Executive Summary

Tesla Motors is the world's leading company in the field of innovating and creating premiumelectric cars
that will change the entire motor industry. This assignment will investigate the fourfunctions of
management and how they have been incorporated into the organisation. Furthermore, itwill also
discuss on how the stakeholders of an organisation can influence a company by providingspecific details.

1.

Introduction

Founded in the early 2s, Tesla Motors was first envisioned as a platform for a group engineers
torevolutionise the world through the production of electric!powered motor cars which were, as
theythought, much more better than gasoline!powered cars. "ow, Tesla Motors aims to create a line of
products that would be universally uni#ue, which aims to become more affordable with eachgeneration
of cars.The Tesla $oadster, Tesla's first car model, was unveiled in 2%, it was the first of itskind, an
electric car that had a moderate top speed and acceleration that has surpassed mostgasoline!powered
cars, it was met with critical acclaim, as it sold more than 2,& manufactured carsin over  countries.
The Model (, which was launched in 212, is an e)ample of Tesla Motors'ingenuity, as it is the world's
first premium electric sedan, developed with the family sedan conceptin mind, the Model ( is e#uipped
with four doors suitable for seven occupants, the veryamalgamation of a sedan and sports car. Tesla
Motors intends to mass produce the Model *, anelectric car that defies previous concepts of electric
cars, a car capable of going long distances,which Tesla Motors plans to achieve by implementing the use
of high speed superchargers that aregoing to connect different routes around different parts of the
world.Tesla Motors' desire to create product cars that can truly have an impact on changingthe
environment stems from the mindset of innovating ne)t!gen cars that do not rely on the use of gasoline
as it has become apparent that gasoline is a contributor to the environmental issues that weface today.
Tesla Motors' cause is backed up by the utilisation of advanced technology, international!level designs
and updated manufacturing processes which also caters to the e)perience of thecustomers .Tesla
Motors isn't +ust another car!making company, it is a company that is on the vergeof technological
breakthroughs and innovation.

2. Vision statement

 vision statement is defined as the reflection of the a company's own aspirations as where the
tope)ecutives of a company set out long!term goals for the organisation to accomplish.2.1.

Vision Of Tesla Motors

Tesla Motors' vision is to build a wide range of models, including affordably priced family cars. Thisis
because the overarching purpose of Tesla Motors is to help e)pedite the move from mine!and!
burnhydrocarbon economy towards a solar electric economy, which - believe to be the primary, but
note)clusive, sustainable solution./lon Musk,20.
Mission Statement

 mission statement is defined as the main declaration of an organiation's core purpose forformation
and is different from the vision statement as it implies the cause which an organisationuptakes rather
than the effect which is the latter.3usiness 4ictionary,210.1

Mission of Tesla Motors

Tesla Motors' goals are to accelerate the advent of sustainable transport by bringing compelling
massmarket electric cars to the market as soon as possible and also to accelerate the world's transition
tosustainable energy.Tesla Motors, 212

Executive Summary

The goal of this report is to provide a thorough analysis of the American automobile company, Tesla
Motors. By conducting a SWOT examination and investigating the company’s issues, our team was able
to generate several potential alternatives and conclude with detailed recommendations for Tesla going
forward. While Tesla is already a well-known technologically innovative automobile company, we focus
on the importance of sustaining that positive advantage in the long run.Tesla was founded in Silicon
Valley in 2003 by a group of engineers with one common goal: to create an electric car that was superior
to gasoline-powered cars, and thereby change the world’s vision on the future of the automobile
industry. The CEO of the avant-garde company is Elon Musk, who has a background in engineering and
business. While Tesla primarily produces electric cars, they also make energy panels for homes and sell
their batteries to other car companies. The company recently merged with SolarCity, which means Tesla
is likely to extend their focus onto solar energy, as well. Musk’s long-term goal is to improve the way
energy is produced, utilized, and stored, and wants to start incorporating solar into their process.Despite
Tesla’s visionary outtake on the automobile industry, they are still facing some issues that can be a
potential setback to their growth. Possible threats include strong competitionfrom car companies with
more capital, consumers apprehensive to change, lack of any form of advertisement, very low
profitability, and open-sourced patents. In order to remedy some of these issues, we recommend that
Tesla form an advertising campaign, and start charging for electricity at charging stations across the
country. These solutions can help to form a positive view of Tesla in the eyes of consumers, and
generate a larger profit for the firm to invest in new

4projects. Financial projections and detailed implementation plans are located in their corresponding
sections.

5I.Issues●Competing with car and tech companies that have more capital and market reach (ex. Ford,
Honda, BMW, Apple, Google, etc.).

Shadiamond HarveyMarch 19, 2017Strategic ManagementWhat are the key elements of Tesla Motors
Strategy?The key elements of Tesla Motors Strategy is the driving force behind affordable
electricvehicles.Another key element includes their implementation of technology and
productdevelopment.By developing new battery technologies helped Tesla become one of the
autoindustry leaders as their vehicles were environmentally friendly causing other luxury
automotivecompanies to migrate towards electric-powered vehicles to lead towards a cleaner
environment.Due to Tesla increasing their research and development costs it allowed them to produce
theModel S and Model X at an accelerated speed.With the extra funds for research anddevelopment
Tesla used those funds towards developing the battery pack, power electronics,induction motor, gear
box, and other software which allowed them to be a leader in the luxuryautomobile industry.Which of
the five generic competitive strategies discussed in chapter 5 most closelyapproximates the competitive
approach that Tesla is employing?Tesla is employing the competitive strategy—broad differentiation
strategy.A broaddifferentiation strategy is seeking to differentiate the company’s product offering rom
its rivals’with attributes that will appeal to a broad spectrum of buyers.Tesla is widely known for
theirproduction of premium electric vehicles.Tesla vehicles are electric-powered with linionum-
ionbatteries allowing drivers to travel up to more than 200 miles per battery charge, known for
theirsleek-stylish design and “blistering acceleration going from 0-97 miles per hour in .37 seconds.

In the article, it explains how the Tesla Model S provided best-in class storage space of 63.4cubic feet in
comparison to the Mercedes Benz, BMW and Lexus and Audi’s luxury sedans.

Introduction of Enterprise (Business Insights)

I have chosen an American company which focuses in manufacturing of Electric vehicle named as Tesla
Motors. It was founded by 2 Americans named Martin Eberhad and Marc Tapenning in the year 2003
who were researching on making a sports car which runs on electricity (Erik Gregsen, 2018). Various
sources gave funds to the Company as it was a promising start to a new era of vehicle running on
electricity instead of gasoline. The Paypal company co-founder Elon Musk in 2004 become one of the
biggest stake holder in Tesla Motors by contributing a huge amount of $30 million dollar to Tesla
Motors. It was in 2008 that the company launched its first electric sports vehicle named as Roadster. A
distance of 394 km could be travelled by the vehicle in one full charged battery. Roadster had a very fast
acceleration and could go up to 97 km per hour in less than 4 seconds. Elon Musk took over the Tesla
Motors as CEO in 2008 because of the resignation of the founding members. In 2012, Tesla launched its
Model S sedan which became popular because of its high performance and design. The first electric SUV
launched by Tesla was model X which came out in 2015 becoming one of the luxurious electric vehicles
in the market. The demand for an economical car led to the launch of model 3 series in 2017 which
could cover a range of around 354 km with a fully charged battery. Elon musk had a wide vision of
growing the company into different sustainable sectors and recognized that for homes and businesses
there is a need for products run by Solar energy. In the year 2016, Tesla took over the charge of Solar
city. In 2017, the company changed its name to Tesla, Inc. to make a sustainable energy ecosystem as
they were no longer only into manufacturing electric cars. Tesla has a goal to create a giga
manufacturing facility by 2018 at Nevada to produce cheap high-quality lithium ion batteries annually
(Tesla, 2018).

Vision

The Vision statement of a company is the roadmap of the company, indicating the future aims and
objectives of company by setting defined steps and directions that will be taken to achieve these specific
goals. The vision statement is the inspiration for that company and the agenda for the strategic planning
to achieve the goals desired by the company.

“ To create the most compelling car company of the 21st century by driving the world’s transition to
electric vehicle” is the vision statement of Tesla Motors inc.

The statement clearly depicts the goal of Tesla is to shift focus of community to a more green and clean
environment by using renewable and sustainable methods majorly in the field of transportation
industry.

The words in vision statement depict goals, aim and method or direction taken to achieve the future
objectives of an organization. The vision to have enterprise excellence and management traits in the
agency by using integrated advance technology in cars run on electricity and related sustainable
products is depicted by the word ‘most compelling’. The 21st century in the statement refers to the
current environment conservation around the globe. The world’s transition to electric vehicle indicates
their goals of expansion in future (Hirtenstein, 2017).

In whole Tesla’s future goal and objective is to be the leading company in the car industry by using their
renewable and sustainable methods and technology to improve the future.

Mission statements

The mission statement is a sentence describing the footsteps taken to achieve the goals and objectives
described in vision of a company. It also describes the company’s role, philosophy, markets and
competitive advantages. This can be referred to as small vision of company to achieve the bigger
picture. The mission statement is kept in mind while taking decisions by the employee

“to Accelerate The World’s Transition To Sustainable energy.” Is the mission statement of Tesla Inc.

The statement can also depict an issue that is faced globally. In this statement Tesla refers to the
transition towards a sustainable future with increase in use of renewable sources. Tesla aims to use
present resources efficiently without hampering the needs of future generation. Their motive is to shift
the reliance of people from fossil fuels to a more clean, green and renewable sources. The world is
slowly transitioning towards sustainable energy but the process is taking a lot of time hampering more
of natural resources. Tesla in their mission statement is intending to speed up or accelerate the process
of transition by implementing faster sustainable energy ecosystem. They not only want to change
transport sector but also enable house owners and companies to manage their resources in an
environment friendly manner.

Competitor Analysis

The electric car industry is on a boom and by the end of third quarter, the global trend in sales of electric
vehicle have seen a rise of around 63% all over the world. The below figure depicts the trends of global
electric car sales.

The manufacturer of Tesla has faced operating losses every year as reported by the business outlook of
Tesla form start. Tesla being the major player in electric car sales has shown tremendous growth over
years in car sales but the company is still not making any profits. Tesla has been the dominant force in
the field of luxurious and high end electric car manufacturers and is now looking to take over the market
for cheap electric cars also. There is a big competition in this field but Tesla ambitions are very high and
have a future vision to lead the electric car industry. Tesla is not only focused in electric car industry but
is also selling new sustainable technologies to bring the transition to a more sustainable world. The
company has great ideas and future vision to make possible a sustainable living in future and would be
exciting to see how people invest in this organization.

The SWOT Analysis is a great tool to assess the future of company by looking at their strength,
weakness, opportunities and threats faced by the company (Dalvagas, 2016). The SWOT Analysis helps
us in finding the best way for upcoming expansion of a company (Bernroider, 2002).

Strengths

The 1st company responsible for the development of a 100% electric car

Dedicated Research and Development facilities and manufacturing facilities for vehicles internally within
the company

Technological superiority in electrical and electronic technology for the development of energy efficient
products.

Tesla’s Model-3 set forward to multiply the production of the company 5 folds.

Parts and equipment supplies to other companies.

As a result of the ecological awareness within the population and an increase in demand in the market
for environmentally friendly solutions, the company has seen a significant growth in production,
achieving good pace simultaneously. As it can be observed from the following illustration, there has
been a drastic increase (about 75%) of Tesla’s Model S deliveries in Quarter 4 in comparison to the
Quarter 1 of the year 2015. This steadily accelerating growth of sales could be accredited also to the
establishment of higher numbers of supercharging stations as well as service centers all across the
globe.

With the recently introduced, economically priced Model-3 it is expected that Tesla’s production growth
is estimated to multiply five or even tenfold in the near future. The above graphical illustration
represents the quarterly growth trends of Model X and Model S. The Model 3 is expected to be a game
changer for the profits of the company as it is coming out as an economically priced car in the sedan
section that has been designed to be sold in the mass market.

Weaknesses

New innovations in technology lead to higher costs thus higher prices of products.

Higher costing Spare parts.

Market Competition with newer innovations.

Weaker distribution network.

The market is pretty niche with both positive and negative outcomes.

Maintenance of the fueling network.

With innovations in sustainable living becoming the latest market trend, Tesla has made huge
investments in its research and developments sector. Higher investments have also led to the
automaker’s vast expansion that too in a very small period of time. The most recent investment has
been made for the development of its Giga-factory for the manufacturing of battery packs and lithium
cell batteries in the state of Nevada USA. This has led to the company showing a negative free cash flow
and earnings since its IPO. The company was forced to sell some of its sales as of March 2006 because of
2.5 billion dollars’ worth of long-term debts. The payment of interests on the debt is higher in
comparison to the cash flow that is currently insufficient thus leading to a very volatile growth trend at
present.

The current distribution of Tesla is quite weak as they don’t have their own car dealership and therefore
sell directly to customers which in turn leads to the higher costing vehicles.

In comparison to other hybrid vehicles, the manufacturing costs for the spare parts of these vehicles are
significantly higher.
The installation of High-speed chargers for the quick charging of vehicles with their own maintenance
unites proves to be another challenge (Kissinger, 2018).

Due to the transition towards sustainable development, the competition between various electric
vehicle or hybrid vehicle manufacturing companies has become immense as well as making it difficult for
new companies to compete with well-established automobile manufacturers

Therefore, to predict the market trend of a fully electric vehicle is quite a difficult task knowing that the
electric vehicle market is still in a very niche sector.

Opportunities

Technology is Innovative

Increase in oil prices leading to rise in the use of electric vehicles

There is a vast potential in international market

People are supporting the idea of going full electric

The only company to provide full energy solutions for domestic and transport use is Tesla

To begin with, Tesla built the first sports car running on electricity in 2003 named Roadster. The next
step was to make a luxury sedan and SUV’s which are reasonably priced. Tesla built Model S and Model
X in 2012 and 2015 with the help of constant research and investments. The selling price of model S and
model X was high around $100,000 and model 3 with a price of $35000 is much cheaper than the other
two. The other luxury car brands like Mercedes Benz and BMWs have quite competitive prices with
Tesla. The model 3 is the only available option in this price range, and with this features and company is
targeting to manufacture around an estimate of 80,000 cars.

The battery manufacturing giga factory of Tesla at Nevada will increase the profits of company more by
using those batteries in electric vehicles. By using these batteries in manufacturing electric vehicles will
reduce the battery cost by 30% which will add to more earnings for company. The model 3 will have
greater space for manufacturing because of the Gigafactory. The Gigafactory will help in reducing the
price of model 3 in future because of increase in efficiency of manufacturing. The community supports
the company which brings innovation by using clean energy methods without harming the environment.

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The need for increase in innovation in sustainable products has happened because of the increase in
international oil prices. Tesla is leading the market of innovative sustainable products for transport and
domestic use because of increase in the global demand of inexpensive energy price. The trend of
sustainable energy market is showing positive results.

Threats

Government around the world is not supportive enough for encouragement of electric vehicle.

There is a lot of competition from already established car companies.

There is uncertainty for sources of funding for manufacturing 5,00,000 cars.

The car market is exceedingly aggressive for Electric cars. There is immense competition from
enterprises like BMW, Audi however lower price companies like Nissan leaf and chevy bolt are also in
competition. They all have been in this field for a long time with higher producing and marketing
capabilities. Tesla needs to be successful in competing with these car organizations on massive scale
production.

Another danger that Tesla is facing is funding for its formidable design to produce 500,000 vehicles. As
of March 2016, Tesla was reported with $1.5 billion of funding which was way less than the total
amount needed for the project. Equity offering and debt funding are some suggested ways to increase
funds for the company.

Identify Key strategic priorities

The strategic priorities are the universal arching things to do that help guide the group within the
organization. By placing the priorities, the personnel can invest time for a purposeful project instead of
waste time. Subsequently, the organization will move onward in the right path. In their 13 year of
existence, Tesla has launched only four cars. The preorder of Tesla model reached massive number of at
least 400,000 cars by mid-May 2016 (Thompson, 2016). To meet the targets of preorder, A strategic
priorities were announced for next two years, They are as below:

By 2020, complete building the Gigafactory which will help in decreasing the battery cost by 30%.

Ensuring the timely production of forthcoming model 3.

To increase the distance covered by a car in a single charge of battery to 1000 kilometers in next three
years.

By 2018 Tesla aims to produce fully autonomous vehicles.

In order to match production of 400,000 cars by 2020 Tesla kept a target of producing 50,000 cars per
year by 2018. The CEO of Tesla aims to increase the production of Tesla cars to 5-fold over the next 2
years.

The high demand of model 3 lead the company to reconsider their targets. They kept goal of producing
1 million cars by the end of 2020.

Strategic Goals Initiatives

Market expansion has become a crucial requirement for further progress of Tesla Motors in the
automobile industry. Targeted customer should be mid 20’s and early 40’s aka Y generation.

Key investment should be placed in improvement of existing services and innovating new products
through heavy emphasis upon research and development (R&D) for gaining a competitive edge.

The luxury car segment will gain attraction from the younger professional, for being a symbol of their
sustainable stature.

Comparatively lower entry-level prices of the products will ensure an enhanced share of customer in the
current market place.

With the introduction of lower priced electronic vehicle, the Tesla Motors will witness 5% increment in
the market share within the next 5 years.

The Tesla Loyalty Program provides the opportunity of putting your family in the Tesla vehicle, with all
the associated bonuses while already being a customer of Tesla.

For retaining their present customers, we will be introducing “Amplify Your Ride” program. In this
program customers can trade their current vehicle for our new Tesla generation 3 product.

For focusing on states where automobile industry has shown exponential sales growth, we will be
introducing “Test Drive America”.

For enhancing organization’s communication with its current as well as future customers, potential
media sources will be utilized. These sources include Google’s Ad Words, significant newspapers, social
media outlets, magazines, company sponsored events etc.

For exploiting the growth of renewable energy industry globally, substantial expansion operations are
required to be implement in foreign markets.

Diversification is required to be introduce in current supply chain for reducing the supply associated
risks.

Discussion

The process of defining the vision of company in future and fulfilling the objectives of a company is
called as the strategic plan of an enterprise. It defines the future or long-term goal that should be
achieved by the company. The timeline of the goal can vary anything sometimes it can be 5 years to
some time it can be 80 years (Kennedy, 2016). It defines the center of business.
The individual step taken by the enterprise to reach the future goal is called as mission. Vision is a long-
term goal whereas mission is short term goal taken to achieve the vision. It instills the existence of
company in minds of employee and define ideal organization state. Vision and mission are turned into
specific determinate goals by the objectives of company. It also helps in ensuring that goals are
accomplished within the time limit. The plan is based on the approach taken by company to achieve
objectives also called as strategy. Basically, strategy are the approaches taken in order to achieve
specific goals.

People’s trust in products or services of an enterprises is created only by using different organizational
strategy like Marketing, Digital, branding, communication and reputational strategies. These strategies
are an indispensable success component for investors. A good reputation of a company helps in
retaining and motivating their enterprise workforce.

Conclusion

With its innovation and effective market strategy, Tesla has established its stature as a leader in
electronic automobile market. Albeit started its manufacturing by venturing into sports car category, the
company’s vision is entering the sustainable automobile industry as a whole. Even after due
contemplation of all the strategies Tesla is expected to have an unpredictable growth pattern in the
automobile industry, particularly after introducing the Model 3. The SWOT analysis conducted revealed
the need of the company to incorporate various factors to maintain its competitive edge and enhance
overall profitability. Application of more marketing strategies specific to the company’s scenario will
assist the company to excel in the near future. As a prominent manufacturer in the genre of electric
vehicle, Tesla plans to to regain its expansion in the international market. This further ensures stable
inflow of revenue for the company.

Tesla, Inc. is the company chosen by me for doing the strategic business plan. In 2003 Tesla became the
first car company to produce a fully electric vehicle which run solely on batteries and not using any
internal combustion engine for traction purpose. Tesla is the only company to sell a zero greenhouse
emission cars in successive production. In comparison with the hundred years old internal combustion
vehicle industry, Tesla remains a budding and promising industry. In terms of future of Tesla, the Analyst
and Investors have remained divided (Mangram, 2012). A SWOT analysis and the strategic priorities
helps us to perceive the upgrades that Tesla can take to reap the goals planned in the close to future.

Introduction of Enterprise (Business Insights)

I have chosen an American company which focuses in manufacturing of Electric vehicle named as Tesla
Motors. It was founded by 2 Americans named Martin Eberhad and Marc Tapenning in the year 2003
who were researching on making a sports car which runs on electricity (Erik Gregsen, 2018). Various
sources gave funds to the Company as it was a promising start to a new era of vehicle running on
electricity instead of gasoline. The Paypal company co-founder Elon Musk in 2004 become one of the
biggest stake holder in Tesla Motors by contributing a huge amount of $30 million dollar to Tesla
Motors. It was in 2008 that the company launched its first electric sports vehicle named as Roadster. A
distance of 394 km could be travelled by the vehicle in one full charged battery. Roadster had a very fast
acceleration and could go up to 97 km per hour in less than 4 seconds. Elon Musk took over the Tesla
Motors as CEO in 2008 because of the resignation of the founding members. In 2012, Tesla launched its
Model S sedan which became popular because of its high performance and design. The first electric SUV
launched by Tesla was model X which came out in 2015 becoming one of the luxurious electric vehicles
in the market. The demand for an economical car led to the launch of model 3 series in 2017 which
could cover a range of around 354 km with a fully charged battery. Elon musk had a wide vision of
growing the company into different sustainable sectors and recognized that for homes and businesses
there is a need for products run by Solar energy. In the year 2016, Tesla took over the charge of Solar
city. In 2017, the company changed its name to Tesla, Inc. to make a sustainable energy ecosystem as
they were no longer only into manufacturing electric cars. Tesla has a goal to create a giga
manufacturing facility by 2018 at Nevada to produce cheap high-quality lithium ion batteries annually
(Tesla, 2018).

Vision

The Vision statement of a company is the roadmap of the company, indicating the future aims and
objectives of company by setting defined steps and directions that will be taken to achieve these specific
goals. The vision statement is the inspiration for that company and the agenda for the strategic planning
to achieve the goals desired by the company.

“ To create the most compelling car company of the 21st century by driving the world’s transition to
electric vehicle” is the vision statement of Tesla Motors inc.

The statement clearly depicts the goal of Tesla is to shift focus of community to a more green and clean
environment by using renewable and sustainable methods majorly in the field of transportation
industry.

The words in vision statement depict goals, aim and method or direction taken to achieve the future
objectives of an organization. The vision to have enterprise excellence and management traits in the
agency by using integrated advance technology in cars run on electricity and related sustainable
products is depicted by the word ‘most compelling’. The 21st century in the statement refers to the
current environment conservation around the globe. The world’s transition to electric vehicle indicates
their goals of expansion in future (Hirtenstein, 2017).
In whole Tesla’s future goal and objective is to be the leading company in the car industry by using their
renewable and sustainable methods and technology to improve the future.

Mission statements

The mission statement is a sentence describing the footsteps taken to achieve the goals and objectives
described in vision of a company. It also describes the company’s role, philosophy, markets and
competitive advantages. This can be referred to as small vision of company to achieve the bigger
picture. The mission statement is kept in mind while taking decisions by the employee

“to Accelerate The World’s Transition To Sustainable energy.” Is the mission statement of Tesla Inc.

The statement can also depict an issue that is faced globally. In this statement Tesla refers to the
transition towards a sustainable future with increase in use of renewable sources. Tesla aims to use
present resources efficiently without hampering the needs of future generation. Their motive is to shift
the reliance of people from fossil fuels to a more clean, green and renewable sources. The world is
slowly transitioning towards sustainable energy but the process is taking a lot of time hampering more
of natural resources. Tesla in their mission statement is intending to speed up or accelerate the process
of transition by implementing faster sustainable energy ecosystem. They not only want to change
transport sector but also enable house owners and companies to manage their resources in an
environment friendly manner.

Competitor Analysis

The electric car industry is on a boom and by the end of third quarter, the global trend in sales of electric
vehicle have seen a rise of around 63% all over the world. The below figure depicts the trends of global
electric car sales.

The manufacturer of Tesla has faced operating losses every year as reported by the business outlook of
Tesla form start. Tesla being the major player in electric car sales has shown tremendous growth over
years in car sales but the company is still not making any profits. Tesla has been the dominant force in
the field of luxurious and high end electric car manufacturers and is now looking to take over the market
for cheap electric cars also. There is a big competition in this field but Tesla ambitions are very high and
have a future vision to lead the electric car industry. Tesla is not only focused in electric car industry but
is also selling new sustainable technologies to bring the transition to a more sustainable world. The
company has great ideas and future vision to make possible a sustainable living in future and would be
exciting to see how people invest in this organization.
The SWOT Analysis is a great tool to assess the future of company by looking at their strength,
weakness, opportunities and threats faced by the company (Dalvagas, 2016). The SWOT Analysis helps
us in finding the best way for upcoming expansion of a company (Bernroider, 2002).

Strengths

The 1st company responsible for the development of a 100% electric car

Dedicated Research and Development facilities and manufacturing facilities for vehicles internally within
the company

Technological superiority in electrical and electronic technology for the development of energy efficient
products.

Tesla’s Model-3 set forward to multiply the production of the company 5 folds.

Parts and equipment supplies to other companies.

As a result of the ecological awareness within the population and an increase in demand in the market
for environmentally friendly solutions, the company has seen a significant growth in production,
achieving good pace simultaneously. As it can be observed from the following illustration, there has
been a drastic increase (about 75%) of Tesla’s Model S deliveries in Quarter 4 in comparison to the
Quarter 1 of the year 2015. This steadily accelerating growth of sales could be accredited also to the
establishment of higher numbers of supercharging stations as well as service centers all across the
globe.

With the recently introduced, economically priced Model-3 it is expected that Tesla’s production growth
is estimated to multiply five or even tenfold in the near future. The above graphical illustration
represents the quarterly growth trends of Model X and Model S. The Model 3 is expected to be a game
changer for the profits of the company as it is coming out as an economically priced car in the sedan
section that has been designed to be sold in the mass market.

Weaknesses

New innovations in technology lead to higher costs thus higher prices of products.

Higher costing Spare parts.

Market Competition with newer innovations.

Weaker distribution network.

The market is pretty niche with both positive and negative outcomes.

Maintenance of the fueling network.

With innovations in sustainable living becoming the latest market trend, Tesla has made huge
investments in its research and developments sector. Higher investments have also led to the
automaker’s vast expansion that too in a very small period of time. The most recent investment has
been made for the development of its Giga-factory for the manufacturing of battery packs and lithium
cell batteries in the state of Nevada USA. This has led to the company showing a negative free cash flow
and earnings since its IPO. The company was forced to sell some of its sales as of March 2006 because of
2.5 billion dollars’ worth of long-term debts. The payment of interests on the debt is higher in
comparison to the cash flow that is currently insufficient thus leading to a very volatile growth trend at
present.

The current distribution of Tesla is quite weak as they don’t have their own car dealership and therefore
sell directly to customers which in turn leads to the higher costing vehicles.

In comparison to other hybrid vehicles, the manufacturing costs for the spare parts of these vehicles are
significantly higher.

The installation of High-speed chargers for the quick charging of vehicles with their own maintenance
unites proves to be another challenge (Kissinger, 2018).

Due to the transition towards sustainable development, the competition between various electric
vehicle or hybrid vehicle manufacturing companies has become immense as well as making it difficult for
new companies to compete with well-established automobile manufacturers

Therefore, to predict the market trend of a fully electric vehicle is quite a difficult task knowing that the
electric vehicle market is still in a very niche sector.

Opportunities

Technology is Innovative

Increase in oil prices leading to rise in the use of electric vehicles

There is a vast potential in international market

People are supporting the idea of going full electric

The only company to provide full energy solutions for domestic and transport use is Tesla

To begin with, Tesla built the first sports car running on electricity in 2003 named Roadster. The next
step was to make a luxury sedan and SUV’s which are reasonably priced. Tesla built Model S and Model
X in 2012 and 2015 with the help of constant research and investments. The selling price of model S and
model X was high around $100,000 and model 3 with a price of $35000 is much cheaper than the other
two. The other luxury car brands like Mercedes Benz and BMWs have quite competitive prices with
Tesla. The model 3 is the only available option in this price range, and with this features and company is
targeting to manufacture around an estimate of 80,000 cars.

The battery manufacturing giga factory of Tesla at Nevada will increase the profits of company more by
using those batteries in electric vehicles. By using these batteries in manufacturing electric vehicles will
reduce the battery cost by 30% which will add to more earnings for company. The model 3 will have
greater space for manufacturing because of the Gigafactory. The Gigafactory will help in reducing the
price of model 3 in future because of increase in efficiency of manufacturing. The community supports
the company which brings innovation by using clean energy methods without harming the environment.

The need for increase in innovation in sustainable products has happened because of the increase in
international oil prices. Tesla is leading the market of innovative sustainable products for transport and
domestic use because of increase in the global demand of inexpensive energy price. The trend of
sustainable energy market is showing positive results.

Threats

Government around the world is not supportive enough for encouragement of electric vehicle.

There is a lot of competition from already established car companies.

There is uncertainty for sources of funding for manufacturing 5,00,000 cars.

The car market is exceedingly aggressive for Electric cars. There is immense competition from
enterprises like BMW, Audi however lower price companies like Nissan leaf and chevy bolt are also in
competition. They all have been in this field for a long time with higher producing and marketing
capabilities. Tesla needs to be successful in competing with these car organizations on massive scale
production.

Another danger that Tesla is facing is funding for its formidable design to produce 500,000 vehicles. As
of March 2016, Tesla was reported with $1.5 billion of funding which was way less than the total
amount needed for the project. Equity offering and debt funding are some suggested ways to increase
funds for the company.

Identify Key strategic priorities

The strategic priorities are the universal arching things to do that help guide the group within the
organization. By placing the priorities, the personnel can invest time for a purposeful project instead of
waste time. Subsequently, the organization will move onward in the right path. In their 13 year of
existence, Tesla has launched only four cars. The preorder of Tesla model reached massive number of at
least 400,000 cars by mid-May 2016 (Thompson, 2016). To meet the targets of preorder, A strategic
priorities were announced for next two years, They are as below:

By 2020, complete building the Gigafactory which will help in decreasing the battery cost by 30%.

Ensuring the timely production of forthcoming model 3.

To increase the distance covered by a car in a single charge of battery to 1000 kilometers in next three
years.

By 2018 Tesla aims to produce fully autonomous vehicles.

In order to match production of 400,000 cars by 2020 Tesla kept a target of producing 50,000 cars per
year by 2018. The CEO of Tesla aims to increase the production of Tesla cars to 5-fold over the next 2
years.

The high demand of model 3 lead the company to reconsider their targets. They kept goal of producing
1 million cars by the end of 2020.

Strategic Goals Initiatives

Market expansion has become a crucial requirement for further progress of Tesla Motors in the
automobile industry. Targeted customer should be mid 20’s and early 40’s aka Y generation.

Key investment should be placed in improvement of existing services and innovating new products
through heavy emphasis upon research and development (R&D) for gaining a competitive edge.

The luxury car segment will gain attraction from the younger professional, for being a symbol of their
sustainable stature.

Comparatively lower entry-level prices of the products will ensure an enhanced share of customer in the
current market place.

With the introduction of lower priced electronic vehicle, the Tesla Motors will witness 5% increment in
the market share within the next 5 years.

The Tesla Loyalty Program provides the opportunity of putting your family in the Tesla vehicle, with all
the associated bonuses while already being a customer of Tesla.

For retaining their present customers, we will be introducing “Amplify Your Ride” program. In this
program customers can trade their current vehicle for our new Tesla generation 3 product.

For focusing on states where automobile industry has shown exponential sales growth, we will be
introducing “Test Drive America”.

For enhancing organization’s communication with its current as well as future customers, potential
media sources will be utilized. These sources include Google’s Ad Words, significant newspapers, social
media outlets, magazines, company sponsored events etc.
For exploiting the growth of renewable energy industry globally, substantial expansion operations are
required to be implement in foreign markets.

Diversification is required to be introduce in current supply chain for reducing the supply associated
risks.

Discussion

The process of defining the vision of company in future and fulfilling the objectives of a company is
called as the strategic plan of an enterprise. It defines the future or long-term goal that should be
achieved by the company. The timeline of the goal can vary anything sometimes it can be 5 years to
some time it can be 80 years (Kennedy, 2016). It defines the center of business.

The individual step taken by the enterprise to reach the future goal is called as mission. Vision is a long-
term goal whereas mission is short term goal taken to achieve the vision. It instills the existence of
company in minds of employee and define ideal organization state. Vision and mission are turned into
specific determinate goals by the objectives of company. It also helps in ensuring that goals are
accomplished within the time limit. The plan is based on the approach taken by company to achieve
objectives also called as strategy. Basically, strategy are the approaches taken in order to achieve
specific goals.

People’s trust in products or services of an enterprises is created only by using different organizational
strategy like Marketing, Digital, branding, communication and reputational strategies. These strategies
are an indispensable success component for investors. A good reputation of a company helps in
retaining and motivating their enterprise workforce.

Conclusion

With its innovation and effective market strategy, Tesla has established its stature as a leader in
electronic automobile market. Albeit started its manufacturing by venturing into sports car category, the
company’s vision is entering the sustainable automobile industry as a whole. Even after due
contemplation of all the strategies Tesla is expected to have an unpredictable growth pattern in the
automobile industry, particularly after introducing the Model 3. The SWOT analysis conducted revealed
the need of the company to incorporate various factors to maintain its competitive edge and enhance
overall profitability. Application of more marketing strategies specific to the company’s scenario will
assist the company to excel in the near future. As a prominent manufacturer in the genre of electric
vehicle, Tesla plans to to regain its expansion in the international market. This further ensures stable
inflow of revenue for the company.

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