Tesla's Business Strategy & Plan

This assignment delves into Tesla's business strategy, examining its approach to resource utilization and change management. It analyzes Tesla's strategic planning, highlighting the importance of human, information, financial, and material resources. The assignment also explores how Tesla manages technological and managerial changes using a structured process adapted from Hornstein (2015).

Running head: PORTFOLIO DRAFT OF TESLA AUTOMOBILE
PORTFOLIO DRAFT OF TESLA AUTOMOBILE
Name of the student
Name of the University
Author Note

1PORTFOLIO DRAFT OF TESLA AUTOMOBILE
Table of Contents
Tesla Automobiles:...................................................................................................................................................2
Strategic Plan:...........................................................................................................................................................2
Strategic capacity Plan:.............................................................................................................................................2
Portfolio Management Process:................................................................................................................................2
Project Selection Criteria:.........................................................................................................................................3
Program Management Plan:......................................................................................................................................3
Resolving Conflicts:..................................................................................................................................................3
Change Management Plan:.......................................................................................................................................4
Resource utilization Plan:.........................................................................................................................................4
References:................................................................................................................................................................5

2PORTFOLIO DRAFT OF TESLA AUTOMOBILE
Tesla Automobiles:
Tesla automobile was established in 2003 with an objective to prove the effectiveness of electric
vehicles over other fuels vehicles ("About Tesla | Tesla", 2018). The first milestone came for Tesla in the year
2008 with Roadster (battery technology). Today Tesla is one of the largest and most successful electric car
makers in the world.
Strategic Plan:
The strategic plan of an organization refers to the approach of the organization towards the direction,
decision over the allocation of resources and the strategy of operation (Cassidy, 2016). The long-term strategic
plan of Tesla came to light after the launch of their latest Tesla Model 3 cars. The organization offered expensive
cars to create value for their brand and generate funds by targeting limited people at the beginning. After the
creating brand value and sufficient fund for further research and production, the organization is targeting broader
audience by introducing cost-efficient car (Model 3). The strategic plan of the agile firm at the initial stage was
the development of innovating technologies to attract customers. Tesla analyzed the strategy of the vehicle giants
of the 21st century and developed its own by offering a benchmark for the employees to beat. The strep was taken
to make the employees aware of the position they were standing in the competitive vehicle market.
Strategic capacity Plan:
Strategic capacity planning refers the method for determination of the change required in the production
capacity and resources as per the market demand (Koren, Wang & Gu, 2017). The resources here refer not only
the raw material used in production but also includes the financial, information and the human resource as well.
Tesla has maintained its strategy of maintaining and decisive implementation of the organization's resource for
strengthening its market position since establishment. Easy identification of the resources is also a part of the
capacity planning for Tesla. In the most recent case, Tesla has decided to sell its shares worth $1.4 Billion to
meet the market demand for Model 3 (Boudette, 2018). The considered firm is also hiring vehicle veterans to
maintain the quality of production while meeting the demands. The hiring of peter Hochholdinger of Audi is the
most recent example of Tesla maintaining and expanding its human resources (Boudette, 2018).
Portfolio Management Process:
The process of managing an organization’s asset portfolio (range of investment) is the designated
function of portfolio management process (Killen et al., 2012). In other words, the process aids the organization

3PORTFOLIO DRAFT OF TESLA AUTOMOBILE
in meeting their investment goals. The considered process in case of Tesla takes control of the accident
management, early terminations, contract transfers, managing the life cycles of the contracts. The process also
includes the customer queries related to finance, compliance and lease while keeping a check on money
laundering. Regular processes like month-end closings, debt collection, keeping a financial track of internal
departments (finance, sales, remarketing and others) are also a part of the process for Tesla. However, the most
crucial role of the process mentioned above in Tesla is to keeping a track and proposing the changes required in
the investment of a product depending on the market position.
Project Selection Criteria:
The impact of a project failure has a very harsh effect on an organization hence the project should be
selected with extreme caution. The organization should maintain a project selection criterion for a reason stated
above. Tesla apart from the risk of project failure faces another significant threat which is competition from the
other vehicle giants. The following points help Tesla in the selection of their projects (Popović, Stanujkić &
Stojanović, 2012):
 ROI (Return on investment) should be considered before investing in a project.
 NPV (Net Present value) represents the measurement of the current investment on the project and the
return it will offer after the completion taking consideration of the value of money after completion.
 IRR (Internal Rate of Return) represents the profit that will be offered on investing the concerned
project.
 Organisational Goal should be kept in mind while investing in a project, to avoid any deviation from the
organization’s strategy.
Program Management Plan:
The plan deduced by a firm to keep a check and to govern on all the activities (management, execution
and controlling) of the ongoing program is a program management plan (Kerzner, 2013). The considered plan
also keeps track of the information of the components, proposed benefits, and the deadline. Tesla in their project
management plan adds an innovative factor to represent their method of working. They also keep the critical
perspective of their goals intact while devising a plan.

4PORTFOLIO DRAFT OF TESLA AUTOMOBILE
Resolving Conflicts:
Conflicts are a significant concern for any firm as it not only affects the productivity but also have a
long-term side effect (Moore, 2014). Hence, the firms try to avoid it and in case if a conflict arises they try to
resolve it as soon as possible. Tesla has also prepared itself for such situation. In case of conflict, the managing
authority first verifies whether the conflict is violating the firm’s principles and vision. In such cases, the firm
does not make any compromises, and strict actions are taken against the culprit(s). In the second scenario,
negotiations are made to resolve the conflict. The conflicts do not arise just between the employee and
employers; it can be devised with the product (regarding cost or quality or both) of the firm and ethically
justiciable factors. In that case, a mutual method is adopted to resolve the conflict for the long-term benefit of the
firm.
Change Management Plan:
Change management plan is devised to manage any change in the organization and to avoid conflicts
developed as a result of those changes. The employees get worried about their jobs in case of any changes made
in the organization. This is because the changes are made based on the most recent technologies, and the
employees feel that they lack in the knowledge and hence insecurity. To avoid such insecurities, Tesla should
develop motivation and training programs for the employees to make them habituated with the new technology.
Other than technological changes managerial changes are also a reason for insecurity among the employees. In
that case, the management should interact with the employees to omit those insecurities. Other changes include
the changes that are made due to some unknown circumstantial reasons. Those changes can be due to various
factors like market influence, expansion, resource constraint or others. To tackle such situations, Kotter’s 8-step
Change Management Process can be adopted (Hornstein, 2015). The above mentioned process can also be
helpful in managing technological and managerial changes. However, changes should be made in the process to
make it suitable for the considered firm’s environment and culture.
Resource utilization Plan:
The resource is the most viable asset of an organization, and hence they should be utilized appropriately
and to their full extent (Pasquale et al., 2012). To achieve the objective related to the resource utilization plan are
made. The human resource is the most significant resource for a firm, and they can be utilized to their full
potential if they are assigned the job related to their expertise. Hence, human resources should be recruited as per
the job requirement. Next, the information resource is of great significance for the future of an organization so it

5PORTFOLIO DRAFT OF TESLA AUTOMOBILE
should be kept secure and in continuous check. The financial resources and the material resource along with the
human resource are vital for the sustainability of a firm. Hence, the financial resources should be utilized only in
the projects that are strategical sound and will provide an appropriate ROI. Finally, the material resources should
be kept under proper surveillance to avoid its potential misuse or theft and hence to positively utilize it.

6PORTFOLIO DRAFT OF TESLA AUTOMOBILE
References:
About Tesla | Tesla. (2018). Tesla.com. Retrieved 20 January 2018, from https://www.tesla.com/about
Boudette, N. (2018). Tesla to Sell $2 Billion in Shares to Bolster Model 3 Output. Nytimes.com. Retrieved 20
January 2018, from https://www.nytimes.com/2016/05/19/business/tesla-to-offer-2-billion-in-stock-to-
meet-model-3-production-goal.html
Cassidy, A. (2016). A practical guide to information systems strategic planning. CRC press.
Hornstein, H. A. (2015). The integration of project management and organizational change management is now
a necessity. International Journal of Project Management, 33(2), 291-298.
Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and controlling. John
Wiley & Sons.
Killen, C. P., Jugdev, K., Drouin, N., & Petit, Y. (2012). Advancing project and portfolio management research:
Applying strategic management theories. International Journal of Project Management, 30(5), 525-
538.
Koren, Y., Wang, W., & Gu, X. (2017). Value creation through design for scalability of reconfigurable
manufacturing systems. International Journal of Production Research, 55(5), 1227-1242.
Moore, C. W. (2014). The mediation process: Practical strategies for resolving conflict. John Wiley & Sons.
Pasquale, M. K., Sun, S. X., Song, F., Hartnett, H. J., & Stemkowski, S. A. (2012). Impact of exacerbations on
health care cost and resource utilization in chronic obstructive pulmonary disease patients with chronic
bronchitis from a predominantly Medicare population. International journal of chronic obstructive
pulmonary disease, 7, 757.
Popović, G., Stanujkić, D., & Stojanović, S. (2012). Investment project selection by applying copras method and
imprecise data. Serbian Journal of Management, 7(2), 257-269.