TESLA COMPANY

PAPER ANALYST
Diajukan untuk Memenuhi Tugas Mata Kuliah Analisis Laporan Keuangan

Dibuat oleh
Nathaniel Richard 01011170235
Clara Nathania 01011170188
Sonia Gunawan 01011170068

JURUSAN MANAJEMEN
FAKULTAS EKONOMI
UNIVERSITAS PELITA HARAPAN
KARAWACI
2019
 1. What Business model is Tesla Pursuing ? How is Tesla’s business
model different from traditional car manufactures?

Tesla's business model is based on a three-pronged approach to selling, servicing, and

charging its electric vehicles. Direct sales: Unlike other car manufacturers who sell through
franchised dealerships, Tesla uses direct sales. And from the product of tesla’s it self is
unique and special from other traditional car manufactures that tesla’s focus on making
electrical car that eco friendly meanwhile traditional car still using fossil fuel.

Business Canvas show that the detail of the tesla it self from the key partners , key activities
, key resources , value propositions , customer relationships , channels , customer segments
, cost structure and revenue streams. We can see all of it , and the main goal from the
business model canvas of tesla is by being the best in class of electric vehicle.

2. / 3. What type of innovation strategy is Tesla Pursuing? Tie your

explanation to Elon Musk’s. Which stage of the industry life cycle for
the electric vehicle industry ? What are the implications for future
development of this industry? What key strategic initiative would be
most important at this stage of the industry life cycle?

In a blog entry on Tesla’s website in the summer of 2006, Elon

Musk explained the startup’s initial master plan:
 1. build sports car.
2. Use that money to build an affordable car.
3. Use that money to build an even more affordable car.
4. While doing above, also provide zero-emission electric power generation options.
5. Don’t tell anyone.

In this Industry Life Cycle , electrical vehicle industry is in GROWTH , because the industry
is still new and even growing and a lot of industry automotive right now are starting to build a
electrical car to compete with tesla’s. and the “growth” it self is the most important part in the
industry of life cycle , because if the industry it self keep growing it means the industry can
hold a longer life and keep doing an innovation to keep staying in the market. Example : from
Tesla’s , they keep reproducing new electrical product and even developing the new technology
and feature to their own car.

As well with that Tesla’s secret strategy , tesla’s able to continue growing especially become
the most value brand in the world , as well the implication for the future development that
tesla’s keep reproducing new cars like from the case above between that stage. Since the stage
1 from 2006 until stage 3 to 2017 , it shown that they keep producing new model , new car with
zero emission electric power , and because of that , tesla’s can survive for 13 Years because
they keep innovating and keep growing even until now. The Key and Recommended Strategies
in Growth Stage:

•Brand recognition
•Differentiated products
•Financial resources to support value-chain activities
4. Apply the crossing the chasm framework to explain some of the
challenges Tesla is facing and provide some recommendations how to
overcome them.

Musk’s current manufacturing challenge is to ensure a reliable supply chain to

meet the demands of the production ramp up for the Model 3. In the fall of 2017,
Tesla explained that it only produced 260 Model 3 instead of the predicted 1,500
because of “production bottlenecks.” At the same time, CEO Musk also sounded
a more confident note: “It is important to emphasize that there are no
fundamental issues with the Model 3 production or supply chain. We understand
what needs to be fixed and we are confident of addressing the manufacturing
bottleneck issues in the near-term.” Another manufacturing challenge facing
Musk is how to maintain the high-quality standard cited in Consumer Reports’
glowing review of the Model S and its sterling reputation as Motor Trend’s 2013
Car of the Year. With increased production rates and the introduction of another
product line, Tesla must carefully design and implement new facilities and processes
that will meet the standards set by the 2012 Model S. This is a very real threat to
Tesla’s brand, as early adopters suffered a few software glitches that kept the door
handles, which retract into the body when not being used, from becoming
accessible when the Model S owner wanted to get

into the car. Early owners of the Model X had malfunctioning falcon wing doors.
While the early adopters were willing to tolerate these types of glitches, the mass
market would be much less sympathetic. With the Model 3, the initial 30 vehicles
were delivered in July to Tesla employees for quality control, with customer
deliveries planned for October.
Crossing the chasm framework , from this Tesla is consider in early adopters because
electric car actually already exist since a long time , but the one who make it successful and
even becoming trend is Tesla’s. With all of that kind challenges , right now Tesla’s and the
electrical vehicle industry already go to early majority , because right now every vehicle
industry are trying to make an electrical car too, and this is a big threat for Tesla’s because
other big brand car such as Toyota , Honda , etc. are starting to come to the electrical vehicle
industry / market.

How to overcome them ?

- By giving best price ,

- more innovative product
- futuristic technology

Because by giving all of that , people these day are willing to pay more if they get what
they want and satisfied. Especially the new feature and the new technology. Right now
Tesla’s is ahead with all of their kind of product right now. But they need to be innovative
one so they can still survive and even compete in the high level with other product.

5. What problems are Tesla encountering in the Model 3 Production?

Why should that matter ? How Should musk address them ?

“Musk’s current manufacturing challenge is to ensure a reliable supply chain to

meet the demands of the production ramp up for the Model 3. In the fall of 2017,
Tesla explained that it only produced 260 Model 3 instead of the predicted 1,500
because of “production bottlenecks.”
That is the problem that happen in the model 3 , all of that because of
“Production Bottlenecks” which means that occurs when workloads arrive too
quickly for the production process to handle. The inefficiencies brought about by the
bottleneck often create delays and higher production costs. And of course all of that are
matter because the production fail , because they produce much more cost and
delays and that so impact in the operating of tesla’s , the initially target and final
execution is unreachable and all of that of course impacted in the whole of Tesla’s
company and even the brand name it self. And by How should Musk address
them? By not doing the same mistake again for sure , as well Musk must re-
evaluate his own operating system in Tesla’s and must have a really structural
plan or even a backup plan for that , incase a bad thing happen or the worst
scenario. And Musk must re-assure all of that plan , by having a good supervisor
as well so all of the plan will work as plan.

SWOT Analysis we can see the weakness from tesla’s , from the price point that
really high , as well from the CEO is also a CEO from SpaceX which can make
the focus loss , the product it self it still on development , so the customer are still
worried to use the Tesla’s product and the infrastructure of Tesla is not yet
develop perfectly.
 6. Evaluate Elon Musk’s “Master Plan , Part Deux” here and assess if
Tesla can gain and sustain a competitive advantage

“Master Plan , Part Deux”

- Create a low volume car, which would necessarily be expensive
- Use that money to develop a medium volume car at a lower price
- Use that money to create an affordable, high volume car
- Provide solar power.

Elon Musk’s Master Plan actually is a really good one and a simple goals , that Elon Musk
wants to help this new generation humanity to have a zero emission by doing all of that. By
helping other people as well to help the earth to keep sustain. And even right now if the new
incomers come to the Electrical vehicle industry , Tesla directly already gain a competitive
advantage , because they are the one who make successful electrical vehicle product , as well
they already been doing it since 2006 , based of experience for sure Tesla’s already won , and
the value of the brand it self that people already put trust on Tesla product because they already
been the first successful electrical vehicle product.

7. See table for case strategic analysis, strategic formulation and

strategic implementation (operation)

Schedule 1:

Strategy Premium Pricing Strategy , Focus on selling point , how can attract
customer from the price of Tesla it self , and differentiate the exclusive and unique
from other brand. As well Tesla use Market-oriented pricing strategy , for their
own product to be able stay superior with a good quality with their competitor.
Schedule 2:

Tesla used the strategy called Digital Marketing Strategy where they sale their own
product in online web , through social media and other online media as well
showroom or sales centre in whole over the world

Schedule 3:

Market Oriented Pricing Strategy , where all the resource that being used for
building a electric car , taken from their own company called Solar City and it will be
a lost cost with high quality

Schedule 4 :

Product Development Strategy , As an operations strategy, product development

goes well beyond rolling out new products. Think about Tesla that keep innovating
and developing their own technology. Initially, when a product is rolled out, it is
compared to other products on the market. Being the best is a good strategy, but it
also means that competitors will immediately work to exceed your product
specifications.

Schedule 5 :

Tesla using Overhead Strategy , Very briefly, Tesla can differentiates itself from
competitors and through its business model shows where and how the firm earns
margins. Some companies plan to operate with very low overhead. These firms
expect to earn higher margins than their competitors while charging the same prices
as the competition. Low overhead strategies can, alternatively, enable the firm to
differentiate itself in the market by charging lower prices. Low-price sellers can still
earn the same margins as their high-price competitors if they operate with lower
overhead.

Schedule 6 :
Cost Reduction Strategies , Because Selling and administrative expenses do not
directly tie to the production or sale of a product or service, management has strong
incentive to minimize these types of expenses. Tesla itself with centralized
management typically experience higher general and administrative costs compared
to companies with decentralized management structures. The sales to administrative
expense ratio compares the revenue generated to the amount of expenses supporting
company’s operations.

Schedule 7 :

Material Requirements Planning , Materials requirements planning employs

computer software applications to manage inventory. Like Tesla trying to keep as
plan from the production of the Tesla Car especially the technology. The applications
break down inventory requirements into planning periods to keep production running
smoothly while maintaining minimum inventory levels.

Schedule 8 :

Tesla using Cost Reduction Strategies , because Tesla try to reduce all the operating
cost from Tesla as well from the production cost , so they can get more profit from
selling .

Schedule 9 :

Niche Marketing , (also called concentrated marketing) is a strategy that targets only
one or a few very defined and specific segments of the consumer population. The
goal is to achieve high penetration among the narrowly defined target segments.
From the price range it self , Tesla is not like Toyota or Honda that cheap and
everyone can buy , Tesla it self have a high standard price range , and not all people
can buy it , only a special segments that can buy Tesla.