Graduate Diploma: Strategic Analysis of Tesla Motors

This report provides a comprehensive strategic analysis of Tesla Motors, examining its strategic intent, including its vision, mission, goals, and objectives. The analysis delves into both internal and external factors, utilizing the VRIO framework to assess internal resources and capabilities, evaluating their value, rarity, imitability, and organizational structure. External analysis employs Porter's Five Forces to understand the competitive landscape, including the threats of substitutes, new entrants, and the bargaining power of customers and suppliers, as well as the intensity of existing rivalry. The report highlights Tesla's competitive advantages, particularly in its innovative technology, brand image, and focus on sustainable energy. It also considers the challenges and opportunities facing Tesla in the automotive industry.

Tesla Motors
The concepts, tools and techniques
System04129
7/5/2019

Tesla Motors: Application of the concepts, tools and techniques
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Strategic intent
Strategic intent outlines the organization’s vision, mission, goals, values and objectives that
deliver a sense of direction in strategic decision making for effective resource allocations.
Vision
To make the utmost persuasive car company of the 21st century, by transforming the world’s
conversion to electric vehicles. The strong brand image and concept of automation and artificial
intelligence helps Tesla to focus on vision and make able to construct real value.
Mission
Tesla’s mission announcement is to accelerate the world’s changeover to sustainable vehicles
and energy. Tesla meets its mission statement by pushing the organization for adopting new
technologies that rely on renewable energy for sustainable business (tesla.com, 2017). Through
tapping market opportunities for renewable energy, Tesla applied the concept of mission
statement.
Goals
Tesla goal is to spread awareness of potential Electric Vehicles among the citizens and especially
for those that are produced by Tesla Motors. Tesla meets its strategic goals by providing an
environmentally friendly car that deals with both driver and atmosphere safety (teslamotors,
2019). The techniques and concept applied by Tesla applied through concentrating on safety of
employee who indulged in manufacturing and multi-day training program. In addition, by
applying performance tracking system for employees also improves the goals achieving speed.
To examine the enhancing strategies, competitive advantage analysis, core competencies and
strategic choice in Tesla Motors the following tools, strategies are consider for studying internal
and external analysis.
Internal Analysis
The VIRO Framework
The VIRO tool helps in examine the organization’s internal resources and capabilities to
investigate whether the resources possess a sustained competitive advantage or not.

Tesla Motors: Application of the concepts, tools and techniques
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Valuable: Tesla’s products considered valuable as the products able to upturn the perceived
customer value and helps in solving the major complications for mortality. Tesla’s constantly
review the value of resources for effective utilization of resources. Tesla’s products help in
reducing dependence on fossil fuels through the construction of some valuable commodities. The
company’s renewable energy products evolve out as the mainstreams for its competitors with
special features of enhanced technology and affordability. The production of Model 3 in 2017,
which is a low valued and high-volume electric automobile, is the best example (teslamotors,
2019). In addition, Tesla’s resolve energy products demands to create challenges for the whole
sphere (Cosic, Shanks, & Maynard, 2015).
Rare: Tesla pertaining to its rarity with own patented technology and ongoing R&D. Through
manufacturing pioneering substitute energy products company able to stand in competitive
parity. Production in the world’s safest factory in Fremont, California also make Tesla Motors
product innovative and rare. For example, automotive sale and development services that include
cars and batteries as concentration on technology and energy innovation.
Costly to imitate: Tesla’s possess with its inimitable technology, business strategies, research
and development. In addition, Tesla achieved a great placing in alternative transport and energy
space through investing huge amount and hard work. Manufacturing of unique sets of energy
solutions, Power wall, Power pack and Solar Roof based on the company’s culture makes Tesla
able to achieve sustained competitive advantage, which is decidedly difficult for competitive
firms to replicate the existing stage of Tesla.
Organized to Capture Value: Tesla repeatedly tries to tapping its valuable potential resources
through the business strategies, strong leadership, and, values. Tesla products is Gigafactory 1
that is specially intended to diminish battery cell costs makes valuable rare and imitate resources
capable company to accomplish competitive advantage, by exploiting opportunities in the
alternating energy segment.

Tesla Motors: Application of the concepts, tools and techniques
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External Analysis
Porter’s Five Forces
It is an effective and powerful systematic process for understanding the competitiveness of
business strategies. Tesla lies in the premium segment that creates Competitiveness and helps in
generating more revenue over the cost of capital.
( Dudovskiy , 2018)
Threat of substitutes
Substitution is the easiest way to deteriorate company position and decrease revenue generating
but in the case of Tesla, the substitution threat is low as the innovation and technologies used in
Tesla's cars are unique and offers customers convenience and flexibility. There is no such
alternative are available as the company itself indulge in 4Ps and aggressive innovation and
marketing. Tesla can block the threat by more focusing on service-oriented rather than just
product oriented and by increasing the swapping cost for the buyers.
The threat of new entrants
The risk of new candidates is low for Tesla, as it possesses low switching cost, moderate
availability of substitute and performance competitor. Apart from all these, entry barriers and
external forces are also responsible for the entrance of new competitors especially when they lie

Tesla Motors: Application of the concepts, tools and techniques
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between renewable energy and fossil fuels. Strong branding also helps to tackle the new entrance
as its decrease the window of astonishing revenues for the new organization (Gerard, 2018).
Bargaining power of customers
Buyers are the end users and highly sensitive to price and because of this automakers are unable
to increase in costs and this increased pressure for Tesla in the long-run. The bargaining power
of customers in Tesla is moderate and somewhat low in the premium segment. Through
constructing a large base of buyers Tesla increases its bargaining power and with this rising of
openings for the organization to streamline its sales and manufacture process (Noe, Hollenbeck,
Gerhart, & Wright, 2017).
Bargaining power of suppliers
Suppliers play a dominant role and try to extract higher amounts from firms through bargaining.
The overall revenues affected by the higher supplier’s bargaining, Tesla should form a proficient
supply chain with other multiple suppliers. In addition, through research and development may
try new raw materials so the price hike of one company can shift to another. Above all, like Wal-
Mart and Nike, as they are solely dependent on the third party, Tesla also develops dedicated
suppliers for less bargaining power.
The intensity of existing rivalry
There is a high intensity of prevailing rivalry as Tesla performs in a exceedingly competitive
marketplace and competition is rising day by day in automotive industry leads to increase in raw
materials, costs and stricter laws and regulations. All these conditions force the industries to
decrease its costs and invest in alternative business in order to stay competitive. In addition, the
lesser swapping cost, sustainable differentiation strengthen the Tesla’s force of competition.
Tesla may adopt the collaborating practices for increasing market size and diminish the
completion in marketplace.
Bibliography

Tesla Motors: Application of the concepts, tools and techniques
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Dudovskiy , J. (2018, October 15). Tesla Porter’s Five Forces Analysis. Retrieved July 3, 2019,
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analysis-2/
Cosic, R., Shanks, G., & Maynard, S. (2015). A business analytics capability framework.
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Gerard, H. (2018). The Relevance of Porter's Five Forces in Today's Innovative and Changing.
SSRN Electronic Journal.
Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2017). Human resource management:
Gaining a competitive advantage. New York: McGraw-Hill Education.
tesla.com. (2017). Tesla’s mission is to accelerate the world’s transition to sustainable energy.
Retrieved July 2, 2019, from About Tesla: https://www.tesla.com/en_NZ/about?
redirect=no
teslamotors. (2019). TESLA MOTORS. Retrieved July 2019, from Primary Objectives:
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