Business Development and Innovation Strategy: Tesla Automotive Report

This report provides a comprehensive business plan analysis of Tesla, focusing on its value proposition, business model, and strategic fit within the automotive industry. The report delves into Tesla's mission to accelerate the transition to sustainable energy and its competitive advantages in the electric vehicle market. It examines the development of Tesla's value proposition, business operations, and supply chain, including its vertically integrated approach. Furthermore, the report explores financial value capture, strategic fit, and the identification of uncertainties and assumptions related to the company's eco-friendly car proposal, including the use of solar panels. The analysis includes a phased development plan to address these uncertainties, a critical self-analysis, and recommendations for future business development. The report also highlights key aspects of the business canvas model, customer viability, technical feasibility, and financial viability. The report concludes by emphasizing the importance of a research and development team and the need for long-term, short-term, and medium-term goals to ensure the successful implementation of the business plan.

BUSINESS PLAN
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Contents
Contents......................................................................................................................................2
Introduction................................................................................................................................3
Business Model description.......................................................................................................3
Value proposition development.................................................................................................5
Business operations development..............................................................................................6
Supply chain development.........................................................................................................6
Financial value capture..............................................................................................................7
Competitive advantage...............................................................................................................7
Strategic fit.................................................................................................................................8
Identification and assessment of assumptions and uncertainties...............................................8
Phased development plan to address uncertainties....................................................................9
Candid and critical self-analysis................................................................................................9
Conclusion and recommendation.............................................................................................10
References................................................................................................................................11
Appendices:..............................................................................................................................14

Introduction
The value proposition is an important aspect of business organisations. This assessment will focus on the value proposition of Tesla. Before
discussing the other segments of the report, it is very essential to understand the concept of the value proposition. The companies provide values
to their customers while they buy the services or products of those companies. The promised values of the companies are considered as a value
proposition. Through the value proposition, the companies provide a statement about their operations, their missions and objectives, the reasons
for which they must continue their business to their customers. The value proposition can be considered as a part of marketing. Using this,
companies present the reasons for purchasing their services or goods to their customers. Through value proposition, the companies try to get
their customers convinced about their products and also convey the message that they provide the best value through their products in
comparison to other competing companies. In this particular report, Tesla’s novel value proposition and the associated aspects will be focused
on. The company will focus on eco-friendly cars that can be unique from other companies. The description of the Business model, development
of value proposition, development of business operations, developing the supply chain of Tesla will be discussed in this assignment. Apart from
that, financial value capture, competitive advantage, strategic fit, uncertainties and plan for addressing uncertainties, innovative tools and
techniques will be added in the assignment.

Business Model description
Raison d’etre
 Tesla’s
mission
is to
accelera
te the
transitio
n of the
world to
sustaina
ble
energy.
 Its
purpose
is to
move
forward
from a
fossil-
fuel
economy
Competitive
advantage
 Tesla
stands out
as the EV
market.
 Invests
highly on
manufactu
ring
facilities.
 Its core
competenc
y is from
its
powertrain
technology.
Customer
acquisition
 Tesla
acquires
its
customers
through
its unique
strategy
and
products.
 The CSR
activities
trigger its
customer.
Overall economics
 The products and
services help to
increase the
financial
performance of
the company.
 It makes $4.54
billion in a
quarter that
shows a higher
ratio.
Design & build
 Uses efficient
techniques and tools
to track the
different
performance
metrics in a regular
manner.

to
sustaina
ble
energy.
Initial market
 The
custome
r base
focuses
on the
20s-
young
40s.
 Eco-
friendly,
tech-
savvy
and
entry-
level
luxury
Value creation
 It is centred
on the
electric-
vehicle
market.
Product unit
economics
 It makes
money on
short term
LTV, long
term LTV
and mid
term
COCA.
Sales
 The company sell
the products using
short-term mix and
long term mix.
Scaling
 Follow on TAM.

buyers.
Value proposition development
Tesla Automobiles can develop their value proposition by focusing on the following steps:
1. The company must research the current condition of the market and the offerings of competing automobile companies (Ageron, Benzidia
and Bourlakis, 2018). The value proposition of those companies must be followed by Tesla to understand the competition from its core.
2. The next step must highlight the customers and their demands. Tesla is a renowned automobile company and the demands of its
customers are unique. The company can survey online through their websites and can take the feedback of the customers about the
design, style and space requirement of the cars.
3. After understanding the problems of the customers, the company can shortlist the most vital requirement of the customers. The value
proposition must be made on that requirement along with some additional offers given by the company (Huh and Kim, 2019) . The
company should make its value proposition for each and every targeted audience of the company and should communicate them through
the company website, social media and print media.
Business operations development
Value proposition also focuses on the development of business operations. Tesla can develop their business operations to draw the attention of
their customers. The developments that can be done by the company are as follows:
The company has focused on the implementation of the strategies which provides special services for their customers to retain them. The
company has also planned to incorporate continuous improvement strategy to provide better service to their customers.
The research and development section of the company is one of the important section of the entire business (Loeb et al., 2018). Therefore, the
company has planned to bring diversity in the research and development team so that researching the market can be done in a better way.

For marketing the products of the company, an online platform has been planned to choose by Tesla Motors. This will decrease the cost of the
company as well as will attract more customers.
Supply chain development
Supply chain development is another important aspect for automobile companies like Tesla Motors. Due to this reason, the company has
developed a strategy for their supply chain, which is known as a vertically integrated supply chain. Through this strategy, the company has
planned to develop supply park just beside their plant situated in California. Through this strategy, manufacturing different parts of cars can be
possible and it will also save the cost of transporting parts of cars (Rigla et al., 2018). Through this strategy, the company will also be able to
optimize the transportation charges by evaluating the work schedules of the drivers. Apart from that, Tesla can also focus on direct delivery from
foreign suppliers so that time and cost can be reduced. This will help the company to deliver the products in less time and the products will serve
a huge number of customers all over the world.
Financial value capture
As per the financial plan, tesla needs to consider ROI as one of the most common profitability ratios. The ROI can be determined by dividing the
net profit by the total assets (Wang et al., 2018). An average annual return of 5 to 12% is considered to be good for the business which might
take a span of 2-3 years.
Competitive advantage
As per the proposal, eco-friendly cars will help Tesla Motors to gain a lot of competitive advantage from the automobile industry. Tesla is one of
the popular automobile companies which have a good customer base. Through the introduction of eco-friendly cars, the company will also be
able to gain more attention to the customers (Guha and Kumar, 2018). The use of fossil fuel in the vehicles will provide better advantages and
gaining the same amount of advantage from this market will be difficult for the other automobile companies. Solar panels and roofs can be
introduced in the new model which will help the cars to use the energy in the nighttime. The customers all over the world are now focusing on

the issues of pollution. This value proposition plan will help the company to retain more customers. Through this business proposal, the
company will be able to gain more revenue as well as advantages from the market (Hernandez et al., 2018). The customers will be able to use
motor vehicles without creating harm to nature. This will increase the satisfaction level of the customers.
Strategic fit
Tesla Inc. is the parent organisation of all the automobile manufacturing plants of Tesla. The proposal for creating eco-friendly cars is very
compatible with the parent organisation of Tesla. Tesla Inc . is mainly an automobile company. Through this proposal, the company will be able
to gain financial advantage. The shareholders of the company will draw a good amount of profit from this business organisation (Sandhu et al.,
2019). Tesla mainly focuses on ion the manufacturing of cars. The business environment of the company has the ability to incorporate this
proposal within their organisation. Apart from that, the employee base of the company is also good. Therefore, this proposal cannot create any
trouble for the employees of the parent organisation. Implementation of this strategy will help the company to establish more businesses such as
recycling of spare parts of the cars (Cha et al., 2018). Therefore, the proposal is very compatible with the parent organisation of Tesla.
Identification and assessment of assumptions and uncertainties
The proposal of introducing eco-friendly cars can create various uncertainties in customer desirabilities, technical feasibilities along with
financial viability. The application of solar panels and solar roofs can affect the design of the car. The model may not be able to grab the
attention of the customers due to this. To make the vehicles eco-friendly, the colour used in the vehicles may not be very bright. These factors
can affect customer desirability negatively (Sumner, 2018). To deal with the situation, the plan can be made focusing on these factors. Marketing
of the vehicles is an essential part that can be involved in the plan. Campaigning must be done properly to make customers understand the
importance of the vehicles. Apart from this, technical feasibilities can face a challenge due to this innovative idea. The use of solar panels, the
ways through which the solar energy can be used for headlights or batteries can be some technical feasibilities (Silvius, 2018). To overcome this

situation, hiring trained em[ployees and engineers can be incorporated into the plan. This proposal might be a little costly for implementation.
Therefore, creating a proper budget with the help of specialists can be done.
Phased development plan to address uncertainties
For addressing the uncertainties, the company can:
 Hire trained employees and can explain their objectives for using the business proposal. The importance of the value proposition of
the company must also be discussed with the existing employees of the company (Kasemsap, 2018).
 Continuous monitoring about the feedbacks given by the customers while campaigning the eco-friendly vehicles must be involved in
the plan to address the issues.
 Meetings with the shareholders can be done to address the financial issues that can arise during the manufacturing of the vehicles.
 Demonstration campaigning can be done by the company to improve the knowledge of the customers for using the vehicles.
Candid and critical self-analysis
It can be opined that from the above analysis, tesla can implement the business proposal appropriately as it has the ability to incorporate the
business plan. I have also understood that the customer base is one of the strengths of Tesla. The eco-friendly vehicles have high demand in the
market. Therefore, the proposal will work successfully for the company if proper employees can be involved in the business.
Conclusion and recommendation
Throughout the report, an innovative business proposal has been given to Tesla which can help the company to gain financial advantage and
brand image. Through this report, the aspects of value [propostion of Tesla have been focused along with the tools and techniques that can be
used to make the value proposition novel for the company. There are certain suggestions that can be given for the company such as :
 The company must develop an expert research and development team for implementing the proposal.

 The company needs to set long-term, short-term and medium-term goals.
 The business plan needs to abide by the goals set by the company.
 The required business resources should be available for proper implementation and execution of the plan.

References
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transformation projects. International Journal of Managing Projects in Business, 11(4), pp.1026-1043.
Chavez, R., (2018), June. Implementing Project Management Methodologies in Social Entrepreneurship Initiatives in Developing Nations:
Methodology for Training SE Project Managers and Two Case Studies. In Global Conference on Business and Economics (GLOBE
2018).
Guha, S. and Kumar, S., (2018). Emergence of big data research in operations management, information systems, and healthcare: Past
contributions and future roadmap. Production and Operations Management, 27(9), 1724-1735.
Heldman, K., (2018). Project management jumpstart. John Wiley & Sons.
Hernandez, A., Pede, S., Rosenfield, J., Riscalla, D., Gasztonyi, L.R. and Gesell, R.G., Compressus Inc, (2018). System management dashboard.
U.S. Patent Application 10/102,599.
Huh, J.H. and Kim, T.J., (2019). A location-based mobile health care facility search system for senior citizens. The Journal of
Supercomputing, 75(4), 1831-1848.
Kasemsap, K., (2018). The roles of information technology and knowledge management in project management metrics. In Global Business
Expansion: Concepts, Methodologies, Tools, and Applications (pp. 1191-1221). IGI Global.
Kerzner, H., (2019). Using the project management maturity model: strategic planning for project management. Wiley.