1

Title: Analysis of Tesla Motors

By

Name:

ID:
 2

Contents
Part 1..............................................................................................................................................................................3
Introduction.....................................................................................................................................................................3
External analysis: PESTL............................................................................................................................................3
Political..................................................................................................................................................................3
Economic...............................................................................................................................................................3
Social.....................................................................................................................................................................4
Technological........................................................................................................................................................4
Legal factors.........................................................................................................................................................4
Industrial analysis....................................................................................................................................................5
Competitor analysis....................................................................................................................................................5
Internal analysis:.............................................................................................................................................................5
Business Model..........................................................................................................................................................5
Corporate Culture.......................................................................................................................................................6
SWOT.........................................................................................................................................................................6
Strengths...............................................................................................................................................................6
Weaknesses...........................................................................................................................................................6
Opportunities........................................................................................................................................................6
Threats..................................................................................................................................................................7
Part 2..............................................................................................................................................................................8
ANALYZING INFORMATION....................................................................................................................................8
Issues..........................................................................................................................................................................8
Cause..........................................................................................................................................................................8
Effect..........................................................................................................................................................................9
Part 3............................................................................................................................................................................10
GENERATING ALTERNATIVES..............................................................................................................................10
Alternative 1: Growth Strategy by Market development...................................................................................10
Alternative 2: Growth Strategy by Product Development.................................................................................10
Alternative 3: Growth Diversification strategy...................................................................................................11
Part 4............................................................................................................................................................................12
Key Decision-Criteria.................................................................................................................................................12
Part 5............................................................................................................................................................................14
RECOMMENDATIONS............................................................................................................................................14
CONCLUSION.............................................................................................................................................................14
Bibliography.................................................................................................................................................................16
Appendices...................................................................................................................................................................17
 3

Part 1

Introduction
Analyzing and evaluation of the data gives us clear understanding of the problems and
understanding the problems cause and effect leads us to give solutions using the theories and
concepts studied during the course. In this the main discussion is about Tesla Motors case study
in which I wanted to evaluate the externa1and internal analysis of the company. The problems
will be discussed and using the SWOT technics I will generate alternatives to resolve the
challenges that the company is facing. The report consists of 5 parts in each par I will discuss a
separate section of the case beginning with the external and interna1analysis as follow.

External analysis: PESTL

Political
Tesla Inc. can avail the opportunity for strengthening its financia1performance through various
incentives offered from the government. The politica1environment of any country influences its
business environment directly and indirectly. It can directly affect the economic environment of
the country and in this way the degree of economic action and business as well. The political
environment influences the administrative environment as well [ CITATION Ham14 \l 1033 ]. On the
off chance that the politica1environment of a country is steady, it likewise prompts economic
dependability and offers ascend to higher economic action and flourishing. Particularly in
nations where an enormous piece of the production network of a globa1business is found,
political disturbance or bedlam can prompt interruption in the inventory network and afterward
business misfortune. Geopolitical issues and psychologica1oppression can likewise disturb
businesses and challenges in politica1connections between countries can likewise make business
between the two troublesome.

Economic
Electric cars are gaining popularity day by day which is mostly connected with
thegloba1economy. Worldwide economic development is relied upon to stay at 3% in the year
2019 and 2020. In 2018 the electric vehicle market was $39.8 billion which is relied upon to
reach $1.5 trillion by 2025 (finance. yahoo, n.d.). This economic factor is an incredible open
 4

door for Tesla to underwrite. Economic powers have a significant job in the business world and
can influence the fortune of businesses in different manners. Tesla has seen its business rising
quick in the previous year. This has happened because of a few reasons. Notwithstanding,
expanded economic movement since the downturn is a significant factor that has influenced this
development. Since the downturn has passed, economic movement has risen all inclusive
[ CITATION Abh18 \l 1033 ]. Tesla's Mode1X is a full estimated electric SUV with bird of prey
wing entryways. The sales of its SUVs have additionally expanded with higher economic action
the world over.

Social
Social conditions and trends affect a firm’s remote through employees, customers, and investors.
Socio socia1factors are similarly as significant as different factors and in some cases they can
impact the interest and supply of specific products. These factors sway how certain products are
seen in specific socia1orders and the degree of acknowledgment they can pick up in explicit
cultures. The interest for supportable products has risen universally and maintainability is
certainly not a passing trend. Presently more individuals need products that are useful for the
environment. The environment is ideal for the feasible brands [ CITATION Abh18 \l 1033 ] . The
interest for maintainable products has developed in the 21 stcentury as more individuals' are
currently considering environmental security.

Technological
The advancement of Tesla’s automotive and energy solutions businessdepends on available
technologies. For instance, materials building innovation decides the productivity and cost-
viability of the organization's batteries. It influences a few things in the business world. From
production to activities and marketing, in each office innovation assumes a significant job in
business. Technologica1changes happen each day and each brand is in a race to embrace the
freshest innovation first. Tesla's business additionally relies upon innovation and technological
development implies sales development in the 21stcentury. Reasonable innovation is stunningly
better since its fame has become exceptionally quick in the cutting edge period [ CITATION
Abh18 \l 1033 ].
 5

Legal factors
Law is a very important force affecting businesses all over the globe. Legal factors have grown
in importance in the 21st century. From work guidelines to environmenta1and other sort of
business guidelines, law can directly affect businesses. Numerous States incidentally hindered
the Tesla Sales directly from maker to purchaser. As per these states producer is required the
connect outsider vendor. This lega1prerequisite can influence the Tesla vehicle conveyance.
Besides, having a business implies more cost and less gainfulness. There are other legal issues
like patent rights and vitality utilization guideline. Tesla need to consent to law and guidelines to
easily maintain the business exercises [ CITATION Abh18 \l 1033 ].

Industrial analysis
Tesla Tesla is forcing the auto industry to rapidly change. Large, established automakers noware
making fully electric and hybrid electric cars. Automakers are starting to explore and include
artificial intelligence (AI) in their cars, and now major automakers and U.S. Not exclusively did
Tesla Chief Executive and Chief Product Architect Elon Musk exhibit that show could be
resisted, he did it in an industry with100year-old customs, standards, and procedures. Obviously,
the vehicle industry has enhanced previously, however Tesla, which was established in 2003, has
pushed the envelope past what most automakers thought conceivable.

Competitor analysis
Tesla has had a competitive advantage over auto industryrivals in design innovation since day
one. The organization decided to switch up the inventory network and obtain from the electronic
manufacturing services mode1of production that is standard practice in the shopper hardware
industry. In this regard, Tesla is nearer to being an innovation organization than a conventional
car producer. The EMS mode1is extending in the automotive industry, and any semblance of
Foxconn, and Jabil are working with brands including Chrysler, Genera1Motors (GM), Daimler,
Jaguar, Ford and Volkswagen.

Internal analysis:
Business Model
Tesla didn't develop the electric vehicle or even the extravagance electric vehicle. What Tesla
invented was a fruitful business model for carrying convincing electric cars to the market
 6

[ CITATION Oli17 \l 1033 ]. Some portion of the methodology was building a system of charging
stations to settle perhaps the best snag confronting the selection of electric vehicles refueling on
long outings. Tesla is determined to changing existing business mode1inside the heavy
automotive industry by selling directly to buyers [ CITATION Nea19 \l 1033 ].

Corporate Culture
Tesla's organizational culture creates human resource competence necessary for innovative
products in the globa1automotive business. An association's organizationa1or corporate culture
speaks to the traditions and qualities that characterize laborers' practices and choices [ CITATION
Ioa09 \l 1033 ]. Tesla's organizationa1culture enables its workforce to scan for perfect
arrangements that make the business hang out in the automotive industry and the vitality age and
capacity industry. Through the organizational culture, Tesla Inc's. the board streamlines workers
to accomplish inventive and imaginative practices. These practices are fundamental to keeping
up the technological innovation that structures some portion of the organization's establishment.

SWOT
Strengths
 Good Calibers, Strong R&D department
 Strong technologica1expertise
 Strong management team
 Top designer of autos like The Mode1S won the2013Motor Trend's Car of the Year
award,
 Pronounced Location.
 Large Production Capacity
 innovative way of marketing
 Expert in electric engines production.

Weaknesses
 Less product diversification focusing only on electric cars
 Less charging facilities for electric cars around the world
 Low battery range
 Tesla is only 10years old that makes its operating history very limited.
 7

 Not a well-known in brand in the auto industry such as Toyota or Nissan

Opportunities
 High demand of electric cars as the oi1prices are increasing
 The world cares about environmental issues rising from the use of petrol and Tesla is
operating in electric cars
 Solar technologies to overcome battery charging issues
 International Market Potentia1such as Europe, Asia, and Canada
 High support by the governments across the globe for environmentally friendly vehicles
 Since 2008, the DOE has invested $5B in EV/PHEV technologies [ CITATION Nea19 \l
1033 ]

Threats
 Strong Competition with BMW, Mercedes, and Lexus that are expected to enter the
electric car market.
 Battery issues and fire cause accident as many accidents reported due to battery issues
and fire in the engine that reduce the demand for electric cars
 Economic slowdown.
 Consumer behavior threats \
 Inadequate supply for raw materials
 Inadequate Experienced resource pool
 8

Part 2

ANALYZING INFORMATION
Issues
a survey by Bloomberg shows that Tesla has developed a reputation for poor paint and build
quality and almost5000 Model3 sedan owners indicates that the electric-car maker is making
progress on fixing those issues. And the participants gave glowing reviews of many of the
Model3's features. Owners described 35problems per 100new vehicles in September, 2018 down
65%from February, the worst month included in the survey, when there were 101problems per
100new vehicles [ CITATION Nea19 \l 1033 ].

Between January2018& September2019, new owners reported an average of 66problems per100

new vehicles. It's difficult to make direct comparisons between Tesla and the rest of the auto
industry. J.D. Power's 2019 initia1quality survey found 91problems per 100vehicles across the
auto industry, though J.D. Power measures problems over 90days, rather than the30-day period
covered by Bloomberg [ CITATION Nea19 \l 1033 ].

Tesla says it has made design and manufacturing improvements in recent months that have
significantly reduced quality problems. the company’s toughest problems seemed to be in the
past. After initia1production troubles with the Model3, its assembly line in Fremont, Calif., was
churning out the new sedan, and customers were flocking to its stores. It reported profits for both
the third and fourth quarters of 2018.

Cause
Consumer Purchaser Reports can no longer recommend the newest Tesla the Model3 electric
sedan because members say they’ve identified anumber of problems with their cars,
incorporating issues with its body equipment, just as paint and trim. CR individuals revealed
these outcomes in our yearly unwavering quality review, which remembers information for
around 470000vehicles [ CITATION Enc14 \l 1033 ] . Tesla's direct-sales mode1is illegal in many US
states. Tesla should work out an after-sales administration arrange that is powerfu1enough to
deal with the interest. As of now, the most testing issue identified with the future improvement of
 9

EVs is battery charging. The current electric network framework doesn't encourage quick EV
battery charging. Thusly, the critical measure of time that is around 6hours required for the
completely charging of an EV battery is a significant downside that must be defeated in the
following years.

Effect
Tesla Tesla reported a massive loss in the first quarter of 2019as it struggled to deliver its mass-
market Model3 and faced challenges including a diminished federa1tax credit and slowing
demand for its cars. The $702million losss was higher than investigators gauge for the
organization, somewhat not exactly the figure detailed in a similar quarter one year prior and an
obvious takeoff from two straight quarters of benefits. Its $3.7billion in automotive income was
$1billion more than the year-back figure, on the impact points of the arriva1of Tesla's Mode13,
yet down 41 %from what Tesla announced in the final quarter. Because of the losses the earning
are negative in past since 2015till 2018theearnings are negative as shown in the below figure
[CITATION fin \l 1033 ]

Tesla is additionally confronting analysis for neglecting to dependably convey on its since a long
time ago guaranteed $35000Model3, production and conveyance challenges, and lega1fights.
Tesla reported slices to around 7%of its workforce inJanuary, and Musk is buried in a
progressing legal fight with the Securities and Exchange Commission over his tweets. Tesla
revealed $67million in rebuilding and related charges[ CITATION Fai19 \l 1033 ].
 10

Part 3

GENERATING ALTERNATIVES
Alternative 1: Growth Strategy by Market development
A viable idea for growth is entering new markets. In the event that Tesla approach more clients,
they can sell more products and simultaneously focusing on its essential line of business. Tesla
can target new markets by opening extra retai1stores, including an online nearness, selling
universally or arriving at new kinds of clients [ CITATION Fan16 \l 1033 ]. Tesla should continue
concentrating on its Niche fragment as the present status yet extend in various markets, for
example, Europe and Asia so as to expand incomes. That is just seven years away. It right now
has offices in the United States and all through Europe where parts are being produced and
gathered. Since they have constrained assets, you should be specific of the area for its extension.

Alternative 2: Growth Strategy by Product Development

Tesla could benefit from its strong R&D department and focus on a more extensive scope of
clients. On the off chance that the strategy is appropriately executed, Tesla can increase a
 11

notoriety for being an organization that is on the main edge of EV industry. This can help catch
more market share and make a desire for energizing thoughts among its clients. So it very well
may be named with various names like model X which will be presented in late 2014.

Alternative 3: Growth Diversification strategy

Diversifying into an alternate industry that the present organization's activity; creating Electric
vehicle. Utilize its battery innovation for different uses, for example, putting away force from
sun oriented boards [ CITATION Nai15 \l 1033 ] . Utilizing the utilization of regular brand name and
consolidating assets to make new focused strengths and capacities.
12
 13

Part 4

Key Decision-Criteria

According to the above corporate strategies we will go with the Product development strategy as
our main goa1is to increase profits to recover from the negative balance [ CITATION Ste07 \l 1033 ] .
Since the organization began unti1last quarter and increment brand mindfulness for Tesla Motors
so as to have the option to go up against solid and understood competitors like Ford and as Tesla
Motors is moderately another organization in the business and began with electric cars directly
 14

not at all like its competitors whom began with cars running on gas and quite a while back
structure brand name and acknowledgment as the years progressed. These objectives must be
come to if every one of the offices cooperate as a one group to accomplish this objective, so
beneath is the manner by which are we going to course the business capacities among every one
of the divisions.

A product development strategy is a strategy dependent on growing new products or altering

existing products so they show up new, and offering those products to present or new markets.
These procedures normally come about whenever there is almost no open door for new growth in
an organization's present market [ CITATION Mar071 \l 1033 ]. By then, an organization has one of
three options: make a refreshed product for a present product in a present market, improve a
current product for another market, or essentially move away from the product inside and out,
and stop growth. Most aggressive organizations won't decide on the third decision so a strategy
is in this manner intended to either advance a product for its current market, or improve it to
bring into another market. consuming on the product an organization offers, there might be little
chance to bring that product into new markets. With that constraint, an organization should rather
take a gander at refreshing a current product for its present market [ CITATION Tor17 \l 1033 ]. This
is known as product development. Product advancement is utilized by organizations who have
the vision to see a product thought, however how that product can develop after some time. It's
mapping out, frequently before the primary product is even fabricated, what future emphases of a
product may be as it improves and develops. For other people, that vision may have not been at
first set up, however an aggressive marketplace has requested it to occur so as to endure. Another
term utilized for this is "product adjustment". Product alteration systems are by and large planned
for existing markets, albeit a side advantage might be the catching of new clients for the new
product [ CITATION Tes19 \l 1033 ].
 15

Part 5

RECOMMENDATIONS
Tesla Motors has to be careful in the implementation of the open innovation process. It has to
choose carefully its strategic alliances and make sure that everyone has understood its role and
has a clear picture of the shared goals and objectives. Tesla Motors should underline its green
technology nature and the environmenta1impacts of EVs and therefore urge for a government
policy scheme that will further facilitate EV companies.

Following are the main recommendations based on the study of Tesla Inc.

 Tesla Inc. has to follow product development marketing strategy

 Tesla Inc has to divide market into segments and target each segment separately, different
distribution channels.
 Tesla Inc. has to do marketing researches to identify customer’s needs andbest areas to
penetrate.
 Tesla Inc. has to building brand equity.
 Tesla Inc. has to focus on Promotions.
 Tesla Inc. has to focus on Broad Price ranges.

CONCLUSION
In conclusion, Tesla Motors had a setback financially in previous years. However, with
new management and the implementation of new strategies, while creating a new product line,
5

the company was able to overcome their issues and make a name for them within the industry.
Keeping up the upper hand will be an undertaking inside itself, with Ford and Genera1Motors
directly behind them likewise creating electric vehicles; nonetheless, in the event that they center
around their productive issues, they can keep up their spot in the industry. Generally speaking,
Tesla Motors is an organization who has the stuff to upset the worldwide automotive industry.
Whatever strategy Tesla's initiative chooses to execute; it must be with the understanding that
different automakers are presenting their own rendition of electric vehicles that will maybe give
Tesla a run for their market shares. Tesla Motors has a decent supervisory crew, including Elon
Musk as CEO. That was a decent key move to make, considering the organization was in a
 16

financial strain. At first, the strategy of Tesla Motors is to apply product innovation by planning
imaginative vehicles and procedure innovation by consolidating various know-hows getting from
various organizations. Consequently, Tesla Motors can be considered as a creative organization.
Besides, in a globalized market where the degree of rivalry is incredibly high, it is extremely
hard for a new business to enter the market. An interest in a totally new vehicle producer requires
a massive capital expense. In addition, an EV organization needs to put resources into framework
activities to verify the correct capacity of the EV arrange. Consequently, close organization with
different organizations to share their ability is very alluring. Tesla Motors has propelled an
arrangement in that direction by helping out numerous accomplices and in this manner it seeks
after further development of its vita1unions organize. In that specific circumstance, it has set up
provider, OEM and R&D coalitions that have helped Tesla Motors in different fields. In any
case, in spite of the numerous advantages of open innovation, a few dangers exist. Some of them
are shrouded costs, astute conduct and the probability that one of the joining forces organizations
may confront financial troubles, which may influence the result of the participation.

Bibliography
 17

Ali, H. A., & Ahmad, S. Z. (2014). Etihad Airlines: growth through successful strategic partnerships.
Emerald Emerging Markets Case Studies.
Boudette, N. E. (2019). nytimes. Retrieved from https://www.nytimes.com/2019/06/10/business/tesla-
elon-musk-outlook.html
Brown, S., Lamming, R., Bessant, J., & Jones, P. (2007). Strategic Operations Management. Routledge.
Encyclopedia Britannica. (2014). Retrieved 2 12, 2016, from Tesla Motors:
http://www.britannica.com/topic/Tesla-Motors
Fan, D., Xia, J., Zhang, M. M., Zhu, C. J., & Li, Z. (2016). The paths of managing international human
resources of emerging market multinationals: Reconciling strategic goal and control means.
Human Resource Management Review, 26(4), 298-310.
finance.yahoo. (2019). Retrieved from Tesla, Inc. (TSLA): https://finance.yahoo.com/quote/TSLA
Ioannou, P. (2009). MAR402 STRATEGIC MARKETING. Academic Journals.
Kapucu, N. (2015). britannica. Retrieved from https://www.britannica.com/topic/strategic-planning-
organization
Pratap, A. (2018 ). notesmatic. Retrieved from https://notesmatic.com/2017/10/tesla-pestelpestle-analysis/
Serrat, O. (2017). Learning in Strategic Alliances. springer.
Siddiqui, F. (2019). washingtonpost. Retrieved from
https://www.washingtonpost.com/technology/2019/04/24/tesla-lost-million-first-quarter-model-
problems/
Tesla. (2019). Retrieved from www.tesla.com
Tomczak, T., Reinecke, S., & Kuss, A. (2017). Strategic Marketing. Springer International Publishing, 1-
18.
Wiersema, M. F., & Bowen, H. P. (2007). Corporate diversification: the impact of foreign competition,
industry globalization, and product diversification. Strategic Management Journal.
 18

Appendices
Tesla Income Statement
 19

Tesla Balance Sheet

20
21