Strategic Assessment of Tesla

This report has been prepared for investigating and recommending the current position and situation of Tesla Motors and for its future business market. It has shed light on the issue of increased demand of Electric vehicles among the customers today. However, although this is a symptom that showcase that people have become more environmental conscious and are opting for means to improve their surroundings. However, Tesla was once regarded as the best players in the industry and market of electric vehicles but the growing competitors and competition in the market is preventing the sales and impacting the overall business profitability. Hence, strategic recommendations have been made for improving the situation.

Business Case Title
Tesla
Department Title: ___
STRATEGIC ASSESSMENT

Contents
Executive summary 1
1. Problem 2
1.1 Background............................................................................................................2
1.2 Definition of the problem......................................................................................2
1.3 Evidence of the problem........................................................................................2
1.4 Timing considerations............................................................................................3
1.5 Consideration of the broader context....................................................................3
2. Part 2 Benefits 4
2.1 Benefits to be delivered.........................................................................................4
2.2 Evidence of benefit delivery...................................................................................4
2.3 Interdependencies.................................................................................................4
3. Part 3 Strategic response 5
3.1 Method and criteria...............................................................................................5
3.2 Strategic options....................................................................................................5
3.3 Recommended strategic option.............................................................................5
4. Part 4 Project options analysis 6
4.1 Project options considered....................................................................................6
4.2 Stakeholder identification and consultation..........................................................6
4.3 Social impacts........................................................................................................6
4.4 Environmental impacts..........................................................................................6
4.5 Economic impacts..................................................................................................6
4.6 Overall evaluation of socio-economic and environmental impacts.......................7
4.7 Financial analysis....................................................................................................7
4.8 Risk comparison.....................................................................................................7
5. Part 5: Deliverability of recommended solution 8
5.1 Details of recommended solution..........................................................................8
5.2 Implementation.....................................................................................................8
5.3 Management..........................................................................................................8
5.4 Delivery8
Appendix A: Benefit Management Plan 9
6. References:11

Executive summary
This report has been prepared for investigating and recommending the current
position and situation of Tesla Motors and for its future business market. It has shed
light on the issue of increased demand of Electric vehicles among the customers
today. However, although this is a symptom that showcase that people have
become more environmental conscious and are opting for means to improve their
surroundings. However, Tesla was once regarded as the best players in the industry
and market of electric vehicles but the growing competitors and competition in the
market is preventing the sales and impacting the overall business profitability.
Hence, strategic recommendations have been made for improving the situation.
Business Case Title
Tesla 1

1. Problem
1.2 Background
The automotive market is facing a profound technology-driven transformation in the
recent years and some of the major implications lies in terms of marketing
(Karvonen et al., 2016). Anything in the modern market is a sign of complete
opposition and customers today actually link the brands and the glossy advertising
that are spend with shortage of innovation. As the focus of the current customers
has been shifted to experiences from advertisements, marketers need to understand
where they should place their bets on. Reputational risk is the risk of failure to fulfil
the expectations of the stakeholders of the company in terms of behaviour and
performance.
1.3 Definition of the problem
Electric cars have always been a topic of discussion for almost a decade. Tesla, being
able to supply these cars rapidly grown to become the most valuable US automaker
in terms of market capitalisation and beating out its three major competitors- Fiat
Chrysler, General Motors and Ford. However, Tesla is not the only game in town
now in the field of electric vehicle market.
1.4 Evidence of the problem
As it can be seen from figure 1. there is a growing demand for electric cars in the
present world. There is high demand for higher-end models from Mercedes and
Porsche coming to the market by the end of 2019. At the same time, at the lower
end market, Volkswagen is releasing a new electric model that is starting from the
price range of 27,000$. While there is no Tesla killer who might emerge from the
group, the abilities of the rivalries of Tesla for producing the electric cars at the scale
could chip into the chunk of Tesla of the electric vehicle market (Liu, Roberts &
Sioshansi, 2017). It is also to mention that the well-established automakers present
all around the globe have all jumped onto the electric vehicle bandwagon and there
are many with more enthusiasm than the others. Many of the established players in
the industry like Audi and Mercedes are proceeding with good deal of caution.
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Figure 1: Evolution in the demand for electric cars in the world
1.5 Timing considerations
An increasing number of consumers, car manufacturers and the government
agencies present across the globe believe that the EVs (electric vehicles) can have
better performance for the environment and the industry. Safer, cleaner and simpler
electric vehicles now span the categories that range from rickshaws and two-
wheelers to the mining vehicles and cars and the fleets of vans and buses (Mersky et
al., 2016). As the demand is increasing, therefore, government must provide electric
charging facilities widely available for the people.
1.6 Consideration of the broader context
As mentioned above, the well-established automakers present all around the globe
have all jumped onto the electric vehicle bandwagon and there are many with more
enthusiasm than the others. Many of the established players in the industry like
Audi and Mercedes are proceeding with good deal of caution (Bjerkan, Norbech &
Nordtomme, 2016). They are likely to not opt for the competitive vehicles present
on the road for short period of time and the IT firms like Alphabet and Apple are
going down for the strictly autonomous line of vehicles. Also, Uber and its several
failed attempts in the process of testing the driverless cars and EVs is worth
mentioning in this context.
Business Case Title
Tesla 3

2. Part 2 Benefits
2.2 Benefits to be delivered
This project has focused on maintaining a value for Tesla Motors. The company has
long been known for consistently delivering high quality cars and higher levels of
consumer expenditure. It has identified its competitors in the market of Electric
Vehicles and have provided some sets of recommendations to follow. The project is
likely to help Tesla in overcoming this challenge that is leading the company to fall
behind the other key players in the market.
2.3 Evidence of benefit delivery
While following the provided recommendations that are designed to make the
company lead the electric vehicle market, Tesla is likely to regain its competitive
edge within short time span. It will further help the company in increasing its
product sales in the countries where customers now go for different established
brand for choosing the best suitable electric vehicles for them. The main target
customers of the company for the supply of electric cars will be the environmentally
aware segments who are more concerned with the impact that their car could have
on the natural environment.
2.4 Interdependencies
It is to note that the emergence of the key competitors with high competitive
advantage is not the only consideration while forecasting the future performance.
The macro environment and economic factors also play a crucial role and therefore,
should be taken into consideration.
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3. Part 3 Strategic response
3.2 Method and criteria
The company should invest more in its research and development for staying ahead
of the competition in the market and for producing more attractive vehicles in the
coming future. It can also opt for the rapid expansion on its Supercharger network as
they are incurring very high costs for eliminating the threat to their sales and
business and for increasing the level of customer satisfaction.
3.3 Strategic options
Tesla Motors has been prepared for exercising its strategic options in light of the
disruptive threats. In the year 2013, Tesla Motors have been expanded in the
Chinese market one of its well-known and successful international operations into a
separate entity. The company has long been considered to be the best electric cars
provider in the world and until 2017, the company was leading the list of the world’s
demanding electric car companies. However, it is now, that the other rivalries who
are established enough to make an awareness in the entire world are also
dominating the company in the sector.
3.4 Recommended strategic option
This paper recommends Tesla to be more focused on its R&D activities in order to
stay ahead of the competition in the market and for producing more attractive
vehicles in the coming future.
Business Case Title
Tesla 5

4. Part 4 Project options analysis
4.2 Project options considered
Tesla Motors could introduce an all-electric version of German hatchback that will
come with about 116 horsepower of electric motor that will make near about 200
pound feet of the instant torque. It will be sufficient for showing the acceleration of
10 seconds from 0 to 60 mph. With the same, the battery of this car could be juiced
up by means of activating one among the three regenerative modes of braking or by
means of a universal charging port that works with both the CCs charging stations
and the household outlets (Kester et al., 2018). With the same, if charged the vehicle
at home, this can take hours but the CCS technology that if imposed by Tesla on its
cars could help in boosting the charge by 80% of battery and it would take only 30
minutes.
4.3 Stakeholder identification and consultation
The key stakeholders for this initiative would be the government, the customers, the
suppliers and the investors itself. As the initiative is likely to be successful and is
environment friendly, therefore, there is high likelihood of the stakeholders
approving the project (White & Sintov, 2017).
4.4 Social impacts
This project will help Tesla in building a reputation of being environmental and eco-
friendly company and is highly conscious about the environment and the negative
impact that cars could impose on the surrounding.
4.5 Environmental impacts
The electric cars with CCS technology are more efficient and is therefore, highly
responsible for the less emission of the green-house gases in the atmosphere that
are done through the normal vehicles in the market. Furthermore, as per the recent
studies, the EVs produce absolutely zero amount of tailpipe emissions and at the
same time, they make use of the energy that are stored in their batteries for
creating a motion in their wheels.
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4.6 Economic impacts
The alternative electricity generation and the technology of renewable power
generation might need to be considered for the future in the coming days for the
country in order to meet the high energy demand from the parts of the customers
arising from the manufacturing of the electric vehicles (Rezvani, Jansson & Bodin,
2015). Notwithstanding this fact, the CCS system that is recommended for putting in
its new model of electric vehicles is a safe technology and it can used for high
efficiency and low emission of the coal-fired power stations that is integrated with
the system of CCS and this can further help in reducing the emissions by 90%.
4.7 Overall evaluation of socio-economic and environmental impacts
Tesla is already considered to be a key player in the automotive industry and by
means of introducing electric vehicles, it has already won the hearts of many.
However, by means of integrating CCS system in the electric vehicles, Tesla can
easily build a reputation of being environmental and eco-friendly company and is
highly conscious about the environment and the negative impact that cars could
impose on the surrounding. Furthermore, the electric cars with CCS technology are
more efficient and is therefore, highly responsible for the less emission of the green-
house gases in the atmosphere that are done through the normal vehicles in the
market. Furthermore, as per the recent studies, the EVs produce absolutely zero
amount of tailpipe emissions and at the same time, they make use of the energy
that are stored in their batteries for creating a motion in their wheels. The
alternative electricity generation and the technology of renewable power generation
might need to be considered for the future in the coming days for the country in
order to meet the high energy demand from the parts of the customers arising from
the manufacturing of the electric vehicles. Notwithstanding this fact, the CCS system
that is recommended for putting in its new model of electric vehicles is a safe
technology and it can used for high efficiency and low emission of the coal-fired
power stations integrated in CCS (Langbroek, Franklin & Susilo, 2016).
4.8 Financial analysis
Following the provided recommendations that are designed to make the company
lead the electric vehicle market, Tesla is likely to regain its competitive edge within
short time span. It will further help the company in increasing its product sales by
8% within 8 months of time frame in the countries where customers now go for
different established brand for choosing the best suitable electric vehicles for them.
4.9 Risk comparison
 There is high chances of its competitors to copy the new concept of using CCS in
the electric vehicles.
 Tesla need to introduce the product in the developed country as in the
developing country there is still less market who would use this vehicle
 This new approach and concept needs to be tested first.
Business Case Title
Tesla 7

5. Part 5: Deliverability of recommended solution
5.2 Details of recommended solution
A clear recommendation is made for piloting a limited high value electric vehicle in
the prevailing events function space at Tesla. It must not incur any significant capital
expenditure with the current high quality finish that is considered to be sufficient for
the trial of the car.
5.3 Implementation
The employment of the high quality sales executives and sellers for Tesla is
important, at least for a short period of time so that people could be aware of the
emergence of the car and this will further help the company in increasing its sales
later on. Also, a well detailed plan for implementation of the marketing strategy
needs to be completed before the final commencement. The company can also
advertise about the product in the market through different online and offline
channels.
5.4 Management
The Tesla team along with the newly hired executives will be responsible of the
management of the entire thing. They should monitor the successful
implementation of the new concept in the electric cars prior to offering it to the
customers and must ensure that the customers are given the opportunity of test
driving.
5.5 Delivery
The delivery of the final project can be conducted within 7 months. A total of five
cars for each market will be manufactured to test the demand for the same.
Thereafter, new cars will be manufactured again.
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Appendix A: Benefit Management Plan
KPI
Baseline Electric Vehicle with CCS system
Source Tesla car manufacturers
Interim target To meet the target of 15% of increase in the sales of car within 6 months.
Reporting forum Tesla Motors
Start date 5 June, 2019
Frequency 2 cars per month
End date 5 January, 2020
Responsibility Manufacturers
Business Case Title
Tesla 9

Appendix B: Cost benefit analysis
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Business Case Title
Tesla 11

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6. References:
Karvonen, M., Kapoor, R., Uusitalo, A., & Ojanen, V. (2016). Technology competition
in the internal combustion engine waste heat recovery: a patent landscape
analysis. Journal of Cleaner Production, 112, 3735-3743.
Rezvani, Z., Jansson, J., & Bodin, J. (2015). Advances in consumer electric vehicle
adoption research: A review and research agenda. Transportation research part D:
transport and environment, 34, 122-136.
Langbroek, J. H., Franklin, J. P., & Susilo, Y. O. (2016). The effect of policy incentives
on electric vehic
Mersky, A. C., Sprei, F., Samaras, C., & Qian, Z. S. (2016). Effectiveness of incentives
on electric vehicle adoption in Norway. Transportation Research Part D: Transport
and Environment, 46, 56-68.le adoption. Energy Policy, 94, 94-103.
Bjerkan, K. Y., Nørbech, T. E., & Nordtømme, M. E. (2016). Incentives for promoting
battery electric vehicle (BEV) adoption in Norway. Transportation Research Part D:
Transport and Environment, 43, 169-180.
Kester, J., Noel, L., de Rubens, G. Z., & Sovacool, B. K. (2018). Policy
mechanisms to accelerate electric vehicle adoption: a qualitative review from
the Nordic region. Renewable and Sustainable Energy Reviews, 94, 719-731.
White, L. V., & Sintov, N. D. (2017). You are what you drive: Environmentalist
and social innovator symbolism drives electric vehicle adoption
intentions. Transportation Research Part A: Policy and Practice, 99, 94-113.
Liu, X., Roberts, M. C., & Sioshansi, R. (2017). Spatial effects on hybrid electric vehicle
adoption. Transportation Research Part D: Transport and Environment, 52, 85-97.
Business Case Title
Tesla 13