Significant Business Strategies of Tesla

Learning Outcomes

LO1 – Demonstrate  the impact and influence which the macro environment has on an organization.

LO2 – Explain an organization’s internal environment and capabilities.

LO3 – Evaluate and use the outcomes of an analysis using Porter’s Five Forces model to a   given market sector.

LO4 – Identify the models, theories and concepts to assist with the understanding and interpretation of strategic directions available to an organization.

Case Study:  Tesla Motors: the future is electric!

 Tesla was founded  in the year 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products.

Tesla is the brain-child of three silicon valley engineers convinced by global warning arguments and looking for alternative fuel sources for cars.  Inspired, Eberhard kept saying to potential recruits - ‘try and touch the dashboard.’ He would then hit the accelerator they couldn’t. The  industry logic said electric cars would never succeed. GM spent $1bn developing EV-1 which was then scrapped. Battery technology had not improved in a 100 years. But Ebhard realised lithium-ion batteries were different improving 7 percent p.a. so Tesla was positioned to ride the current of technological history. The founders had no experience making cars, but realised car companies now outsourced everything, even styling. Manufacturing partners were ready to be connected with: a ‘fab-less’ car company was possible. Production began in 2008. The business plan described the Roadster as ‘disruptive technology’ a high end sports car with lower price and emissions than competitors and a lower resource cost to the planet.

Tesla’s aim was:

To  target the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each succession model all free cash flow is ploughed back into R&D to drive down the costs and ring the follow on products to market as fast as possible. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.

Tesla main goal is to provide zero emission electric power generation from their ‘giga’ battery factory in line with their ‘overarching purpose to help expedite the move from a mine’-and-burn hydrocarbon economy towards a solar electric company. In 2015, Tesla energy was launched selling batteries for home and business use.

Edison didn’t invent the lightbulb, but he made it affordable and accessible through his electric system. Tesla is also offering an energy system for a world of electric vehicles, homes and businesses, using batteries.

With the help fo this case study,  use your own place of work or the reputed  company you would like to work for or any other company of your choice.

TASK 1: ( LO1, LO2,LO3)

Prepared an internal and external analysis that provides a basis for strategic planning.

1. It must include a PESTLE and SWOT of the organisation and an analysis of the organisation’s internal environment and capabilities.
2. Also, prepare an analysis of the competitive environment of the organisation using Porter’s Five Forces Model.

You have been appointed as a Junior Strategy Manager and you have been asked by your line manager to provide and analyze an environmental analysis and strategic growth management plan, based on the use of recognized internal and external analytical tools.

TASK 2: (LO4)

 Establish  a strategic plan based on the environmental analysis and findings in task 1:

3. Evaluation of the different types of strategic directions available to the organisation.
4. Justify and recommend the most appropriate growth platform and strategies.
5. Provide a strategic management plan with strategies, objectives and tactics.

Learning Outcome and Assessment Criteria