MGT201 Essay: Strategic Analysis of Tesla, Inc. (Semester 2, 2019)

This essay provides a strategic analysis of Tesla, Inc., examining its corporate-level strategy, strategic position, choices, and actions. The analysis begins with an overview of Tesla's business, followed by the formulation of a corporate strategy statement. It then delves into Tesla's strategic position, considering macro-environmental opportunities and threats, industry forces, stakeholder alignment, and organizational purpose. The essay explores Tesla's strategic choices, including competitive strategies, business portfolio decisions, international expansion, and innovation. Furthermore, it examines Tesla's strategic actions, such as strategy-making processes, organizational structure, change management, and the roles of key executives. Finally, the essay assesses the market's reaction to Tesla's strategy, evaluating its success based on factors like market share growth and financial performance. The analysis draws on the provided case study, lecture materials, the Tesla corporate website, market reports, and academic articles to provide a comprehensive understanding of Tesla's strategic approach.

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Tesla, Inc.

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Table of Contents
Introduction......................................................................................................................................2
Corporate level strategy statement...................................................................................................2
Strategic position.............................................................................................................................3
Strategic choices..............................................................................................................................4
Strategic actions...............................................................................................................................4
Tesla Growth...................................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Tesla is an American automotive and Energy Company situated in Palo Alto, California. The
company was founded in the year 2003; which specializes in manufacturing of electric car
through its solar city subsidiary, solar panel manufacturing. The numbers of employee’s works in
company are 45,000. The revenue earned by Tesla in the year 2018 was $21.461 billion, in the
year 2019, the company sells the Model S, X as well as Model.3 (Anon., 2019). The company
operates multiple productions in Gigafactory near Reno, Nevada. In this report Tesla statement
of corporate level strategy is discussed and the strategic position, choices is examined .Further
the reaction of the market in relation to strategy is also analyzed.
Corporate level strategy statement
The corporate level strategy, it is higher most as well as the wide strategy, which companies
made because it indicates the objective of the business and defines major purpose of the
company. In this strategy, the company defines mission, vision, which help to achieve overall
objective of the company (Furrer, 2016). Tesla, Inc is in the industry of Automotive Energy
storage and offer Electric vehicles. The statements of mission and vision reveal the character of
its prominent all-electric automobile manufacturing as well as associated business. The mission
of the company statement identifies the significance of the organization batteries as well as
associated power storage product in the marketplace. The mission indicates various parts in the
statement accelerate means the company is approaching towards the advanced and superior
technologies, World’s Transition part indicate that the expectation of Tesla is to be successful in
the international marketplace with the company electric automobile products. Further the
components of sustainable energy defines that the strategy of the mission is linked with the
objectives of the company. From the statement, it articulates that Tesla role is to move towards
the advanced technologies as well as to expand the business in the international market with their
products. The strategy of company is to be connected with overall objectives; the statement gives
the complete picture about the products as well as the capacity and scope of Tesla.
The vision of the company highlight that the focal point of Tesla is on the renewable energy, the
vision statement of the company articulates that the company wants to be excellent in the
business by operating the business using advanced technologies. It helps the company to

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manufacture the product according to the needs and requirement of 21st century as well as
achieve the objectives in international market. Tesla operates using these strategies to achieve the
long-term success in the local market as well as international market. The overall objective of the
company was to make sports car as well as to make car, which is affordable (Frey et al., 2017).
Strategic position
The cost of Tesla Model 3 is much lower that is $35,000, but still its demand is less according to
the expectation of the company, which results that lower costs does not help the company to
achieve the objective. The opportunities leads that the Company is in the procedure of building
Gigafactory, which makes the batteries for Tesla vehicle at 30% lower cost (News18, 2019). The
factory can enlarge the capacity, so that it increases the demand for Model 3. The threats arise
due to highly competitive market; however, the Model 3 of the company is in the competition
with Audi, BMW as well as other low cost vehicles like Chevy Bolt. To manage the industry
forces, Tesla sell Model S, which is filled up with convenience as well as safety and energy. In
2015, the company adds the feature of autopilot for Model X as well as S. The company is highly
investing in batteries producing facility that is $5 billion in 2019 (Rodrigues et al., 2016). The
employees, owners are aligned with functional teams in which CEO, office of finance,
Technology, engineering all work is performed in hierarchy to achieve the organization purpose,
further the heads of all office, monitor and control all the activities, many shareholders own the
shares of the company, like Musk the shareholder of company owns 38.6 million. The purpose of
Tesla is to approach the advanced technologies, so that the efficient automobile product is
produced which satisfy the customer and to accomplished the objective to expand in the
international marketplace. The strategies used by Tesla is culturally fit, it means that the
behaviors of the employees is aligned with the values of Tesla because company has innovative
culture to solve the problem by focusing on 6 attributes, which includes progress quick, perform
impossible, regularly innovate, think and work like owner as well as work together.
Strategic choices
The main competitors of Tesla include company of Ford Motor, Honda Motor. Tesla sell Model
3, which compete with Audi, BMW, the company compete by adopting various strategies like
the company adopt the strategy of premium price, so that it can target the rich people by selling

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an all-electric luxuries SUV, which deliver the record of 1 lakh vehicle in 2017 (Bahles & Cook,
2017). The statement of positioning also helps Tesla to compete well, the statement describes
that the car of company moves from zero to three hundred in three seconds without dropping of
oil. Tesla builds the energy goods to use it in houses, business, the portfolio of this products
includes Powerwall 2 , it is a 14kwh rechargeable battery produced to store the energy in house
other is 200k Wh which is used by the industries, businesses (Knowledge@Wharton, 2019).
Tesla is competing in the country of USA, Canada, Europe, UK, China, Hong Kong, Australia,
due to the profits earned by the company up to $311.5 million in the year 2018 , the company
can expand its business in the country of India, Russia, Africa, South America (Ward & Staffell,
2018). Tesla has done innovation by adopting the various strategies like increasing the
investment in electric batteries and in the year 2019, the company is considered the most
innovative company, because of using the artificial intelligence as well as the other technologies
like batteries. The company makes 3 stages 4 pole AC motor of induction and used it in Model S
as well as X. In the 2019, Tesla acquire energy company that is Maxwell technologies at the
value of $218 million, this agreement is made to help the automaker of electric to enhance
batteries as well as reduces the cost because of high competition arise in the market (Kau et al.,
2019).
Strategic actions
The strategies used by Tesla is appropriate and feasible like due to the strategy of producing the
high quality products according to the needs and requirements of the customers as well as
keeping the price of the lower, in the year 2018, the revenue earned by the company was $21.461
billion. Tesla focuses on the mission, vision while making the strategy, like for expanding the
market share in the competitive environment company adopt the strategy of acquisition, for
strategy implementation the focus of the company was to produce the reasonably priced car as
well as sports car (Frey et al., 2017). In last Stage Company monitor the performance by making
comparison like by monitoring and compare with their competitors, through this in the year 2015
company create Model X SUV. The company follows the structure of U-form, which is based on
the hierarchy and the structure is related to the functions and divisions. In the functional structure
various office made related to the finance, legal, engineering and company has the division of
automotive and Generation as well as storage of energy. The company also uses the concept of

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centralization in the system, by providing the control in the hands of the manager or leader of
functional team. Tesla manage the change by involving the employees in the procedure of
change like before making the change, company use the survey, which includes eighteen
question in which sixteen question is with the scale of 1-5. For this, employees will be giving
three minutes to complete the survey (Singh et al., 2016). The company organizes all- hands
meeting to communicate the change to all workers in the organization. The CEO of the company
Elon Musk involved in the making the highest-level strategy, which is related to the acquisitions.
The strategy was formulate by high executives like CEO of the company, implemented by the
employees working in the office of technology, engineering and strategy is monitored by the
leaders of team members in each office.
Tesla Growth
In the highly competitive market, it becomes significant for the companies to make innovative
strategies, so that the company will sustain in the highly competitive environment. Tesla operates
its business in highly competitive environment, the strategy made by the company is successful,
which helps the company to expands and earn profits in long run. Tesla’s strategy is successful
due to increase in the share of market that is in 2018 each 50th vehicle, which is sold in United
States was Tesla. In the year 2019, The Company holds up to 80% market share of electric
vehicle. In the end of the year 2018, 5,32,000 electric cars sold by the company worldwide, the
maximum Tesla vehicle is in the US (US Securities, 2018). In the year 2018, Tesla produced
2,45,162 vehicles (Anon., 2019). In the year 2018, the total revenue earned by the company was
$21.461 that is 82.51% rise from the year of 2017 (McGuire & Deborah, 2018). The assets of the
company increases by 14.2% in the year 2019, the gross profit earned by the company in the year
2018 was $4,042.021, and currently the share price of Tesla is 228.32 (Vaidyanathan, 2018). The
capitalization of the market in the year 2019 is $41.98B (McGuire & Deborah, 2018).
Conclusion
From the above, it concludes that Tesla specializes in making electric vehicle, the mission and
vision guides the company to make innovative products and expands globally. The company has
the opportunities to grow but threats arise due to high competition in the automobile industry.
The main competition are from the Ford motors and Honda motors, the company follows U-

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form structure, which is followed in hierarchical order and it is made on the basis of function as
well as division. It also concludes that, Tesla highly grows overtime, in the electric vehicle it
holds about 80% of share in the market.
References
Anon., 2019. Tesla. [Online] Available at: https://www.tesla.com/energy [Accessed 6 Augustus
2019].
Bahles, M. & Cook, G., 2017. Car Motivations in the Young Target Group. An International
Perspective." Central European Business Review, 6(3).

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Frey, J.D., Ara, S.A., Choi, M. & Karp, N.S., 2017. Mastectomy flap thickness and
complications in nipple-sparing mastectomy: objective evaluation using magnetic resonance
imaging. Plastic and Reconstructive Surgery Global Open , 5(8).
Furrer, O., 2016. Corporate Level Strategy: Theory and Applications. Abingdon: Routledge.
Kau, T. et al., 2019. Delayed fenestration of Blake’s pouch with or without vermian hypoplasia.
Cerebellum & Ataxias , 6(1).
Knowledge@Wharton, 2019. The U.S. Auto Industry in 2019: Twists, Turns and Bumps Ahead.
[Online] Available at: https://knowledge.wharton.upenn.edu/article/the-u-s-auto-industry-in-
2019-twists-turns-and-bumps-ahead/ [Accessed 8 Augustus 2019].
McGuire, S.J. & Deborah, D., 2018. Journal of Case Research and Inquiry.
News18, 2019. India to Get Tesla Type Gigafactories for EV Battery by 2020, Rs 6000 Crore to
be Pumped. [Online] Available at: https://www.news18.com/news/auto/india-to-get-tesla-type-
gigafactories-for-ev-battery-by-2020-rs-6000-crore-to-be-pumped-2246801.html [Accessed 8
Augustus 2019].
Rodrigues, S. et al., 2016. Tesla powerwall: analysis of its use in Portugal and United States. Int.
J. Power Energy Syst, 36.
Singh, A.D. et al., 2016. Optic nerve assessment using 7-Tesla magnetic resonance imaging.
Ocular oncology and pathology, 2(3).
Teece, D.J., 2018. Tesla and the Reshaping of the Auto Industry. Management and Organization
Review, 14(3).
US Securities, 2018. UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
[Online] Available at: ttps://www.sec.gov/Archives/edgar/data/1318605/000156459019003165/
tsla-10k_20181231.htm [Accessed 8 Augustus 2019].
Vaidyanathan, G., 2018. Core Concept: Microgrids offer flexible energy generation, for a price.
Proceedings of the National Academy of Sciences, 115(17).

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Ward, K.R. & Staffell, I., 2018. Simulating price-aware electricity storage without linear
optimisation. Journal of Energy Storage, 20.