Michelle

Mueller

Table of Contents
BACKGROUND

Situation Analysis

General environmental
analysis

Industry analysis

Internal analysis

STRATEGY FORMULATION

Competitor analysis

SWOT analysis

Current strategies

Strategy Recommendation

Goals, vision,

Background

Main Headquarters: Palo Alto, California

Tesla Motors, Inc:
It is an American automobile company founded in 2003 by a group of
engineers in Silicon Valley who wanted to prove to the world that
electric cars could be better than gasoline-powered cars
Tesla designs, manufactures and sells electric vehicles and electric
vehicle powertrain components
Teslas Mission: To accelerate the worlds transition to sustainable
transport
Tesla is not just an automaker, but also a technology and design company
with a focus on energy innovation
Goal is not to sell a person a car, but to educate them on what electric
cars are and, particularly, what Tesla electric cars can provide.
Uses an open source paradigm to share its technology

Direct sales model

IPO launch in 2010 raised $226 million

Teslas vision: To create the most compelling car of the 21st century by

Situation Analysis

General Environmental Analysis

Opportunities:

World is running out of oil, Peak Oil by 2030

More awareness around environmental issues

Economies of scale with Gigafactory

Growing support by governments around the world for EVs

Enormous international market potential, Europe & China

Threats:

Competition from well capitalized auto-manufacturers (open-source

technology)
Recent price drop in gas hurt the EV market temporarily

Internal Analysis
Critical Resources

Tangible

Intangible

Value Chain

Primary activities

Support activities

Core Competencies

Technological
innovations of lithium
ion battery packs and
powertrain components

Strategy Formulation

Competitor Analysis

Top 2 rivals
Top 5 potential competitors
Toyota Prius
General Motors
nanoFLOWCELL AG
BYD
Nissan Leaf

Toyota
General Motors

Competitive Forces

Threat of Entrants: Low

Buyer Power: Low

Supplier Power: Moderate

Substitution: High
Rivalry: Moderate

Competitive Advantages

OEM of powertrain components

Lithium battery packs
Unique leadership style created
by Elon Musk
Tesla's Gigafactory in Nevada
Direct Sales Model

SWOT Analysis

Strengths
-

Highly
differentiated
through
specialization
Strong R&D
department
and
Management
Team
Set industry
standard for
high quality
design at a
low cost
Online order
of vehicles
provides a
unique sales
strategy that
differentiates
them from
the
competition
Tax credits
available for
customers
purchasing
an EV

Weaknesses
-

Lack of
industry
experience being a
newer
company in
comparison
to its
competitors
(GM or
Toyota)
Burning
through cash
quickly with
their fast
pace growth
being the
cost of rapid
expansion
Negative
free cash
flow means
shareholders
ownership
will be
diluted and
they may be
forced to tap

Current Strategies
Luxury Vehicle Market:
Model X and Model S, Roadster

Cheap Compliments:
3,652 Superchargers

Expand the Use of Lithium Ion

Batteries:
Clean Energy Mentality:
Powerwall
$7,500 Federal Tax Credit

First Mover
Ford bought a Tesla

Market Expansion
Model 3

Strategy Recommendations

Goals, Vision, and Mission Recommendations

Tesla Motors will continue to make providing

value to its customers the organizations primary
focus. The company will demonstrate this core
competency to customers by producing electric
vehicles of great quality and style at the best
prices, while emphasizing brand over profit.

Strategic Alternatives Generation & Evaluation

Teslas current strategy: A

three step process

Step 1: Tesla Roadster high

price, low volume

Step 2: Model S and Model X

with mid price, mid volume

Step 3: Model 3 low price,

high volume

Vertical Integration

First Mover Strategy

Differentiation approach
through specialization of their

Strategy Recommendation
Tesla should start R&D on a value driven small-sized SUV
Market for small-sized SUVs grew at 39.8% in 2015
Economies of Scope
Model X
Low priced SUV could grow sales internationally:
China
Teslas Mission: To accelerate the worlds transition to
sustainable transport
A value driven, small-sized SUV could grow sales which
would in turn lead to an expansion of the electric
vehicle industry

Questions?