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Competency of Tesla

Introduction

Competency of Tesla

Elon Musk

Mission

Tesla Motors designs and sells high performance,

super efficient electric cars, styles and acceleration

  • Introduction
  • Competency (Mission, Vision, goals, core competency)
  • PESTEL
  • Internal (BCG, Ansoff, PIMS,SW)
  • External (Porter 5 forces, OT)
  • Stakeholder analysis
  • Select strategic options & why
  • Strategy Implement
  • Bibliography & Question

Vision

The best automotive

Technology

Performance

Efficiency

design

The 1st fully electric vehicle in the world.

Where is the birth place of Tesla?

Who created Tesla?

Leadership & Structure

Unique technology and sale volume

Competency of Tesla

Competency of Tesla

PESTEL of Tesla

Competency of Tesla

Core competencies:

3. Motor design

Core competencies:

1. Battery technology

Core competencies:

2. Power electronic

Goals

Create affordable mass market electric vehicles

1. Selling their own vehicles

2. Selling patented electric power train

3. Serving as a catalyst and positive example to other automakers

P: Government support of green environmental project product

E: Growth rate of markets and value of markets

S: Leading environmental culture

T: Dynamics of technology innovation

E: The tendency of companies and individuals towards litigation

L: Geographic distribution of possible markets and suppliers

Model S occupied 8.4% market share in American automobile industry, 2013

Internal

BCG Matrix in Tesla

Internal

Ansoff matrix in Tesla

Stars:

Question mark:

Norwegian Market

The hottest cars in Norway ,2013

Cash cow: American and Norwegian market

American Market

Indian and Japanese market

Indian market

Might difficult to accept by consumers

Low per-capita income and living standard

Japanese market

High barrier to into this market

Well established vehicle industry

Already mastered and produced electric cars.

Chinese market ·

  • Environment-friendly products are becoming popular in China result in pollution problems.
  • The exemptions duties policy made a suitable price and high concern in China.
  • As Elon Muck said that Chinese market is expected to Tesla’s contribution to the global sales of 30-35% in 2014.

External Opportunity & Threat

External

Porter 5 forces

Internal

PIMS analysis

Internal

Strength & Weakness

Higher investment intensity will result in a lower return on investment (ROI) and cash flow

Tesla got a huge investment to R&D and manufactures in prophase (Lower return)

Should reduce the investment intensity effect on profit

E.g. Improve utilization rate of equipments, rent equipments to manufacture to avoid purchase fees

Bargaining power of suppliers

Select the most professional supplier

Best quality products

Bargaining power of buyers

Unique high-end electric cars

No similar products

Threat of substitute products

Traditional high-end brand car

Improve product quality

Threat of new entrants

High-end consumers change

Low-end market opportunity

Intensity of the competitive rivalry

Enter different markets

Different products

Enhance the competitiveness of products

Thank you !

Why select this option?

Strategic options

Stakeholder analysis

Company current situation

  • Sustainable growth refers to the economic growth to maintain steady and rapid growth without economic issues.
  • In sustainable growth strategy, M&A or joint adventure can make Tesla motors maximize potential and minimize the risk.
  • M&A and joint adventure can make the company focus on the core technology development.
  • M&A and joint adventure plays an important role in the global economy.
  • The prospect of development China's market, purchasing power and potential let M&A or joint adventure more selective.

Tesla co-operates with both international and domestic stakeholders

Its main stakeholders are supplier of battery research and development

It is through the cooperation of suppliers and developed to meet the needs of the market for electric cars

1. Substantive growth strategies

Joint ventures or M&A (mergers and acquisitions) with other vehicle companies

2. Limited growth strategies

Growing too fast brings financial problem and challenges

3.Retrenchment

It is a remedial measure

Lee, Jason, Jay, Sean

Question & Bibliography

Implement Roles and responsibilities

Implement

Resources requirements

Implement

Targets & timescales

Needle, D. (2010). Business in Context: An introduction to business and its environment. 5th Edition. South-Western: UK.

Wetherly, P. & Otter, D. (2011). The Business Environment: Themes and Issues. 2nd Edition. Oxford University Press: Oxford.

Boddy, D. (2011). Management: An Introduction. 5th Edition. Pearson: Harlow. 

Irene, C. (1997). Business strategy: an Asia-Pacific focus. Singapore; London; Prentice hall 

Robin, J. (1997). Global Business strategy. London: International Thomson Business Press 

David, C. et al. (2002). Business strategy: An introduction. 2nd Edition. Routledge 

Niall, K. (2014). The business book. Dorling Kindersley  

Pauline T. (2012). Elon Musk: Biography of the Mastermind behind Paypal, SpaceX, and Tesla motors. Hyperink Enterpreneur Bios 

Jim, M. (2013) As It Increases Production, Tesla Worries About Battery Supply. Available from: http://wheels.blogs.nytimes.com/2013/09/06/as-it-increases-production-tesla-worries-about-battery-supply/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2[Accessed on 7th, Mar, 2014]  

Linette, L. and Business Insider (2013). February 1st Toronto Tesla Fire. Business Insider. Available from:http://www.businessinsider.com/february-1st-toronto-tesla-fire-2014-2[Accessed on 26th, Feb, 2014] 

Bernie, W. and Norihiko, S. (2013). Tesla Model S charging system may have started garage fire - California fire dept. Reuters. Available from: http://www.reuters.com/article/2013/12/18/us-autos-tesla-fire-idUSBRE9BH1J020131218[Accessed on 26th, Feb, 2014] 

Joachim, D. (2013). Tesla’s Model S overtakes VW Golf as Norway’s best-selling car. Reuters. Available from: http://www.reuters.com/article/2013/10/08/tesla-norway-idUSL6N0HX1CH20131008 [Accessed on 1st, Mar, 2014] 

Organic growth

Cost:30$ million (apply for government, transfer income from cash cow)

Allocation of funds:

Use 10$ million to construct charging stations around UE centers by August, 2014

Use 10$ million to build and operate at least 25 UE centers by August, 2014

Use 5$ million to publicity and advertising in first and second tier cities during 2014

Use 3$ million to maintain daily expenses and salary in 2014

Use 1$ million to recruit and manage employees within 3 months

Use 1$ million to establish service system by August, 2014

Revenue: 40% Asia EV sales in 2015 (100$ million)

Merger and acquisition local carmaker (BYD Ltd)

Cost: 2$ billion (ask for shareholders, apply for loan from local bank)

M&A BYD Ltd.

Staff training

Existing equipments upgrading to EV model

Revenue:

Help Tesla to complete market development and productivity improvement

Make a first mover advantage and help Tesla to occupy 80% Chinese EV market share

More than 500$ million per year.

Risk:

Capital recovery issues

Loan crisis

Revealed technology by BYD

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