Professional Documents
Culture Documents
Task 1
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Mission and Vision statement: For any organisation its mission and vision statement
provides a direction to the organizations plan. Vision statement is a broad overview of
what actually a company wants to achieve throughout its existence, on other hand
mission is more like a well-defined short term and long term goals which company
continuously wants to achieve.
Vision statement of Tesla Motors is very objective and clear, it has targeted towards
becoming one of the primary innovator and manufacturer in the field of electric car
manufacturer in 21st Century. Company wants to create a sustainable transport system
which is enabled by automobiles based on electric power. On other hand mission
statement of Tesla Motors is focused on creating a healthy, green and sustainable
environment through by reducing use of carbon fuels like petrol, coal and other source
of hydrocarbons, by promoting electric power based automobiles in the market. Based
on market analysis of Tesla Motors it can be said that as of now, it primary goal is to
become primary leader in the market of electric car. In alignment to its goal and overall
business strategy, its objective is to position itself as niche manufacturer in the
automobile sector and to sustain its position by achieving stable growth and profitability.
In order to achieve its business objective,Tesla Motors has focused on ensuring that it
does a small scale production of 400 electric cars every week, and to further ensure that
pricing strategy of such cars in long term is such that it becomes affordable for all the
classes of society in United Kingdom. Important aspect of business strategy is to
analyse the core competencies of an organisation. For Tesla Motors its core
competency lies in its expertise in the electric car market. The level of technical
expertise it has in this sector is unmatched, no other company is even near to create
mass production model of electric cars. This is one major reason, due to which Tesla
Motors has been able to uniquely position itself in the automobile market of UK and
other countries. However, two main factors which give Tesla Motors an edge over other
competitors are its superiority in development of the battery technology which powers its
automobiles, and secondly its capability to innovate new features in saturated market of
automobiles. It has been able to achieve this innovative edge through various ways like
filing patents on relevant technologies, and then scaling up the product to a level of
mass production.
Timeframe for strategy implementation: The time frame within which the
strategy has to be formulated and implemented should be well-defined. Well-
defined time line for strategy implementation will enable the business
organisation to properly utilise its available resources in order to achieve its
business objectives.
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Identification of stakeholders: Tesla Motors needs to ensure, that it clearly
identifies the stakeholders who will be impacted by the implementation of the
strategy.
Identification of resource required to fulfill the strategy: For Tesla Motors, in
order to ensure that its business strategy is implemented properly, it will be
important to identify the resources which will be required to achieve the strategy.
Above displayed Ansoffs matrix clearly identifies the suitable strategy w.r.t a specific
market environment. On the basis of this matrix, it can be said that currently Tesla
Motors has started its operations in UK and is rapidly spreading its presence in various
cities of UK. For example, currently business strategy of Tesla Motors can be based on
market penetration, as it is yet to gain major share of UK automobile market. However,
in future Tesla Motors should focus more towards market development and
diversification, especially since Tesla Motors offers on X and S class of automobiles
currently. Hence, based on market environment Tesla Motors can accordingly plan its
strategy and implement through analysis of Ansoffs matrix.
BCG Matrix is a framework which is used to evaluate the strategic position of the
business organisation, its brand portfolio and overall business potential. BCG matrix can
be used to identify the business of Tesla based on the industry attractiveness and
competitive position.
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Hence, for Tesla Motors, four segments as per BCG matrix will be Stars (High market
growth rate, high market share), Questions marks (low market share, high market
growth rate), Dogs (Low market share, low market growth rate) and cash cows (low
market growth rate, high market share). Hence based on analysis, below diagram
represents the BCG Matrix for Tesla Motors:
Hence, based on the analysis, it can be said that Tesla Motors falls in the category
of questions marks,where despite of earnings and profits growing, cash flows remains
negative and overall strategy of Tesla Motors should be focused on investing in market
development.
SWOT Analysis: As the name suggests itself that SWOT analysis if focused on
identification of strength, weakness, opportunity and threat for any particular business
organisation. It can be said that SWOT analysis enables an organisation to analyse all
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the aspects mentioned above and accordingly prepare its business strategy. Strength
and weaknesses are internal to the organisation whereas opportunity and threats are
from the external environment which might not be directly associated with organisation
(Alstete, 2013).
Hence SWOT analysis of Tesla Motors is as follows:
Strength
Opportunities
Threats
Growing market
Increasing oil and gas prices Gradually increasing competition
Support from government Concentrated industry
Limited range of products
Political factors: Following are the political factors which will have impact on the
business strategy of the Tesla Motors:
Gradually United States has reduced its dependency on oil imports from middle
east countries
Government has been giving tax exemptions to the companies like Tesla which
are focusing on use of green technologies.
There has been increase in demand for the green transportation from public as
well.
Economic factors:
Low interest rate and easily available funds from venture capitalist
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Increase in fuel prices have pushed consumers to look for other cheaper energy
alternatives.
Steady growth has increased the job creation has as well, impacting purchase
power of the consumers.
Social factors:
Tesla Motors has become a hugely popular organisation which people are
following for its growth on social media.
In 2013 Tesla Motors car was awarded as Motor Safety Trend Car of the Year.
Over a period of time, increased consumer confidence has helped Tesla Motors
to increase its potential market segment.
Technology:
Porters Five Force Model: Porters five force model helps a business organisation to
understand the existing market scenario on the basis of five important factors. These
factors are related to threat from a new entrant in the market, existing competition
among the market players, bargaining power of the buyers, bargaining power of the
suppliers and ultimately threat perception from any potential substitute product. Hence,
based on the assessment of these factors future business strategy can be prepared.
Balance scorecard: Unlike other methods, this method is focused more towards the
monitoring and implementation of the strategic plan. It also ensures that effectiveness of
the implemented strategy is measured, so that accordingly various aspects of the
strategic plan can be modified accordingly and future goals can be achieved.
Stakeholder mapping for Tesla Motors is mentioned below. It is important to know that
stake holder mapping has to be done on the scale of impact of change and support for
change.
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Figure 3: Stakeholder mapping for Tesla Motors.
Task 2
Investors: people who have invested money in Tesla Motors. Investors main
intention is to get profit for their investments.
Employees: People working for Tesla are also major stakeholders. For these
stakeholders having a stable job with Tesla and a positive work environment is
the main expectations.
Customers: Customers who purchase product from Tesla are the most critical
stakeholders in the business. If they are not satisfied with the product, then they
will lose their faith in the company and will not buy products from Tesla.
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Government: Government as a regulatory authority is a major stakeholder in the
organisation. Rules and regulations related to automobile sector impacts the
organisation.
Present a new strategy for the chosen business based on organizational audit
and stakeholders analysis
Based on the organisational audit and stakeholder analysis of Tesla Motors there are
certain key aspects which needs to be highlighted clearly. Firstly important aspect is
that Tesla Motors currently does not have many products in its portfolio. For example in
UK, Tesla Motors has only two products named MODEL S and MODEL X, whereas
other competitors offer range of products in different categories, even though other
manufacturers do not offer electric cars but still customer wants more products from a
company. Hence in order to sustain itself and gain competitive advantage, Tesla Motors
should first focus on diversification of its product line.
Further on, one major aspect which Tesla Motors needs to focus upon is its pricing
strategy. Compared to other cars in market Tesla Motors products are nowhere cost
effective, mainly due to high cost of innovation in electric car segment. Hence, it needs
to optimize its pricing strategy so that its investors can achieve return on their
investments. Hence in order to gain further market share and strengthen its position,
Tesla Motors should focus on strategy of product differentiation, according to which it
should be designing and launching new products frequently (for example yearly).
Frequent launches of new products will maintain customer interests in the company,
and will also provide new options to customers to select from. If the product
differentiation strategy is implemented properly then Tesla Motors should definitely
increase its sales and gain more market share and customers. In fact, for Tesla
Motors, role of government is equally important since decision of government toward
promotion of clean and renewable energy might result into certain subsidies or tax
rebates for Tesla Motors. Hence Tesla Motors should work in close association with
government in order make sure that through its products government is able to achieve
the goal of promoting renewable energy.
Conclusion
Based on the analysis of business strategy of Tesla Motors it can be said, that Tesla
Motors is currently going through a transition phase, where it has to not only focus on
strengthen position in UK market, but also has to ensure that it is able to enter high
growth market like China.
Business strategy should always be prepared in a way that it considers external as well
as internal environment to the company. Also, for Tesla Motors strategy which is
recommended for sustaining future growth is related to retrenchment and market entry.
It is important to understand that no two companies can follow same strategy as factors
associated with one company might differ with another. One of the major take away
from is that if the organisation is able to create a niche position in the market then it can
insulate itself from aspects such as Porters Five Force Model etc.
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References
Abdulsater, A., Balasubramanian, A., Wang, B., Madani, F., Mansour, M., & Talla, R.
(2014). Technology Road Map for Tesla Motors Sedan EV. In Planning and
Roadmapping Technological Innovations (pp. 215-238). Springer International
Publishing.
Alstete, J. W. (2013). The dynamics of strategy: Mastering strategic landscapes of the
firm. Strategic Management Review, 7(1), 110-111.
Dinwoodie, D. L., Quinn, L., & McGuire, J. B. (2014). Bridging the Strategy/Performance
Gap How Leadership Strategy Drives Business Results
Europe, T. M. (2013). Tesla Motors Presents Supercharging at IAA and Announces
Plans for European Network Expansion.
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