Report on Tesla's Growth Management: Challenges and Opportunities

This report provides a comprehensive analysis of Tesla's growth management strategies within the automotive industry. It begins with an introduction to the company and its industry, followed by a PESTLE analysis to understand the macro-environmental factors impacting Tesla's operations. The report then delves into Tesla's business model, including its customer value proposition, key resources, processes, and profit formula. A significant portion of the report focuses on identifying and evaluating both external and internal constraints that could hinder Tesla's growth. Finally, the report concludes with future plans and recommendations for Tesla's continued success, considering the challenges and opportunities within the evolving electric vehicle market. The report emphasizes innovation, consumer relationships, and technological advancements as key drivers for Tesla's growth.

Managing growth for
organization

Table of Contents
INTRODUCTION...........................................................................................................................3
BACKGROUND.............................................................................................................................3
Industry Overview..................................................................................................................3
PEST Analysis........................................................................................................................4
Business Model................................................................................................................................4
Customer Value Proposition:.................................................................................................5
Key Resources:.......................................................................................................................5
Key Processes:........................................................................................................................6
Profit Formula:.......................................................................................................................6
CONSTRAINT................................................................................................................................7
External Constraint.................................................................................................................7
Internal constraints.................................................................................................................9
FUTURE PLAN .............................................................................................................................9
Recommendation Tesla Future plan ......................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Automobile industry of UK is the most important economic pillar that provide new
figures in its growth through different business success. The major aspect of success of this
industry are manufacturing, engineering and technician who make high value of goods for
quality services. Automobile industry creating skilled jobs to fulfill strong domestic and export
demand. UK is the place for the genuine long-term opportunities, particularly for supply chain
companies and developers of ultra-low emission vehicles.
Tesla which comprises an enormous effect in maintaining a brand in market and offer
quality product to the customers. Company dealing in automobile industry and focus on
maintaining a standard in market with proper strategies. It frames strategy which put efforts in
designing brand for market future.
BACKGROUND
Industry Overview
Tesla is an American automotive manufacturing company which works on focusing an
innovative designs of car to offer in a market for customer demand. Company headquarter is in
Palo Alto, California from where the company runs (Bigham‐Sadegh and Oryan, 2015.). It
creates an immense effect on designing new look, manufacturing by proper operations and offer
best related services which includes financing, management, lending money in an appropriate
manner (Blandford, 2012.). It has founded in 2003 served in many countries with varieties of
product such as Automobiles, commercial vehicles etc. Different services are to be offered in the
form of Banking, financing and many other aspect related to it.
In 2017, Tesla Motors has come-up with a decision to shortened its name to Tesla. The
world's largest auto designer which has captured the entire sales come-up with an innovation by
offering electric car with a reasonable price to target the middle class market. Company sold
millions of vehicle in market and establish the largest market share. In 2018, company jump-up
by maintaining plug-in passenger car manufacturer and has extended its market in various
countries and work across boundaries. It has maintained an stability towards growth in market.

PEST Analysis
Pestle analysis defines as political, economic, social-culture and technological with a
framework to get the proper description about macro-environmental scenario of economy
(Coghill, 2017.). The strategies are define as a vital part of framing an enormous function which
relates to external environment. This clarifies more functions of various macro-environment
which is as follows:-
Political Factors- These are the factors which intervene government in economy. It
includes political stability, foreign trade policy, environment law, trade restrictions and others.
This can impact business and its operations effectively and efficiently. Tesla deals in automobile
industry which need to be follow all rules and regulations of government. This company trade in
car in 17 countries that can influence business operations. The important political factors which
can affect Tesla is environmental protection laws that can strict emission levels for car industry
(Edgell Sr, 2016). The US government provide loans programs for research and development for
new car technology.
Economic Factors- This factors can impact business and their profits. Such factors are
exchange rates, inflation, economic growths. This factors can lead Tesla to growth and increase
in cost of using cars that leads to rise in fuel prices within short period. Due to improve in global
economy leads to rise in sales of vehicles and cars. There is dip in prices of Tesla vehicles to
make affordable to all.
Social Factors- The values, belief, attitudes of population regarding goods and services.
These factors includes age distribution, population growth and so on. If Tesla can provide high
quality cars to consumers then they can easily purchase it. They should use low carbon footprints
and renewable energy for manufacturing cars.
Technological Factors- This can affect marketing and management in which there is
new ways of producing and distributing goods and services and ways of communicating with
target market. Tesla should use latest technology while manufacturing goods and services. The
improvement in technology and rapid globalization can effect automobile car industry. The use
of technology can leads to reduction in carbon footprints (TESLA Motors – External Analysis
Using PESTLE – The SpherePress, 2017).
Legal Factors- It includes health and safety, advertising standard, consumer rights and
laws, product safety, product labeling. There are various regulations developed from green

movements, energy program and production of Eco-friendly vehicles. As Tesla has franchise
laws with US so it cannot sell cars directly to customers. This can affect automobile industry
because of increased regulations by governments.
Environmental Factors- Such factors are importance due to increasing scarcity of raw
materials. This is challenging for car manufacturer to produce eco-friendly and fuel efficient
vehicles for consumers (Tesla SWOT & PESTLE Analysis, 2019). Here, Tesla produce zero
emission for attracting consumers that should be Eco-friendly. Due to automobiles leads to
increase concern towards greenhouse gas emissions.
Business Model
Business model is an plan of company to make profit and defines about products and
services which they want to sell, their target market and expenditure that occurs. A business
develops business model for their development and attract investors, recruit best and competent
employees and motivate employees. To establish a new business organisation have to update
their plans and policies according to trends and challenges they face in future. In case of Tesla
their business model is based on innovation that helps in enchant consumers by compensating
existing or emerging needs and demands.
Customer Value Proposition:
In marketing customer value proposition sum of benefits that promised by vendor to give
in return to consumers (Ellis and Roberts, 2015.). It is one of most vast subject which based on
giving values and proposition to capture large market share. Tesla's consumer value proposition
based on electric vehicle market but the share of Evs is very less but due to emerging needs and
wants of consumers they focus on developing that kind of cars ( French and Rees, 2016.). The
main focus of organisation to play with price or aimed to offer exquisite products. Some key
attributes that define about value proposition of Tesla motors that are as follows:
Vehicle performance:
it give best features and accessories in their motors vehicles. In 2008 when it released Tesla
Roadster that change imagination of people for Electronic vehicles that is an fancy looking sport
car that offers 0-100 Km/h in 3.7s acceleration by standard range of 393km after one time
charge.
Connecting services with vehicles:

With fancy appearance and solid performance of vehicle, Tesla magically enhance
creativity in users and environment by providing (recharging station navigation, charging control
and autopilot systems that enhance experiences of consumers.) enabled by hardware and
software applications.
Consumer relationship:
By creating unique and long term relationship with their consumers helps them to lead in
market for long period of time. When it suffer from scam they get all vehicles back and get back
their reputation which helps them to remain always competitive in marketplace.
Key Resources:
Tesla's key resources is their intellectual property rights, named as Electric power train in
which consist of battery packs, motor and gearbox with power electronics and software control.
There another main resource is their engineering staff that helps in design, develop and
manufacturer their products and services with their sales person that sell them. At last their staff
members which support their consumer base. With main strength and resources that they
facilitates in Lathrop and frefront in california and Nevada. In June 2014, it opened source which
is patent holding by claiming open source innovation which is most powerful resource in
comparison to anything else ( Gallagher and Underhill, 2012.). It co located with Apple,
Google, NVIDIA, ORACLE, CISCO and with HP at San francisco that helps in speed up pace of
technology. It has highly excellent management team for auto manufacturing and technological
companies that led by CEO Elon musk.
Key Processes:
The term production and processes refers to various kinds of things and their association.
In key processes production system within operation management (Go and Govers, 2012.). In
production system in which describe about an organisation can achieve their aims by combining
various resources and tools with various organisational elements such as workflows and
division of labour.
Profit Formula:
Revenue streams: In their revenue streams consist of Two streams that are as follows:
Automotive revenues: It is most important source of income of Tesla motors that are sales of
their vehicles by their consumers.

Service and other revenues:
the another source of generating revenue by maintenance and repair services,
merchandise and sales of electric vehicle of their power train components and various other
system from other than manufacturing. Their another source of revenue is their energy products,
sales of their pre owned vehicles and sales of their non Tesla vehicles.
Cost structure and their profitability:
Tesla adopts a value driven structure aimed to premium price proposition by giving
personal services with rapid enhancements in products and services. Its main cost of variable in
which automotive revenues consist in it (Jones, 2013.). On other hand main drivers of sales in
which research and development and profit from that process should be in positive manner. Their
main profit formula based on satisfying consumer needs and save environment from hazardous
effects that are major concern in front of organisation as well for consumers. They focus on
saving cost by reducing carbon emission and lead in market by using advance technology which
push them to become one of most leading brand in auto mobile industry.
In whole world the ratio of electric cars are very less but if talk about Tesla motors that lead in
Evs market by launching four models and occupying a large market share in past decade and
half. It not only survive successfully in automotive industry but shape other related markets too
and push global auto maker market in which GM and ford follows their trends (Paramananthan,
2013.). The one of most profitable formula that it adopts innovation and their related activities
frequently which helps them to remain always competitive in market place. Their remarkable
risk factor helps them to shifting risk landscape and their CEO Elon Musk easily coordinate or
manage innovation related risk factor that become one of most successful profit formula to lead
in new and emerging market (Piercy and Evans, 2014). The another one of most important
factor that contributes in raising their profitability is their distribution channel which is strong
enough, researchers found that it enhance its sales and services by 75%. By using unique
marketing approach that is different from their fierce competitors. It follows modern marketing
strategy in which they only showcase their vehicles in showroom for fulfilling orders customer
have to wait for shipments that save their cost and make it profitable enough. When it enter into
totally new marketplace they use relatively new supply chain by innovate to lead creativity,
engineering and manufacturing of their products and services and deliver up to right place.

CONSTRAINT
A condition to focus in a way that showcase the barriers towards the future growth. A
company always focus on continuous improvement in working culture and the improvement in
different technology as to get a proper and an appropriate market stability. Example- A car
engines can't adjusted in lesser space as it produce proper specified energy to consume.
External Constraint
The present scenario for company like Tesla has facing various situations which clarifies
all doubts to improve in future growth of a company. These constraints can be the hurdles for the
firm as it can be beyond the control of firm and can create major issues or challenges. It focuses
on different barriers in finding out the external constraints which is as follows:-
Focus on enough skilled labor-
Tesla facing struggle not getting labor with an efficient knowledge and to get the work
done on time. Tesla uses advanced technology in order to manufacture advanced cars. Artificial
intelligence and GPS with tracking devices. Using artificial intelligence in most of the streams is
becoming an external constrain for Tesla to identify skilled and professional manpower that must
have knowledge about artificial intelligence cum up-gradation process as well as keen
understanding on combustion engine for battery power and sky in the limit (Tesla faces five big
challenges. 2019).
Apart from this, labor rate any of major metropolitan areas with Tesla and store with
companies varies with different sections. The sections and variations in more critical and
synchronized manner are evaluated with different channels and multinational branding models.
Fluctuations in labor rate and working hour conditions also affect the organizational process.
Somewhere, government policies on ecology system and regulations upon electronic engine
remain changes that affect the progression and performance of business in effective form. The
company should focus on finding skilled workers as to give a proper finishing in completion of
work. Bay Area, where the people are more focus on software code writing instead of indulging
in manufacturing. More labor cost directly impact on the finishing price of car which does an
enormous effect in selling of product.

Internal constraints
These are the factors that control or restrict a business for the better attainment of its
objectives. Internal constraints of an organisation can be finance, production, management and
so on. The bigger concern for Tesla is “Production practices” from the only significant point of
true expertise in the auto industry as battery production. It is hard to ramp up high techniques in
the business production for any specific thing as for Model 3. Tesla is focusing in manufacturing
mammoth lithium-ion battery which has diversely complex. It has generating sales to the
customers in various places but beyond its electric vehicle as to get a differentiate market for
varieties of product. Battery is becoming a major core product for Tesla which is dealing with
different customers in market as it replace power and energy storage from various places such as
home, office and buildings. It can be a major concern for the firm to produce high quality
battery for its over 222 models during the quarter to 5000 Model 3 by the end of first quarter of
specific duration. This expected figure requires a tremendous production practices and experts
who can participate in manufacturing as per the business requirement. Completing work on
various aspect related to different manufacturing, designing, marketing and selling. Production
hurdles for Tesla requires to be solved because for a longer period unresolved quality issue
would be very hard for firm to overcome. Creation of production in a market is much important
and to maintain that stability can be possible by expanding its network. Tesla has to focus in
growing the network of marketing that assist them to collaborating with other organization who
can help them in the production of their required needs.
FUTURE PLAN
The CEO of Tesla Elon Musk took many initiative in improving the technology of
company but never focus on short of making uber promising different statement and varieties of
claims. Tesla is planning to expand business in country like India as to get more market share.
Deal has been approved in between both the countries which has become a future planning of
company.
Recommendation Tesla Future plan
Constraints are the part of a company and as to face challenges these are the
recommendation to tackle it in an appropriate manner which is as follows:-

Identify the constraint – To find out the exact barriers is much important as it clarifies
all the questions which arises in the mind of a particular leader. In term of Tesla, it is required to
pay their maximum attention towards the job creation opportunities for skilled and experts who
can resolve production constraints of firm easily. Therefore, they needs to first identify major
hurdles that can be raise due to lack of skilled employees.
Exploit the constraint – To focus on designing full use of it by breaking it into various
terminology in finding the proper way of getting an appropriate result. By respect of Tesla, they
needs to classify their issue in some small aspects as to identify specific division in which firm
have minimum employees. After this, they should conduct training session for them in order to
maximising capabilities of them easily. Through this process, management of firm can enhance
capabilities of production in the firm.
Subordinate & Synchronize to constraint – Action or to focus on development in
improving the breaking constraints by applying systematic models or techniques as to work on
growth perspective. In order to resolve internal and external hurdles, firm needs to arrange
working activities in systematic manner by getting contribution of each employees on their basis
of their working capabilities. It also requires to clarifies a rule of management that is delegation
of authority which maintain a proper management to complete a work in an efficient and
effective manner.
Elevate the performance of Constraint – To work on elevating the proper scenario to
solve the issue in an appropriate manner as to get fully finalised work on board. After
implementation of above steps, it is required to identify requirement of further actions that needs
to b taken in order to eliminate hurdles from the firm. In Tesla, it is required for management to
analyse production needs on timely basis so that they can make best possible changes in it.
Examine every aspect of function in a way to get work on board with a manner to maintain it for
future. It should clarifies every work to be maintained in an appropriate manner as to offer in
market by creating a goodwill in the eye of consumers.
Repeat the process – Repeat it with the proper guidance and make it possible to get the
work done in an appropriate manner. In terms of Tesla this stage can be a beneficial move as it
aid to identify conditions properly as to contact with an another, to get the work done. At the end
firm needs to repeat their business strategy properly that assist them in getting better results on
desired level.

CONCLUSION
As per the above report, it has been summarised that customers are the king of a market.
Tesla is more focused on update its technology which plays a vital role in establishing a market.
Suitability for long term is much beneficial in auto-mobile industries as it maximize profit. To
cover the working expenses in a company there can be some major that needs to identify as
maintaining the price of stock which Tesla is lacking behind. Consumers is not focus in dealing
with the proper management and because of which it losses the value in market share. Thus it
can be a required factor that assist in identifying properly so tht firm can create best possible
solution for it.

REFERENCES
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Ellis, P. and Roberts, M., 2015. Leveraging urbanization in South Asia: Managing spatial
transformation for prosperity and livability. The World Bank.
French, R. and Rees, G. eds., 2016. Leading, managing and developing people. Kogan Page
Publishers.
Gallagher, C. and Underhill, E., 2012. Managing work health and safety: recent developments
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Go, F. and Govers, R. eds., 2012. International Place Branding Yearbook 2012: Managing
Smart Growth and Sustainability. Springer.
Jones, G.R., 2013. Organizational theory, design, and change. Upper Saddle River, NJ:
Pearson,.
Paramananthan, S., 2013. Managing marginal soils for sustainable growth of oil palms in the
tropics. Journal of Oil Palm, Environment and Health (JOPEH). 4.
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Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
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Stone, R.J. and Stone, R.J., 2013. Managing human resources. Wiley.
Online
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through: <http://thespherepress.com/tesla-motors-external-analysis-pestle/>.
Tesla SWOT & PESTLE Analysis. 2019. [Online]. Available through:
<https://www.swotandpestle.com/tesla-inc/>.

Tesla faces five big challenges. 2019. [Online]. Available through:
<https://www.usatoday.com/story/money/cars/2016/04/10/tesla-faces-five-big-
challenges/82859740/>.