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Analysis Paper for Tesla Company
Transcript of Analysis Paper for Tesla Company
Value Chain Analysis
Resource Based View Analysis
Business Level Strategy
Corporate Governance & Leadership
Board of Directors
Composition of the Board
Contacting the Board
Headquarters: Palo Alto, California
Stores & Service Locations: 125+ worldwide, more coming soon. On the Road in 37 countries.
Model: Model S (2012) & Model X (2015)
First fully electric sports car
Supplier to other manufacturers
Technical expertise in electric transmissions and drive trains
Develop vehicles completely in-house
Current platform can be used for any other future model
High cost of production as economy of scale is not achieved
Prices are higher than competitors who sell electric as well as combustion engine vehicles
Growing support by governments around the world for environment friendly vehicles.
Expand to different models of vehicles
Become a pioneer of fast charging stations
Currently competing against a technology that has proven to be successful for over 100 years
Technology may take time for being optimal for use of masses
Government sanctions against direct selling to customers.
Falling gas prices
Only 18 different models to choose from
Industry is expanding rapidly
Tesla should try to keep up and not get squeezed out.
Threat of New Entrants
Fairly easy for established manufacturers to enter
Governmental program support for developing electric vehicles
Bargaining Power of Buyers
Rely on relationship with Toyota and Daimler
Sell cars to individual buyers
Government gives customers tax credit
Threat of Substitution
Only a few choices to substitute a car with
Walking/biking inconvenient for long distances
People prefer to have own car
Bargaining Power of Suppliers
Highly dependent on suppliers
Over 200 different suppliers
Many of which are single sources
Porter's Five Forces
1. Inbound Logistics
most important components: in-house
Other components : suppliers
All cars are made in Northern California
highly innovated and automated
Multi-function robots can produce up to 83 vehicles per day easily reprogrammed to produce different car models
Distribution channel across 18 countries to educating customers about the benefits of electric cars.
Own stores located in wealthy districts to interact brand awareness,
Hollywood celebrities are the owner of Tesla
Built and expand the super-fast free charging station network for their customers‘ vehicles
own service centers i in North America, Europe and Asia
It's more than electric, it's Tesla.
Cost at the Pump
Pumping VS. Charging
Falling Gas Prices
Major Strategic Problems
Elon Musk is the CEO and Product Architect of Tesla Motors and the CEO and Chief Designer of Space Exploration Technologies (SpaceX).
Adopted a horizontal organizational structure,
better communication; faster decision making
Strong management team
Outsourced recruitment and company shares reward policy
Leading edge in technology, reinvesting in R&D; excellent products‘ design
Partnerships and alliances with suppliers, short-term agreements
Reducing Demand for Tesla
Tangible Resources :
Property, Plant and Equipment
Tesla’s property, plant, and equipment was valued at $562.3 million USD at the end of 2012, equating to roughly half of the firm’s total assets.
- vision to change the way the automotive industry works; creativity and innovation.
- committed to reducing society’s reliance on the oils and gas industry
Innovation and Creativity
- constructed upon a very strong innovative and creatively strong environment.
-The firm’s technology, research and development components create the competitive advantages
1. Charging VS. Pumping?
2. Gaining traction in the market
Charging VS. Pumping?
Are you really saving?
Gaining traction in the market
Tesla's Business Model
1. Make things.
2. Sell them directly to consumers in stores owned and operated by Tesla.
Why is this an issue?
In the 1920's car manufacturers worked with dealers to help stabilize the market.
There are laws protecting dealers made by the National Automobile Dealers Association (NADA) from entering competition with their manufacturers (19th largest political donor) .
Why doesn't Tesla sell to dealerships?
Telsa wants to maintain control of its own brand.
They don't believe it would be a success.
They don't want a middleman.
Beat the pump!
1. Beat the Pump!
2. Conform Intelligently
Super Charging Stations
Oil will run out.
Noncombustible engines are the future.
Long run, this is the next big thing.
Need to achieve economies of scale.
Partner with dealerships
This will get the product into the hands of more people.
Increase top dollar.
Take on the competition.