SLIDE 11 Additional Analysis
Four Corners SWOT
Drivers Current Strategy
- Tesla wants to sell 500,000 cars a year by 2020 across
all markets.
- Tesla’s strategy emulates typical technological product
life cycles.
- Begin with a high price point car and as your company
expands and grows, begin lowering the cost, and enter more competitive markets and price points. External Constraints:
- Once a base line model is released, competition is
fierce! Competing with auto giants like Toyota, Audi, Nissan, BMW, and Mercedes who already have a huge name in the industry will be difficult. Leadership Background:
- Elon Musk- brains behind the operations. Founder of
Paypal and SpaceX Revenue Goals:
- Tesla is seeking profitability once the Model 3 is in full
production.
- Increase the number and variety of electric
vehicles(EV) that are available to mainstream consumers.
- Start with a high-end product targeted
towards affluent buyers and as the company gets larger and its products are generally accepted on a larger scale, it moves into larger, more competitive markets at a lower price point.
- Also known as “Multi Vehicle Strategy”
- All free cash flow to put back into R&D to
drive down the costs and bring the next, less expensive, Tesla model onto the market.
- Standardization of Tesla’s battery pack.
- Gigafactory factory strategy.
Assumptions Capabilities
Strengths:
- Innovative technology
- Strong leadership – Elon Musk – previously founded
Paypal and SpaceX
- Futuristic, luxurious, acclaimed design
- Increase in consumer convenience, allowing users to
charge cars in their homes through Powerwall & on the road through Supercharging stations. Weakness:
- Not been able to deliver their products on time
- Low production capabilities compared to competitors.
- Tesla so far does not make profits; the company relies
primarily on cash infusion Cultural Traits:
- Customers come first
- Willingly accepts challenges
- Not afraid to admit when wrong
- Thirsty for innovation
Market:
- Competitors are pricing their hybrids to compete with
the Model 3.
- 10 million hybrids sold since 1997
- Over 1 million fully electric cars on the roads –
September 2015
How Tesla reaches customers:
- Company owned stores
- Online sales
- Test drives
Employee Satisfaction:
- Employee’s work at Tesla because they
stand behind what Musk’s vision.
- The company moral was fragile when Tesla
almost collapsed but since the investment from the Department of Energy, morale has been high within the company
- You have to believe in what you are
working for if you want to work at Tesla because the work environment is high stress. Patents:
- Tesla released it patent on its battery in
2014, hoping other car makers would use it to help expand the EV market.
Key Takeaways 1. Tesla wont be profitable until the Model 3 is released. 2. Gigafactory Strategy – game changer 3. Problems in the past delivering products on schedule. 4. Production capabilities are low compared to competitors 5. Less expensive Tesla cars in the future could cancel out the loss of tax incentives
Strengths Weakness
- Strong Leadership
- Innovative Tech
- Futuristic Design
- No middleman for sales process
- Do not pollute the environment
- Problem not being able to delivery products on
time
- Charging station infrastructure is weak outside
- f the US
- Production capabilities are low compared to
competitors
Opportunity Threats
- Model X – A car that appeals towards
a family demographic
- Petroleum products will decrease in
the future
- Expanding to a larger market with the
Model 3
- New tech innovations will decrease
battery costs and increase battery range
- More competition when entering more
markets
- Media attention – Every incident that goes
wrong with Tesla is viral
- Elon could shift focus to Space X or Solar City.
- Loss in government tax incentives would
increase the cost of cars.
- Some states don’t allow Tesla’
s sales model.
