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Tesla Motors

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Megan McCracken

on 1 August 2013

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Transcript of Tesla Motors

Tesla Motors Inc.
Zero Emissions
Zero Compromises
Elon Musk

TIME Magazine’s 100 Most Influential People In The World list (2013)
Born in South Africa
Father: Engineer; Mother: Dietician
Hitchhiker’s Guide To The Galaxy

PREFERRED RECOMMENDATIONS
Invest In Production

Produce Cars & Supercharge Stations
Success: Electric Vehicles.
What should be done:
Continue to hire Grade A workers
Continue to invest in plant technology
Expand production of Supercharge Stations
Who Should do this: Peter Carlsson, VP-Supply Chain

Invest In Marketing
Success: Brought by Quality Electric Vehicles
What should be done:
Hire a Marketing Director
Increase Advertising budget
Move away from word-of-mouth sales
Why: To improve accessibility and awareness amongst market segments
Who: Elon Musk should be in charge of hiring a reputable Marketing director.

Recommendations

Threats
"I came to the conclusion that we should aspire to increase the scope and scale of human consciousness in order to better understand what questions to ask. Really, the only thing that makes sense is to strive for greater collective enlightenment"
More large car companies are redesigning their cars to be eco friendly
New automobile companies are entering the electric car market.
Rapid Changes in technology may make current technology obsolete
Perception of a good car for the middle class
People are still unsure of how electric cars work


Opportunities
People are Becoming more environmentally aware.
Government is giving tax cuts to people who drive Electric cars.
As we get out of the recession people may be willing to spend their money on luxury goods.
American Owned business.


Stanford Applied Physics Dropout

University of Pennsylvania: Economics and Physics.
Tesla’s success started off of luck
Dells Acquistion: $120 Million
Founded: Zip2, PayPal, Tesla, SpaceX
Weaknesses
Manufacturing delays
Elon Musk is extremely busy and not necessarily dedicated solely to Tesla.
First Mover Disadvantages
High long term debt.
Leadership Style: Transformational-
Leadership Traits:
Intelligent
Task-Relevant Knowledge
Dominance:
High Energy & Very Tolerant of Stress
Integrity & Honesty, and Emotional Maturity:

Strengths
Excellent Transformative Leader: CEO Elon Musk
Workers are aligned with Tesla Motors Mission Statement & Vision.
Grade A employees
Employees are happy with their benefits.
Excellent reputations after receiving 1st place awards by various automobile magazines.
1st mover advantage in Electric Vehicles sports car industry.
Manufactures most of its own Parts.


Leadership Behavior:
Motivational
Transactional Behavior
Balanced: Transactional & Relational

SWOT

Level Of Rivalry:
High



Large Car Dealerships
hybrid cars
flex fuel cars
cars that run on diesel
hydrogen powered cars
cars that run on compressed natural gas

Innovation
"Here's to creating the greatest car company of the 21st century and to making a real difference in the world, and to moving us off oil as fast as possible." (Gertner 106)
Public Transportation
Walking
Bicycling
Motorcycles

Threat Of Substitution:
Low

Bargaining Power of Buyers: Medium

More Environmentally safe options
No Price Negotiations

Bargaining Power of Suppliers:Medium

Samsung Battery Negotiation
Tesla is predicted to be most important battery buyer.
Produces Most Parts In House
Produces Parts for other companies.

1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero-emission electric-power generation options (pg 107)

Master Plan for Tesla
Threat Of New Entry:
HIGH

New companies
Existing Large Automobile Companies
Tesla Considered New Entrant

Porter’s 5 Forces:

The Automobile
&
Electric Automobile Industry


Tesla Roadster
EXTERNAL ANALYSIS INSERT

Released for those who were willing to spend their money to try out the new, luxury, electric car
VRIO Analysis

Tesla realizes they need a more affordable vehicle if they wanted to really get their name out there.
Very high priced, sports car ($119,000)
Entrepreneurship
Musk co-founded PayPal, SpaceX, and of course Tesla Motors

PayPal - convenient form of payment offered by many companies that work with PayPal

SpaceX - launches advanced spacecrafts
FIRST MOVER ADVANTAGE YES YES YES YES

HYBRID CARS YES YES YES NO

CEO ELON MUSK YES YES YES NO


VALUABLE

Globalization Presence and Effects
RARE

HARD TO IMITATE

ORGANIZED
Ethics
Responsible Wealth Creation
Secondary Activities

General Administration: Experts Hired
HR Management: Excellent Benefits
Technology Developed: High Tech Facilities & Improved national Electric Vehicle Infrastructure.

Engagement & Plan Allignment
Primary Activities

Factories are made to make employees happy:
Bright
Magnetic Strip Production Line
Workers with technology & automotive background

Inbound & Outbound Logistics: Hired Experts
Operating: 30% decrease in operating costs; Potential to earn $880 million in operating income; Max Capacity: 500,000 Cars
Marketing & Sales: Minimal- Word of mouth
Services:

Plans
Annual

4- Year Plan

4- Year Plan + Extension

4-Year Anywhere Plan

4- Year Anywhere Plan + Extension

Details
“Tesla's new $50,000 four-door electric sedan, the Model S, is assembled on wheeled platforms that follow a magnetic strip that snakes through the factory floor. Engineers huddle at workstations scattered throughout the factory, giving them the ability to tweak the car's design at a moment's notice. ‘It's simple for us to reconfigure our lines,”
-Gilbert Passin, Tesla Motor’s Manufacturing Chief
Tesla Service for 1 year or 12,500 miles

Tesla service for 4 years or upto 50,000 miles

Tesla Service for 8 years or 100,000 miles

Tesla Service for 4 years upto 50,000 miles Unlimited Tesla Ranger Service

Tesla Service for 8 years upto 100,000 miles with Unlimited Tesla Ranger Service


Engagement & Plan Alignment Cont'd
Cost
$600 at annual Inspection

Corporate Culture & Worker Benefits
primary value of improving humanity is felt throughout the company

$1900 Prepaid

$3,800 Prepaid

$2400 Prepaid

$4,800 Prepaid

Value Chain

“Create the benefits of the future. Create it for our company. Make it unique. Make it awesome”- Nate Randall, Tesla Motor’s Benefits Manager
Worker Benefits
Emphasis on Environment
Excellent healthcare
“Sexy Benefits”
Showers at facilities
Company Garden
Stock Options
Tesla Roadster
Excellent Salary & Wages

INTERNAL ANALYSIS
Corporate Culture & Worker Benefits

“At Tesla, I always felt like part of something big. The projects I worked on were always important even though I was only an intern”
Entrepreneurship
Musk was doubtful of Tesla at first

Less than 50% chance of success

85 - 90 hours/week

Very hands on

"Mission Impossible"
July 2003

Telsa Motors Inc. Was Founded by Martin Eberhard & Mark Tarpenning

April 2004

Elon Musk Invests & Becomes a Board Member

February 2007

Tesla Motors Inc Announce plans to open a plant in New Mexico

November 2007

Eberhard was ousted from his position at Tesla.

Tesla sells 2,150 vehicles for $109,000

June 2008

California Gives Tesla Motors a tax break. Tesla Moves facility to Los Angeles instead.

October 2008

Elon Musk was made a CEO

June 2009

Tesla gets a low interest loan from the US Department of energy for $465 million to produce Model S cars

January 2010

Tesla Registers for an initial public offering of stock


May 2010

Tesla purchases and refurbishes a former Toyota factory. Toyota agrees to work with Tesla on electric vehicle development.

January 2012

Two of Tesla's key engineers resign on the same day resulting in a decrease in shares. Tesla stops producing the Roadster.

May 2012

Announces it will open its first retail store in White Plains NY

June 2012

Wells Fargo & Tesla partner up to provide competitive retail financing options for customers.

September 2012

Tesla Reveal opening of 10 new retail stores and 6 super charger stations in California, Nevada, and Arizona.

November 2012

Won Automobile Magazines "Automobile Of The Year" and Motor Trends "2013 Car Of The Year"

May 2013

Tesla paid off in full its loan that it recieved from the Department of Energy- being the first car company to fully repay the government.

Tesla also announced its would expand its super charger network to allow customers to travel longer distances.


Tesla's History
Respect foreign policies
training sessions avaiable

Conflict of Interest
receiving goods, gifts, or even loans
working for the competition
inappropriate use of social media
disclosure of information


Social Responsibility
Petroleum is a limited resource
Petroleum fuels 95% of the transportation sector
28% of total energy use
Tesla vehicles cut in half the carbon dioxide emissions of its petroleum-burning rivals
Reduce cost of battery and improve the charging infrastructure
90 Second Battery Swap
Home charging port
Other charging ports
General Environment
Economic forces: Fluctuating gas prices
electric cars
hybrid cars
Technological forces: Technology progresses everyday
Tesla (along with other car companies) have to keep up
Technology makes cars more expensive
Sociocultural forces: More concern for the environment
More people are interested in hybrid or electric cars
Demographic forces:
Young adults buying their first car (ages 18 - 25)
Tesla is not targeted toward them
Well off, middle/high class (ages 40+)
Looking to upgrade
Political/Legal forces:
Federal loan for $465 Million
$7,500 tax break to customers
Global forces: Countries like Japan could get a hold of this technology or possibly duplicate the idea with their own technology
PROBLEM STATEMENT
Competition from larger automotive makers can release new fully electric vehicles and have the capabilities to manufacture more vehicles at cheaper cost and have lower costs to consumers.


Long term debt can be detrimental to the health of the Tesla overtime the interest could overwhelm the corporation putting it out of business. Tesla currently has over $414.2 million in long term debt

WORKS CITED
"21st Century Service." Tesla Service. N.p., n.d. Web. 28 July 2013. <http://www.teslamotors.com/service>.

Baker, D, R. (2010, May 22). Auto Plant Deal Better for Tesla than for Toyota. San Francisco Chronicle (10/1/2007 to present). p. A1. Retrieved from EBSCOhost..
http://www.businessinsider.com/teslas-financial-problems-and-recovery-2013-2?op=1


Branson, Richard. "The 2013 TIME 100." TIME.com. TIME Magazine, 18 Apr. 2013. Web. 19 July 2013. <http://time100.time.com/2013/04/18/time-100/slide/elon-musk/>.

Brown, Nicholas. "How Tesla Motors Outsmarted The Automobile Industry With Real Innovation." Gas 2. N.p., 12 June 2013. Web. 27 July 2013.

Caulfield, B. (2012). Made IN Silicon Valley, Forbes, 189(11), 104-111.
Cardenas, H. The Advantages of Having a Flat Organizational Structure.

Death Of The Car Salesman. Businessweek - Business News, Stock Market & Financial Advice. Retrieved March 16, 2011, from http://www.businessweek.com/magazine/content/06_48/b4011049.htm

"Executives on the Move." Automotive Logistics. Ultima Media, 28 July 2010. Web. 27 July 2013. <http://www.fvlmagazine.com/people/executives-on-the-move-16>.

"Environment." Environmental Benefits of Driving an Electric Car. Tesla Motors Inc., 22 Dec. 2009. Web. 15 July 2013. <http://www.teslamotors.com/goelectric/environment>.

Folely, Megan. "Here's Why Tesla Doesn't Need Traditional Automotive Marketing." Wall St. Cheat Sheet. N.p., 15 June 2013. Web. 29 July 2013. <http://wallstcheatsheet.com/stocks/heres-why-tesla-doesnt-need-traditional-automotive- marketing.html/>.

Gertner, Jon, and Lindsey Kratochwill. "The Risk Of A New Machine." Fast Company 164 (2012): 104-133. Business Source Elite. Web. 25 July 2013.


Harnett, Carol. "Is Beer In the Workplace an Employee Benefit?" Www.HREOnline.com. Human Resource Executive, 04 June 2012. Web. 19 July 2013. <http://www.hreonline.com/HRE/view/story.jhtml?id=533348306>.

Jones, Michelle. "Tesla Motors Inc (TSLA) Becoming ‘Most Important Global Battery Buyer’." ValueWalk. N.p., 25 July 2013. Web. 28 July 2013.

Knox J. Tesla Adds New Talent to Management Team. Automotive Industries [serial online]. August 2011;191(8):16. Available from: Business Source Elite, Ipswich, MA. Accessed July 29, 2013.


Martin Eberhard and Marc Tarpenning. (2013). In Encyclopædia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/1507314/Martin-Eberhard-and- Marc-Tarpenning
Sparks, Daniel. "I Can't Justify Tesla Motors' Valuation." The Montley Fool. The Montley Fool, 20 July 2013. Web. 27 July 2013. <http://www.fool.com/investing/general/2013/07/20/i- cant-justify-tesla-motors-valuation.aspx

"Tesla Motors Reviews." Glassdoor. Glassdoor Inc., 9 July 2013. Web. 22 July 2013. <http://www.glassdoor.com/Reviews/Tesla-Motors-Reviews-E43129.htm>.

"Tesla Motors Salaries." Glassdoor. Glassdoor Inc., 16 July 2013. Web. 22 July 2013. <http://www.glassdoor.com/Salary/Tesla-Motors-Salaries-E43129.htm>.


"Tesla Motors." MBASkool-Study.Learn.Share. MBA-SKOOL, n.d. Web. 28 July 2013. <http://www.mbaskool.com/brandguide/automobiles/4475-tesla-motors.html>.

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