The Tesla Company Case Analysis

Tesla Motors

Tesla Motors manufactures energy storage solutions as well as completely electric automobiles, solar installations, and energy storage equipment. The Silicon Valley-based business is best recognized for its high-performance completely electric vehicles, though. The focus of Tesla is on energy innovation, which is reflected in the company’s mission and vision statements. Tesla Motors’ mission statement highlights the company’s main objective, which is to demonstrate that electric automobiles are superior to gasoline-powered vehicles. In essence, the company creates environmentally efficient cars to aid in the global transition to cleaner driving. The vision of Tesla focuses on product and brand image in their efforts to achieve future sustainability. It is the driver behind the company’s purpose of enabling the transition to electric vehicles. However, this vision fails to incorporate shareholder value and does not explain where the business wants to be in the future regarding financial position and competition.

Strategies

There are several strategies used by Tesla Motors to help build its sustainable competitive advantage and grow its brand presence and market. The first approach is differentiation where this company creates fully electric and luxurious cars that very few brands develop. As a result, Tesla has been outstanding in the industry by focusing on sustainability in terms of vehicles and energy. The second strategy is market development; Tesla has successfully expanded its markets, particularly in North America, Europe, and Asia. The third plan is product development, which Tesla uses to grow its customer base. With a wide range of products, this firm has managed to reduce the competitive threat and differentiate its brand. The final key strategy at Tesla Motors is innovation; evidently, the company invests a lot of resources to produce new and better products, which are environment-friendly. As a result, the business gains more customers who are interested in sustainable products and energy.

Recommendations

New Vision

Tesla Motors, Inc.’s vision statement efficiently outlines and describes the goals of the business. However, the statement does not incorporate the business endeavors, given that the company does not exist just to serve the customers. Additionally, Tesla’s vision only expresses its intention of being the leader of the world’s transition to electric cars; it fails to define where the company wishes to be in future in terms of financial position. As such, a new vision is required, which will include all critical aspects entailed in the company. For instance, the vision could be, “To create the most compelling range of products of all times by driving the world’s transition to sustainability in as far as energy, automobiles, and storage systems are concerned.” Such a statement is well adjusted to reflect the organization’s interest in diverse products.

New Strategies and Supporting Objectives

Essentially, all companies operate as part of a value system; either connected with different suppliers or working in collaboration to deliver products and services. Whether a business decides to use the vertical, forward or backward strategy, the purpose should be to enjoy greater economies of scale. Although Tesla have the capacity to operate independently, it should consider integration strategies. Through forward integration, the company can merge with Solar City. This will enable the company create solar roof tiles, which are more insulative and durable than a traditional roof. In the same way, the company can merge with distributor companies to make sure that the company’s products are distributed widely. As a result, Tesla will reach to more consumers in a more cost-effective manner.

In terms of intensive strategies, Tesla can incorporate the market development concept to help them launch their products in new geographic areas. In essence, there are countries where Tesla has little or no presence in the market. Adopting the market development strategy will ensure that the company is able to enter new markets, especially on the international platform. Therefore, Tesla should approach new channels of distribution, which are of good quality, inexpensive, and reliable. Considering that the company is successful in its current operations, and it has created a sustainable competitive advantage, Tesla can venture into untapped markets available. If the company maintains its consistency in the new markets, it will convert into a global business.

Although Tesla Motors Inc. is popular for created high performance fully electric vehicles, it is evident that they are venturing into new products. As such, the company should focus more on dealing with diverse markets in efforts to address a wide population with different needs. It is of the essence to recognize that diversification does not have to be related to automobiles; there is a wide range of unrelated products the company can consider. For instance, as mentioned above, Tesla can venture into the creation of roofing tiles that are more insulating and durable. Additionally, if the company merges with Solar City, the roofing tiles can be produced in a way that will be compatible with the solar energy. This will not only lead to diversification in the company but also increased customer base.

In everyday operations, businesses are faced with an inevitable threat of competition; also, other companies are always looking for ways to steal your customers or market share. Therefore, Tesla should consider the retrenchment strategy where it will restructure its business operations to align them the new vision of the company. Moreover, this approach will play a significant role in reducing the expenses of the company, thereby promoting a more financially stable firm. Since Tesla is focused on sustainable energy, it can withdraw from storage systems markets. As a result, the organization will have adequate resources to ensure innovation and market development without adversely affecting the company’s financial position.