The History of Tesla Motors

American-based Tesla Motors makes electric vehicles. The company’s name pays respect to Nikola Tesla, the man responsible for the invention of the induction motor and alternating current. Nikola Tesla’s ideas are linked to the company’s high-quality products. Martin Eberhard and Marc Tarpenning founded the company in 2003. Making environmentally friendly cars was one of the driving forces for the company’s founding (Milosheska, 2013). The company’s founders were aware of the damaging effects that using fossil fuels has on the environment. They also intended to build comfortable sports cars. As the business increased its products and services, the name was changed to Tesla Inc. Currently, the organization operates under two segments; energy generation and storage, and automotive. The automotive section is deals with designing, developing, manufacturing, and selling of electric vehicles. The energy generation and storage section of the company is involved with designing, production, installations, leasing and selling stationary energy storage and generation equipment for commercial and residential uses. The organization also sells solar energy generated electricity for home and business uses. However, the automotive segment is the major pillar of Tesla Inc. The company invests heavily in research and development and it is indicated that the company could introduce another segment to add on the two sections that are operational at the moment. The products are based on the diverse wants of the potential customers as well as ensuring sustainable development. Since the resignation of the two founders from the management roles, the company has experienced changes in strategies and leadership styles as a result of bringing in new managers like Elon Musk. The company research is also market based to identify the most appropriate strategies that it can employ to control a large market share. The company’s success is based on its cutting edge innovations, good management, and market research. The paper will focus on the details of the organization particularly on its nature of products, core competencies, and major factors attributed to its success.

Company Overview

The Tesla Inc. was founded in 2003, the company has experienced massive expansion. The growth is manifested through its increased revenue generation as well as expansion of its products and services. The revenue of the organization has augmented by more than 2 billion dollars. When Tesla Inc. went public in 2010, its gross profit stood at 456.3 million dollars. The innovations and expansion of its service and product spectrum is motivated by the belief that motor vehicle buyers will increasingly need an econ friendly and more stylish means of transport (Zarko, Marko, Mladen, & Blagota, 2012).

The innovations and engagements of the company are guided by its vision and mission statements. The mission of the corporation is to offer the most extraordinary experience in the motor vehicle industry at the same time collecting information concerning the views of the customers in order to help in attainment of operational efficiency, control over costs of innovation, warranty services, plus further development of the brand Tesla Motors. The vision of the organization is to have 100% electric enabled motor vehicles that would reflect a strong future through manufacture of cars that will help in achievement of sustainable development across the globe.

The marketing strategies of the company are based on its specific marketing objectives. The company plans to increase awareness about its brand at the local and international level as a way of attracting customers. The hopes of meeting the sales levels of the organization are invested in its objective to have a strong marketing team. Customer referrals and loyalty are used as main pillars of customer management. Tesla Inc. considers the opinions of their potential consumers to develop products.

Products

Some finest models manufactured by the company are marketed using the brand name Tesla Motors. The organization has been producing different models that demonstrate varied features to meet the expectations of customers. The Model S is currently the leading car model manufactured by Tesla Motors because it has recorded more sales than any other model. Model S is followed by other models like Roadster in addition to Model X. the models are also designed to fit customer needs across various parts of the world. The models like Roadster are fit for developed countries with nice roads because their high speeds require good roads. The company’s strategy of entering new markets is through invention of a new model. Model 3 was specifically designed to suit and enter the Australian motor vehicle market. In reference to the company’s financial reports, the model is the leading in Australia in the financial years 2016 and 2017 (Milosheska, 2013).

Core Competencies

The use of Porter’s five forces analysis is essential in the discussion of Tesla Motors’ core competencies. The five forces that determine the core competencies of Tesla Inc. are; new entrants, buyers, suppliers, substitutes, as well as competitors within the industry. The company experiences less threats from new entrants because of the challenges associated with the market segment. The capital need to enter the electric vehicle industry is a threat to new business who wish to join the industry. The only businesses that have capacity to join the sector and compete Tesla Motors are those that have been in the car manufacturer industry for long time and with sufficient resources. Such organizations include Toyota and General Motors. As it is now, the company faces less threats for new entrants and it enjoys its financial capacity. Another core competency for Tesla is that it has established a strong company-customer relationship. The good relationship gives it a high bargaining power of customers. The company’s heavy investment in research and development has resulted in manufacture of endearing products that are preferred by other big companies and individuals. The good quality has boosted the bargaining power of the business organization in the sector. The unique nature of their products has also raised its power in the industry (Kim Dong-Won & IlyongLEE, 2012).

Product diversification is an essential competence of Tesla Inc. The technological advancements enabled the organization to venture into power management systems in homes and for business use. Diversification helps the company to expand its markets and spreading its risks. The solar systems manufactured and supplied by Tesla Inc. are taking over the world as the most reliable sources of energy supply within homes.

A SWOT analysis of the organization reveals its core capabilities and how they have helped the company sail through the competitive markets. The fact that cars manufactured by Tesla Motors have ability to travel for 300 miles without being recharged while their closest competitors can only afford 100 miles makes its products be lovable by many car users. Their cars have received several awards for being the best on the market. The costs of operations have been cut down through outsourcing of some parts used in its products. Its strategies to cut the costs through collaborating with other organizations as suppliers for example Panasonic is expected to increase its competence on the market. Tesla Inc. has proper strategies of balancing then five forces that affect an organization’s chances of success.

Company Culture

The culture of the company has also contributed to its success in the industry. The culture in the organization is to record improvement in terms of profit generation and customer attraction every year. Being future oriented has also promoted the organization’s culture of being ahead of the game always. The organizational culture encourages its employees to do what seems impossible, move fast, reason from first principle, constantly innovate, think like the owners, and believe that all of them are in (Dolan, Garcia, & Richley, 2006).

Key Success Factors

Since Tesla Motors was established, it has had a success story all through. When other motor companies and clean energy businesses are facing challenges and even closing or reducing their market presence, Tesla Inc. has been growing its profit generation every year as well as establishing its presence on new markets and maintaining a large market share. There are specific factors attributed to the success of Tesla Inc. Technology is a major aspect behind the company’s success. So impressive is the organization’s technology that its major competitors are relying on its products to run their businesses. Mercedes Benz applies powertrain that is produced by Tesla, Tesla’s battery packs are used by Daimler, and Toyota uses Tesla motor. The technology has also benefited the company in competing on the market because their level of technology is too high for its competitors to reach. Its cars for example Model S are designed with high end technology with features that meet technological expectations of customers.

Tesla Motors is good in timing and most of its success is associated with its timing strategies. The organization uses market researches to remain ahead of the game always. They are normally the first to discover new needs of customers and innovate new products before their competitors realize. At the time other companies join the market with competing products, Tesla will always be on the next move. The company has been enjoying monopoly in manufacture of high end electric vehicles and power management systems. Other companies are unable to venture into the manufacture of such high technology products because of lack of capital and technological capacity.

The team working in Tesla is a major success factor. The company enjoys a team of competent and dedicated employees starting from the CEO. Elon equates his fellow employees to a team of Special Forces officers because every team member is good at what he or she does. The team is result and future oriented with every employee working to achieve the vision of the organization. Tesla Motors ensures durability in its products and it the main source of success because customers make their purchase decisions basing on the durability of a product. Other organizations like Audi and BMW have manufactured cars with technological features that compete Tesla’s electric cars but they do not meet the durability in Tesla’s cars. Another secret for the organization’s success lies in its management of distribution chain. The company has established service centers and stores in different parts and they take full management of the distribution chain. The corporation has higher up-front costs compared to other automobile manufacturers because of their unique business model that excludes dealership networks, but at the same time managing control over the experience of customers, the strengths of its brand, in addition to saving money for the company in the long run.

Works Cited

Dolan, S. L., Garcia, S., & Richley, B. (2006). Creating a Culture Shift: Roles and Managing Resistance to Change in Your Company. Managing by Values, 116-147. doi:10.1057/9780230597754_6

Kim, Dong-Won, & IlyongLEE. (2012). The Development of Core Competence Indicators and the Analysis of the Core Competence Level of Secondary School Principals. The Journal of Korean Teacher Education, 29(4), 347-368. doi:10.24211/tjkte.2012.29.4.347

Milosheska, D. (2013). Tesla Motors, The Reinvention Of The Luxury Sports Car Industry. Global Luxury Trends, 209-223. doi:10.1057/9781137287397_16

Zarko, J., Marko, J., Mladen, M., & Blagota, J. (2012). The advanced eccentricity and broken cage diagnostic method for medium voltage induction motors. Zbornik radova, Elektrotehnicki institut Nikola Tesla, (22), 235-249. doi:10.5937/zeint22-2946