Tesla Renewable Batteries Situational Analysis
Added on 2020-03-04
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Running head: Situational Analysis of Tesla Renewable Batteries 1Situational Analysis of Tesla Renewable BatteriesStudent’s NameInstitutional Affiliation
Situational Analysis of Tesla Renewable Batteries Table of ContentsExecutive Summary...................................................................................................................3Situational Analysis of Tesla Renewable Batteries...................................................................41.0 Introduction..........................................................................................................................41. 1 Strategy Challenges Affecting the Tesla Renewable Battery Company.............................41.1.1 Projected High Prices of Lithium..............................................................................41.1.2 Compatibility.............................................................................................................41.1.3 Affordability..............................................................................................................52.0 Strategic Direction...............................................................................................................52.1 Product Strategy................................................................................................................52.2.1 Powerwall Home Battery...........................................................................................52.2.2 Powerpack Industrial Scale Battery...........................................................................63.0 External Environmental Analysis and Its Strategic Implications........................................73.1 Industry Structure.................................................................................................................73.1.1 Potential Entrants....................................................................................................83.1.2 Substitutes...............................................................................................................93.1.3 Suppliers...............................................................................................................103.1.4 Buyer’s power..........................................................................................................103.1.5 Industry Competitors............................................................................................114.0 SWOT Analysis.................................................................................................................114.1 Internal Strength..............................................................................................................114.2 Internal Weakness..............................................................................................................124.3 External Opportunities.......................................................................................................124.4 External Threats.................................................................................................................125.0 Criteria of Sustainable Competitive Advantages...............................................................125.1 Engineering Excellence...................................................................................................125.2 Synergy as a result of Cooperation with other Firms.........................................................135.3 Suppliers.............................................................................................................................135.4 Competence.....................................................................................................................13Conclusion................................................................................................................................13References................................................................................................................................15Appendix..................................................................................................................................18
Situational Analysis of Tesla Renewable Batteries Executive SummaryTesla Company has successfully established itself in the market by leading in the inventionand manufacture of the Electric Vehicles (EV) in the market. The company has been able todominate the EV market by due to its strategies and the production of luxurious vehicles thataid Tesla to uphold the core values. These have also given Tesla a competitive advantageover other large enterprises within the same industry. As a result, the company Teslacontinues to enjoy a significant market share, acquiring loyalty of the brand and generating alot of revenue through their modern innovations. The objective of this assignment is to carryout a situational analysis of Tesla Motors Inc. About its technological innovations andmarket forces. The report identifies the strategic challenges faced by the company and theexternal influences affecting Tesla Batter. Afterwards, the external and internal environmentis analyzed alongside their policy consequences to identify factors that determine the creationof value. Analysis on external and Industry will be followed by an internal analysis of thecompany to determine the determinants of value creation. An analysis of the competitiverivalry analysis and dynamics is also done to determine the likelihood of attack andevaluation.
Situational Analysis of Tesla Renewable Batteries Situational Analysis of Tesla Renewable Batteries1.0 Introduction Tesla Motors, Inc. is a firm based in America that designs, produces and trades in electriccars and electric vehicles and powertrain machinery. The name of the company signifies thefounder Elon Musk, a scientist who is also known for creating the alternating current powerand induction motor. It was founded in 2003. In 2015, the company made innovations in theenergy sector by introducing the Powerwall home battery and the Powerpack industrial –scalebattery. Later in 2016, Tesla bought Solar City, the top provider of solar power systems in theUnited States. Such massive developments indicate the seriousness of Tesla in the sector ofrenewable energy (Tesla Motors, n.d.).1. 1 Strategy Challenges Affecting the Tesla Renewable Battery Company1.1.1 Projected High Prices of LithiumAccording to Aulicino (n.d) Tesla Company is expected to incur billions of dollars toestablish a massive battery factory which means the company has to double the number oflithium batteries they produce and further increase the lithium mined from the ground.Lithium is rare in the current market, and a high demand for it implies extra high pricesbecause it is the key component of the Tesla battery. Furthermore, the world’s supplier oflithium is Bolivia, which also has plans of creating an OPEC from the supply of lithium.1.1.2 CompatibilityRodrigues et a. (2015) asserts that based on the design of the Power wall battery, only twoinverters in the market can be compatible with it. This means that all houses with otherexisting solar panels have to acquire a new inverter which is costly and renders the previousones redundant. Such a consequence has made most consumers not to adopt the Power wallbattery. For those that do not possess solar panels will have to buy the complete system that
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