Detailed SWOT Analysis of Tesla Inc. - Open University B100 Report

This document presents a SWOT analysis of Tesla Motors Inc., examining its strengths, weaknesses, opportunities, and threats within the automotive industry. It identifies Tesla as a pioneer in electric vehicles and AI integration but highlights issues such as an inefficient supply chain, leading to deadline misses and underproduction. The analysis also points out unfavorable HR policies and a lack of effective marketing communication, impacting stakeholder trust. The report recommends leveraging sustainable initiatives to improve market visibility and strengthening relationships with the supply chain and stakeholders. Key issues discussed include supply chain inefficiencies, ineffective HR policies, and insufficient marketing efforts, with recommendations provided to address these challenges and capitalize on Tesla's strengths.

Running head: SWOT ANALYSIS OF TESLA
SWOT Analysis of Tesla
Name of the Student
Name of the University
Author Notes:

1SWOT ANALYSIS OF TESLA
Table of Contents
Introduction................................................................................................................................3
Background of the Case.............................................................................................................4
SWOT analysis...........................................................................................................................5
Definition...........................................................................................................................5
Purpose...............................................................................................................................7
Table: SWOT analysis (Source: As created by the author).....................................................15
Core Issues...............................................................................................................................15
Unfavourable HR policies................................................................................................16
Lack of marketing activities.............................................................................................17
Improper utilisation of the Supply chain..........................................................................18
Recommendation......................................................................................................................19
Conclusion................................................................................................................................20
REFERENCES.........................................................................................................................22

2SWOT ANALYSIS OF TESLA
Executive Summary
Tesla have been identified as a company who have acted as pioneers for innovation and
sustainability in the market. They have made considerable progress with the help of Artificial
Intelligence and electrically powered vehicles. The company have failed to utilise the full
efficacy of their supply chain. This has resulted in deadline misses and underproduction from
the part of the company. The HR policies and lack of marketing communication create a
negative impression of the company in the market and thus the company has not gained the
trust of its stakeholders. However the company can throw light on their sustainable initiatives
in order to gain visibility in the market and to develop better relationships with the supply
chain and the stakeholders as a whole.

3SWOT ANALYSIS OF TESLA
Introduction
SWOT analysis is a function that is used by various organizations all over the world
to assess the hindrances and catalysts of their business operations. A SWOT analysis puts
forward the internal and external factors that pose as strengths, weaknesses, opportunities and
threats for the effective performance and functioning of organizations1. It is a key factor
which determines the strategic operations that will be undertaken by a company2. The
strengths and opportunities determine the factors that might lead to be beneficial for the
operations of the company. On the other hand the weaknesses and threats are used to
determine the degree hindrances that the smooth functioning of a company can supposedly
experience while functioning in an industry that is considered to be dynamic. Tesla motors
Inc have been subject to mixed reviews in the past3. They have also been subject to mixed
reviews in the past and mostly have been due to the company’s inability to deliver. It has
been found the company have a faulty and inefficient supply chain and that has been
identified as the main reason behind their performance4. The company have been found to
rely on single suppliers for all the components that are required to manufacture tesla vehicles.
The issue has been significantly more visible with the Model 3 that was promised to be
supplied in a said amount by the company5. However the company where not able to do so.
This acts a handicap for the company and they are unable to capitalise of their idea of
supplying the market with electrically powered vehicles. The following paper will be used to
prepare a SWOT analysis for the company through which the important issues that hinder and
1 Bohari, Abdul Manaf, Cheng Wei Hin, and Nurwahida Fuad. "The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis." Geografia-Malaysian Journal of Society and Space 9.1 (2017).
2 Yuan, Hongping. "A SWOT analysis of successful construction waste management." Journal of Cleaner
Production 39 (2013): 1-8.
3 Howe, Benjamin M., et al. "3 Tesla Zero TE Imaging of the Hip." (2016).
4 Hsu, Chin-Chun, Keah-Choon Tan, and Suhaiza Hanim Mohamad Zailani. "Strategic orientations, sustainable
supply chain initiatives, and reverse logistics: Empirical evidence from an emerging market." International
Journal of Operations & Production Management 36.1 (2016): 86-110.
5 Sung, Kyunghyun, Bruce L. Daniel, and Brian A. Hargreaves. "Transmit field inhomogeneity and T1
estimation errors in breast DCE‐MRI at 3 tesla." Journal of Magnetic Resonance Imaging 38.2 (2013): 454-459.

4SWOT ANALYSIS OF TESLA
bolster the performance of the company will be identified. Furthermore the paper will put
forward recommendations to the issues that have been caused by the negative factors and the
same will also be provided in accordance with how they can capitalise on the backgrounds
that they are good at.
Background of the Case
It is known that Tesla motors Inc. is the company who put forward the vision to
supply the consumers with electrical powered vehicles6. They have also played one the most
crucial roles in the automotive industry by presenting the industry with the idea of artificial
intelligence (AI) in vehicles7. Vehicles that have artificial intelligence are able to navigate
itself with little or negligible assistance from the user. Even though Tesla are the company
who have commercialised the above ideas, they have negligibly benefited from the same. The
ideas that was put forward by the company were capitalised on by other big and established
names within the industry. Tesla have been pioneers in providing the ideas, however, they
have not been able to successfully utilise on the same8. It can be said that the main reason
behind this performance and evident scenario is as a result of their faulty supply chain. The
supply chain has been identified as the Achilles’ heel of the company and the same has also
been identified as the reason behind the achieved performance of the company9. Furthermore
the supply chain of the company has been identified to be in-efficient10. The company is
comparatively new as compared to the established brands that exists within the industry. The
reason behind the success of other companies has been due to the fact that they have strong,
6 Kilsdonk, Iris D., et al. "Improved differentiation between MS and vascular brain lesions using FLAIR* at 7
Tesla." European radiology 24.4 (2014): 841-849.
7 Pinkse, Jonatan, René Bohnsack, and Ans Kolk. "The role of public and private protection in disruptive
innovation: The automotive industry and the emergence of low‐emission vehicles." Journal of Product
Innovation Management 31.1 (2014): 43-60.
8 Moritz, Manuel, et al. "Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile
industry along the open source movement?." 2015 Portland International Conference On Management Of
Engineering And Technology (picmet). IEEE, 2015.
9 Karamitsios, Achilleas. "Open innovation in EVs: A case study of Tesla Motors." (2013).
10 Lebedeva, Natalia, Franco Di Persio, and Lois Boon-Brett. "Lithium ion battery value chain and related
opportunities for Europe." European Commission, Petten (2016).

5SWOT ANALYSIS OF TESLA
functioning and efficient supply chains11. It is said that establishment of clear and smooth
communication with the supply chain results in maximum efficiency derived from the latter12.
The inability to do the same has cost Tesla. It can be said that the supply chain of the
company is inefficient in delivering. This has been responsible for the deadline misses that
have been faced by the company along with the loss of goodwill and trust in the market. It
can be said that there is some fault or gap in communication that is taking place between the
company and its supply chain13. This keeps them from solving an issue that persists and
which is responsible for their ineffectiveness. It has also been identified that the company
have been relying on a sole supplier for all their vehicular components14. Depending on one
supplier is not a strategy that should be undertaken by any automotive company. The supply
chain in the automotive sectors is dynamic and thus is subject to various risk15. Thus
inefficiency from the part of the supply partner would imply that the same fate is faced by the
company. The company have been under delivering as compared to the rest and the supply
chains should be amended as soon as possible in order to avoid further loss of the interest of
the customers.
SWOT analysis
Definition
SWOT analysis is a strategic and systematic tool that is used by organizations all over
the world to locate, mitigate and cope with the difficulties faced by organisations and to
11 Matopoulos, Aristides, Ana Cristina Barros, and J. G. A. J. Van der Vorst. "Resource-efficient supply chains:
a research framework, literature review and research agenda." Supply Chain Management: An International
Journal 20.2 (2015): 218-236.
12 Czinkota, Michael, Hans Ruediger Kaufmann, and Gianpaolo Basile. "The relationship between legitimacy,
reputation, sustainability and branding for companies and their supply chains." Industrial Marketing
Management 43.1 (2014): 91-101.
13 Hu, Bin, Ming Hu, and Yi Yang. "Open or closed? Technology sharing, supplier investment, and
competition." Manufacturing & Service Operations Management 19.1 (2017): 132-149.
14 Liu, Yafeng Elsie, et al. "Tesla Motors Inc. Case Synopsis." Burnaby BC: Simon Fraser University.
Retrieved 10.18 (2014): 2014.
15 Matsuo, Hirofumi. "Implications of the Tohoku earthquake for Toyota׳ s coordination mechanism: Supply
chain disruption of automotive semiconductors." International Journal of Production Economics 161 (2015):
217-227.

6SWOT ANALYSIS OF TESLA
identify the factors that they can reap benefits of16. In simple words SWOT analysis is the
technique used by organization to identify their Strengths, Weaknesses, Opportunities and
Threats. It might not be feasible or possible for an organisation to directly locate or identify
the strengths, weaknesses, opportunities and threats. In certain instances organisations use the
SWOT analysis tool to identify the potential strengths, weaknesses, opportunities or threat
that are posed to and by the organisation. It can be opined that through an effective SWOT
analysis program companies or organisations can assume the aforementioned factors.
An effective SWOT analysis helps and organisation to analyse the market before
beginning to proceed with a certain operation17. Operation or activities such as starting a new
marketing campaign, launching a new product, shifting to a new geographical location,
adapting in accordance of newly formulated and many more activities require organisations
to conduct a SWOT analysis program. The efficacy or the SWOT analysis determines the
nature of the strategic operations that are undertaken by the organisation hence after. If a
SWOT analysis is conducted in an effective manner it can turn out to be productive for an
organisation. Through an effective SWOT analysis program a company can identify their
core strengths. It can also help determine the suitable opportunities that are presented before
the organisation. The opportunities that are presented to the organisation or the ones that are
identified by the organisation, along with the identified strengths can place the same
organisation in a position from where they can determine their advantage. The advantageous
position thus identified by the organisation can help them determine their Unique Selling
Proposition (USP). The USP of an organisation helps them position themselves indifferently
in the minds of the consumers18. Thus by conducting a SWOT analysis and by ensuring that
16 Milhem, Wajdi, Khalil Abushamsieh, and Maria Nieves Pérez Aróstegui. "Training Strategies,
Theories and Types." Journal of Accounting, Business & Management 21.1 (2014).
17 Brooks, Gail, Alan Heffner, and Dave Henderson. "A SWOT analysis of competitive knowledge from social
media for a small start-up business." The review of Business information systems (Online) 18.1 (2014): 23.
18 Niu, Yongge, and Cheng Lu Wang. "Revised Unique Selling Proposition: Scale Development, Validation, and
Application." Journal of Promotion Management 22.6 (2016): 874-896.

7SWOT ANALYSIS OF TESLA
the same has been carried out in an effective manner, organisations can locate the key point
through which the can gain competitive advantage against their competitors.
Just as an effective SWOT analysis helps determine the Strengths and opportunities
present before a said organisation, the same can be used to determine the weaknesses of the
organisation and the threats that are imposed on the smooth functioning and operating of the
organisation. The weaknesses of the organisation help them identify the areas in which they
need to improve. The organisation can screen their weaknesses by employing market research
activities. Furthermore companies can gain awareness about the loopholes in their functional
and operational framework. Threats posed to an organisation can be in the form of increased
competition, a very competitive environment, unfavourable industrial and government
policies. These factors can hamper the smooth functioning of an organisation and in certain
instances they are enough to halt the operational and functional activities within the
organisation. Companies can use the strengths and opportunities that they have located by
creating a scope to further improve on the same skills or attributes. The weaknesses and
threat that has been detected by the organisation can be used as constructive criticism and
after locating the same the company can choose to improve on the same and thus mitigate the
problems that were located by the SWOT analysis. Thus it can be said a SWOT analysis can
be used constructively and productively by any organisation and the same can help in setting
the organisation apart from its competition.
Purpose
A SWOT analysis is being carried out for the case of Tesla Motors Inc. Till is being
carried out in order to derive and locate the strengths, weaknesses, opportunities and threats
that are present for the organisation in the currents scenario. As discussed above it has been
seen that Tesla motors have been facing sever issue while carrying out their daily activities. I
has been found that the company are not being able to perform up to the desired levels of

8SWOT ANALYSIS OF TESLA
expectation of the managerial division of the company and are undercutting their deadlines19.
Moreover it was found that the company have not been able to deliver on their proposed
amount of production. It can be assumed that the reason behind this unfavourable and faulty
performance is as a result of the unfavourable climate of relationship that the company has
with its supply chain20. Furthermore it was also discovered from the case study that the
company a dependent on a single supplier for all the component and peripherals and are thus
not being able to derive maximum productivity from the supply chain. Being dependent on a
single supplier for all the component while operating in the automotive industry can be risky
and if a company aims to outperform their competitors they must be careful not be
completely dependent on any one particular member of the supply chain. The aim of the
paper is to identify the strengths, weaknesses, opportunities and threats that are prevalent
during the operations Tesla motors Inc. These bases or factors will be identified by
conducting a SWOT analysis of three functional division within the organisation. The
divisions that will be adjudged in the SWOT analysis are the Human Resources Department,
the finance and accounts department and the marketing department.
19 Song, Jian, Chun-wei Gu, and Xue-song Li. "Performance estimation of Tesla turbine applied in
small scale Organic Rankine Cycle (ORC) system." Applied Thermal Engineering110 (2017): 318-
326.
20 Morali, Oguz, and Cory Searcy. "A review of sustainable supply chain management practices in
Canada." Journal of business ethics 117.3 (2013): 635-658.

9SWOT ANALYSIS OF TESLA
Strengths (S) Weakness (W) Opportunities (O) Threats (T)
Human
Resource
Management
 Top down
approach: The
HR division
within the
company uses a
top down
approach of
leadership21.
The HR policies
within the
company
ensures that
there exists a
smooth flow of
communication.
 Even though
hierarchy exists
in the
organisation, it
is ensured that a
barrier free
communication
culture exists.
 The
organisation
encourages an
anonymous
feedback and
grievance
redressal
mechanism. The
employees of
the organisation
are allowed to
share their
opinions
regarding the
feelings and
 It has been
found that the
company have
not been able
to deliver on
the promises
that they have
made to its
stakeholders.
The company
has is
dependent on
sole supply
partners for
supplying
peripherals and
components of
their every
individual
vehicles. It can
be said that the
company has
not paid due
attention to the
needs of
creating
relations with
more members
in the supply
chain22. The
more the
merrier is a
statement that
is followed in
the automotive
industry and
thus the same
should be
 Companies
across the
world have
employed
various policies
to cater to the
need of the
employee in
order to
establish
engagement
with the
employee and
to ensure that
the employees
of the
organisation
are aligned to
the goals of the
organisation23.
Tesla have
been subject to
criticism
regarding their
HR policies in
the past and
thus they
should look at
the vast amount
of options that
are available
within the
industry.
 The company
can engage the
employees
through
employee
 Past activities
and practices
within the
company
have created a
negative
impression of
the company
in the
employment
sector of the
industry24.
The company
received
criticism for
the
terminating
employees
and for a
supposedly
unsafe and
unfit working
environment.
Thu it can be
said that the
company is
threatened by
the change of
image that the
company has
developed.
 The human
capital of a
company
form the base
of production
of every
company.
21 D'Elia, Gregory, et al. "Capstone Project-Tesla."
22 MacDuffie, John Paul. "The Policy Trajectories of Autonomous Vehicles." (2018).
23 Hulme, Oliver J., et al. "Sparse encoding of automatic visual association in hippocampal
networks." NeuroImage 102 (2014): 458-464.
24 Parrish, Michael H., et al. "Self-compassion and responses to negative social feedback: The role of fronto-
amygdala circuit connectivity." Self and Identity 17.6 (2018): 723-738.

10SWOT ANALYSIS OF TESLA
grievances
linked with the
company or
their Jobs. The
identities of the
employees are
not disclosed
and this ensures
that
communication
is clear from the
part of the
employees. This
along with a
smooth
communication
frameworks
ensures that the
employees
within the
organisation are
motivated and
the attrition
rates are low.
followed by
Tesla.
 The company
has been
subject to
various forms
of
discrimination
over the past
years. There
were several
instances when
the employees
reported
discrimination
in the
workplace.
Other than the
latter there has
also been
instances when
employees of
the company
reported unsafe
working
conditions and
harassment.
Thus the need
to formulate a
disciplinary
framework for
the company is
evident.
 The company
have been
accused for
mass
termination. In
a recent
performance
appraisal
program
conducted by
the HR
department of
the company,
four to seven
farewell
activities such
as rewards and
recognitions.
They can also
carry out
activities
through which
they can
engage the
employees. The
aim is to
develop and
atmosphere
which
encourages
employee
participation.
This will result
in motivated
employees.
Motivated and
engaged
employees
imply that the
attrition rates
within the
organisation
will be high.
 The
employees of
an
organisation
can be
considered as
the asset of
the
organisation
and it is based
on their
efforts that a
company
functions.
Thus it can be
said that there
is a threat that
is posed to the
proper
functioning of
the
organisation
if prospective
employee
choose not to
work with
company due
to the internal
affairs of the
company

11SWOT ANALYSIS OF TESLA
hundred
employees of
the company
were
terminated
form their
positions. Even
though the
company
reported that it
was a fair and
just appraisal,
one could
understand that
it was due to
the fact that
certain
divisions of the
company were
not being able
to perform
well. That
resulted in low
amount of
outputs
generated from
the same
division. Thus
this can be
identified as
the reason why
prospective
employee and
candidates
consider the
Tesla Motors
company as an
unsuitable
employer of
choice.
Finance and
Accounts
 The annual
revenue that was
generated by
Tesla during the
year 2017, 9.64
billion dollars25.
The sales
generated by the
 It has been
found that
Tesla have not
been able to
take advantage
of their supply
chain.
Furthermore it
 Tesla is a
company that is
considerably
smaller than
companies
such Toyota
and general
motors.
 According to
the
information
sourced from
the case
study, it has
been found
that the
25 Chen, Yurong, and Yannick Perez. "Business model design: lessons learned from Tesla Motors." Towards a
Sustainable Economy. Springer, Cham, 2018. 53-69.