Strategic Management and Leadership:Tesla Company Strategic Analysis
Table of Content
Part 1: Measurement of Success. 3
1.1 Define success. 3
1.2 Summary of Tesla Company Balanced Scorecard. 4
1.3 Tesla Motors Balance Scorecard. 4
Part 2: Reasons for Tesla Company’s Success. 5
Part 3: Internal Analysis of Tesla Company. 6
3.1 Tesla Inbound Logistics. 6
3.2 Tesla Outbound Logistics. 7
3.3 Tesla Service. 7
3.4 Tesla marketing and sales. 7
3.5 Tesla Core Competencies. 7
3.6 Tesla VRIN Framework Analysis. 8
3.7 Summary of VRIN framework table for Tesla. 10
Part 4: Contribution of Leaders in Tesla Company. 10
4.1 Apply leadership model 10
Part 5: Review of strategies used. 13
5.1 Generic competitive strategy. 13
5.2 Intensive growth strategy. 14
Part 6: Analysis of the factors of Tesla Company. 14
6.1 Will the company remain successful in the future?. 14
6.2 Factors affecting the future of the Company. 14
6.2.1 PEST factors. 14
6.2.2 Competitive environment. 15
Tesla is an electric automotive company in America, specializing in solar panels, electric automobiles and energy. Having been founded in 2003, Tesla has shown tremendous achievements, tapping the potential of technology to provide energy friendly devices. The Company focuses on electrical products from vehicles to energy sources. The unique line of products that is making it stand out from the competitors (Bilbeisi Kesse, 2017). The company CEO, Elon Musk, revealed that the Company is interested in creating the best platform for the auto industry to help it achieve a long-term goal of sustainable transport. Tesla company headquartered in Palo Alto, California, with the Company enjoying a large group of more than 300,000 employees and 212 stores worldwide. Tesla deals with a variety of models; the highest sold number being Model S, which has boomed in the market since 2012 (Karamitsios, 2013). Tesla Company serves a broad market segment in the world, although the Company is keen on target market specification whenever a new model is released. For instance, during the launch of Model S, the Company’s target market was American families with an annual income of $100,000 and above. GET CUSTOM PAPER
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Success is the completion of a single or entire project within the stipulated timeframe using the estimated amount of resources for a course. It can also mean completing an objective after a long period of commitment. In my own opinion, success is a sequential development trend set when you meet short or long-term goals. Its baseline is determination and proper use of available resources factors for the same.
A balanced scorecard is useful in determining the success of a business, a company, or an organization. It creates awareness, especially to the stakeholders on how an organization is developing towards achieving set objectives. The four perspectives from the Tesla company analyzed are; financial segment, customer, internal processes, and growth. In terms of finance, Tesla Company is improving cost structure and enhance the use of assets (Karamitsios, 2013). Tesla is fast-growing and can, therefore, focus on expanding revenue opportunities and improving customer value (Liu, & Meng, 2017. The Company also actively incorporates other perspectives which contribute to more significant success trajectory.
|Areas for Measures||Objectives||Measure||Metrics||Target Year 1||Target Year 2||Target Year 3|
|Financial||Increase profitability||Market value||% in market share||2%||3%||5%|
|Increase revenue||Price of vehicles||% of vehicles||1%||2%||3%|
|Lower costs||Vehicle Parts||% of the price compared to cost to make||90||80%||70%|
|Customer||Customer experience||Tesla driver experiences||Customer surveys||85%||90%||95%|
|Best in class||Customer ranking||Customer surveys||90%||95%||100%|
|Safety||Industry Standards||Crash Test Ratings||80%||90%||95%|
|Internal||Improve turn around||Quicker production times||Statistics from production||85%||90%||100%|
|Communication||Effective communication||Feedback from customers and employees regarding communication||75%||80%||95%|
|Reliable services||Skills with employees/customer monitor reliable service through surveys||% of satisfied customers who think our services are reliable||80%||90%||95%|
|Learning & Growth||All employees receive proper training||Provide clear, understandable instruction||Employee training program||80%||85%||90%|
|Evaluations||Customer and employee feedback||Performance surveys (excellent =5 to poor =1||85%||90%||95%|
|Ensure effective customer service skills||Encourage communication both internal and external||Monitor employee feedback and involvement||85%||90%||95%|
The first prominent reason for Tesla Company success is massive investment in technology. The Company has tapped into opportunities brought by technology and create a favourable platform for enhancing sales, uniqueness, and customer satisfaction (Chen & Perez, 2018). For instance, Model S has set a good record for the Company, earning it different awards. The Company’s CEO Musk has reiterated that technology-facilitated development of Model S, which has put Tesla Company on a favourable competitive edge (Bilbeisi & Kesse, 2017). The second success factor is timing. The Company benefited from the administration of President Obama, providing efficient services and proving that it was swift in its operations. Tesla benefited from government subsidies, boosting its activities (David, 2013). Monopoly is another critical success factor for the Company. Apart from Model S, the Company is also committed to building third-generation care; a model 3 car which will attract the mass car market.
Tesla Company also enjoys a team of special forces, which help in creating a synergistic productivity level. The Company’s CEO described his team as a team of special effects, committed to efficient delivery and quality products with reasonable turnaround time. The Company’s CEO is motivating despite putting pressure on workers on various occasions. He has created a culture of resilience and hard work in the Company. Tesla Company is making use of distribution opportunities. The Company has opened new outlets in various states and continues to survey other potential areas. Tesla is producing durable cars; a move that was validated by being granted a clean bill of health by NHTSA body. The privilege comes after a long watch and benchmarking of Tesla operations by General Motors (GM). Lastly, Tesla Company handles its supply chain. The Company, after identifying gaps resolved on owning its distribution chain. It does not use dealers to help manage some shops. Instead, it has set up a sound management system dealing with different customer expectations, improving brand, and saving costs.
Value Chain Analysis
Tesla Primary Activities
Tesla Company majorly receives and stores raw materials to use in building electric vehicles and related products. The Company also applies scarce materials such as cobalt, lithium, copper, and aluminum to make their final products. Tesla is also concentrating on revolutionizing its strategic operations plan to build-to-order strategy, which also helps it to strengthen a longevity relationship with partners.
The Company has divided its activity areas into automotive and energy generations and storage, which enable it to cover a wide margin of services, reaching many market segments. The Company conducts its vehicle manufacturing, and assembly activities at its significant shops located in the Netherlands and California (Chen & Perez, 2018). The automotive segment deals with, design, development, manufacture, and sales of electric vehicles, during energy generation and storage deal with the production, design, and installation of solar energy systems and sale of electricity. The Company is also incorporating a good number of robots to work on its new models such as model S.
The company’s outbound logistics involves storage or warehousing and distribution of products. The Company transports electric vehicles to storage facilities and associated and outlets in the United States and other countries in the world. Notably, the Company equally participate in direct car deliveries to different customers irrespective of location. At the stores, the Company is committed to keeping small inventories for faster sales. As one of the critical breakthroughs in outbound logistics, the Company does not involve dealers in selling their cars, which boots value creation. It also shortens the delivery time of vehicles to customers.
Tesla is continuously improving a system that can listen to customers. It has a company-owned post-sales service center that listens to customer needs and reacting to their complaints. The Company is currently setting up more 100 service centers and other 350 new on-demand services vans to offer services in the country.
Tesla Company enjoys the right scale of media attention, which boosts its overall marketing scheme. The Company’s marketing strategy is similar to other automakers. Tesla also sells used cars when customer trade-in needs are already met. It uses third party auto auctions to sell some of Tesla cars and used vehicles.
The first competency of Tesla Company is the generation of self-reinforcing enthusiasm for the brand. The Company believes that a good brand has the potential of generating a self-reinforcement pattern based on the attached value. Tesla Company created a platform for making energy fast electric cars which can attract longevity patterns. The second competency of the Company is utilizing advanced technology in improving its products and enhancing customer satisfaction and experience. The Company tapped into opportunities created by technology to make models S with advanced ideal features. Another competency area of Tesla Company is the willingness and ability to take the risk. Tesla is committed to customer satisfaction, and it is willing to adjust its scale of operations to suit customer demands. In terms of taking the risk, the Company has resisted instances of harsh conditions when setting up their significant outlets. Notably, the Company has demonstrated resilience as a critical factor behind the widespread outlet shops globally.
The Company believes that its core competencies have gained them more strengths and ability to survive in the competitive market. Tesla majors on powertrain and vehicle engineering, which guarantees its core intellectual property to be contained in its electric powertrain. The powertrain is made of different essential components that work in a complex process ensuring its longevity (DuBrin, 2015). These components are assembled in the proper pattern, creating a way for the development of advanced technology for making Model S. Notably, the Company aims to use the same technique in making future electric cars as a modular design. Another important competency area of Tesla Company is building strategic partnerships. The Company believes in synergy production, to produce an overall high-quality product that will guarantee customer satisfaction. As a result, Tesla Company has partnered with Lotus for advanced manufacturing. The joint partnership has resulted in the technology used in Tesla Roadster, which also forms a baseline for designing the Models X and Model S. Culture of a mutual company is also expanding Tesla’s marketing niche because it provides a favourable platform for selling products to a broader customer domain.
VRIN framework is an essential tool in an organization or a business firm because it analyzes the capabilities of a business to sustain a unique competitive advantage niche based on the use of internal resources. According to the VRION founder, Birger-Wernerfelt and popularizers, Prahald and Hamel, a business meets competitive advantage when it marches configuration of internal resources available to management. In terms of broad categorization, Tesla Company utilizes both tangible and intangible resources. For instance, battery technology and power train are regarded as substantial, while the brand image of the Company is elusive. Tesla meets RBV analysis in terms of internal resources and their orientation. Innovative battery
pack and powertrain are Tesla’s unique resource (Min, Jang, Han & Kang, 2016). Therefore,
further analysis of internal resources is useful to certify if they all meet the deliverables.
According to core competency analysis of Tesla Company, the most significant competencies come from innovative CEO and the team, who hold to the idea of designing futuristic modern electric vehicles to achieve competitive advantage and excellent customer satisfaction (Weiller, Shang, Neely & Shi, 2015). Tesla has placed high-efficiency vehicles and propriety batteries as major competing parties since other companies are capable of replicating both with hybrid electric-gasoline powered cars.
Battery and powertrain are the critical value-creating strategy because they have extended range and performance. They are also environmentally friendly, which makes them stand out. The company offers rare and unique products which makes it difficult for other companies to copy the trend, mainly because of expensive advanced technology applied. The company producers are also creating imperfectly imitable products from battery and powertrain technology, thus gives competitors a hard time in imitating products. Lastly, Tesla Company offers non-substitutable products. The battery pack and powertrain have unique qualities and functions, which make other companies unable to create products that can substitute those of Tesla Company.
|Resource and Capability||V (Valuable)||R (Rare)||I (Costly to Imitate)||O (Exploited by Organization)||Competitive Implication|
|Battery Packs||Yes||Yes||Yes||Yes||Sustained Competitive advantage|
|Supercharger Network||Yes||Yes||Yes||Yes||Sustained Competitive advantage|
|Gigafactory||Yes||Yes||Yes||Partially since it’s just starting up||Potential for sustained competitive advantage|
|Direct Sales||Yes||Yes||No||Temporary competitive advantage|
|Elon Musk||Yes||Yes||Yes||Yes||Sustained Competitive advantage|
Leaders have been in the limelight as crucial success factors after Tesla Company reached a market value of USD 50.84 billion. This figure made Tesla Company be above the General Motors Company, which has dominated the market for a long, thus raising questions on how this sudden shift could happen (Ulrich, 2015). However, an in-depth analysis indicates that Tesla Company as reliable, innovative, and committed leaders. Led by its CEO, Tesla leaders have shown remarkable commitment to service delivery, giving zero chances to gaps while devising appropriate strategies for apt interventions whenever a problem is realized in the Company. The leaders have created an environmentally friendly workplace for its workers (Birk, 2015). Their essential determination and efforts have earned the company a good sustainability standard, a concept that enabled the Company to experience an excellent competitive advantage. Tesla leadership incorporated the idea of sustainability, which is the heart of its business strategy (Minimalist, 2018). Notably, Tesla leadership cut off the dealership, creating an excellent operational flow and efficiency of customer service. The administration is also committed to ensuring a smooth transition of the customer when he or she buys Tesla’s product. They have initiated a systematic post-sales guide for customers.
A transformative leadership model is evident in the Tesla Company. Tesla CEO, Elon Musk, is a transformative leader. According to Musk, developing an excellent platform for futuristic cars is a crucial priority for the Company. According to revelations made by the company workers, Tesla is a determined leader, who always want to actualize his vision. He motivates workers to strive even if a design process does not seem possible. One of the engineers described him as a person who does not conceive a process failing even if input process is complicated. Musk has an excellent record of setting bars for the rest of the industries. He also founded Solar City, which is the second-largest solar provider in the US and its helping in combating global warming (Nylund, Ferras-Hernandez & Brem, 2018). Just like Steve Jobs, Musk is a genius and visionary who believes in fulfilling his vision. He has an inner drive and persistence and therefore refuses to accept obstacles impeding his path. Musk had shown areas in which he conflicted ideas of other leaders for a better outcome as evident by the time he was actively managing PayPal.
Tesla Company practices change leadership to improve its production scale according to variations in the service markets. Notably, Elon Musk accepts change and has transformed this culture into the organizations’ working pattern. One of the engineers described Elon Musk as a man who holds to a vision despite odds, give it a benefit of doubts through trials and creating new patterns when the final product design does not appear compatible. The Company’s CEO is also keen on studying current market trends and initiating changes where necessary to be on the competitive edge. Notably, the Company did several trials before finally unveiling Model S and Model 3. The staff wanted to set a positive trajectory for meeting customer needs.
Tesla leadership is set standards, which act as templates guiding overall performance. The company is comfortable to change. Elon Musk described the move as sometimes eating glass while staring into space. He admitted in one of the interviews that successful leaders can adapt to changes that come in any situation, and the way they react to such creates an overall sustainable development. The company is also guided by vision. His vision guides the tesla CEO, and he takes time to explain the idea to his staff so they can move together towards achieving it. Setting the standard in your industry is another influential critical factor behind the growth of Tesla Company (Birk, 2015). Notably, Musk developed a standard template for the various sector he championed. For example, he set Paypal as an established online banking institution, SpaceX to become the first private company to launch a rocket successfully, and SolarCity to promote the use of solar energy as a sustainable energy source, setting a good standard for the Company (Liu, & Meng, 2017). Lastly, Tesla Company’s leadership management is setting a right trajectory with continuous quality improvement because of applying feedback loop constructively. The Company values the feedback loop platform because it encourages them to identify circuits and constructively change or upscale its leadership pattern whenever a gap is realized (Kauerhof, 2017).
Tesla Company applies the generic competitive approach to create a favorable platform for selling its products and achieving competitive advantage against other companies in similar producing products. According to Porter’s model, competitive strategy is ideal for a company because it helps it to exhaust different deliverables that make it gain a competitive advantage. As a way to stand out in the marketing mix, the Company applies advanced technology in its electric vehicles and related products. This is a way of competing with other companies dealing with closely similar products; the companies include; Honda Motors Company, General Motors Company, Nissan Motor Company, Bavarian Motor Works (BMW), and Volkswagen. The Company maintains constant use of technology while keen on getting customer feedback on product experience. Tesla is also interested in making fundamental changes when a gap is realized while maintaining internal communication and coordination. The Company ensures that discrete information about their products is kept within the organization as such differences may give its competitors the upper hand. Tesla’s strategy helps it to maintain an excellent competitive advantage scale. It also helps the Company to attract early investors in their market.
Tesla’s generic competitive strategy is based on broad differentiation. The Company is keen on building products that differentiate them from other companies. One factor that differentiates Tesla products is the ability to integrate environmentally-friendly technology in making its products. This distinguishes their products from those using internal combustion engines. The differentiation focus strategy adopted by the Company also provided them with a platform for developing unique products, winning many early adopters in the market. (Galpin, 2019). The first adopted then went on to become affluent customers who are keen on buying new products of Tesla, hence are making the Company to gain competitive advantage. Currently, the Company has shifted its competitive strategy to braid differentiation, which aims at broadly targeting customers in the automobile market because of increasing brand popularity.
Tesla Company has mastered the art of intensive growth strategies, which they are applying to boost their production and profit margins. Notably, the Company values market penetration as a primary strategy. The Company employs aggressive marketing techniques, which increase its revenues (Kauerhof, 2017). The Company also embodies product development as a secondary strategy. Tesla Roadster is a product of new technology valued by Tesla. Lastly, the Company represents market development and diversification, which help in creating good customer relations and subsequent revenue boost.
Tesla Company has made great efforts to be in the limelight as a critical automotive industry producing environmentally-friendly electric cars. The innovative strategy of the Company spearheaded by its leader has improved the efficiency of services offered by the Company. The staff is committed to attaining long-term dominance in the automotive industry through a different tap of new technology in developing powertrains and other affiliated products (Rothaermel, 2013). Based on the in-depth analysis of the company, it is most likely that Tesla will succeed in the future due to longevity plans it has in place.
Additionally, the Company has a futuristic CEO with a long-term vision for the Company (DuBrin, 2015). The latest idea is innovative moves to explore space. Musk visions that Tesla Company should be on a leading end on creating aerocrafts that will facilitate human being going extra planet. To achieve such an objective, the Company is strategically placing its resources towards the full exploration of space.
In terms of political aspects, Tesla Company, although has enjoyed exponential expansion, it fears restrictions in its operations due to influence of the US government. The latter is investing in the electric automotive industries with the latest being investing large amounts in installing around 48 new electric car charging stations. Regarding the economic aspect, Tesla Company is at the borderline of survival due to changes in economy and issues of looming wars. Tesla Company meets various social needs of customers. It met expectations of people with middle income, unlike traditionally when it reserved its cars for high-class in society. Technological factors also affect the operations of Tesla Company. Notably, Tesla Company has tapped technology to make modern electric car models. However, the new technology manifests some gaps; for instance, the new Model S can only travel around 220-300 miles on a single charge, thus indicating that car owners may suffer charging vehicles in remote areas. Tesla company products are environmentally friendly because of zero carbon emissions hence preferred by customers. Lastly, Tesla Company has faced legal restrictions on various occasions, limiting the direct sale of vehicles to clients.
Tesla Company is facing a competitive industry rivalry, especially from General Motors, which is the highest-selling car manufacturer in 2016 (Reinhardt, Domingo, García, & Christodoulou, 2017). The competition is disadvantageous to Tesla Company because rival companies get the opportunity to control market shares. The competitors are keen on achieving flat market share; therefore, they design new car models and redesign existing one then offer them at reduced prices to lure customers.
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In other words, Tesla's competitive strategy is a broad differentiation to target both segments by targeting premium buyers and low-price buyers in the automobile industry.What is Tesla strategy statement? ›
Tesla's vision is to “create the most compelling car company of the 21st century by driving the world's transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional ...What are the most important elements of Tesla's competitive strategy? ›
Tesla's Generic Strategy (Porter's Model)
Tesla's generic competitive strategy is broad differentiation. This generic strategy builds competitive advantage based on the development of products that differentiate the company from other firms in the industry.
The problem Tesla faces includes production bottlenecks, shortage of cash, high cost and competitions. Based on these analysis, the direction that Tesla should go for is to expand its market share and increase profitability.Is Tesla a strategic management firm? ›
How can our team address it in a unique way?” As Tesla recognizes their company problem openly as a company they are working as a strategic management company. Tesla wants to know what their problems are so that can work up from the problem and create goal and company objectives to overcome the problem as a team.Is Tesla a cost leadership strategy? ›
Let me tell you with great assurance: TESLA's automotive business does not follow a cost leadership strategy and ALDI's stores do not follow a differentiation strategy.Which aspects of strategy are illustrated by the company Tesla? ›
- Focus on electric cars. ...
- Ownership of distribution. ...
- Low cost of ownership. ...
- Unconventional way of doing business.
Tesla's mission statement is: “To accelerate the world's transition to sustainable energy.”Does Tesla have a good mission statement? ›
Tesla Inc.'s Vision Statement
Tesla's corporate vision is “to create the most compelling car company of the 21st century by driving the world's transition to electric vehicles.” This vision statement emphasizes the company's focus on sustainable applications in transportation.
Strategic management provides overall direction by developing plans and policies designed to achieve objectives and then allocating resources to implement the plans. Ultimately, strategic management is for organisations to gain a competitive edge over their competitors.
The environmental and cost benefits of EVs will accelerate — an aim to which Tesla is committed. The keys to success, it says, are centered on recycling, bettering battery technologies, and expanding renewable energy's reach.What is Tesla's innovation strategy? ›
By investing in batteries —producing them at scale and in better ways — Tesla is betting that they will control the bottleneck, and thus the profit center, for the future of the industry. Tesla's strategy also accounts for the system level: the entire set of complements needed for a consumer to use its product.What is Tesla's biggest problem? ›
So then, what stands between Tesla and total market domination? In a statement reported by Bloomberg, CEO Elon Musk brushes off the notion that as increasingly-competitive electric vehicle market is to blame. Instead, he cites supply chain constraints as Tesla's biggest obstacle to growth.How is Tesla different from other companies? ›
Zucchi explains, "Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries." And by selling direct, Tesla "creates a better customer buying experience.What is Tesla's diversification strategy? ›
The marketing of electric cars is arguably the backbone of Tesla's diversification strategy. Tesla sought to bring a different brand of electric cars that were faster, smoother, and exceptionally slick compared to those manufactured by its competitors (Birk, 2015).What is strategic management and Tesla? ›
Issues such as those currently faced by Tesla are the focus of strategic management because they help answer the key question examined by strategic management—”Why do some firms outperform other firms?” More specifically, strategic management examines how actions and events involving top executives (such as Elon Musk), ...What is Tesla's organizational structure? ›
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson.What business strategy means? ›
Put simply, Business strategy is a clear set of plans, actions and goals that outlines how a business will compete in a particular market, or markets, with a product or number of products or services.What is Tesla's main competitive advantage? ›
Conclusion. Tesla is a leading player in the EV sector. The company's competitive advantages emanate from its focus on environmental sustainability, its incorporation of technological innovations, product differentiation, and cost leadership among other aspects.What is cost leadership strategy in strategic management? ›
A cost leadership strategy hinges on a company's ability to lower costs of production to offer quality products at low prices. It's an effective strategy for large companies with lots of buying power, but it's less effective for small businesses.
A generic strategy is a general way of positioning a firm within an industry. Focusing on one generic strategy allows executives to concentrate on the core elements of firms' business-level strategies and avoid competing in the markets better served by other generic strategies.What is successful differentiation strategy? ›
A differentiation strategy is an approach businesses develop by providing customers with something unique, different and distinct from items their competitors may offer in the marketplace. The main objective of implementing a differentiation strategy is to increase competitive advantage.What do you know about Tesla interview questions? ›
- Why do you want to work at Tesla? ...
- How do you deal with tight deadlines and multiple priorities? ...
- Where do you see yourself in the next five years? ...
- What makes you a good fit for this role here at Tesla? ...
- What qualities and traits are needed to work for Tesla?
Think Like Owners. Like the above, Tesla encourages all employees to think like owners meaning that they always find the best way to do something, rather than going through the motions and ticking boxes. A culture that encourages this strategic thinking will create a team that is passionate, proactive and responsible.What is Tesla's value statement? ›
Tesla's core values comprise “doing the best, taking risks, respect, constant learning, and environmental consciousness.” Tesla applies these values as the principles that govern the overall attitudes and practices of all stakeholders and its workforce.What is Tesla summary? ›
Tesla Inc (Tesla) is an automotive and energy company. It designs, develops, manufactures, sells, and leases electric vehicles and energy generation and storage systems. The company produces and sells the Model Y, Model 3, Model X, Model S, Cybertruck, Tesla Semi, and Tesla Roadster vehicles.What makes a good mission statement? ›
A good mission statement embraces the expectations of a target audience for something they truly crave. For example, Zappos' mission statement is “To provide the best customer service possible.” That creates the expectation in Zappos' customers that they will deliver superior customer service each and every time.What is Tesla's motto? ›
"Ride Free" - That's My Motto | Tesla.Who is the most important strategy in strategic management? ›
The assessment stage is the most important step in developing a strategy. You need to evaluate your strengths and weaknesses as you identify your target market and look at how you can survive the competition. If something isn't working, you can come up with improved frameworks to perform better.What is the most important part of strategic management? ›
The most essential element of strategic management revolves around the concept of identifying and understanding specific organization goals. Setting short term goals is an ideal way to start, as they act as a direct blueprint in achieving long term objectives.
Examples of the functional strategy include product strategy, marketing strategy, human resource strategy, and financial strategy. The functional strategy is concerned with developing a distinctive competence to provide a business unit with a competitive advantage.What are the key factors for success in the electric vehicle industry? ›
The two-highest ranked key factors, battery price and range, as well as the factors of charging time and battery technology, show that the success of electro mobility is decisively dependent on advances in battery technology.Who is Tesla's target market? ›
The Tesla target demographic is largely established families with kids, including younger children or teenagers, and they are mostly professionals, executives, senior managers or hold other high-income positions.What is Tesla's brand positioning? ›
Tesla's brand idea is “the electric vehicle designed for our future, with shockingly high performance, and stylish designs.”Why Tesla is one of the most innovative companies? ›
Tesla produces unquestionably innovative products, including a range of electric cars that defy consumer expectations, like the Model S, “the safest and quickest car on the road”. Tesla is also committed to world-changing technology, like its line of fast-charging sustainable batteries.What can we learn from Tesla? ›
- Genius Requires Solitude. Nikola Tesla was a loner. ...
- It's Perfectly OK To Be Ahead of Others. Don't be afraid to do something new, something different. ...
- Money Isn't Everything. ...
- Don't Care About What Others Are Doing: ...
- Be patient And Push-On.
Tesla, Inc. has been criticized for its cars, workplace culture, business practices, and occupational safety. Many of the company's criticisms are also directed toward Elon Musk, the company's CEO and Product Architect. Critics have also accused the company of deceptive marketing, promises, and fraud.What are the challenges of Tesla? ›
Supply chain issues, a global chip shortage, and a pernicious pandemic plagued the industry. However, an unorthodox strategy at Tesla proved invaluable when facing tough times in 2021 — vertical integration.What are Tesla's weaknesses? ›
- Expensive price tags of Tesla vehicles.
- Huge amount of debt (USD 11.69 billion)
- History of over-promising and under-delivering the quantity of vehicles.
- Limited global presence.
Who Are Tesla's Top 3 Competitors? Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. China's BYD, sold over 590,000 vehicles in 2021 and is a contender. Another Chinese company, SGMW, sold over 450,000 EVs in 2021.
- These electric vehicle stocks could catch up with Tesla. ...
- Nio Inc. ( ...
- Li Auto Inc. ( ...
- Rivian Automotive Inc. ( ...
- Lucid Group Inc. ( ...
- XPeng Inc. ( ...
- Ford Motor Co. ( ...
- General Motors Co. (
Tesla uses broad differentiation to compete in its industry. The strategy entails developing unparalleled car models that differentiate Tesla from other automakers. Its car models, e.g., Model S, come with eco-friendly technology, making them attractive to a growing environmentally conscious market.Which of the five generic strategies is Tesla pursuing with its marketing strategy explain? ›
Tesla's Generic Strategy (Porter's Model)
Tesla's generic competitive strategy is broad differentiation. This generic strategy builds competitive advantage based on the development of products that differentiate the company from other firms in the industry.
Tesla uses one of the most effective methods of marketing: word-of-mouth. The brand's referral program rewards those who share their experiences with others. Consumers tend to trust recommendations from people they know and trust — friends, co-workers and family members — more than brand-owned channels.How does Tesla use differentiation strategy? ›
Tesla uses broad differentiation to compete in its industry. The strategy entails developing unparalleled car models that differentiate Tesla from other automakers. Its car models, e.g., Model S, come with eco-friendly technology, making them attractive to a growing environmentally conscious market.What is Tesla's innovation strategy? ›
By investing in batteries —producing them at scale and in better ways — Tesla is betting that they will control the bottleneck, and thus the profit center, for the future of the industry. Tesla's strategy also accounts for the system level: the entire set of complements needed for a consumer to use its product.What is Tesla's diversification strategy? ›
The marketing of electric cars is arguably the backbone of Tesla's diversification strategy. Tesla sought to bring a different brand of electric cars that were faster, smoother, and exceptionally slick compared to those manufactured by its competitors (Birk, 2015).Does Tesla use horizontal integration? ›
Tesla has vertically integrated many production steps, from battery production to electric powertrain production and self-driving software. According to Tesla CEO Elon Musk, Tesla is a "chain of startups."What makes Tesla so successful? ›
Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers. By owning the sales channel, Tesla believes it can gain an advantage in the speed of its product development. More importantly, it creates a better customer buying experience.What is the competitive advantage of Tesla? ›
The cost-effectiveness of Tesla's manufacturing approaches has boosted the company's competitive edge compared to its rivals. Notably, Tesla produces power units for its electric vehicles at a reasonable cost concerning the price incurred by rivals such as Nissan and BMW.
A cost leadership strategy hinges on a company's ability to lower costs of production to offer quality products at low prices. It's an effective strategy for large companies with lots of buying power, but it's less effective for small businesses.Why Tesla is one of the most innovative companies? ›
Tesla produces unquestionably innovative products, including a range of electric cars that defy consumer expectations, like the Model S, “the safest and quickest car on the road”. Tesla is also committed to world-changing technology, like its line of fast-charging sustainable batteries.Why is Tesla an inspiring company? ›
Tesla creates strong brand advocates because it is creating products that are contributing to a better future. It wants to solve the world's problems and won't be limited to doing so in just one industry. It will come as a surprise to few that Tesla views innovation as THE catalyst to what the company sees as success.What makes Tesla unique? ›
Touchscreen. All Tesla models feature a unique touchscreen that comes with an array of features including video games, streaming services, and live traffic updates. The screens are also home to standard features like climate control and navigation but look nothing like anything else on the market.How does Tesla promote their products? ›
Tesla uses one of the most effective methods of marketing: word-of-mouth. The brand's referral program rewards those who share their experiences with others. Consumers tend to trust recommendations from people they know and trust — friends, co-workers and family members — more than brand-owned channels.How Tesla changed the auto industry? ›
Tesla successfully pioneered the concept of ordering a vehicle directly from the factory using an online configurator, and that seems to be the way of the future. “People really like that approach, as it limits the uncomfortable pressure of sitting across from a salesperson,” said Abuelsamid.Why can Tesla sell direct to consumers? ›
According to “Tesla's Approach to Distributing and Servicing Cars” they also mention that the reason for not having granted dealership franchises is the conflict of interest between selling gasoline cars, which constitute the vast majority of the dealer's business, and selling the new technology of electric cars.What are the most important strategic benefits that Tesla derives from its vertical integration strategy? ›
For example, vertical integration has given Tesla much more control over its manufacturing process, faster response to changes needed, and all at a lower cost by cutting out the middleman.Does Tesla have strategic alliances? ›
Tesla's ability to attract and manage leading companies in the automotive and other key industries as strategic alliance partners is an important part of its formula for success.Is Tesla vertical or horizontal integration? ›
Tesla is now ~80% vertically integrated, says Goldman Sachs after a Tesla Factory visit.