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Tesla

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by

Yuzhou Hou

on 18 March 2014

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Transcript of Tesla

Internal
Strength & Weakness

Question & Bibliography

Implement
Targets & timescales

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

Strategic options

Stakeholder analysis

Internal
Ansoff matrix in Tesla

Core competencies
:
2. Power electronic

Competency of Tesla

Elon Musk

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



Introduction

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)

Implement
Resources requirements

Company current situation



Strategic options

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

Stakeholder analysis


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.



Question mark:

Cash cow: American and Norwegian market

American Market



Internal
BCG Matrix in Tesla

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


PESTEL of Tesla

Vision
The best automotive
Technology
Performance
Efficiency
design


Competency of Tesla

Mission
Tesla Motors designs and sells high performance,
super efficient electric cars, styles and acceleration



Competency of Tesla

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

Implement
Resources requirements

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




Internal
PIMS analysis

Core competencies
:
3. Motor design


Competency of Tesla

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] 
Outline
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
Competency of Tesla
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
Competency of Tesla
Core competencies
:
1. Battery technology
Model S occupied 8.4% market share in American automobile industry, 2013
Norwegian Market
The hottest cars in Norway ,2013
Stars:
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
Porter 5 forces
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
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
Why select this option?
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.
Implement Roles and responsibilities
External Opportunity & Threat
Lee, Jason, Jay, Sean
Thank you !
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