managed to position as a high-end dealer of prominent EV cars that have authenticated design and extreme features that can put the other non EV cars to shame. The creativity that pertains to the chief designer of the company clearly elaborates on the potential of the product. The manufacturing process of majority of their factories, especially that of Fremont Factory is exponential (Praem, 2015).

Sustainability

ASDA has always been known for being the cheapest and friendliest supermarket chain. The essence here is to prioritize the kind of behavior that is portrayed from the side of the employees to the consumers is of primal importance. Here, the essence and prominence of the human resources of the organization are depicted with complete enticement.

2.4 Distinctiveness

The distinctiveness of an organization is based on their strengths and weaknesses and their internal capabilities. The strengths of Tesla Motors are as follows:

• The company has a well-equipped human resources, intellectual proper,ty and financial resources ability
• The company has a unique design structure and a flexible manufacturing process
• The use of an effective supply chain management strengthened the position of the company

At the same time, from the internal analysis above, the following weaknesses were identified:

• The company does not have a successful measure in terms of providing adequate customer service post-purchase of the products
• There is a much lesser consideration of the use of marketing methods that would draw more population

Conclusion

The report generated an adequate amount of information about the electric car industry of the USA and the company Tesla Motors operating in it. It was found that the electronic car industry has extreme amount of potential and is a tough competitor to the non EV car manufacturers. There is extensive amount of political barriers from the side of USA government and thus, the economic environment is not enough stability for the company to operate. However, the industry is constantly growing and would tend to do so. Tesla Motors would continue to gain popularity because of its use of sustainable measures.

External and Internal Analysis of the Organization Named Tesla Motors

Introduction

The use of strategic management for an organization has always been considered of incremental value because of the amount of competitive advantage it provides the company with from time to time. The tools and techniques that form an important part of the strategic management theory allows in understanding the internal capabilities of an organization and utilise it accordingly (Cegliński, 2016). This report would essentially focus on the external and internal analysis of the organization named Tesla Motors.

Company Background

Tesla Motors is one such company that has revolutionized the way of engineering and innovation in the technological aspect. The company was founded by a group of engineers in the year of 2003 whose mission was to ensure that the world was able to accelerate toward the use of sustainable energy (Tesla.com, 2019). Tesla ensures the use of lithium-ion batteries for powering up their hybrid electric cars. The company believes in having a future that includes zero emissions and zero reliance on fossil fuels. The company has its headquarters situated in Palo Alto, USA and as of 2018, the company has generated a revenue of about US$ 21.461 billion (Tesla.com, 2019). Their products comprise electric vehicles with popular models such as Model S, Model X, and others.

Industrial Background

In the year 2017, the global electric car market was valued at US$118,864.5 million and is expected to grow four times by the year 2025 (Hu et al., 2018). This particular industry is growing at a CAGR of 22.3% from the year of 2018 and is anticipated to maintain the same rate until 2025 (Hu et al., 2018). The demand for electric vehicles is continuing to increase because of the efficiency they provide. The electric vehicles are divided into three kinds and they are known as plug-in hybrid vehicles (PHEV), hybrid electric vehicles (HEV), and battery electric vehicles (BEV). Some of the best electric cars that are available right now belong to Tesla Motors and the models are Tesla Model 3, Tesla Model X, and Tesla Model S.

1. External Analysis

1.1 Trends and Key Drivers

The understanding of the trends and key drivers for both present and future would be effective with the help of the PESTEL framework.

Political

The political scenario of the UK can be considered as extremely complicated. The population is in favor of the use of electric cars but the government continuously mocks the use of low-emission vehicles. The government is inclined towards passing a law that is against the ‘Driving America Forward Act’ that eradicates all the chances of the Americans enjoying tax credits while using electric cars (Turrentine, 2019). In a situation as such, there is a chance that Tesla would be subjected to compound damage in terms of gaining and providing facilities associated with the use of electric cars.

Economic

As per Bledsoe (2019), America is going back in the times and is ignoring the kind of improvements that can be instigated with the help of climate policy and EV cars. Due to the ignorance that has been presented by the economists and the political climate of the nation, the expected sales of the EV have been anticipated to remain stagnant for a substantial amount of time. The impact of the economic environment on the operations of Tesla is diverse. The government’s initiative to not provide a tax credit to people would affect their decision of buying an EV car. However, Tesla would continue to gain benefits from foreign countries and that might divert their attention towards focusing on the foreign market collectively.

Social

The social stance always depends on the approach towards the kind of lifestyle that is appreciated by the people. The people in recent times are more appreciating the use of low carbon footprint cars and other major technological devices. The people have also been showing concern towards the use of renewable energy and Tesla has managed to do both. Thus, it can be implied that the company is favored among EV car users and non-EV car users as well.

Technological

The foundation of Tesla is based on groundbreaking advancement and is considered for being one of the prominent ones to do so. The company has always been inclined towards the use of advanced technology, but mostly the ones that promote sustainability to abide by its mission and values. Meanwhile, they continue to grow with the help of lower carbon footprint embedded EV cars and the use of renewable energy for attracting consumers (Hardman et al., 2017).

Environmental

In the recent light of events, there has been growing concern of people over environmental issues and the way it is degrading due to coping with the requirements of the world’s population. The recent trend that has been made mandatory for every organization to consider the concepts of the green economy, pollution, waste management, carbon footprint and the emission of fossil fuel usage (Antikainen and Valkokari, 2016). Tesla Motors has always been inclined towards using sustainable means of work that allows innovation and its mission has always been the use of renewable energy as well. In this case, they are benefiting the environmental concerns of people.

Legal

Complete compliance with the legal jargon of a country is extremely essential and Tesla Motors have been consistently doing that. They are popularly known for paying their employees right and make sure that have been able to assure compliance with the environmental laws of UK.

Table 1: Use of PESTEL Framework to determine the business environment and trends

From the table above, it can be said that the key trends comprise of using advanced technology, keeping up with the lifestyle choices of the people and at the same time make sure that eco-friendly measures are being used for the betterment of the organizational performance. The driving nature of the industry is completely dependent upon the political and economic scenario. Tesla has been successfully incorporating the use of sustainable measures since the beginning.

1.2 Power

According to Chen et al. (2016), for the understanding status of the competitive environment, the use of Porter’s 5 forces would provide a decent idea. As mentioned by Hoelzlhammer (2018), the following is the five forces analysis of Tesla Motors:

The Five Forces Analysis:

Bargaining Power of the Suppliers

The bargaining power of the suppliers is extremely high in the case of Tesla because the technical parts required for the manufacturing process have high demand. The rise in demand has a tendency to provide the suppliers with all the power.

Bargaining Power of the Buyers

The bargaining power of the buyers is medium in the case of Tesla Motors because of the balance of both high and low factors. However, due to the minimum existence of substitutes for electric cars, the bargaining power of buyers is medium. On the other hand, there are sufficient amount of brands that exist as another option.

Competitive Rivalry

The competitive rivalry in this scenario has been considered to be medium because despite having an adequate amount of other companies trying to replicate the nature of Tesla cars, none of them have succeeded properly except a few. However, Competitive rivalry would increase in the upcoming years because of the changing preferences of majority of the automobile companies towards manufacturing EV cars.

The threat of the New Entrants

The threat of the new entrants in this industry has been identified as low because of the barriers to entry that exist. Not every company has enough resources, ambition, engineering capability and environmental concern to use sustainable methods. Also, there are enough political barriers in UK which makes it even more difficult for other companies.

The threat of the Substitutes

In the recent context, the threat of substitutes has been identified as medium, however, it is likely to grow in the upcoming years. The already existing automobile companies are the ones that are integrated towards making the use of electric cars popular. Some of the popular names include Mitsubishi, Ford, Chevrolet, and others

Table 2: Porter’s 5 Forces

1.3 Attractiveness

From a thorough analysis that has been conducted, some of the key opportunities and threats are identifiable. The opportunities identified are:

• The technological advancement and understanding of the lifestyle preferences of population has benefited the company
• The use of renewable energy continues to be a beneficial aspect for the company
• The company has the potential to maintain a long term relationship with their suppliers to have a proper operational flow for better business management

The following threats have been identified from the external analysis:

• The existing political barriers and the reduction of tax credits is a major threat to the company
• The foreign market has been identified to be more desirable than that of the UK because of the lack of consideration presented by the government

2. Internal Analysis

2.1 Core Competencies

The strategic attributes of a company are properly identified when its core competencies have been understood well. They have been detailed as under:

Resources- The key resources of Tesla Motors comprise of its human capital and the intellectual property they have. The company has always been successful in fostering substantial creativity among its employees and that is one of the reasons why their intellectual property is such an important resource. The biggest aspect here is their formation of an appropriate recruitment and hiring policy. The company has a desirable relationship with its investors and board members who strengthens their financial resources. One of the biggest intellectual properties they have is their electric powertrain that consists of battery pack, control software, gearbox, motor and other essential components (Monsellato, 2016).

Competencies- The key competences of Tesla Motors generate from their intellectual property. The ever-improving motor that consists of the inverter and battery is considered to be the core competences of the company (Moritz et al., 2015). They also gain their competences from their use of powertrain technology and their advanced vehicle design and manufacturing aspects.

Skills- The ability of Tesla Motors to focus on the needs of the stakeholders and replacing with substitutes that can enhance the possibilities of them being an advanced yet a sustainable company (Moritz et al., 2015). They have also maintained a long term growth strategy that would enhance the possibility of an effective relationship with proper inventory management as well.

Value Chain- The value chain of Tesla Motors can be considered highly efficient because as per inbound logistics as they include the use of renewable energy and scarce raw materials. The operations management of the company is highly efficient and has included automotive aspects to their cars along with energy generation ability or storage. The reliance on both physical stores shows their outbound logistics capability and at the same time providing accessories that facilitate the use of renewable energy using methods. In terms of their services and offering the company has incurred wide range of complaints about the product but at the same time has been able to help eradicate the issue as well.

Despite all of the advancements occurring for the organization, it can be said that the company is still lacking in terms of appropriate marketing and sales strategy. Meanwhile, there is also a requirement of improved customer service as well for the company to improve the nature of their services.

2.2 VRIN Analysis

The use of VRIN analysis would provide a sufficient overview of the internal capabilities of Tesla Motors and make sure that all of that has been utilized effectively.

Resources

Valuable

Rare

Imitable

Non-Substitutable

Human Resources

Financial Resources

Supplier Management

Intellectual Property

Table 3: VRIN Analysis

(Source: Created by the learner)

From the analysis conducted above, it is evident that the company is equipped with a substantial amount of valuable resources that allow them to proliferate in their respective fields. Intellectual property, financial capability, and supplier management have always been the strongest aspects of the company. However, in terms of customer service and assuring the complete potential and maintenance of the product is something that the company is struggling with.

2.3 Competitive Advantages

As mentioned by Kraja and Osmani (2015), having competitive advantage provides with a sense of dominance over the other companies operating in the same industry. In the case of Tesla Motors, having a competitive advantage is extremely essential because of the growing demand and competition in the industry. In the words of Teece (2018), the competitive advantage of Tesla Motors lies in the following elements:

Intellectual Property

The intellectual property of the company is their biggest strength and has been allowing them to rise to prominence for years now. Some of their proprietary technology comprises cooling systems, electronic management systems, the proper use of software, customized motor design and adequate amount of environmental durability from their products (Teece, 2018).

Unique Design and Manufacturing

The company has managed to position as a high-end dealer of prominent EV cars that have authenticated design and extreme features that can put the other non EV cars to shame. The creativity that pertains to the chief designer of the company clearly elaborates on the potential of the product. The manufacturing process of majority of their factories, especially that of Fremont Factory is exponential (Praem, 2015).

Sustainability

Tesla Motors have always been known for their advanced technological machineries but with a succinct and distinct approach towards maintaining an ecological balance. The foundation of the company is entirely based on using sustainable approach and causing a reduction in the use of fossil fuels. Thus, sustainability is the biggest USP (Unique Selling Point) of Tesla Motors.

2.4 Distinctiveness

The distinctiveness of an organization is based on their strengths and weaknesses and their internal capabilities. The strengths of Tesla Motors are as follows:

• The company has a well-equipped human resources, intellectual property and financial resources ability
• The company has a unique design structure and a flexible manufacturing process
• The use of an effective supply chain management strengthened the position of the company

At the same time, from the internal analysis above, the following weaknesses were identified:

• The company does not have a successful measure in terms of providing adequate customer service post-purchase of the products
• There is a much lesser consideration of the use of marketing methods that would draw more population

Conclusion

The report generated an adequate amount of information about the electric car industry of the UK and the company Tesla Motors operating in it. It was found that the electronic car industry has extreme amount of potential and is a tough competitor to the non EV car manufacturers. There is extensive amount of political barriers from the side of UK government and thus, the economic environment is not enough stability for the company to operate. However, the industry is constantly growing and would tend to do so. Tesla Motors would continue to gain popularity because of its use of sustainable measures.

Reference List

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The Business Model of Tesla Motors: Analytical Essay

This article is about Tesla, Inc., which was founded in 2003 by a group of engineers in Silicon Valley whose objective was to create zero-emission electric cars better than gasoline automobiles and to accelerate the advent of sustainable transport by providing compelling, mass-market electric cars as soon as possible. Tesla is not just an automaker. It is also a technology company with a focus on energy innovation. Its CEO is American’s most well-known entrepreneur, Elton Musk.

1. Introduction:

The inception of the automotive industry is rooted back to the formation of Ford motor company by Henry Ford, in which the manufacturing units consist of moving assembly line and interchangeability of equipment brought a concept of mass production procedures. The basic design of the car at that time till date has not been much changed as the cars still have two pair of wheels at front and back with similar type of chassis. However, the competitive advantage of Ford motors had not much lived long and soon took over by the General Motors despite being the founder of commercialized cars. Alfred P. Sloan, who was the founder of General Motors brought a new concept of decentralized structure of organization and advanced management concepts which offered customers with ease to select their desired car type and design from vast product portfolio (Holweg & Pil, 2001). From the introduction of commercialized cars till date, the technology used in the cars have given edge to the companies who can provide better solutions and efficient systems that can provide fuel efficiency and better performance. In modern world, it has become difficult to survive for those companies who still practicing traditional management tactics and not commencing technological advancements in their designs and manufacturing. Acquiring advanced technology has now become a necessity rather than luxury in modern world. The automotive giants are now working in change management concept to introduce better solutions that are different and efficient from their competitors. Hence implementing system capable of fulfilling the requirements of the market with respect to advance technology requires effective and efficient management. These changes in the system are like changing the overall operations of the company regarding its marketing, services, productions and sales (Dessler & Phillips, 2007). The change management concept consists of modification in the actions of the company as well as technologies and methods to obtain the desired goal of the company just as changing the business environment of the company from inside and outside in order to attain high profitability. These changes are associated with the adaptation change, control change and effecting change. In this report, we will examine the business model of Tesla Motors, the journey of the company in terms of introducing novel concept in traditional automotive industry and the change management concept.

2. Background of Tesla Motors:

Tesla Motors is the company that is pioneer in designing, manufacturing and selling battery electric vehicles (BEV) along with other equipments related to BEVs such as battery chargers and powertrain technology. Tesla Motors came into being existence in San Carla, California, 2003, by the founding members Marc Tarpenning and Martin Eberhard. Soon the company was purchased by Elon Musk by investing $7.6 million with only one aim to manufacture totally battery based electric car that can generate 0% toxic emission and perform efficiently with minimum energy consumption, that is why Tesla Motors is totally different from traditional car manufacturing companies as its cars have state-of-the-art highly integrated technology with eco-sustainability (TeslaMotors.com, 2017).

3. Products Overview of Tesla Motors

Tesla motors initially launched its first electric car “Roadster” in low volume and high price. Soon after getting recognition from the market, Tesla launched two new models “Model S” and “Model X” fall under the category of sports utility vehicle and sports sedan. Recently, the company has launched its latest electric vehicle “Model 3” having most advanced technology with fully auto driving feature and over-the-air upgrades of software that can make this car safer than the actual human driver (Express, 2017).

Tesla Roadster 2.5 S (2011) Image 2: Tesla Model S P90D (2013)

Tesla Model X P90D (2016) Image 4: Tesla Model 3 (2017)

4. Production Facility of Tesla Motors:

The first production facility of Tesla Motors is situated at Fremont, California. This facility was purchased from Toyota Motors which has total area of 370 acre. The company has expanded its tentacles in Tilburg, Netherlands, where it opened its second assembling facility that can supply its products to whole Europe (TeslaMotors.com, 2017). Now the company is planning to launch its first Gigafactory that will have the capacity to produce over 500,000 vehicles and enough battery packs that can meet the demand of its electric cars per year by 2020 (Business insider, 2017a).

5. Organizational Structure of Tesla Motors:

Tesla Motors is based upon the functional organizational structure where the divisions of the company are headed by their respective chief operating officers and vice presidents. However, the other forms of organizational structures are present in bottom line of the management hierarchy. The functional structure is also termed a centralized hierarchical structure where the command and control of the whole company can be monitored from a central point consisting of all departments’ heads (Julian et. al., 2010).

Figure 1: Typical structure of Functional Organization

Tesla Motors consists of three major pillars of management which are as follows (TeslaMotors.com, 2017):

1. Elon Musk (C.E.O, Chairman of Board, Product Architect).
2. JB Straubel (Chief Technical Officer).
3. Deepak Ahuja (Chief Financial Officer).

6. Elon Musk as a Leader:

The Leadership is a characteristic of the person that drives the motivation of the followers in order enhance their capabilities and influence them to work together to achieve the desired goals beneficial for all (Vroom & Jago, 2007). Elon Musk (C.E.O of Tesla Motors) have proved that he is a successful entrepreneur and influential leader who converted his dreams into reality by achieving every single target one by one from the success of PayPal to SolarCity and from Tesla Motors to SpaceX. There are two types of leadership, in which one is transactional leadership and other is transformational leadership. The transactional leadership concentrates on receiving rewards in exchange of the efforts of subordinates. On the other side, the transformational leadership concentrates on intrinsic needs; in other words, going beyond the acquirement of short term goals. The transformational leaders have four features such as inspirational motivation, idealized influence, individualized consideration and intellectual stimulation (Podsakoff et al, 1990). Consequently, Elon Musk has all these four features making him a transformational leader.

7. Overall Performance and revenue generation of Tesla Motors:

Despite being the most innovative company, Tesla Motors is still trying hard to penetrate in the market in order to change the concept of external stakeholders by avoiding the use of conventional gasoline car and start using new fully electric vehicle. But the market is vast and the product is still in the development phase. By only considering the overall sales of passenger vehicles in 2016, it has been observed that over 74 million vehicles were sold and three major players of automotive industrial segment (e.g. Toyota, Volkswagen and Daimler) earned revenue more than $600 billion. The major producers of cars were China, Japan, Germany and U.S. This shows that the automotive market has much potential but introducing such novel product can be difficult for companies like Tesla. The product lifecycle of Tesla Motors’ new cars are still in the initial level of growth phase but crossed the introduction phase (see figure 2). Within the introductory phase, the company has few or no competitors so that the resources are allocated for the development and marketing of the new product as shown in the valley of death curve (figure 3) but the risk of product failure is high. However in growth stage, the product become commercialized and company start making profit from the launch of its product (Onkvisit & Shaw, 1986).

Figure 2: Product Lifecycle Curve

Figure 3: Valley of Death Curve

However, it is an alarming situation for the management of Tesla Motors that the company has reached at growth phase and still not earning the desired amount of profit. The target of Tesla Motors is to produce 500,000 cars every year by 2020. In that case, the company should take further steps with change management strategies and result-oriented environment that can help in achieving the desired target. The fact is that the production of such amount of vehicles by 2020 per year is not so farfetched according to the size of the market if proper steps are taken. But at this stage, the overall sales of Tesla Motors can contribute only 1% to the total sales of cars in 2016 (Statista, 2016).

Figure 4: Stats of total Cars sales in Billions of Dollars (Statista, 2016)

Being a revolutionary company does not mean that all odds will be in favor of that company, but there are always loopholes and gaps present between the desired outcome and actual outcome. In case of Tesla, the company is currently facing tremendous amount of pressure in terms of sales, revenue and manufacturing. The third quarter earnings report have shown very disappointing figures which forced the C.E.O to review his decisions and implement change management strategies that can help the company to overcome the issues (NBC News, 2017).

8. Supply Chain Analysis

Supply chain analysis helps to see how the industry is growing and what decisions has to be made in improve it’s growth. This analyze helps to check which suppliers would be the best and which prices would be good for the company. According to According to Ellram (1991, pp.13), supply chain management represents a network of firms interacting to deliver a product or service to the end customers.

8.1Gap Analysis on Tesla Motors:

The process or tool “Gap Analysis” is implemented within the organization to explore the variations and gap between the current working conditions of the system and what actually the system should work according to desired plans. The major function of the gap analysis is to first identify the gaps and root causes for the gap and then recommend remedial action in order to fill out the gaps (Anthony, 2012).

The first step of typical gap analysis is to first understand if there is a problem in any segment and the second step to identify what is causing the particular problem. The third step is to do make recommendations or solutions in order to solve the issue.

Figure 5: Typical flow chart of Gap analysis

Gap analysis is used where the performance of current scenario is not meeting the expectations of the company and where the dissatisfaction of the customers are present which enforces the management to mitigate the unhappiness at clients’ end and improve the overall quality of the product (Franklin, 2005).

8.1. Identified Gaps in Tesla Motors:

During the decade, Tesla Motors have faced many challenges as well as positive aspects, such as in 2008, Tesla faced a hard time when Tesla was near to bankruptcy. On the other hand, also become a $30 billion market cap organization. This is considered to be one of the major triumphs in business history that penetration in automotive industry is very difficult but Tesla Motors managed to do so (Business Insider, 2017b). But at present, Tesla motor should do more in order to survive in the market as there are major obstacles present within the company with respect to sales, manufacturing and management. These major obstacles and gaps are mentioned in this report which will be further assessed for better solutions.

Case Review of Tesla Motor’s Goal to Create a Global Acceptance of Electrically Powered Automobiles and Trains

Tesla motors face stiff completion from the traditional motor companies that sell petroleum-powered automobiles and trains. Tesla motors were founded in 2003 at the Silicon valley by Marc Tarpenning and Martin Eberhard. Tesla manufactures, develops, and sells technology for power trains and electrically powered high-end automobiles. Tesla motor’s goal is to create a global acceptance of electrically powered automobiles and trains as substitute to the traditionally preferred petroleum-powered automobiles that currently dominate the market.

Issue/Problem Identification

• Tesla motors face stiff competition from the existing traditional companies using electric or alternative fuel. Tecla Motors aims to manufacture high-end vehicles with high performance whereas its competitors like Porshe and BMW manufacture smaller compact vehicles which are more affordable. Apart from that Tesla motors face competition from other companies such as General Motors, Honda, and Toyota among others, using alternative fuel for their automobiles such as plug-in hybrid vehicles, hybrid electric vehicles, and hydrogen vehicles. The hybrid systems are affordable compared to the electric-only model that Tesla Motors preferred.
• Tesla Motors faces a challenge of resources required to develop these unique electric-powered automobiles. The unique technologies require a lot of research and resources to develop them. Apart from the resources required to develop entry to the market by these automobiles is a challenge. Major automobile companies prefer hybrid system by Prius which is well understood and known. The major automobiles again prefer to develop and market their own developed hybrid vehicles. The above makes it difficult to invest a lot of resources and would require Tesla Motors to partner with other companies for it to succeed.

Stakeholder Analysis and Management Evaluation

• The government is a major stakeholder and affects operations of Tesla Motors through its policies. In recent times focus has been on alternative sources of energy especially green energy which cheaper and safer for the environment. The government is committed to getting more electric cars on the roads in the coming years. The government state and federal are availing loans to enable the manufacturing of alternative energy automobiles. The government initiatives are to the advantage of alternative fuel companies Tesla Motors included.
• The major stakeholder at Tesla Motors is the human resource. The technical team directly under Ammon Geshuri; the human resource director formerly an employee of Google. Tesla Motors operates more like a software company than an automobile company. The CEO Elon Musk, a renowned entrepreneur, has his executive team comprised of seasoned hybrid of techie-savvy and entrepreneur specialists for efficiency and productivity. He has borrowed a working model environment of Google where innovation, challenging norms and thinking outside the box is the norm. The model is to enable team-work and collaboration among staff members as teamwork is paramount in designing products. Manufacturing takes place in California led by a technical team composed of top-notch engineers
• The other stakeholders of Tesla Motors are all the general employees working there. Tesla Motors has 900 employees; 170 in vehicle design, 79 in service, 213 at the manufacturing unit, 121 in marketing and sales, and 212 in the power train. Tesla Motors prefer to hire graduate engineers and marketers who have hands-on experience. Tesla Motors aims to recruit and retain as many employees as the employees have the task of designing, testing, manufacturing, and selling products concurrently.

Recommendations

• Tesla Motors should work on widening its market segment. Currently, its target of high-end vehicles of high performance is limiting its clientele base. The expensive high-end vehicle targeting 45 old unmarried white males is limiting as not so many people in California, and other states can purchase these automobiles.
• Tesla Motors should open more outlets. Currently, the company has few physical stores at premium locations, with regional sales representatives and online presence. The outlets have minimum product offering which is so limiting to the clients as compared to a wide range of products and stores its competitors have.
• Tesla Motors which is at its infancy stage compared to its competitors should consider partnering and merging with already established companies such as Toyota, Nissan, and BMW among others so that they can have ready markets for their products instead of relying on patent products and high-end automobiles limiting their potential.

Implementation

• Tesla Motors should widen its market segment by manufacturing affordable, family-friendly automobiles affordable to mass… The automobiles will increase its market share unlike how it is limited now to high-end vehicles competing with other non-electrical vehicles.
• The designing and manufacturing of the electric automobile and other products require massive resources. Tesla Motors should partner with big brands to have a direct market for their products and to access resources for research and development of its products.
• Tesla Motors can take advantage of the government’s growing interest in green and renewable energy. It can work hand in hand with the government to put up more recharging stations for its vehicles and access loans to fund research and development. With the help of the government, they can sensitise potential clients on benefits using electric automobiles since it comes with $7500 government tax credit in the US among other benefits such as low cost of maintenance and efficiency.