Introduction
The three engineers, Elon Musk, Martin Eberhard and Marc Tarpenning, founded Tesla Motors. They aimed at proving that electric vehicle could be impressive.
Today, Tesla Motors is world-leading in selling cars online, using a tactic to eliminate the salespersons. The company continues to generate new products, which costs are affordable and performance is high.
Tesla mission was to hasten the world’s evolution to sustainable transportation while the vision was the creation of the fascinating car company of the 21st century through motivating the world transition to electric automobiles.
Tesla is an energy firm whose prime objective was to be the catalytic agent of renewable energy products in the current consumer market. The company is well known for its model S, that is an electric sports car.
The company has expanded its manufacturing capabilities by building big factories that produce lithium-ion batteries that have been distributed all over the globe.
According to a report given in 2006 by car and driver, Tesla has outperformed the BMW, Infiniti, and Mercedes in the self –driven cars. These competitors have been slow to gain a market share on the high-dominated Tesla American electric market.
In the year 2009 Tesla Company unveiled its first electric Model S in Hawthorne, the car has a 300 miles mile and could go from 0 to 60 mph in 5.5 seconds.
In May 2009 the company was in financial distress. However, Daimler agreed to a partnership that saved the company from bankruptcy; this was a massive event in that the company was protected financially.
SWOT Analysis of Tesla Motors
The internal factors of Tesla Company contribute to the organizational growth of the firm and also ensure profitability in the long run.
The company strong brand has raised it to a higher competitive niche the company also has very high innovative processes and commendable production processes. However, the company has weaknesses that affect its competitiveness and growth.
Their product is costly as compared with other competitors; they also have a limited supply chain of their products and inadequate market coverage. Due to this, most of the company revenues are from America and China, leaving out all other markets to their competitors.
Tesla has an excellent opportunity to expand in the global automobile to support business growth. Therefore the company should grow its market share, diversification of the business to avoid bankruptcy. This helps to prevent exposing the industry to the automotive market.
The company should consider expanding its production and sales operations. Even though the business is not bad, Tesla Company has a threat that prevents its maximization of their strengths and opportunities.
The company should consider doing aggressive marketing; this is due to the strong competitors in the market. Also, there is an increase in the cost of lithium a material they use in their production; the company has a threat in that it sells its products directly to customers without dealership involvement, yet, some states like Virginia and Texas prohibits direct sales of company product, therefore, they should consider eliminating these challenges.
Tesla Company has considered doing vertical integration, with the strategic battery-manufacturing partners. Due to this integration, the company will reduce the costs of production hence optimizing the company profits.
Tesla Giga-factory is aiming to reduce the production costs whereby the wastes, overheads, and optimization of co-located processes. The Tesla motors should also consider conglomerate integration to diversify and reduce the business failure risks.
It is good to recommend that the Tesla motors should do proper customer outreach whereby they will get more customers. In conclusion, the company should be more aggressive in doing market outreach.
PESTEL Analysis of Tesla Company
Every company gets impact indirectly or directly by the political happening of a country or state. Tesla Motors is no exception to this; politics affects profoundly the regulation and policies of company like Tesla, for example, Virginia State curtail any company doing business solely without the inclusion of salespersons.
Economic factors are very critical to the business. The good economic growth in the United States and China has led to market rising to Tesla Company, due to the level of employment rising, therefore leading to the demand for luxury cars.
Social and culture affect how different products are perceived; currently, people want an environmentally friendly product. Tesla Motors makes sustainable products that give it a plus in the competitive business and favor its enterprise.
Undeniably better technology is the prime factor in this company, from the initial stage of production to marketing Tesla is using technology, thereby making it more competitive. Tesla sale increased from the year 2015 to 2016 through use of improved technology.
Tesla Motors have an excellent reputation in environmental conservation since its products are electrical and sustainable and conservation of energy. The company is still working hard to make its supply chain more effective.
Regulations affect the business directly and indirectly. Law advocate for the sustainability of the environment, and Tesla is doing precisely that. However, other laws change the company making its production cost to shoot.
Considering the SWOT and PESTEL analysis, it is evident that thorough research on how to produce technologically advanced products will be helpful.
It is positive that the company should do proper customer outreach, whereby they will get more customers. Therefore, one would be justified to conclude that the company should be more aggressive in doing market outreach.
VRIO Analysis of Tesla Motors
Tesla Company is famous for its alternative fueled motors, especially the electric car.
When Daimler and Toyota realized that Tesla had started spreading its wings from a fancy upstart to a notable competitor, they invested in the company early enough.
Accordingly, the company had sold over 100,000 advance orders by 2015 for its Model 3 mass market.
Recommendations
Based on the SWOT analysis facts, the company needs proper customer outreach from where it will get more customers. The company needs active management to make its supply chain more effective. It will be helpful for products, increasing marketing scope, and will benefit in the long term.
There is a need to focus on business failure and any such market risks so that that the company can optimize its production level. Due to facing high competition in the market, it is essential that the company should focus on innovation in products.
Conclusion
In conclusion, it is worthwhile to say that Tesla Motors is producing versatile products while operating in a competitive environment, yet there is a broad scope for growth.
Despite specific threats and weaknesses, the company is working at its optimal level. However, the company should revise its pricing strategy because its price level is higher than its competitors. Company is earning most of its revenue from America and China.
Therefore, it is clear that it has a good reputation in these countries, and it should focus on other markets.
Tesla is experiencing good global advantage, and it would likely expand its market share, and bring diversification to business to avoid bankruptcy. At last, Tesla should concentrate on its renewable energy products, i.e., sports car, to cater to market share.
