SWOT analysis of Tesla

B100 TMA01

Submitted by: Patryk Socha

Tutor: Mr Jason Phillips

· Explanation of SWOT

SWOT; Strengths,Weaknesses, Opportunities and Threats is a method of analysis which

gives an overview of external and internal impacts and their possible effects on the
organisation.

By pointing out strengths and weaknesses, the institution can realise what fields of
business, management and marketing are fundamental and which areas require
improvement. Strengths and weaknesses are the result of internal business management.

Opportunities and threats, contrary to strengths and weaknesses, are rising from external
factors. By identifying extraneous influences, an organisation can define them as either
opportunities, which can be used as an advantage, or as a threats which will enable an
organisation to manage or eliminate a potential future risk.

''There are several tools that enable managers to analyse the internal and external factors
that impact on an organisation. SWOT analysis is one of the conceptually more
straightforward tools (…)'' (Schaefer, A (2015) An introduction to business and
management ‘Block 1 Introduction’ . 2nd edition. Milton Keynes, The Open University)

· SWOT analysis of Tesla

Human resource Accounting and Marketing

management finance
Strengths · Being an · Producing · Being a
influential, their own pioneer and
known brand batteries main promoter
considered to which helps of the electric
be prestigious the company car industry,
which can aid to be more leading to it's
in increasing independent; recognised
 potential · Software with and respected
employee OTA (over-the- brand image;
interest; air) vehicle · One of the first
updating automakers to
system which explore and
is considered test artificial
as a great intelligence
software (AI) used in
system; car industry
· Less mistakes and
on Model 3 autonomous
production vehicles
due to (AVs);
experience · Highly rated
from design of all
producing Tesla's cars by
Model S both
previously; consumers
and
automotive
experts;
Weaknesses Lack of information · Lack of · Issues with
funding and holding
small capital, deadlines;
especially · Delivering
comparing to cars with
the biggest defects;
companies in · Elusive
the industry, is profitability of
the main issue the company
of the firm; · Being
· Problems with criticised for
establishing their highly
long-term ambitious
contacts with plans and
suppliers and aggressive
often being marketing;
over · Trying to
dependent on prove that
a sole their vision is
supplier; the definitive
one which
leads to every
mistake being
increasingly
highlighted;
Opportunities Lack of information · Innovative · Constantly
technology growing trend
solutions and of eco-friendly,
solid vision low-emission
can help solutions in
 investors and the car
suppliers to industry;
take a risk and · Driving a
invest in Tesla; conversation
· U.S. about
Congressmen autonomous
interest and vehicles can
willingness to set Tesla in a
innovate leader
autonomous position;
vehicles
system is a
big advantage
considering
the fact that
Tesla is one of
the first
companies
using this
solution;
Threats Lack of information · Other · Accidents and
companies crashes
with lots of caused by
capital and Tesla's
stable supplier autopilot
relationships system can
are developing lead to the
their electric loss of trust
car technology from
very rapidly consumers
which can and potential
result in a investors.
growing
market for
potential
competitors.

· Most important issues to be addressed

The two biggest problems facingTesla are the lack of funding and their troubled supply
chain. These issues have caused the company to fail on their production goals in 2017.
Subsequently, this has also had a knock on effect on both it's investors and consumers
due to the resulting adverse publicity.

Elon Musk's company was trying to develop rapidly and compete with the biggest
automotive manufacturers in the world, but by having relatively small capital and a faulty
supply chain, Tesla was exposed to failure in many fields.
The result of Tesla having one main supplier at a time and the lack of long-term contracts
means that the company is at the mercy of the supplier. By limiting its suppliers, the
company exposes itself to the risk of prices being driven up, timeframes being stretched to
the advantage of the supplier, and having general lack of control of production.

The fact that Tesla is still not profitable discourages potential investors.

· Suggestions to remedy identified issues

In order to help with the company's cash flow, Tesla should be producing and selling as
many cars as possible. This will improve the firm's liquidity and enable them to repay their
suppliers on a more timely basis. In turn, this will better supplier relations and encourages
other suppliers to work with the company.

In order to address the above issues, Tesla should also concentrate their efforts on
establishing stable relationships with new suppliers and nursing existing supplier
relationships.

To encourage investors to cooperate, Tesla should promote using artificial intelligence in

the automotive industry and autonomous vehicles technologies and develop them to stay
an icon of these solutions.

Total word count = 734

· References

Schaefer, A (2015) An introduction to business and management ‘Block 1 Introduction’ .

2nd edition. Milton Keynes, The Open University.