Tesla Strategic Analysis

Added on - 08 Jan 2021

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STRATEGIC REPORT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3SECTION 1......................................................................................................................................3a). Critically analyze the internal resources and capabilities that give Tesla a competitiveadvantage.....................................................................................................................................3b). Identify key drivers of change in external environment and evaluate their impact on theentrepreneurial activities of Tesla................................................................................................5c). Evaluate impact of main competitive forces that are influencing entrepreneurial activitiesand profitability within automobile industry by using appropriate framework...........................6SECTION 2......................................................................................................................................8a). Select and critically evaluate two strategic options that could be recommended for Tesla inorder to increase entrepreneurial opportunities on the market....................................................8b). Justify selection of each strategic choice using suitability, Acceptability and Feasibility(SAFe) criteria.............................................................................................................................9CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................12
INTRODUCTIONTesla Motors Inc. is a public company engaged in building and manufacturing electricvehicles and rendering services for personal and professional energy management. It wasfounded in July 2003 and went public in year 2010. This firm is specialized in commercializinghigh quality electric cars empowered by great performing battery packs. Tesla sells powertraincomponents and produce battery charging equipment’s as well. The strategic report on TeslaMotors Inc. will analyze internal resources and capabilities that renders firm a competitiveadvantage by evaluating strategic competencies and external environment. The case studyconducted on Tesla will explain main drivers of change in external environment and its impacton entrepreneurial activities of organization.The assessment conducted on the strategic decisionsof Tesla will analyze the internal capabilities and resources that renders organization acompetitive advantage. The study will evaluate strategic competencies and external environmentand will explain the major drivers of change in macro environment and its impact onentrepreneurial decisions of the firm. Report will also elucidate the various competitive forcesthat affects the decision making, management and profitability of the organization.SECTION 1a). Critically analyze the internal resources and capabilities that give Tesla a competitiveadvantageFrom an economic perspective, entrepreneurial opportunities generally refer to situationsthat hold potential or new economic value. There are five types of entrepreneurial opportunitieswhich Tesla identifies; Introduction of new goods, Introduction of new method of production,control of a new source of raw materials or half manufactured goods, opening of a new marketand creation of new type of industrial organization (Banker and et.al., 2011). The identifyingopportunities for creating new technologies requires innovation which is a process ofrecombination where the latest technology comes into being by combining with existingknowledge and information.Internal AnalysisInternal organizational assessment is the analysis of financial, human resource,information systems and marketing strengths and weaknesses to recognize present and potential
competitive advantages of Tesla. Effective strategic management requires understanding oforganizational competencies and resources and how each contributes to formation of strengthsand develop a competitive advantage. Tesla’s investment in R&D, capital expenditures andexpenses relating to operations have increased since 2010 and experienced a decrease in cashflows in 2015. Tesla is in a transition phase and requires consistent and long-term strategies andaction plans for attaining growth. Internal analysis of Tesla will consist of core, distinctivecompetencies and competitive advantage. The internal competencies include; power-trainengineering, vehicle engineering, energy storage etc. Distinctive competencies involve batterylife in long travel, self-driving capabilities etc.Organizational / Financial / Physical resourcesBalance sheets for the year ended 2016 of Tesla shows $1.2 billion cash reserve for totalof $8 billion assets(Bini, Dainelli and Giunta, 2016).Tesla owns its factory located in SouthFremont, California which has the capacity to produce 2000 cars per week and anotherproduction unit in Nevada, the gigafactory that is financed by Tesla and Panasonic is workingtogether to reach an optimal level by 2018 thus lowering costs of batteries to 30%.ResourcesIntangible assets of Tesla include intellectual property right that is clear and consistentwith its vision; ‘all our patent are belonged to you”, brand valuation is complex that combinesbenchmark, cost, market and Income based methods. And the value know how is concerned withelectric car and energy storage that is critical in understanding traditional car makers who areplanning to manufacture power charged automobiles by 2018.Capabilities / Core competenciesThe key corporate capabilities of Tesla consists of its Financial management, expertise instrategic control, effectiveness in motivating and coordinating business units etc.It is atechnology company building technology platforms and thereby positions itself to become aleading player in energy industry and economy which will bring integration, data analysis andelegance. Human resources including blend, aptitudes, learning and skills of individuals inTesla’s organization network is the greatest tangible asset which it utilizes in its processes andactivities. Capabilities of Tesla that makes them unique and gain a competitive edge over othersare split into two categories; Electric Vehicle Manufacturing (EVM) and High PerformanceBattery Manufacturing (HPBM).
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