Category: Tesla

Problem Statement

Tesla is recognised as a manufacturer and retailer of the only all-electric vehicles in the global market that can offer a range of cars to compete with gasoline-powered cars. The company’s customers, however, now face a critical challenge of getting adequate charge in their battery to cover significant miles, especially if the driver intends to cover a long distance. For this challenge, it is observed that high-speed car battery charging has been touted as the best solution as opposed to other charging systems that require over 12 hours to charge the big Tesla battery fully. Many Tesla customers have observed that getting to charge the car super-fast is quite difficult across many cities. One must drive across multiple neighbourhoods in attempts to find a charger, particularly when the GPS is out of service in such areas. Thus, the major challenge for many Tesla customers is that there are not adequate supercharger stations to recharge their cars fast enough. The problem of inadequate charging is further complicated on highways. Efforts to build many superchargers along major highways have been rather slow. This implies that using Tesla cars for long road trips remains a major challenge for most motorists.

Analysis of Situation

Tesla electric car is yet to become the mainstream car, although it is making inroads. As previously observed, the battery itself and recharging are the most challenging issues currently experienced. If Tesla can deliver a long-lasting battery with super-fast chargers across every city, just like with gas stations, then the company would deliver the car of the future that consumers will all experience. Tesla currently is investing heavily to realise this initiative. The issue is always how fast to deliver this innovative supercharger and scale up production and installation to meet the rising needs of electric car owners. A road trip further complicates the issue because of extremely few and far apart available charging stations. Many Tesla owners now struggle with the charging issue. Tesla has also gained popularity, but many considers it as a luxury carmaker. As such, some charging stations charge premium and, thus, it becomes expensive for many motorists. The price gouging tendencies have led to low usage of some stations and disappointment for motorists who purchased electric car to save on fueling costs. Moreover, stations also have different charging systems, which consume different time to charge a car fully.

Suggested Solution

Consumers appreciate the need to charge their electric cars much more easily. As such, Tesla requires innovation in supporting super-fast charging infrastructures. Some observers have proposed leasing a car battery rather than owning it. Referred to as the Better Place battery exchange, car owners can overcome technological drawbacks of limited travel range and longer periods of recharge for batteries (Tsang et al. 2012). Consumers will be charged based on the mileage covered across various networks of supercharging points where they can switch depleted batteries and replace them immediately.

Additionally, to support charging infrastructure, BMW innovative approach of upgrading streetlight to chargers by introducing an electric car charging solution and integrating them with streetlights will appeal to many owners of electric cars. The company refers to this solution as Light and Charge (Humphries 2014). This solution would allow any drivers of electric car to park up and quickly recharge their batteries. The system can be supported by a functional app for payment installed on a smartphone or the dashboard. Further, the app can alert owners when the car is fully charged. Such solutions can solve challenges associated with long road trips and lack of nearby charging stations. If this solution can work, then Tesla can also find it simple to provide charging solutions on major highways with streetlights and mobile signals.

The term servitization was introduced to define an increasing tendency of many manufacturing firms to provide services that went beyond their traditional core business of product development and manufacturing (Benedettini, Swink & Neely 2015). It is also known as product-service system or integrated solution (Wilkinson, Dainty & Neely 2009). The fundamental aspect of this definition is the additional services offered to complement a product sold to customers in order to enhance its value.

Tesla is a manufacturer caught in the web of after-sale service to its customers. In manufacturing, innovation and service provision have gained popularity. Consumers now demand enhanced product customisation and quick solutions to solve their immediate challenges. Academics and professionals have observed that products with value added services could improve profitability of a firm (Benedettini, Swink & Neely 2015; Lightfoot, Baines & Smart 2013). Particularly in advanced economies, adding services into products is seen as an opportunity for creating competitive edge for the manufacturer. This approach is seen as viable when product differentiation is minimal. Tesla, for instance, now faces competition from other electric car manufacturers. However, Tesla has opted to directly sell to consumers and provide related services, including charging stations. Based on service dominant logic (SDL), supplementary services directly improve the value of the physical product, which is seen as an object of providing services to consumers (Benedettini, Swink & Neely 2015). In product-service delivery, the process may involve co-production with the customer in which customer is seen as operant resource in the co-creation of value considered as distinct and difficult to imitate.

Additionally, service provision is now a source of constant revenues for many product manufacturers, and the margins generated from service charge in some industries, for instance, far much exceed the cost of a physical product sold to customers (Benedettini, Swink & Neely 2015; Ellis, 2011)). In the case of Tesla, when the company first introduced its superchargers more than four years ago, they were free for life. However, as expected, the company recently announced that it would start charging new customers for supercharging services once they exhaust 1,000 miles of free charging (Fehrenbacher 2016). The supercharger takes approximately 30 minutes to charge a battery fully relative to other chargers at home that consume hours, and it was seen as an opportunity to grow super-fast charging infrastructures. While free charging created a competitive edge for the company, charging for a fee is seen as a way to manage the growing demands, costs associated with production and installation of superchargers, and to drive sales of current car models that come with a free charging package. Further, the company expects to cut costs associated with new models by reducing costs of batteries as it positions itself in the mainstream market of electric cars to compete with other manufacturers.

Studies have also demonstrated that product-service integration is a way to increase customer satisfaction and improve customer relationships, thereby improving customer retention and loyalty (Benedettini, Swink & Neely 2015; Hutt & Speh 2014).

Some companies have succeeded in servitization and delivered commendable growth. On the other hand, despite the appeal of servitization, some researchers have observed critical failures in some companies attempting product-service integration. For instance, Siemen’s service division was generally a loss-making arm, Intel’s service based unit was folded after few years into operations, and Dürr’s outsourcing service unit was not successful too. These few cases demonstrate challenges with servitization (Benedettini, Swink & Neely 2015). Wilkinson, Dainty, and Neely (2009) point out that some of these product-service integration models are vague. In some instances, such firms do not include customers in defining solutions to their needs. Effective servitization requires value creation that is seen and understood by the customer (Wilkinson, Dainty & Neely 2009). This implies that a reverse view must be adopted in value creation.

Tesla can actually excel in its servitization efforts. The company is a leader in the electric car market. While it has realised considerable number of supercharger stations and the Gigafactory to manufacture cheap battery, the company should carefully review its strategies to ensure that electric car becomes the mainstream vehicle in the next few years. By expanding charging infrastructure, the company can create competitive edge and realise the value of servitization. While Lightfoot, Baines, and Smart (2013) note a weaker linkage between technology and engineering to advance servitization, this certainly would not be a challenge for Tesla because the company is a technology cum a manufacturing firm. Firms such as Rolls-Royce, Caterpillar, Alstom, and MAN among others have achieved tremendous growth because of servitization (Lightfoot, Baines & Smart 2013). By introducing supercharging fees, Tesla can now see the value and opportunities of product-service integration. Moreover, the company has ensured that product-service bundling will always deliver desired results while easing electric car challenges.

Advantages (Benefits) and Disadvantages (Risks and Costs) of the Chosen Approach

The approach adopted for the case of Tesla is supporting supercharging infrastructure. The ultimately goals are to enhance service delivery, customer satisfaction and eventually position Tesla car models in the mainstream auto market.

For customers, Tesla would be using servitization to offer value by more customisation and high quality services. That is, delivering improved supercharger network across cities and major highways. Notably, the supercharger is from Tesla and is the fastest charger on planet for electric cars. This implies that customers would get value from Tesla’s supercharger with distinct factory specifications for its models. The service element is seen as flexible and, therefore, the company can expand the charging infrastructure by adding new functionalities to meet needs of customers better. Since the introduction of supercharger stations, Tesla has been responsible for their operations and maintenance. In this case, related costs are removed from the customer and back to the company. In most instances, it has been observed that customers prefer value that solves their immediate challenges (Baines et al. 2007). In this case, expanded network of superchargers is certain value addition that customers would find extremely useful. Tesla is most likely to realise strategic marketing opportunities through its servitization, which can act as an alternative to the conventional standardized practices and mass production. The primary business advantage of product-service integration is an enhancement in total value for car owners by getting increased service elements. As such, competitive advantage is increased, for instance, it is not simple for any current Tesla’s competitors to imitate and develop its superchargers and the network. Thus, it will only continue to deliver superior product-service package to customers (Schmidt, Bauer, & Mört 2015). Further, Tesla would also claim its enhanced environmental sustainability initiatives through product-service integration because it would be more responsible in handling used parts, recycling, take-back, and refurbishment to reduce waste by increasing product life. Such efforts will most likely improve customer acceptance of Tesla car models.

Tesla is also poised to benefit tremendously from servitization. The company will advance its technical knowhow and manufacturing capabilities in the new Gigafactory to determine novel ways of delivering better value in using products and services while depending on fewer resources, thereby reducing costs of operations and service delivery to consumers. At the same time, the company will be addressing concerns of customers, the public, producers, and governments through servitization (Baines et al. 2007).

While Tesla might desire to design, develop, and deliver additional superchargers across many cities and highways, the significant cost of superchargers are enormous (Sakao, Rönnbäck & Sandström 2013). For a young company struggling out of loss making, the desire to realise profitability for shareholders may deter mass production and installation of superchargers (Sheth & Sisodia 2015). Initially, the company had promised free for life charging, but the recent announcement that new models without that package will start paying for supercharging has shown difficulties associated with free services from manufacturers. Moreover, pricing offering could also be a challenge for Tesla, although the CEO declared that charging would be relatively cheaper. Customers will demand more as they start paying for superchargers (Kuo et al. 2010). Tesla may also face difficulties in structuring the company to manufacture and deliver more charging infrastructure to support the growing number of users across developed nations (Schenkl, Sauer & Mörtl 2014). Consumers must contend with additional charges and ownerless consumption, although this is the norm in vehicle products.

References

Baines, T, Lightfoot, H, Steve, E, Neely, A & Greenough, R 2007, ‘State-of-the-art in product service-systems’, Journal of Engineering Manufacture, vol. 221, pp. 1-11.

Benedettini, O, Swink, M & Neely, A 2015, ‘Why do servitized firms fail? A risk-based explanation’, International Journal of Operations & Production Management, vol. 35, no. 6, pp. 946-979.

Ellis, N 2011, Business-to-business marketing, Oxford University Press, Oxford.

Fehrenbacher, K 2016, Tesla will start charging for its fast charging network, Web.

Humphries, M 2014, BMW solves the electric car charging problem using street lights, Web.

Hutt, MD & Speh, T 2014, Business marketing management: A strategic view of industrial and organizational markets, Thompson, South Western.

Kuo, TC, Ma, H-Y, Huang, SH, Hu, AH & Huanf, CH 2010, ‘Barrier analysis for product service system using interpretive structural model’, International Journal of Advanced Manufacturing Technology, vol. 49, pp. 407-417.

Lightfoot, H, Baines, T & Smart, P 2013, ‘The servitization of manufacturing: A systematic literature review of interdependent trends’, International Journal of Operations & Production Management, vol. 22. no. 11/12, pp. 1408 – 1434. Web.

Osterwalder, A & Pigneur, Y 2010, Business model generation: A handbook for visionaries, game changers, and challengers, Wiley, New York.

Sakao, T, Rönnbäck, AÖ & Sandström, GÖ 2013, ‘Uncovering benefits and risks of integrated product service offerings: Using a case of technology encapsulation’, Journal of Systems Science and Systems Engineering, vol. 22, no. 4, pp. 421–439.

Schenkl, SA, Sauer, RM & Mörtl, M 2014, ‘A technology-centered framework for product-service systems’, Procedia CIRP, vol. 16, pp. 295-300.

Schmidt, D, Bauer, P & Mörtl, M 2015, ‘Product-service systems for influencing customer barriers and customer acceptance’, Journal of Economics, Businessa nd Management, vol. 3, no. 10, pp. 990-993.

Sheth, J & Sisodia, R 2015, ‘Why good companies fail’, European Business Forum, vol. 22, pp. 24-30.

Tsang, F, Pedersen, JS, Wooding, S & Potoglou, D 2012, Bringing the electric vehicle to the mass market: A review of barriers, facilitators and policy interventions, RAND Europe, Cambridge.

Wilkinson, A, Dainty, A & Neely, A 2009, ‘Changing times and changing timescales: the servitization of manufacturing’, International Journal of Operations & Production Management, vol. 29, no. 5, pp. 1-6.

Strenghts

• Strong Leadership.
• Well-known and respected brand.
• Attractiveness for job applicants.
• Anticipation of social and economic trends.

Among Tesla’s greatest strengths is its strong leadership provided by the company’s CEO, Elon Musk. His experience and impact on society as a visionary proponent of socially attuned technology certainly benefits the organization’s wellbeing. Although the brand is relatively new, it has achieved massive popularity due to its ideas and ambitious goals. Due to the above-named strengths, Tesla Inc. gained another advantage in the area of human resources. The company became one of the most wanted employers. Tesla’s mission aligns with the world’s trends for alternative energy sources and aims to solve the upcoming energy crisis connected with fossil fuels as well as the environmental impact that worries scientists and populations.

Weaknesses

• Manufacturing and shipment issues.
• Overreliance on public image.
• Occasional Internal miscommunication (Thompson, 2018).

Tesla Inc. also has certain weaknesses as an organization. Due to the success of marketing strategies, the company was able to sell many cars on a pre-order basis. However, corporate leaders apparently underestimated the stability and capacity of its manufacturing facilities. The whole production and shipment cycle took longer than expected due to the limited geographical representation of the company. As a stock-driven company, Tesla Inc. seems to be relying heavily on its public image. Such a weakness exposes the organization to losses if it mishandles communication with outer world. As recent events demonstrated, internal communication is also of issue in Tesla Inc. Personnel was unable to coordinate efforts in order to maintain stable production rates.

Opportunities

• Diversification of products.
• Entrance to new markets.
• Developments in battery technology.
• Stricter environmental policies.

There are certain opportunities that Tesla may utilize to its advantage. For instance, by increasing the range of products it releases, the company may achieve substantial financial gains in future, provided the products find its buyers and are competitive. Discovery of new markets could also become a positive change for Tesla Inc. since the rise of environmental awareness increased the pool of potential customers. Battery technology that is currently based on li-ion energy storage limits the current usability of electric cars. If a new technology emerges, the market for electric vehicles could grow and Tesla could use that to its advantage. In Europe and the US, environmental policies become harsher on car owners, forcing them to buy more environmentally friendly cars. Tesla Inc. offers a solution to this issue.

Threats

• Dependency on stock value.
• Insufficient tangible assets.
• Interest of large car companies in the electric vehicle market.
• Demand issues (Bomey, 2017).

Dependency on stock value could turn out to be a threat as a negative reaction to company’s actions will trigger an immediate response from shareholders. A decrease in stock value is highly detrimental to a company such as Tesla Inc. as it does not have enough tangible assets. The latter could also become a threat as Tesla is a relatively small company in terms of manufacturing capacity and entrance of big players could lead to value loss. Mercedes Benz and other large brands with their high production volumes and R&D may leave Tesla behind. As Bomey (2017) suggests, Tesla’s products have a limited audience and the market saturation with the company’s products could soon reach the limit.

SWOT-Based Strategy

• Focus on increasing product range.
• Involvement with social and environmental activities.
• Update the staffing policy.
• Refinement of public image.
• Acquisition of tangible assets.

In accordance with the presented SWOT analysis, the proposed strategy should take into account several items. Since the company suffers from the limitations imposed by completive environment it needs to develop other car models. In order to further enhance its image and raise stock value, Tesla Inc. should engage in more projects important for society and nature. To address its weaknesses and threats the company needs to reassess communication protocols among its employees to ensure smooth operations. In addition, the process of public image construction should not depend too much on actions and words of its CEO and be more related to Tesla’s achievements. Acquisition or creation of tangible assets could help the company strive towards becoming more grounded and resistant to stock market fluctuations.

Strategies to Maximize Profits

• Integrated cost-leadership differentiation:
  • Underlined economy for premium segment.
  • Concentration on unique product properties (Hitt, Ireland, & Hoskisson, 2013).
• Horizontal growth:
  • Increases production output;
  • Helps expand into other markets.

As for different strategies that could help the company increase its competitive potential and maximize its profits, business and corporate level ones could be applied. Integrated cost-leadership differentiation could assist Tesla Inc. in capitalizing on the unique properties of their products advertised to a specific narrow audience and concentrating public attention on the long-term economy. Horizontal growth is applicable as it helps to occupy new markets and address the rising demand with increased production rates. These strategies address the company’s needs on business and corporate level effectively as they are based on deep understanding of the company’s needs.

Communication Plan

• Sustainability as a perspective and a goal.
• Broad vision and focused objectives.
• Shaping future together with stakeholders.
• Investment in human potential = financial gain.

A viable communication plan should allow Tesla Inc. to ensure the alignment of goals and objectives of the company and its stakeholders. It should be based on the several principles listed on the slide. Sustainability should shape the basis of each message to stakeholders and remind them the ultimate goal of all company operations. Breadth of vision should dictate the ambitious nature of Tesla’s leadership and objective should clearly be defined for stakeholders to further their trust. Future profits and mutual gains could in this case be explained as an effect of collaboration with special value assigned to every person’s impact.

Ethical Efforts

• Production of cars harmless to environment.
• Permission to use Tesla technologies for advancing sustainable future (Tesla Inc., 2014).
• Development of products with high social value.

The actions of Tesla Inc. have an embedded ethical value due to the nature of their products. Their cars that do not harm the environment and, therefore, make living conditions better by reducing pollution. In order to achieve sustainable future, Tesla allowed using its patents to any company who shares the same goal. In addition, the company creates social value by trying to address other social problems such as accessibility of cars for disabled people by developing driverless vehicle technology. Doing all that, Tesla Inc. definitely assumes the role of a responsible corporate citizen. These actions produce a sizable positive effect on the company’s image which transforms into brand recognition and, ultimately, sales.

References

Bomey, N. (2017). Top four threats to Tesla’s plan for electric vehicle dominance. USA Today. Web.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competiveness and globalization (10th ed.). Mason, OH: South-Western Cengage Learning.

Tesla Inc. (2014). All our patent are belong to you. Web.

Thompson, C. (2018). Elon Musk: Model 3 production problems stem from Tesla getting “overconfident” and “too comfortable.” Business Insider. Web.

Reasons for a Development Plan

• Overcoming a competitive barrier and addressing the existing legislative issues are crucial tasks.
• High costs of component materials are the reason to develop a strategic plan.
• Regulatory requirements impede the company’s growth and contribute to increasing costs on legal conventions.
• The Asian market is not covered comprehensively.
• Tesla’s pricing policy is ambiguous in the context of accessibility.
• The lack of innovative technologies may cause too high costs at the production stages.

To achieve authority in the international market, the Tesla company has to overcome the current competitive barrier and address the existing legislative issues impeding its sustainable growth. It is essential to introduce changes to the internal production processes to reduce the high costs of the production process and minimise the expenses on component materials. In addition, the necessity to enter new markets is a relevant task. To expand the sphere of influence, Tesla needs to interact with the Asian market and represent its products in this region. More opportunities should be provided to consumers to increase brand recognition so that the company’s products could be more affordable because now, Tesla’s goods are expensive. Despite the modern assembly principles, expenses increase due to significant production costs, which, in turn, makes it difficult for the corporation’s marketing specialists to promote the brand

Strategic Aims

• Applying for relevant and in-demand information technologies.
• IT innovations may contribute to solving this issue (Falát & Holubčík 2017).
• Establishing effective cooperation with the Asian market.
• Overcoming competition with other market electric vehicle brands.
• Maintaining partnerships may help reduce legislative conventions.
• Creating a sustainable system of marketing both locally and internationally.

Utilising information technologies may help avoid too high production costs and eliminate expenses at all the assembly stages. According to Falát and Holubčík (2017), addressing the company’s pricing policy due to more accessible offers is a relevant step, and the optimisation of production though implementing productive innovations may help correct the current problems. More favourable terms of sales can enable Tesla’s representatives to cooperate with Asian distributors effectively, which is one of the most important objectives. Using IT innovations in manufacturing can help Tesla create a sustainable background for overcoming competition in this market segment. Strengthening power opportunities through partnerships can not only expand the sphere of influence but also reduce the legislative conventions with which the company has to deal. Achieving brand recognition is possible due to maintaining a sustainable system of marketing, which may help promote the company’s goods in both local and international markets.

Current Marketing Mix Effectiveness

• Sufficiently advanced marketing principles for effective promotion.
• Productive advertising campaigns through different media.
• Engaging new target segments constantly.
• Establishing public relations and brand promotion are the basic activities.
• 4Ps technique may be utilised to assess the effectiveness of brand promotion.
• The criteria of price, place, product and promotion applied.
• Narrow-profile products to overcome competition and create unique advertising offers.
• A flexible offer policy promoting both premium and low-cost vehicles.
• The majority of outlets are in the USA.
• Popularising the brand on social networks is one of the basic promotion activities.

Tesla’s current marketing principles are sufficiently advanced to promote the products of the company successfully. Thus, the brand has become world famous due to effective promoting campaigns through different media, including both traditional advertising sources and modern social networks. Those marketing practices utilised in Tesla are aimed at attracting new target segments constantly and expanding the sphere of influence to increase its profits. The establishment of public relations and brand promotion in the international arena are the company’s key objectives of the current marketing plan. To analyse the productivity of Tesla’s marketing strategy, Falát and Holubčík (2017) offer to use the 4Ps technique to assess the criteria of the effectiveness of brand promotion in the market. The presented methodology includes such criteria as price, place, product and promotion and makes it possible to evaluate how productive marketing principles are in each of these categories.

Tesla’s products are narrow-profile since the corporation offers exclusively electric vehicles and components for them, but in the conditions of demand for the brand, this practice can allow overcoming competition and create unique advertising offers due to the specifics of the corporation’s goods and their advantages over traditional automobiles. Regarding pricing, the corporation’s management has a flexible offer policy since most of the products are premium and nor affordable to many customers; therefore, low-cost models are proposed, as well as bonus programmes. The position criterion is a relatively weak link because the majority of the outlets are located in the United States, and the Asian market is not covered comprehensively. In the promotion strategy, the key emphasis is on popularising the brand on social networks, which is largely achieved by increasing the number of followers of the company’s official groups and the activities of Elon Mask, Tesla’s charismatic leader.

Reference List

Falát, L & Holubčík, M 2017, ‘The influence of marketing communication on financial situation of the company – a case from automobile industry’, Procedia Engineering, vol. 192, pp. 148-153.

The current project involves the development and implementation of a comprehensive COVID-19 management system for Tesla Inc. The pandemic has forced the closure of many businesses across the United States and the world. Firms and government face the dilemma of working or not, as explained by Xia (2020). Tesla is one of those companies which are keen on resuming operation at full capacity. The current COVID-19 safety measures include the deployment of ventilators (Ohnsman, 2020). Such efforts may prove inadequate because new spreads of the virus can take place.

The new project is an information technology (IT) system developed to monitor workers and their health conditions. The term ‘comprehensive’ has been used because the system deploys multiple functionalities, including some of the current initiatives for COVID-19 management. Temperature checks and COVID-19 tracking are already available, which means that a decision-making platform in the form of a database combined with the right data analytics can be implemented. The new platform will help determine the health and risk conditions of each employee to help management decide the safety implications of having individual workers at the workplace.

The COVID-19 management system project follows the guidelines provided by the Project Management Institute (PMI) through the Project Management Body of Knowledge (PMBOK). According to Xue et al. (2017), the PMBOK 2013 is the edition which added a chapter about stakeholders, meaning this is the best version to use. PMBOK can be defined as a project management guide for executives. The project lifecycle in this guideline comprises five stages, each of which will feature in the proposed project.

The first phase is project initiation, which broadly defines the project. As explained in the project goals and objectives, the COVID-19 system can be described as software for supporting administrative decisions regarding the COVID-19 safety risks in the workplace. Additionally, the project scope entails utilizing data from multiple points, including temperature checks, travel logs, and other tracking applications, currently in use. An analytics tool is integrated into the system to help in the analysis of the data.

The second phase is the project planning, where a roadmap for the project is developed. Additionally, all the features of the system, individual tasks, and key resources are outlined. The project execution phase will involve the actualization of the specific tasks. The development and implementation of a COVID-19 management system will involve such tasks as program feature specification, feasibility analysis, prototype development and testing, program implementation, and monitoring and maintenance. The last two activities will also form part of the fourth phase in the project cycle, which is the project performance or monitoring. In this stage, any changes needed are implemented before project closure. The last phase is the project closure where the completed project is handed over to the sponsor.

Project Goals

• To implement a COVID-19 management system to monitor new symptoms
• To maintain an employee health record to facilitate workplace safety
• To actively prevent a new spread of COVID-19 among the employees.

Project Objectives

With the current pandemic, businesses have found it hard to resume normal operations. However, the situation can be changed if firms can implement effective safety measures, which can be used for both monitoring and controlling the spread. The primary objective of this project, therefore, is to allow the company to resume normal operations by having a system in place that can monitor the health situation of all employees. The three objectives of the new COVID-19 management system are:

• Providing a safe environment for all workers to resume their jobs and to allow the company to operate in full capacity
• Providing management with a decision-making framework regarding wellbeing and other key management decisions, including operational and staffing levels
• Supporting economic reforms during and after the crisis by facilitating the re-employment of workers.

Key Customers

The key customer for the COVID-19 management system project is Tesla, Inc. The electric car manufacturer is one of the businesses which have resumed operations in the company’s factories. The presence of employees in such facilities presents Tesla with the risk of exposing them to COVID-19. The worst-case scenario for Tesla’s management would be a new spread of the virus, which could have critical implications for the company and the staff. Most importantly, the company relies heavily on its top talent for its innovativeness and success. Loss of skillful workers can threaten the resumption of business for the Tesla, in addition to suffering huge costs of replacing them.

Tesla’s employees can also be considered to be key customers for the project. The argument is that the COVID-19 management system is intended for their safety. Employees’ travel logs and other health data will help the company make sure they are protected by ensuring minimal risk of contracting the deadly virus. Additionally, the personnel will become the main users of the system because they will provide all the input in terms of individual health and risk data by logging into the system. Travel logs, temperature checks, recent contacts, and health status are the basic information entered by the individuals at Tesla.

Key Stakeholders

In addition to the project customers, there are several other groups with vested interests in the project. The government is a major stakeholder due to the nature of the project. Many IT-related ventures have multiple legal implications, which include data and privacy protection. Bradford et al. (2020) help illustrate this point by examining privacy and data protection regimes affecting the application of the contact tracing apps for the COVID-19. The management system being implemented at Tesla faces the same issue. The government will be keen to ensure the project and the company comply with the current laws.

The second key stakeholder group for the COVID-19 management system is the project team. The vested interests of these individuals include the success and functionality of the project. Considering that Tesla will be investing significant funds into the system, the project team has a responsibility to deliver a functional project within the timeframe provided. Delivery delays will affect the cost of the project, which might be incurred by the management. Other consequences might include project cancellation at the cost of the team. The failed performance also ruins the reputation, which affects future projects. Most importantly, it is essential to emphasize that due to the contractual terms, the people responsible for management will be the ones most likely to suffer the consequences of a failed project.

Key Milestones

The COVID-19 management system project has three major milestones or deliverables. First, the project provides for COVID-19 checks and data collection feature, which allows Tesla to collect all the relevant data regarding the COVID-19 status of each employee, including contact tracking. Second, a centralized data storage framework is created to make it possible for the company to store the data from multiple sources in s single location where it can be easily accessible.

A large database will, therefore, be created as part of the system. Third, an analytics framework is embedded in the storage system. The role of the analytics is to assess the data and generate reports regarding the condition and risk factors of the employees. The outcomes of the analysis will be used to make decisions on whether to isolate specific individuals either due to suspicions of having the virus or posing a higher risk of spreading it.

Project Timeline

The COVID-19 management system project involves the development of software for gathering, storing and analyzing COVID-19 data. Therefore, the software development life cycle (SDLC) framework becomes the best way to structure the project timeline. However, there are additional project activities as outlined in the five phases of project management phases, which will be included in the timeline. The tasks and deadlines involved in this project are summarized in Table 1 below:

Table 1: A Summary of the Project Timeline (developed using MS Word).

Project Cost

The project has an allocated budget of $100,000, which involves the amount of money Tesla would pay upon the delivery of the project. It is hard to break down the costs of the projects because most of the finances are used to fund software development and other experts employed in different phases of the project. However, there are key cost centers that can be broken down as illustrated in Table 2 below. A key point to note is that these estimated costs will be adjusted as the project progresses. The project costs cannot exceed the budget by over 25%, which is the maximum deviation allowed by Tesla. Increases in cost beyond this limit will be incurred by the project team.

Table 2: Project cost estimates (developed using MS Word).

Staffing and Non-Staffing Resources

The proposed project is a small-scale undertaking, which does not require heavy investment in resources. The staffing resources needed include the project manager, who fills one position, and a software development team comprising three IT designers and developers. Two positions are left open for any supporting personnel who might be needed in various project phases, including outsourced expertise. The two extra positions are employed on a part-time basis while the rest are full time. The rationale for the additional positions is that the project manager may need to fast-track certain aspects of the project, which could mean hiring more workers.

Additionally, there are several non-staffing resources needed for this project. As outlined in the cost structure, the internet will be a key resource considering the nature of the project. Additionally, computers and other relevant hardware will be a key requirement. However, it is assumed that the project personnel will provide these resources, which explains why they have not been included in the cost Table 2.

Project Risks

The project faced three major risks which threaten its success. First, the project could exceed the budget, which exposed management to heavy losses. The small allowance for deviation means that the costs have to be strictly managed to mitigate the losses. Second, the time is limited and the project team risks late delivery. Measures taken to handle this risk include recruiting extra personnel. Lastly, there is the risk of project failure because the idea is novel and has never been implemented before. Comprehensive planning is used to handle this risk by clarifying all aspects before the project starts.

Keeping Project on Track

One of the best ways to keep the project on track is by observing the deadlines set in the timelines. The accomplishment of each task before the due date will ensure that the project is completed within the set time. Additionally, the project manager seeks to utilize external experts or assistance whenever the project deliverables are not accomplished within the deadlines. The outside help is also used in the instances the full-time personnel encounter any challenges that might derail the work. Strict adherence to the timeline, however, remains the best way to keep the project on track.

Proposed Plan for Project Completion

The proposed plan for project completion involves sending an email updating the project owner, the employees, and the project team that all deliverables have been achieved. At this stage, it is important to emphasize that testing is successful. A handover appointment is made where all the project documentation is provided to the company. All payments for the project will also be made by the company upon verifying that all the aspects requested are delivered. All project closure activities are then performed, including a review and confirmation of all contract documents. A simple celebration is performed with the key customers and the project team in attendance.

References

Bradford, L., Aboy, M., & Liddell, K. (2020). COVID-19 contact tracing apps: A stress test for privacy, the GDPR, and data protection regimes. Journal of Law and the Biosciences, 7(1), 1-21. Web.

Ohnsman, A. (2020). Tesla shows off prototype ventilator for COVID-19 patients made out of electric car parts. Forbes. Web.

Xia, Y. (2020). Workforce survival: Tracking potential COVID-19 exposure amid socioeconomic activities using automatic log-keeping apps. Population Health Management, Advnce Online Publication. Web.

Xue, R., Baron, C., & Esteban, P. (2017). Optimizing product development in industry by alignment of the ISO/IEC 15288 Systems Engineering Standard and the PMBoK Guide. International Journal of Product Development, Inderscience, 22(1), 65-80. Web.

Tesla had entered the automobile market forcefully and, with energetic leadership, smart marketing, and high-quality products, carved a considerable share for itself. It inevitably puts the company at odds with other auto dealers, including the giants like Volkswagen and Toyota, who use a different retail model. While the competition and increased supply impact the range of choices that people have positively, monopolization still remains a possibility, driven by the same sinful nature that was already recognized in biblical times.

Overall, Tesla’s entry into the automobile market impacted the situation for the better insofar as the ordinary customer is concerned. On the one hand, it added another car manufacturer to the list of those to choose from and, therefore, increased the range of options available to the customers. Apart from that, its emphasis on direct sales, as opposed to franchising, creates a different buying experience, which also facilitates choice.

In terms of natural market forces, increased supply represented by Tesla’s entry into the market is also a positive factor. The dynamics of the economy ensure that, with an increased supply and roughly stable demand, the price equilibrium point will gradually move down, thus, making the goods more accessible. In this respect, increased competition also impacts the range of choices for the better, albeit indirectly, as lower prices ensure there can be more options for the same spending level.

That being said, the drive toward monopolization, with all its detrimental effects for the consumer, still remains. The simplest biblical explanation for this drive is, of course, the sin of greed that drives people to obtain more than they can possibly need. By eliminating competition and dominating the market, monopolist suppliers seek to increase their wealth at the expense of the consumers by depriving them of alternatives, which is hardly Christian.

To summarize, Tesla’s competition with traditional auto dealers impacts the range of choices positively insofar as the consumer is concerned. Increased supply and competition ensure that, at least theoretically, there should be more options available. Still, there is no doubt that any large company in the industry would favor the opportunity to monopolize the market by eliminating competition to satisfy its greed.

The person I interviewed for this assignment was my mother, a pious and conservative christen woman. She does not have that much interest in the automobile market, and her answers were largely influenced by the common sense perspective on the matter. She posited that the entry of a new company into the market is generally good because it would give people more choice options. She did not have much to say about the natural market forces shaping the supply-demand mechanics in the automobile market but assumed that competition was good as long as the companies competed honestly. She even quoted Proverbs 1:11 – “The Lord detests dishonest scales, but the accurate weights find favor with him.” That was the way of expressing her distaste for the dishonest and corrupt competition practices.

Speaking of the desire to monopolize the market and eliminate competition, she likened it to the Pharaoh lending grain to the Jews, as described in Genesis 47. From her perspective, it is not mere greed that drives the desire toward monopolization but the lust for power and control. According to her, creating a situation when people cannot choose and only buy from a single supplier means making servants of people, like the Pharaoh would make servants of Jacob’s sons, if not for Joseph.

Key strategic issues for Tesla are various factors that, in one way or another, affect its development and product sales not only in the future but even now. The most important ones are the political factor, the competitive aspect, the technological aspect, and the solvency of the manufacturers, along with the purchasing power. Each feature is worthy of individual attention and explanation of the cause, together with possible consequences and methods of solving the problem. As can be seen, despite its relatively short history of Tesla, it already has a number of difficulties that do not allow it to fully conquer the automotive production market and expand its sphere of influence to other countries, where their cars can be a novelty (Hess and Andiola). However, as has already been said, each side should be considered further and analyzed to solve the problems.

The problem on the side of political influence, although not the most obvious, has a significant impact on the overall development of Tesla. As it is already known, this company is private, i.e., it does not depend on state funding, which is a significant disadvantage for the manufacturer, who decides the main concepts of development, directions, design, and production capacity. Therefore, you can trace the trend to the fact that the appearance, power and running gear of Tesla cars, is significantly different from its analogs, as it brings new features and is not afraid to experiment (Hess and Andiola). On the other hand, the need to regulate Tesla production plays an essential role for the government, as it directly affects a significant part of the U.S. auto industry. Since it is a private company, it has the right to regulate the price of its product itself, which is not beneficial for the government as it creates a monopoly in this market. The solution to this problem is relatively straightforward, namely to provide evidence that the government receives interest on each unit sold, which effectively adds to the country’s overall economy. Thus, the rise in the price of models, although it will have an impact on the market, will not become an obstacle for government agencies, bringing them a substantial profit.

Another, no less critical indicator by which to assess the sales and production capabilities of Tesla products is the competitiveness and the ability to fight it. It is no secret that the cars produced by this company are very different from those of other manufacturers. Primarily it concerns not only the design, which according to many, is ahead of its time but also the power of the product itself. In addition, Tesla was one of the first companies which have developed and were able to start the production of cars powered by electricity. Not only was it able to improve the planet’s ecology, but it also set a precedent, which directly raised the rating among other car manufacturers and served as a good booster for the advertising campaign. In this way, Elon Musk’s company was able not only to create a new product that distinguishes it from others but also to influence its sales by significantly improving them.

However, it is worth understanding that by demonstrating their car’s capabilities in this way, other companies have caught this trend and started their own development. Thus, in many ways improving the ability of their vehicles and reducing the lag from Tesla. At the moment, it still leads in all major indicators and is in demand among customers, but it cannot be like this forever. The solution to this problem must be grounded in the company’s ability to adapt to the automotive manufacturing market. Tesla has already shown that it is an entirely different company in terms of level and production capabilities. Therefore, it is worth constantly bringing in new, innovative ideas. This should not be a hardship for a company that is engaged in the production of modern technologies for the new generation of rockets.

Despite this, the technological aspect is still quite a significant challenge for Tesla. So many ideas within this division of the company, namely mechanical engineering, are up-and-coming. You can already see how revolutionary this company is in its approach to realizing its product and that the world of automotive engineering has already managed to change since Tesla entered this market. On the other hand, it is essential to note that some of these technologies are not yet fully ready and need time to refine and implement. One of the most prominent examples was the Cybertruck demonstration, which was conducted with some sort of scandal. Throughout the presentation, people were assured that the windows in it were powerful and impossible to break. However, the window was shattered during the demonstration of their abilities, bringing Tesla’s stock down considerably and casting doubt on their reputation. The way out of such a situation could be to refine the product for the sake of assurances. It is crucial to find your speed and work at a certain pace, supplementing the product with more and more perfect components, which will show their effectiveness over time. It is essential to take your time and be able to sell your product even without unique details.

The last problem people encountered when buying Tesla products was their price. It is too high, not only for the customers themselves but also for those who sell it. Thus, there are dynamics judging by which the sales of Tesla, contrary to predictions, are not growing, but on the contrary, are decreasing. The problem is in the production of the vehicle since some of the innovative technologies are too expensive and rarely used but are included in the cost of the car itself. Since the price is too high, fewer buyers are willing to buy it, which leads to a decrease in demand and, consequently, the inability to sell the car. This puts the product sellers in a wrong position since there is no sale. The solution to this problem is the most obvious: to expand the list of features of the car, which the customer can exclude from the value due to personal uselessness. In this way, it is possible to reduce the cost of production and produce more car models.

In conclusion, it must be said that despite having such a long list of problems, Tesla is still one of the fastest-growing companies in the world. Its shortcomings in some details, although significant, are setting a vector for the future of the automobile industry. We can be sure that, over time, this company will become a benchmark for other manufacturers, but for now, the potential and capabilities of Tesla are already apparent.

Reference

Hess, Megan F., and Lindsay M. Andiola. “Fraud Risk Brainstorming at Tesla Motors.”Issues in Accounting Education, vol. 33, no. 2, 2018, pp. 19–34.

Introduction

The selected global brand is Tesla, and the paper will address vehicles’ functional and emotional benefits. Mayo and Kay (2022) state that autopilot is a driving assistance technology that is preinstalled on all Tesla vehicles. The feature allows a vehicle to navigate, accelerate, and halt inside its lane autonomously.

Discussion

The functionality is not intended to replace a driver’s duty but rather to simplify driving and minimize incidents. The second functional advantage is that Tesla has a karaoke function that lets vehicle owners choose from an extensive library of music and song lyrics (Mayo & Kay, 2022). Furthermore, the karaoke music collection includes songs in a variety of languages. Finally, all Tesla models include a distinctive touchscreen with various amenities, such as online games, streaming platforms, and real-time traffic data (May & Kay, 2022). The displays also house basic functionality like temperature control and GPS.

Tesla began with a mission to shift the automotive market from gas-powered to electric vehicles. Robertson (2018) emphasizes that the brand seized on the consumer’s eagerness to help the environment and launched a movement. Hence, while purchasing a vehicle, the first emotional reward is the sensation of protecting the environment. Because Tesla automobiles are costly, popular, and technologically advanced, the second emotional advantage is status. Tesla recognizes that a premium automobile must be appealing, whether it costs $55,000 or $110,000, to give an owner a feeling of getting noticed (Robertson, 2018). Finally, because the brand concept is that the electric car is created for the future, feeling safe and comfortable is another emotional advantage (Robertson, 2018). Thus, the high performance of these vehicles allows drivers to relax and rely on modern technology.

Conclusion

To conclude, it is critical to focus on emotional and functional product advantages to create a successful brand. According to Robertson (2018), businesses aim to have an emotional spot in the consumer’s heart and a logical place in the consumer’s intellect. Tesla recognized a chance to challenge the conventional thinking that energy efficiency meant unattractive and slow. Tesla invested in technology to create a strong desire for their automobiles. The emotional advantages of owning a Tesla include feeling ecologically friendly, safe and recognized.

References

Robertson, G. (2018). Tesla case study: How Elon Musk built Tesla based on creating intense desire.Beloved Brands. Web.

Mayo, A., & Kay, G. (2022). 22 features that make Tesla cars unlike any others. Business Insider. Web.

The world is striving for the transition from a linear economy to a circular economy. The linear economy that emerged after the first industrial revolution is often referred to “take-make-throw” model (Cui, 2021). It is a wasteful consumption and manufacturing of resources with severe environmental impact. In comparison, the circular economy is divergent from this damaging approach and can be defined as a model that attempts to include the needs of businesses, societies, and the environment (Cui, 2021). This model is directly involved in the provision of sustainable services and manufacturing that aims to proliferate their products as much as possible.

Currently, Tesla guides its economic development towards the sustainable approach of circular economy through their batteries for electric vehicles. The company’s electric vehicles are powered by batteries that, unlike fossil fuels, which emit hazardous pollutants without the possibility for reuse, can be recycled and recovered (Tesla, n.d.). The company claims that its batteries are not disposed of in the landfill and are 100% recycled (Tesla, n.d.). Therefore, materials for Tesla batteries are refined and placed in a cell and remain within until the end of their life cycle. Then valuable ingredients are recovered and reused.

However, this is not the only aspect of the company’s circular economy. The company’s factories are designed to be sustainable and minimize the amount of unrecyclable waste to the minimum. Its battery producing Gigafactory in Nevada was designed to be covered with solar panels and aims to produce 24,000 KW of energy for manufacturing purposes (Tesla, 2021). The company is utilizing renewable energy in every operation possible “factories, sales, service or delivery locations, or through Supercharger Network” (Tesla, 2021, p.21). In the future, the company plans to launch the Robotaxi project to address disproportionate carbon emissions from regular taxis and reduce its imprint on Earth (Tesla, 2021). Tesla’s approach to the environment is elaborate and tries to encompass every unit of its activities globally.

5 examples of circular economy taken from the book “An introduction to circular economy”:

1. Aluminium used by Apple in its computers and phones.
2. Patagonia’s lifetime warranty for return and repair.
3. Michelin tyre example.
4. Sharing platforms such as AirBnB, Uber, Grab, Mobike.
5. “Rice-fish-duck” system in China, Vietnam, Philippines

Reference List

Cui, M. (2021) Key Concepts and Terminology. In: Liu L and Ramakrishna S (eds), An introduction to circular economy. Springer Singapore, pp. 17–34.

Tesla (2021) Impact report 2020.

Tesla (no date) Battery Recycling.

Introduction

The automotive industry presents a variety of challenges and opportunities for companies. Tesla chose to become a technology developer focused on solving specific car-related challenges. The company implemented a strategy aimed at expanding the market, spurring innovation, and ensuring future growth. Its enviable position as an electric vehicle market leader has led to an increase in value, seeing as it offers a sustainable alternative to the internal combustion engine. Tesla’s dominance as an innovative giant has cemented its position as a global leader in the automotive industry.

The Internal Combustion Industry versus the Electric Vehicle Industry

The automotive industry is experiencing a transformation in drive train technology. Internal combustion engine vehicles have dominated the market over the last few decades. This is, however, bound to change because electric vehicles (EV) are gaining popularity. In 2017 over a million EVs were registered globally, with over 60% of the vehicles being operated in China (Casper & Sundin, 2020). The similarities between the electric vehicle market and the internal combustion market are numerous. First, they both cater to consumer preferences in terms of mobility solutions. In addition, manufacturers from both industries must partner with energy producers to facilitate fueling and charging options.

There are some essential differences to consider when assessing the automotive industry. While internal combustion engines are dependent on fossil fuels, electric vehicles use renewable energy sources that have a limited environmental impact. The latter are often expensive to acquire compared to the former because the cost of research and development is extremely high. Finally, the electric vehicle industry requires immense infrastructural investment compared to its rival in terms of charging stations and support systems.

Tesla’s Open Patents

The decision to allow free access to Tesla’s patents was met with shock in the automotive industry. In 2014, Elon Musk announced that the company would not initiate patent lawsuits against individuals that intended to use its technology for legitimate applications (Grijalva, 2017). The declaration was an opportunity cost the organization was willing to take to facilitate the expansion of the electric vehicle market. Tesla held the view that patents stifle progress and enrich individuals in the legal profession as opposed to actual inventors (Grijalva, 2017). The company had few competitors because the market was in its infancy.

The firm made the right decision when it allowed manufacturers to make use of its technology. The open-source philosophy facilitated market expansion. In addition, it allowed Tesla to form strategic alliances, which improved its stock price and led to the development of more efficient vehicles. The cost of enforcing patents was counterproductive for the institution since it limited growth. It should be noted that allowing unfettered access to proprietary material encourages innovation in the industry.

Tesla’s Strategy

Tesla has achieved a significant level of success thanks to its application of well-researched policies in the automotive industry. Its stock market capitalization reached 55 billion dollars in August 2018, edging out the Ford Motor Company, which was valued at 39 billion dollars (Grant, 2018). The company’s strategy involves gaining access to the high-end market where consumers are willing to pay a premium then driving down the market to encourage high unit volumes and lower prices (Furrier, 2020). Therefore, the competitive strategy is aimed at targeting both premium and low-price buyers by increasing research and development allocations every year. The variety of products on offer allows access to varied clients and facilitates market penetration.

Innovation is an important aspect of the company’s strategic plans. The company’s funding for its research and development department has grown from 0.7 billion dollars in 2015 to 1.5 billion dollars in 2018 (Furrier, 2020). The other players in the industry are bureaucratic, big, and unprepared to compete in a software-based world. Unlike Tesla, they are slow to respond to consumers, are focused on offering customer financing for growth in unit sales, and ignore the elements that define software companies (Shipley, 2020).

Focusing on materials, automation, and software development is intended to meet consumer needs and facilitate the delivery of quality products to its clientele. The premium market demands refined products such as extended range, customizable seats, and bespoke interiors. The company must stay ahead f its competition by solving problems and applying broad differentiation initiatives aimed at securing its market share.

The Sustainability of Tesla’s Competitive Advantage

Tesla has gained a significant competitive advantage by leveraging innovation. Even though the company is involved in the manufacture of vehicles, it is primarily a technological company (Azmi & Ahmed, 2019). The organization’s competitive advantage is sustainable because it has embraced the green initiative. It is focused on reducing carbon emissions and promoting habitat protection. This is an important principle that global economies are adopting to save the earth from the devastating effects associated with the changing climate. The market for sustainable energy and environmentally-friendly vehicles is constantly growing.

Tesla is a market leader in this segment because it is approximately five years ahead of its competitors (Azmi & Ahmed, 2019). The company has transformed the automotive industry by focusing on innovation. The company’s business model presents an existential threat to the entire automotive industry (Shipley, 2020). Its strategies are sustainable because they address important energy problems that affect the global economy and provide solutions to a variety of environmental challenges.

Changes to Tesla’s Strategy

Even though Tesla’s current strategy has brought innovation to the world, specific changes must be made to facilitate effective production and global growth. In the first half of 2018, the organization faced operation difficulties in terms of production and serious cash flow problems (Grant, 2018). The company’s objectives must consider the factors necessary to facilitate worldwide expansion. For instance, it needs to focus on talent optimization to ensure that challenges such as reliability and product quality are overcome. The organization must also assess potential leadership gaps in its management process. The use of personality-based behavioral assessment tools will help identify individuals suited for specific positions within the organization. This will facilitate the internalization and implementation of critical strategic plans and initiatives.

Finally, the organization needs to dedicate more effort to finding the right talent. Identifying people who are behaviorally wired to fast-track the company’s goals is essential. Conducting a formal needs evaluation facilitates the identification of specific traits, values, and experiences required for the specific roles being advertised. The application of the aforementioned changes will allow the company to achieve high levels of success in the automotive industry.

Conclusion

Traditional combustion engines, unlike electric vehicles, depend on fossil fuels which pose a threat to environmental conservation. Tesla has leveraged this opportunity by offering emission-free alternatives to customers willing to pay a premium. Its strategy involves the promotion of higher unit sales at a lower price by driving down the market. The company’s open-source policy has led to collaborative alliances that have spurred growth. The use of innovation as a competitive advantage is sustainable, seeing as the firm is focused on the green initiative, which impacts every aspect of the global economy. Tesla leads the way in electric vehicle development at a time when the world demands the application of environmentally friendly technologies in all aspects of life.

References

Azmi, K. M., & Ahmed, D. S. (2019). Can innovation in sustainability be a sustainable competitive advantage?Perspectiva – A Case Research Journal, 5, 18–28. Web.

Casper, R., & Sundin, E. (2020). Electrification in the automotive industry: Effects in remanufacturing. Journal of Remanufacturing. Web.

Furrier, A. (2020). Tesla: Business Model and Strategic Analysis. Medium. Web.

Grant, R. M. (2018). Contemporary strategy analysis (10th ed.). Wiley.

Grijalva, M. P. (2017). Tesla Motors: Planteando estrategias originales. Iuris Dictio, 19, 55–60. Web.

Shipley, L. (2020). How Tesla sets itself apart. Harvard Business Review. Web.

Introduction

Tesla Incorporation is an automotive and Energy Company based in the USA. The company operates worldwide and has been thriving due to its robust supply chain management and warehousing. Tesla designs and manufactures solar panels and electric vehicles such as Tesla Roadstar, Model X, Cybertruck, Model Y, and Tesla Semi. Tesla Model Y is the latest and most purchased product. Tesla leverages technology in its supply chain, warehousing, and inventory management. The company receives its raw materials directly from the mines and has signed long-lasting agreements to obtain them at a lower price. Tesla’s key suppliers of raw materials are Ganfeng Lithium in China to supply lithium, Mozambique for nickel, and the Democratic Republic of Congo for cobalt.

Discussion

Tesla streamlines its operations using artificial intelligence, machine learning, and robotics to automate its production process. The introduction of robots in manufacturing increased precision and accuracy in producing goods. The industrial revolution in the company’s production sector is motivated by its robust research and development department, which constantly researches trends in production. As a result of continuous research, Tesla constantly changes its machines and techniques to include 3D printing, additive manufacturing, and big data, which makes production not only fast but also efficient. The company uses technology to revolutionize the production process.

Warehousing is an essential process in industries involving the storage of a physical inventory as it awaits distribution or sales. Tesla has invested heavily in warehousing facilities to ensure that the products are stored effectively before selling them. Tesla operates in four facilities worldwide, including three in the USA and one in China. The respective factories are annexed to a modern warehouse where all the products are stored under the required environmental conditions. The company has over 2,500 acres of land dedicated to modern warehouses for adequate storage. The company further entered into agreements with the Oaks logistics center near the Fremont factory to lease three warehouses. It is paramount to note that as a company’s production expands, the warehousing facilities must also be extended to increase its capacity. Tesla has leased about 1.3 million square feet of the warehouse, underscoring the importance of modern warehousing as production increases.

The company has an efficient inventory management system to ensure that all the products are recorded for accountability. Unlike the traditional ways of putting products into batches, the company uses a serialized system where each product is assigned a unique identification number which makes it special. Further, the inventory system uses the First in, First out (FIFO) system to ensure that the products that arrive fast in the warehouse are the ones that leave first for distribution. On the other hand, the products that arrive last at the warehouse are the last to leave. The inventory management system is advantageous because it ensures that products do not get spoiled due to overstaying at the warehouse.

Conclusion

Further, serialization makes it easy for the management to account for the effects and have the ability to warn the customer in case there is a shortage. Tesla has a custom-built inventory and supply chain management tool that uses intelligent systems for accuracy and efficiency.