Tesla Motors
Anna Sender
Jackie Tran
Danielle Cyr
Justine Pasiecnik
Lauren Kelly
Contents
● Current Situation o Financial Ratios
● Analysis & Problem Diagnosis o External Environment o Internal Environment o Strategic Challenges
● Strategic Formulation
● Strategic Implementation
Current Situation
Current CEO Elon Musk
Tesla Model S (left) and Model X (right)
Analysis
Financial Ratios
(2008-2012)
Profitability Ratios:
How profitable is the company? Financial Ratios
(2008-2012)
Activity Ratios:
How efficient are the operations of the company? Financial Ratios
(2008-2012)
Leverage Ratios:
How efficiently is the company financed in terms of debt and equity?
Financial Ratios
(2008-2012)
Liquidity Ratios:
How capable is the company of meeting its shortterm obligations?
External Environment
● General Environment o Demographic Segment
Targets middle to upper class, and those with higher income. o Economic Segment: Consequences of World Financial Crisis
Gas prices and limited natural resources
Few alternative technologies vying for market dominance o Political/Legal Segment
US National Institute of Standards and Technology
Federal Energy Regulatory Commission o Social-cultural Segment
Fuel gas emission and Global Warming o Technological Segment
Electric vehicle charging station infrastructure
External Environment
● Industry Environment o Bargaining Power of Suppliers
High o Bargaining Power of Buyers
Low o Threat of Entry
Low o Threats from Substitute Products
Low o Industry Rivalry
High
(Continued)
Internal Environment
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●
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Resources o Tangible
Financial Resources
Suppliers
First to market with luxury zero emission vehicle o Intangible
Widely recognized brand
Innovative technology
Patents of drivetrain and battery
Capabilities
o Developed ability to apply commoditized small cylindrical lithium cells, which are generally used to consumer electronics, to cars through good proprietary power management. o Empowering and self-driven employees that promote company’s development. o Great partnerships with Toyota, Daimler AG, and Parasonic.
Core Competencies o Patents and differentiation
Strategic Challenges
● Guarantee sufficient battery supply - mechanical problems, driving range restrictions.
● Domestically expanding the business - charging stations
● Maintain brand loyalty - negative press
● Price Pressures - expensive car, high manufacturing costs
● Internal Infrastructure Development - management problems
● Manufacturing Challenges - battery cost
Strategy Formulation
Business-Level Strategy
● Sustainable Competitive Advantage o Differentiation to Integration
Cost Cutting
Broaden the Market o Open Innovation
40 Patents and 200 more pending
Influx of further ideas
● Battery
● Supercharging Stations
● Work with other companies to buy Tesla parts o Restructure Upper Management
Hire a new CEO and/or Engineer
Corporate-Level Strategy
Where to compete?
1. Industry Value Chain
2. Range of products and services
3. Geographically
