MGMT1101: Detailed Analysis of Tesla's Management and Environment

This report provides a comprehensive analysis of Tesla, the innovative electric vehicle manufacturer. It begins with an overview of Tesla, including its customer base, mission, core values, and vision. The report then delves into Tesla's corporate and business-level strategies, examining how the company approaches growth and differentiation within the automotive industry. A detailed SWOT analysis is presented, identifying Tesla's strengths (e.g., product differentiation, strong R&D), weaknesses (e.g., narrow experience, low profitability), opportunities (e.g., sustainable energy transition, reducing battery dependence), and threats (e.g., supplier limitations, competition). The analysis considers the external environmental factors affecting Tesla, such as the shift towards electric vehicles and the competitive landscape. The report concludes by summarizing Tesla's position in the market and its potential for future growth, emphasizing the company's innovation and its contribution to sustainable practices.

Running Head: MGMT 0
MANAGEMENT AND ENVIRONMENT

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Table of Contents
Summary of Tesla......................................................................................................................2
Customer Base...........................................................................................................................2
Mission and Core Values...........................................................................................................3
Vision.........................................................................................................................................3
Corporate Level Strategies.........................................................................................................4
Business Level Strategies...........................................................................................................4
SWOT Analysis.........................................................................................................................5
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Summary of Tesla
Tesla is one of the leading innovative enterprise manufacturers and designs electric
cars under automotive industry founded in 2003. The company is having its presence in most
developed region and territory of the globe such as North America, Europe, Middle-East and
Asia-Pacific. From Roadster to its key cutting-edge electric vehicles, some of its key
manufactured electric products include Model 3, Model S, Model X and Model Y. All the
company’s products are formed at its factory in Fremont, California and there also vast bulk
of the vehicle's components are also made.
The revenue of the company in 2018 rise to nearly 21.5 billion U.S. dollars and from
long period of time, the US is known to be Tesla largest sales market (statista.com, 2019). In
addition, the Model-3 of Tesla has developed as company best-selling vehicle as of high
demand and this also forces the company to open up a Gigafactory in Shanghai, China. The
key themes that will be covered in the research include analysis of Tesla customer base,
mission and core values, vision, Tesla corporate and business level strategies and company
internal environment analysis using SWOT framework. It will help in identifying various
internal factors help Tesla in achievement of its strategic business goals.
Customer Base
Tesla products and vehicles are considerably expensive for the average consumers
and there the customer base of the company mainly comprises of wealthy individuals and
households (Bogost, 2016). The company mainly targets individuals in their 20’s to young
’40s in three main criteria i.e. tech-savvy, environment-friendly and entry– level luxury
buyers. The customer base comes from both the geo-graphic density as rural and urban and to

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the customers having occupation as employee professional, executives and senior managers.
Though, with the announcement of the Model 3, Tesla is steering wider consumer segments
and focuses on the people who seek for an upscale vehicle.
Mission and Core Values
The purpose of Tesla is to boost the world transition to sustainable energy implying
their business role to push the automotive sector near advanced technologies so as to come
across sustainable business and produces grounded on renewable sources in the global
market. In addition, it also states that company have an opportunity for the increasing demand
in relation with renewable energy to shield products such as batteries and other perhaps
profitable renewable energy keys in the future.
In relation with Tesla culture, it integrates three key elements including ambitious
innovation, ‘first principles’ method of working and lack of bureaucracy. Tesla has embraced
the idea of looking outside the company core focus for innovation opportunities. The
company main values include every time do your best, no prediction is perfect, however, try
anyhow, admire and inspire people, always be learning and ultimately, respect the
atmosphere (teslaforecast.com, 2016). It can also be said that characteristics of Tesla
organisation culture and core values encourage the organisation employees to generate new
ideas and solutions.
Vision
The vision of Tesla is to build the most convincing car enterprise of the 21st century
with taking out the world transition to electric vehicle (teslaforecast.com, 2016). It signifies
excellence and leadership in the business where Tesla attains its objectives with integration of

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cutting-edge technology in its electrical automobiles and connected produces. Considering
world transition, Tesla endures expanding its operations with plans for expansion of
operations in both developed and developing regions. Ultimately, TESLA group of
businesses wish to be the global leading world-wide provider of energy sector forecasting
solutions.
Corporate Level Strategies
In relation with Tesla corporate level strategies, the company exploits growth as its
strategy with expanding in to a number of markets offering products through its existing
business. Furthermore, Tesla is centring on its major line of business and raise the total of
products presented or marketplaces aided in this main business (Bellos, Ferguson & Toktay,
2017). The company vends most of its products via its showrooms and online channels that
its holds and this strategy also associates fine with the existing market forces that of growing
internet abilities within cars and enduring the progress through the automobile sector.
Furthermore, the company uses market development as its concentrated growth strategy like
in 2019, the company finally plan to expand into Eastern Europe as various owners
demanded the same like the Ukraine where local owners gave a plea for the company to array
Service centres and Superchargers in the nation (Lambert, 2019). In other words, Tesla sells
in only a handful of nations, however, with global expansion, it also supports Tesla vision
and mission emphasizing world-wide leadership in the automobile sector. The company
corporate mission and aim are to stimulate the approach of sustainable transport with
manufacturing persuasive vast market electric vehicles within the shorted time span.
Business Level Strategies

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Tesla uses differentiation approach in relation with its business strategy and come up
with the products dissimilar and unique from others firms in the automotive sector. This
strategy helps the company to make it easier and effective for the consumers to recognise the
business products in the marketplace (Pearlson, Saunders and Galletta, 2019). In addition,
Tesla products also differ from its competitors since it comes with environmental free
technology and that also gives the company a greater hand in the marketplace as most of the
firms in the marketplace manufacturers’ cars that have ignition engines. In comparison of its
competitors like Toyota where the company uses cost leadership, it appears that the company
is not ensuing them as the corporation charges the uppermost prices in the marketplace and
company differentiation approach is obstructed by the technology that is used by other
companies in the sector. With having advanced technology in a place to manufacture
exceptional electrical vehciles, Tesla electric vehicles have gained greater market, Musk
decisions of possessing and operating all the dealership himself were also the strategy that no
other firm has tried. Ultimately, Tesla existing broad or business level strategy is a focused
differentiated one with a corporate level strategy spinning near with a multinational design
and presenting inclusive viable competitive benefits in the EV market.
SWOT Analysis
Strengths
 Well differentiation in products
portfolio – electric power train
technology
 Robust marketing policies and
improving customer base
Weakness
 Narrow experience in new product
development and handling of other
business models
 Low profitability and increasing
liability of assets and debt

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 Strong R&D division
 Unified manufacturing of battery at
Gigafactory
 Single source of cells supply for
battery power packs
Opportunities
 Emphasize more towards decreasing
consumption of fossil fuels
 Intensifying the ecosystem to
explore related opportunities in the
market
 Reducing dependence on Panasonic
for battery
Threats
 Supplier base is low
 Overseas rates of currency exchange
 UK exit from European Union
 Transformation and competition in
the automobile market
Strengths – In relation with differentiation in product portfolio, Tesla bound its
competence in electric power systems and initiated to build power pack application products
meant for domestic household in 2013 and other commercial utilities and purposes and these
products are also used for power-backup, electric market services and load shifting. The
company also have a strong research and development division where Tesla endures to
upturn its expenditure on research and development to nearly 1.5 billion U.S. dollars
(statista.com, 2019a). In addition, Tesla is also increasing its customer base with targeting
new markets after United States, China and Europe. At last, the company strength can also be
identified with its integrated manufacturing of battery at Gigafactory as Tesla is developing

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up a new facility – Gigafactory at Nevada and this will lead the company a significant push
towards achieving economies of scale which will decrease the costs of operation with nearly
30 % and allow Tesla to raise its profitability.
Weakness – Tesla is having a narrow experience in relation with the development of
products and the company is trying to exploit the elasticity of its business model considered
to be a narrative vulnerability. The business model of Tesla is confined to designing the cars,
building them and selling them making Tesla wind up a victim of its spectacular success. In
addition, the company is facing a cash crunch with a $920 million debt compensation putting
question on Tesla profitability and success (Kolodny, 2012). With regards to this, Tesla also
relies on its sole supplier of battery i.e. Panasonic since 2014 to produce battery cells for
vehicles and clean energy products.
Opportunities – Tesla can bring out more affordable electric cars with accelerating the
transition to sustainable energy as the company required to consider that an electrical vehicle
possibly use 6,100 fewer gallons in excess of its life time and in comparison of current close
gasoline vehicles. Intensifying the ecosystem to explore related opportunities in the new
markets like Barhat (2019), also stated that the company can do a world of good if Elon Musk
get hold of the coming boom in India’s energy marketplace. The company also have an
opportunity to reduce dependence on Panasonic for power pack battery as it was identified
that the company is facing challenges in getting enough batteries from Panasonic since the
opening of Gigafactory and according to company, demand is constantly outstripping supply
for the same. Hence, it shows opportunity to the company to develop its own battery cells or
make ties with other battery suppliers.
Threats – Tesla has a limited supplier’s network and it is necessary for the company to cut
close time costs as it tussles to make money considering supply base. Having low suppliers

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network also presents high bargaining power to the suppliers and they can easily dominate or
bound organisation with their decisions. Taking an example, in 2018, Tesla has to reach out
to its suppliers requesting not only for cutting of price on parts however, also retroactive
repayments (Abuelsamid, 2018). In addition, the company is also facing tough competition
from BMW, Toyota and Ford, who is moving towards further disruptive technologies such as
driverless cases with AI integration and so forth. The UK exist from European Union also
have a significant impact on electric motor industry and it was found that Tesla also has
raised prices in the UK by 5 percent in 2017, as of currency fluctuations.

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Conclusion
In the lime light of above discussion, Tesla is a great company that renew the electric
vehicle sector with sharing its experiences so as to develop more electric charging stations
and encourage the green environmental practice. The company has innovation as its strength
which is dominating the modern automotive market and as the company works on this
sustainable future with developing battery on its own, there is really a bright future for the
company.

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References
Abuelsamid, S. (2018). How Tesla's Suppliers May Have Killed Elon Musk's Private Dream.
Retrieved from https://www.forbes.com/sites/samabuelsamid/2018/08/25/how-teslas-
suppliers-may-have-killed-elon-musks-private-dream/#373136ff46c6
Barhat, V. (2012). Tesla can do a world of good if Elon Musk seizes the coming boom in
India’s energy market. Retrieved from https://www.cnbc.com/2019/02/27/tesla-can-
do-world-of-good-if-elon-musk-turns-to-india-energy-storage.html
Bellos, I., Ferguson, M., & Toktay, L. B. (2017). The car sharing economy: Interaction of
business model choice and product line design. Manufacturing & Service Operations
Management, 19(2), 185-201.
Bogost, I. (2016). The Tesla Model 3 Is Still a Rich Person's Car. Retrieved from
https://www.theatlantic.com/technology/archive/2016/04/tesla-model-3-/477243/
Kolodny, V. (2012). Tesla faces a cash crunch with a $920 million debt payment due Friday.
Retrieved from https://www.cnbc.com/2019/02/27/tesla-faces-a-cash-crunch-with-a-
920-million-debt-payment-due.html
Lambert, F. (2019). Tesla is finally going to expand in Eastern Europe, says Elon Musk in
response to plea from owners. Retrieved from https://electrek.co/2019/06/26/tesla-
expand-eastern-europe-elon-musk-plea-owners/
Pearlson, K. E., Saunders, C. S., & Galletta, D. F. (2019). Managing and using information
systems: A strategic approach. John Wiley & Sons.
statista.com. (2019). Tesla's revenue from FY 2008 to FY 2018. Retrieved from
https://www.statista.com/statistics/272120/revenue-of-tesla/
statista.com. (2019a). Tesla's research and development expenses from FY 2010 to FY 2018.
Retrieved from https://www.statista.com/statistics/314863/research-and-development-
expenses-of-tesla/
teslaforecast.com. (2016). About TESLA. Retrieved from
https://www.teslaforecast.com/about-tesla/

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