Tesla

Business Analysis

Industry Overview

Tesla Motors, Inc. is an American business that develops, produces, and markets electric vehicles and
the powertrain components for them. The Tesla Roadster also known as the first completely electric
sports automobile, is how Tesla Motors initially came to the public's notice. The Model S, a luxury
sedan that is entirely electric, was the brand's second car. Automobile manufacturers like Daimler and
Toyota can purchase lithium-ion battery packs that are produced and sold by Tesla. Elon Musk, the CEO
of Tesla, has stated that he sees Tesla as a stand-alone carmaker with the aim of someday providing
electric automobiles at a cost that the typical consumer can afford. The firm is protected against severe
dependency and integration risk by the commoditization of lithium-ion cells and its high-end product
strategy.

ENTREPRENEURS & INTRAPRENEURS

Elon Musk (Entrepreneur)

Elon Reeve Musk is a well-known American investor and business entrepreneur who owns a number of
companies in a variety of relevant industries. One of the most effective and influential corporate leaders,
he has established many milestones with his cutting-edge business tactics. Elon Musk co-founded and
leads Tesla, SpaceX, Neural ink and The Boring Company. Elon is responsible for overseeing all
product design, engineering, and global manufacturing for Tesla's electric automobiles, battery goods,
and solar energy products as the company's co-founder and CEO. Elon Musk is a man who consistently
pushes for more, for larger, and for better despite his enormous fortune and worldwide recognition.
Regarding Musk's plans for Tesla, he hopes to produce 20 million cars by 2030 and plans to expand into
India, where demand for the electric vehicle might reach 10% in the next ten years. In 2004, Musk
joined the team, along with engineer Martin Eberhard, to assist operate what was then known as Tesla
Motors as an early investor. Musk ended up investing a total of around $6.3 million in the venture.
Eberhard was fired in 2007 after a string of conflicts, and a temporary CEO was hired until Musk took
over as CEO and product architect. Tesla, one of his most well-known brands, has grown to be the most
valuable automaker in the world.

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Business Analysis

MISSION & VISSION STATEMENT

Mission statement: “to accelerate the advent of sustainable transport by bringing compelling mass-
market electric cars to market as soon as possible.”
Vision statement: “create the most compelling car company of the 21st century by driving the world's
transition to electric vehicles”
Values: Tesla's core values comprise “doing the best, taking risks, respect, constant learning, and
environmental consciousness.”
Tesla's five key performance objectives: are quality, speed, sustainability, dependability, and cost. For
a company that develops and manufactures high-performance products, conformance quality is the most
important characteristic.

WHICH SECTOR IS THE INDUSTRY INVOLVED IN? INTEGRATED BUSINESS?

Integrated Business

Tesla is an integrated (uses one or more sectors) business it uses all sectors.
It is also an automotive and energy company. It designs, develops, manufactures, sells, and leases
electric vehicles and energy generation and storage systems.
Primary sector: Tesla uses a lot of raw materials that it sources directly from the mines.
Secondary sector: Tesla manufactures the basic electric components of the car, including the electric
motor, the battery pack, and the charger. It also aims to make its own batteries and microchips.
Quaternary sector: tesla uses word-of-mouth for their marketing
Tesla also uses deep neural network algorithms to train its autopilot with collected real-world data, and
has its own webpage
Tertiary sector: tesla makes cars which could be considered as a service because it transports people.

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STEEPLE ANALYSIS

 Social Factor: This is a crucial element since contemporary society is trying to adopt eco-friendly
practices. As a result, businesses base their short- and long-term goals on input from their target
customers.
- Tesla vehicles are unique and are known for spreading the idea of opulent electric
automobiles among the public.
- The rise of renewable energy sources and the general environmental consciousness of people
both support Tesla.

 Technological Factor: Innovations and other elements that may have a positive or negative impact
on the business are referred to as technological factors. Incentives, automation, and the pace of
technological progress can all have an impact on a company's overall success.
- Tesla vehicles keep up with technical development. The future is in these high-end vehicles
with the newest technology, and purchasers are drawn to these characteristics. The attribute
of fuel efficiency redefines sustainability.
- The newest technology is yet another plus in addition to all of this. But technology is always
changing. An organization can quickly develop a comparable function to compete.
- But online mobile systems and automation with Tesla-like qualities are unmatched.

 Economical: The company's profitability and economic growth are referred to as its economic
factors. A firm is impacted by the present interest rates, currency rates that estimate consumer
income, inflation, economic growth rates, and other factors. It also takes unemployment rates into
account

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- Tesla's electric vehicles encourage preference for renewable energy sources and low-carbon
lifestyles.
- The worldwide economy has benefited from the sale of electric vehicles. The potential to
produce affordable automobiles in the future has been created by the rise in sales.
- to satisfy the market's increasing demand for electric vehicles. Although the cost of
renewable energy is falling, economic volatility is one of the main struggles to Tesla's
development.

 Environmental: For the past few years, environmental factors have gained importance above all
others. Environmental issues are covered, including governmental control of carbon footprint,
pollution, raw resource shortages, and more. The better the business, the more environmentally
conscious it is.
- The business supports the growing environmental initiatives to address challenges like
climate change and waste disposal
- he sustainable future includes environmentally conscious items like solar panels, batteries,
and electric automobiles.

 Political: refers to the impact that the government plays in that particular business. It illustrates how
various regulations, policies, corruption, and other factors impact a company's long-term
development. All of these elements have a role in determining how the business and industry are
developing.
- Tesla was given a $465 million low-interest loan from the Department of Energy as a result
of the US government's interest in renewable energy and electric vehicles.
- Eco friendly Tesla vehicles rely more on energy than fuel. Customers have a possibility of
receiving a particular tax credit as a result of driving an electric vehicle.
- Tesla's growth and international expansion have been facilitated by political circumstances in
other nations.

 Legal: The legal factor takes into account the nation's laws and regulations, just like the political
element does. It keeps track of how various legal developments—including those pertaining to
consumer rights, equal opportunity, health and safety, and more affect Tesla's development.
- Tesla must uphold the laws and change its practices to comply with them as it expands its
operations internationally. Tesla has the potential to expand its global patent portfolio while
marketing its environmentally friendly vehicles.
- Additionally, it may decide to launch its energy solution products in other markets. In
addition to the limitations several states have placed on direct sales, Tesla's limited abroad
operations may be problematic.

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SWOT ANALYSIS

Weaknesses –

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- Shortage of batteries: As Tesla’s most of the business depend upon battery electric vehicles
and plug-in electric vehicles which sometimes cause shortage of the supply of batteries. This
directly affects the sales of electric vehicles and energy storage systems.
- Elon Musk: Elon Musk has become the brand face of Tesla and it is accepted as a one-man-
show. Although Elon Musk himself has a lot on his plate
- Mechanical complications: Due to their higher standard of innovation causes certain
production and mechanical delay in terms of launching product such as the manufacturing of
their Model X got delayed due to frequent innovative changes.
- Failing to meet demand

Opportunities –
⁃ In house battery production: Tesla can develop its battery cells, reducing its reliance on
Panasonic, the company's major battery supplier. If adopted, this step might be a real game-
changer for Tesla.
⁃ Affordable cars: Tesla is working on launching its affordable cars so that people of every class
can access the innovation of Tesla. Such as it recently launched Model 3 which is a more
affordable version of Model S.
⁃ Autonomous driving: Tesla’s autopilot technology has gained it fame for its safety and
convenience. Making it trustworthy by consumers and the share market. Tesla’s work in
autopilot is constantly evolving.
⁃ Environment-friendly cars (As consumers are becoming more environmentally conscious, the
need for more electric vehicles is growing along with the need to minimize fuel-driven cars.)
⁃ International market

Threats –
⁃ Increasing Competition: Heavy research is being done for automobiles powered by renewable
energy and many big companies like BMW and Volkswagen are becoming Tesla’s competitors.
⁃ Product liability claims
⁃ Self-driving cars being a concern (vehicle safety issues): Self-driving vehicles are still relatively
new in most locations, and as a result, there are few rules in place to govern their usage. This has
previously resulted in legal complications and continues to jeopardize the future performance of
the company.
⁃ Shortage of materials

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THE TYPE OF THE BUSINESS ORGANIZATION AND LEGAL STRUCTURE

(ADVANTAGES/DISADVANTAGES)

Tesla is a for-profit publicly held company, owned by entrepreneur Elon Musk, since it became open to
be traded by the public on. June 29, 2010

CSR/CSV WORK AND HOW IT IMPACTED DIFFERENT STAKEHOLDERS – 3P’S & THE
DOUGHNUT MODE

CSR: The company is based on a strategy of corporate social responsibility.

Tesla manufactures solar panels, energy storage devices, and electric vehicles. These items are thought
to encourage environmental sustainability, and the company's marketing communication message
successfully incorporates this image.
Tesla, Inc. has a great opportunity to demonstrate to the world what a large, international company's
CSR initiatives can achieve to meet the needs of stakeholders and benefit the whole community.
Profit: The majority of Tesla's income comes from the selling of automobiles.
Tesla generates revenue by constructing a diversified business model that takes into account EV sales,
servicing, and cutting-edge green energy solutions in addition to storing a portion of its balance sheet in
Bitcoin.
Their profits are put back into the business to support growth and the introduction of new products.
People: Tesla cars are built with safety in mind, combining an all-electric architecture with onboard
technologies for maximum protection. enhances consumer pleasure and experience. Tesla CSR
initiatives make sure that the stakeholder group of customers is satisfied. Innovative approach to how it
engages with its stakeholders, with a focus on staff development and training in particular.
Planet: Longtime supporters of sustainable energy have praised Tesla for its initiatives "To accelerate
the world's transition to sustainable energy."
Tesla fuels the world transitions away from fossil fuels and toward a future with no emissions, the better,
the corporation claims by basing and creating “green products, like electric vehicles, solar roofs etc...
Circular Model:
Batteries are reduced, recycled, reused, repurposed, and recovered to protect raw resources and prevent
the disposal of harmful waste.

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Business Analysis

INTERNAL & EXTERNAL STAKEHOLDERS

Internal stakeholders at Tesla include:

 Employees: Tesla Motors cites its workers as a critical success element for the firm when
developing its CSR strategy. Employee productivity and performance have a direct influence on
a company's bottom line. Tesla must thus address the concerns of its staff, which include, first, a
competitive compensation and the possibility of career advancement. Tesla is attempting to ease
these worries by providing a good salary strategy and unique HR initiatives designed to improve
the professional abilities of Tesla's staff members. Additionally, the company's CSR strategy
provides exclusive training programs with Tesla's partners across the world, enabling the
workforce to explore new prospects and broaden their perspective on the world, therefore serving
the interests of workers as a stakeholder group.

 Shareholders: Early on, a stakeholder group like investors was very important to Tesla. They
are essential for a company's cash flow and capitalization. The profitability and expansion of the
firm are of primary significance to investors and shareholders. With the aim of transforming the
automobile sector, Tesla's CSR is attempting to appease such interests. For instance, allowing
other companies to utilize Tesla's patents may expand the number of brands and goods that use
energy and may also raise demand for such items, both of which may help Tesla grow more and
more and serve the interests of investors. The interests of investors are aligned with Tesla's
continued growth. As previously mentioned, Tesla's attention to the ecological side of its
business serves the interests of the community, which can be advantageous for investors as well.
If the company has a positive reputation, it can expand and continue to concentrate on new
products or improving quality, which would enable it to sell more cars and steadily increase its
profits, thereby satisfying investors and shareholders as a stakeholder group.

External stakeholders at Tesla include:

 Customers: Customers have an impact on Tesla's revenue and care about the product's quality
and appropriate price point. To satisfy such a demand company right now is trying to reduce the
cost of batteries in the cars to reduce the overall cost of the finished product. Therefore, tesla is
attempting to start the manufacture of its own batteries rather than purchasing them from
Panasonic in order to lower the price of the vehicle for consumers. Additionally, one of the
primary objectives of the organization today is to expand the network of charging stations
globally, which would increase overall customer happiness and service quality. This guarantees
that as a stakeholder group, Tesla addresses the issues of its consumers.

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 Government: Government initiatives are also necessary for Tesla Motors, Inc. Governments are
concerned about the company's legal activities, compliance, and contribution to the growth of the
State's economy as a stakeholder group. Strategic worldwide expansion plans and Tesla's stellar
track record properly accommodate such government goals.

CONCLUSION ABOUT THE BUSINESS

The major components of Tesla Motors' marketing strategy, which are responsible for their rising
development and prosperity in terms of market share and total profitability, are their unorthodox
promotional mix and constant innovation. It serves the demands and wishes of a sizable market to
display electric automobiles with cutting-edge technology paired with opulent amenities. Additionally,
the advertising strategy used by Tesla Motors has significantly increased both brand recognition and
brand loyalty among prospective buyers. Their ongoing ethical behavior, which supports the use of
renewable energy in the automobile sector, demonstrates their integrity and fosters consumer trust.

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CITATIONS

 “Elon Musk.” Encyclopædia Britannica, Encyclopædia Britannica, Inc.,

https://www.britannica.com/biography/Elon-Musk.

 Morrison, Gabe Rodriguez. “Tesla's Vertical Integration and Efficiency Show Why They're the
Leader in Evs.” Not a Tesla App, 1 Aug. 2022,
https://www.notateslaapp.com/tesla-reference/867/tesla-s-vertical-integration-and-efficiency-show-
why-they-re-the-leader-in-evs#:~:text=In%20recent%20years%2C%20Tesla%20has,production
%20and%20self%2Ddriving%20software.

 Plc, GlobalData. “Tesla Inc Company Profile - Overview.” GlobalData,

https://www.globaldata.com/company-profile/tesla-inc/#:~:text=Tesla%20Inc%3A
%20Overview&text=Tesla%20Inc%20(Tesla)%20is%20an,Semi%2C%20and%20Tesla
%20Roadster%20vehicles.

 R.rossington. “Elon Musk: The Inspirational Success Story of Tesla's CEO.” CEO Today, 7 Oct.
2021, https://www.ceotodaymagazine.com/2021/10/elon-musk-the-inspirational-success-story-of-
teslas-ceo/.

 Anasagasti, Alden. “Tesla Swot Analysis (2022).” Business Strategy Hub, 2 Aug. 2022,
https://bstrategyhub.com/tesla-swot-analysis/.

 “The SWOT Analysis of Tesla: EdrawMax.” Edrawsoft, https://www.edrawmax.com/article/swot-

analysis-of-tesla.html.

 Musk, Elon. “The Mission of Tesla.” Electric Cars, Solar & Clean Energy, 24 May 2018,
https://www.tesla.com/blog/mission-tesla.

 Naor, Michael. “Tesla's Circular Economy Strategy to Recycle, Reduce, Reuse, Repurpose and
Recover Batteries.” IntechOpen, IntechOpen, 16 Sept. 2022, https://www.intechopen.com/online-
first/83611.

 “Tesla Becomes a Model for Sustainable Leadership: David and Goliath Revisited.” IMD Business
School for Management and Leadership Courses, 9 Sept. 2022, https://www.imd.org/research-
knowledge/articles/tesla-becomes-a-model-for-sustainable-leadership-david-and-goliath-revisited/.

 The Complete Toolbox for Investors, https://finbox.com/NasdaqGS:TSLA/explorer/sector.

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 Greenspan, Roberta. “Tesla, Inc.'s Corporate Social Responsibility & Citizenship, Stakeholders.”
Panmore Institute, 26 June 2018, https://panmore.com/tesla-motors-inc-stakeholders-corporate-
social-responsibility.

 “Manufacturing.” Tesla, https://www.tesla.com/manufacturing#:~:text=Today%2C%20we%20have

%20the%20capacity,products%2C%20battery%20cells%20and%20more.&text=Tesla%20operates
%20on%20a%20continuous,at%20the%20forefront%20of%20innovation.

Bansal, Tima. “How Green Is Tesla, Really?” Forbes, Forbes Magazine, 10 Dec. 2021,
https://www.forbes.com/sites/timabansal/2021/05/13/how-green-is-tesla-really/?sh=6a232b2d1576.

 About. Tesla. (n.d.). Retrieved October 6, 2022, from https://www.tesla.com/about

 Consulting, B. (2022, September 28). Tesla Swot & PESTLE ANALYSIS: SWOT & PESTLE.
SWOT & PESTLE.com. Retrieved October 6, 2022, from https://www.swotandpestle.com/tesla-
inc/

 Encyclopædia Britannica, inc. (n.d.). Tesla, Inc.. Encyclopædia Britannica. Retrieved October 6,
2022, from https://www.britannica.com/topic/Tesla-Motors

 Reed, E. (2020, February 4). History of tesla: Timeline and facts. TheStreet. Retrieved October
6, 2022, from https://www.thestreet.com/technology/history-of-tesla-15088992

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