(PDF) Tesla Motor Case Study

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Running Head: TESLA MOTORS CASE 17
Tesla Motors case 17
Name
Institution Affiliation

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TESLA MOTORS CASE 17
The primary issue
The primary issue that faced by Tesla presently is unpredictable guidance which
arises from the managements. The issue has been influenced by delays in production and
delivery, and unrealistic financial guidance. Tesla CEO Musk has been through hard time
while trying to locate the precise niche market for Tesla Motors. All these gave been tailored
towards the expansion of Tesla into global markets too speedy devoid of well-establishing the
corporation in an entity market first. Tesla experiences great operational scale yet poor
economies of scale, and undersized sales volume; which have made the company to fail in
sustaining the expansion rate. There is the need to adjust a number of parts in the value chain
so that there can be better execution of the current plans. Under the management of Musk,
Tesla has sturdy, inventive ideas with probable for victory but lack the right strategy that is
needed to fully execute them (James, 2015).
Alternative solutions
First, Tesla can sell the company’s intellectual property. By selling the company’s
patented electric powertrain components to other auto manufacturers, they can partner with
several auto manufacturers to work towards Tesla’s long-term strategic goal of creating
affordable mass market electric vehicles
Secondly, Tesla should continue to sell its own vehicles in the growing number of
company-owned showrooms and online including the Roadster, the Model S, and the
expected Model X. By limiting the product line to these three models, the company will be
able to focus its development and resources on more of a niche market (Rugider, 2018).
Third, Tesla should bring in alternative top management from automotive and
technology industries to run Tesla’s operations and stabilize the recent high turnover of
management (Stringham, Miller & Clark, 2015).

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TESLA MOTORS CASE 17
Evaluation of the alternatives using a decision matrix
Alternative A Alternative B Alternative C
Selling
Intellectual
property
Selling its vehicles Bring an
alternative top
management
Criteria
Expected
income
6 8 4
Business
impact
7 6 8
Expansion
success
6 8 5
Totals 19 22 17
Select the optimal solution and explain why
From our decision matrix, it is quite evident that the optimal solution in this case is
selling its vehicles. The other two options, selling of its intellectual property and bringing an
alternative top management are not optimal solutions. The reason behind this rationale is
because the selling of its vehicles has the highest total score (22). When Tesla sells its own
vehicles, it is likely to have a higher income when compared with the selling of its

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TESLA MOTORS CASE 17
intellectual property and bringing an alternative top management. The company is also likely
to have a higher expansion rate and the lowest business impact. Nonetheless, the benefits of
selling its vehicles outweigh all the other options (Stringham, Miller & Clark, 2015).
Develop an implementation plan
In order to gain more global presence, Tesla will need to increase its own brand
awareness through additional advertising expenditures and accept international reservations
for the Model X (Vynakov, Savolova & Skrynnyk, 2016). The battery pack technology of
Tesla is very important to the economical differentiation and arrangement of the firm. The
squat fee of the battery pack lets Tesla to not only devise cars with battery ranges superior
than the competition but also situate a comparable weight on design, performance, and
energy effectiveness. Maintenance this decisive advantage is necessary for Tesla in command
to uphold its competitive advantage in the electric vehicle market (Vynakov, Savolova &
Skrynnyk, 2016). Tesla must centre its target market on customers who are equally
engrossed in functionality and performance and are also politically and environmentally
conscious. If Tesla can convene planned sales and augment its operating margin, Tesla will
be on the right path to its mission of mounting the number and diversity of electric cars
available to typical consumers by producing cars that exemplify the amalgamation of
performance, style, functionality, energy general cost of possession and efficiency,

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TESLA MOTORS CASE 17
References
James, k. (2015). Elon Musk of Tesla Motors stirs media excitement for house- and
industrial-scale batteries. Physics Today. doi: 10.1063/pt.5.8116
Stringham, E., Miller, J., & Clark, J. (2015). Overcoming Barriers to Entry in an Established
Industry: Tesla Motors. California Management Review, 57(4), 85-103. doi:
10.1525/cmr.2015.57.4.85
Rugider, J. (2018). Model S | Tesla. Retrieved from https://www.tesla.com/models
Vynakov, O., Savolova, E., & Skrynnyk, A. (2016). MODERN ELECTRIC CARS OF
TESLA MOTORS COMPANY. Автоматизація Технологічних І Бізнес-
Процесів, 8(2). doi: 10.15673/atbp.v8i2.162