MBA501 - Stakeholder Analysis and Strategy Development for Tesla

This report provides a comprehensive stakeholder analysis of Tesla Motors, examining the company's vision, mission, and recent developments. It identifies key stakeholder groups, including communities, customers, employees, and investors, and analyzes their respective interests and concerns. The report also includes a diagram illustrating Tesla's stakeholder view model. Furthermore, it proposes generic and recommended strategic programs tailored to each stakeholder group, addressing their specific needs and expectations. The analysis highlights Tesla's corporate social responsibility (CSR) approach, particularly its focus on sustainable energy and electric vehicles. The report discusses the company's strategies for customer satisfaction, employee development, and investor relations. It also considers the challenges Tesla faces, such as the high cost of its products and production bottlenecks. The report concludes by summarizing key findings and recommendations for future strategic development, including the importance of cost optimization, employee training, and market expansion. References are provided to support the analysis.

TESLA MOTORS
Stakeholder Analysis and Strategy Development Report
System04104
4/25/2019

Executive Summary
Tesla Motors is an electric automobile company that focuses on renewal energy vehicles in
the automobile industry. Tesla is known for its electric cars and its different models like
Model 3 and Model X etc. Tesla Motors applies the premium-pricing strategy on its products
that target high-income group of customers. Tesla Motors is a company based on corporate
responsibility that gives high priority to its community stakeholders. It focuses on producing
electric cars that are emission-free and not using any fossil gas or oil. However, the electronic
cars of Tesla Motors are so expensive but the company is continuously working on reducing
the price of its products by various cost optimisation strategies such as manufacturing of car
batteries as an alternative of buying it from Panasonic. Company is also trying to increase its
sale every year so it can give maximum profit to its investors and shareholders. However,
Tesla should work on to reduce its product prices if the company wants to expand its market.
It can only be possible if Tesla Motors minimise its operational and manufacturing cost. A
quality training and effective human resource program that enhances the competency and
skills of its employees also helps the company to increase its productivity and lowering the
operational cost.

Table of Contents
Executive Summary...................................................................................................................1
A. Introduction to Tesla Motors..............................................................................................3
B. Stakeholders View of Tesla................................................................................................3
C. Stakeholder Analysis..........................................................................................................5
1. Communities (Key stakeholder).....................................................................................5
2. Customers........................................................................................................................5
3. Employees.......................................................................................................................6
4. Investors/Shareholders....................................................................................................6
D. Generic Strategic programs for each of the four stakeholders............................................7
E. Recommended strategic program for each selected stakeholders......................................8
Recommended Strategic Program for Communities..............................................................8
Recommended Strategic Program for Customers..................................................................8
Recommended Strategic Program for Employees..................................................................9
Recommended Strategic Program for Investors/Shareholders...............................................9
F. Conclusion..........................................................................................................................9
References................................................................................................................................11

A. Introduction to Tesla Motors
Tesla Motors Inc. was founded in 2003 by a group of engineers. The young group of
engineers were so enthusiastic to make the world's first electric car that is emission-free and
does not require fossil fuel consumption or any gasoline. Tesla Motors is known as a leading
electric car manufacturing company and developing related technology. The founder and
present CEO of Tesla Motors, Elon Musk shared a strategy that Tesla Motors wants to enter
the high end of the car market and target all those premium customers. The strategy behind
this thought is to inter in the market with premium price cars and then lowering the price of
every car with each successive model.
The mission statement of Tesla Motors reflects the strategy of company and its approach
towards its stakeholders. The mission and vision statement of Tesla Motors reflect its
intention towards the sustainable energy consumption and manufacturing electric vehicles
that does not affect the global environment. Tesla vision statement is “To create the most
compelling car company of the 21st century by driving the world’s transition to electric
vehicles” (Chen, and Perez, 2018). Tesla' mission statement shows its commitment to
manufacturing easy drive electric cars, which motivate the world towards sustainable energy.
The mission statement of Tesla was "To accelerate the world's transition to sustainable
transport" in its initial days. However, in 2016, Elon musk changed its mission statement and
replaced the old one with “To accelerate the world’s transition to sustainable energy”
(Akakpo, Gyasi, Oduro, and Akpabot, 2019).
B. Stakeholders View of Tesla
Tesla focuses on social responsibility strategy and its major stakeholders are shown in the
diagram. Tesla has four specific stakeholders group. These are General Ecosystem
Stakeholders, Internal Stakeholders, Industry level Stakeholders, and potential new
stakeholders.
General Ecosystem Stakeholders: These stakeholders include press, communities, the
public at large, interest groups etc. Tesla gives the highest priority to these stakeholders
because the business strategy of Tesla is influenced by Ecosystem and sustainable energy.

The main interest of this stakeholder group is to protect the environment (Tesla Motors,
2018).
Industry Level Stakeholders: The industry level stakeholders include customers, end users,
lenders, suppliers, partners etc. Customers, suppliers, lenders, and end users affect the income
of Tesla and these stakeholders also influence the pricing strategy of Tesla. Tesla adopts
various strategies that not affect the pricing level of Tesla products. The company also
provide world-class facilities to its industry level stakeholders including its suppliers and
lenders (Sharma, 2016).
Internal Stakeholders: Internal stakeholders includes directors of Tesla, employees,
contract-based employees, manager, skilled employees, and senior leaders of the company.
Tesla considers that its employees are crucial headway for its electric car business. Internal
stakeholders directly affect the company's performance and productivity. Therefore, Tesla
provides a good salary package to its all employees and company also provide professional
growth to all internal stakeholders (McCormick, 20170.
Potential Stakeholders: The potential stakeholders of Tesla are those stakeholders, which
can be a part of any stakeholder group in future. The company attracts people by its corporate
strategy to join the company and give their contribution to making the dream successful of
Tesla. These may be external shareholders, government authorities, or any future supplier or
employees that want to join Tesla as its stakeholder.
STAKEHOLDER GROUP OF TESLA MOTORS
General Ecosystem
stakeholders
Press, Public at large,
Communities, Interest
Groups,
Industry level
stakeholders
Local competitors,
substitute companies,
lenders, alliance
partners, suppliers,
customers and their end
users
Internal
Stakeholders
Board of Directors,
contract workforce,
outsourced
workforce, potential
new recruits, senior
leaders, employees.
Potential New
Stakeholders
Investor/Shareholders
Governments
or, any potential new
stakeholders that join
the company in
future.

C. Stakeholder Analysis
Tesla is known for its CSR approach and strategist that focuses on the uses of renewable
energy and reduce the consumption of fossil fuel. Tesla is often viewed as the antipode of old
cars which is based on combustion engines and that adversely affect the environment by the
emission of dangerous gases. For stakeholder analysis, one stakeholder has been taken from
each stakeholder group of Tesla.
1. Communities (Key stakeholder)
Communities are responsible for making a corporate image of Tesla. Tesla gives more
emphasis on Community needs and their demands. The business of Tesla Motors is largely
depended and influenced by the communities because they actually designate corporate
image. As an important stakeholder of Tesla Motors, the key interest of communities to
protect the environment. As Tesla mainly focuses on an ecologically clean environment and
reducing the emission rate by promoting electric vehicles in the world, it satisfies the need of
community, as communities are more satisfied with the approach of the company (Higgins,
2016). Tesla Motors continuously focuses on zero-emission products that accelerate the
world towards sustainable energy uses. Tesla is also trying to manufacture advanced
technology cars that provide excellent driving experience to people without any fear of
pollution or emission rates. For example, for the purpose of promoting the sustainable energy
and advanced technology in all over the world, in 2014, Elon Musk allowed other parties to
use the patent rights of Tesla and produced advanced and up-to-date technology vehicles. The
decision of Tesla Motors directly benefits the community that want to use or research on new
tech or automobile products and helps the Tesla Motors in its mission and vision (Hardman,
Shiu, and Steinberger-Wilckens, 2015).
2. Customers
Customers play a crucial role in Tesla motors and determine the quality of products and
pricing level. Customers of Tesla motors want justified pricing level of Tesla products. To
satisfy such a demand of customers, Tesla is now trying to manufacture its own batteries
instead of purchasing batteries from Panasonic to reduce the operational cost of
manufacturing electric cars. This step of Tesla makes its car more affordable for people.
Apart from this, Tesla is trying to increase its Charging stations that provide better customer

service and satisfaction. It shows how Tesla focuses on its customer’s interest and gives more
priority to their needs (Rimmer, 2018).
3. Employees
Employees play a significant role in the success of Tesla Motors as they directly affect the
company performance and productivity of the company. That is why Tesla accommodates its
employees concern on top priority and provides them with all the facilities that they deserve.
First of all, Tesla Motors provides a competitive salary package to all employees and give
them all opportunities for their career development and professional growth. Tesla uses a
good compensation strategy and HR programs that allow its employees to enjoy their life
with huge salary packages and job satisfaction. Apart from this, Tesla provides training to its
employees on a regular basis that helps the employees to meet future challenges. Apart from
this, Tesla offers special training programs to its other partners all over the world that helps
them to meet new opportunities.
4. Investors/Shareholders
The business of Tesla Motors was initially based on such stakeholder group as Investor or
shareholders who invested their money in the company. Shareholders or Investors play an
important role in the cash flow of the company and very much concerned about the
profitability or future of growth of the business. Tesla’s CSR strategy is trying to satisfy such
interests of investors using long-term strategies because Tesla is working to transform the
automotive industry in with most advanced technology and innovation technique. For
example, the decision of allowing other parties to use Patents of Tesla broaden the number of
electronic brand and products that further helps in increasing the demand for such products
and it helps Tesla Motors to grow more and more in future. Moreover, this step of Tesla
directly linked to its investors and shareholders as they gain maximum return on their
investment. Apart from this, the ecological approach of Tesla that addresses the community’s
interests helps the company to improve its image in public that further helps in its future
growth and new product development. This strategy of Tesla helps in increasing sells of its
electric cars and also increases its profit that satisfying the needs of investors and
shareholders as a stakeholder group.

D. Generic Strategic programs for each of the four stakeholders
Tesla has launched various strategic programs for its stakeholders that fulfil the needs of its
stakeholders. Tesla focuses on various strategic programs that increase the interest of every
stakeholder. These generic programs of each stakeholder can be described under the following points:
1. Ecological and Sustainable Energy For the community: Tesla focuses on
sustainable energy consumption in cars that gives the world's best experience to the
community people. One of the major concerns of the community is that they worry
about fuel emission and environmental pollution. Tesla strategies its business around
the needs of community and company is manufacturing cars with the latest
technology that is able to run on electricity. However, the major problem of Tesla is
that its products are too expensive. Although, Tesla targets only premium customers
who are ready to pay the high cost of cars but still the failure of its innovation for
electric cars still be under question mark because of its failure (Voigt, Buliga, and
Michl, 2017).
2. Manufacturing of Car Batteries for Customers: Tesla announced to manufacture
car batteries instead of purchasing car batteries from Panasonic. This action reduced
the cost of Tesla cars and make it affordable for customers. This step of Tesla
Company reduces its manufacturing cost and increase the demand for its car in
automobile sectors. It has been seen that people always questions about the quality
and cost of Tesla products. However, after this step, Customer can purchase the Tesla
car in low prices and enjoys the best driving experience.
3. Innovative culture and best compensation plan for employees: Tesla provides
innovative culture and best salary packages for its employees. Tesla cares about the
needs of its employees and provides them with the best human resources facilities in
the world. Tesla always focuses on innovation, maintaining brand image, and the
latest technology. However, from the last few months, Tesla is continuously
postponing its Model 3 production just like when Tesla started to manufacture Model
X. It shows the bottlenecks of Tesla in production planning and poor strategy to meet
technical bottlenecks in the organisation.
4. Strategies for investors/shareholders: Elon Musk announced in 2018 that Tesla is
looking for delivering more than 50,000 vehicles per year by 2020. However,
increasing demand for Model 3 car forced Tesla to change in Plan because more than
40,000 pre-order of this model was registered in March month. This increasing

demand for Tesla cars provides faith to its stakeholders to invest in the company.
However, the increasing rate of production of Tesla car and strategy to expand the
business every year gives immense benefits to shareholders and investors of Tesla
Motors (Yasinskyi, 2017).
E. Recommended strategic program for each selected stakeholders
Tesla is one of the most advanced and innovative Automobile Company in the world and
leading the car market in all over the world. Despite being the heavy cost of electric cars and
Tesla's strategy to target only premium customers, the demand for Tesla car is increasing
every year. Tesla is now looking for manufacturing 80,000-90,000 electric cars per year
(Dana, 2018). Even Tesla is working on various strategies for its stakeholders, somewhere the
company lacks in its strategic programs designed for various stakeholders. These are some
recommended strategic plan for each stakeholder:
Recommended Strategic Program for Communities
Tesla motors focus on sustainable energy use in cars and self-driving electricity vehicles. The
ecological approach of Tesla to produce Electricity car that is free from emission is not
effective for those communities who belong to the middle-income class. Apart from this, the
safety concern of Tesla cars is always a problem for people. Although Tesla is continuously
working on bringing innovative technology and adding advanced system in its cars, but most
important is that how many people afford these cars. The problem of the premium price is
still a problem for the community, as people cannot buy this car in their budget. The company
should lower the price of its car by reducing the other operational and manufacturing cost of
its products (Bouwer, 2019).
Recommended Strategic Program for Customers
Tesla is currently using a premium-pricing strategy for its products. This strategy is based on
using high prices on uniqueness or high-value attributes of company products. Even though
the company is focusing on lowering its product prices by manufacturing car batteries in their
own manufacturing centre, but Tesla can take other measures as well to reduce the cost of its
electric cars (Sollars and Tuluca, 2018). The company should work on innovation and part
and should make its product affordable for other customers. The high pricing strategy of
Tesla will not be effective in developing countries like China and India, where Tesla can sell
electric cars in large quantity because of their population. However, the pollution level in

developing countries is also on a high level so, this problem helps the company to create new
customers in these countries and give more competition to fossil fuel cars. Tesla can open its
manufacturing plant like China or India where the labour cost is very low. It also helps to
decrease the operational cost of manufacturing electric vehicles (Dibble, 2018).
Recommended Strategic Program for Employees
Tesla believes that employees play an important role in the success of any company.
However, Tesla has a good compensation plan that gives immense benefits to its employees
and engineers, but Tesla should also focus on continuous training programs that helps its
employees to reduce the operational cost of car manufacturing (Stringham, Miller, and Clark,
2015). Quality training is essential for the success of Tesla because people can buy more and
more electric cars only when they can afford it. Tesla should hire talented people for
manufacturing more innovative and technical advanced cars. Tesla should also work on to
introduce the best strategic programs that will help employees to increase their skills and in
their leadership development (Hettich and Müller-Stewens, 2017).
Recommended Strategic Program for Investors/Shareholders
Tesla should make strategies to increase its production capacity. The increasing rate of car
manufacturing is only possible if Tesla identifies its target customer and lowering its product
prices. The increasing sale of Tesla cars gives maximum profits to the company, which
further result in its big brand image in public and among its shareholders. This helps the
company and investors as well to invest their money in the company with good faith. The
company can also publicise its progress update, profit and loss statement, balance sheet and
other relevant information to its shareholders, thus they can be aware of the present growth
and profitability status of Company (Hettich and Müller-Stewens, 2017).
F. Conclusion
In conclusion, Tesla is one of the leading and quickly expandable companies in the
automobile industry. The success of Tesla largely depends on its advanced technology, its
commitment to producing emission-free cars, its global reach in the world automobile
market, and strong brand image. Although Tesla mainly focuses on electric car
manufacturing and targets premium customers for its electronic vehicles, most of the people
cannot afford the car because of its heavy prices. Thus, the mission of Tesla is to accelerate
the world towards sustainable energy will be meaningless, if Tesla is not reducing the price of

its products. To provide benefit to its shareholders, Tesla motors should increase its
production and deliver more cars every year, which helps the company and its shareholders
both. As per the study, Tesla has a strong need for implementing good human resource
planning in the organisation that includes technical training for employees. Because it will
help Tesla Motors in innovation that will reduce the operational and manufacturing cost of
Tesla.

References
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