Case –Entrepreneur Tesla Motor Harvard Case Solution & Analysis

Case –Entrepreneur Tesla Motor Case Solution

Problem Statement

                In a recent survey, the individuals said that there are reliability issues in the Model S sedan, due to which the brand image of the company was affected negatively. However, Tesla Motors has no issue in its cars as people are passionate to purchase such a car which stands out and is affordable in feasible price. There are some issues with Tesla Motors which have to be addressed that will improve the position of the company in the market in financial and non-financial terms. Some problems which are being faced by the company are such as;the company has to maintain its own fueling network as the customers require a car which can accommodate their requirements such as going on a long trip by road there are very few electric fueling systems available in the cities. Furthermore,Tesla Motor does not want to traditionally distribute its cars rather it wants to sell the cars directly to the customer however, there are problems to do so, which might include convincing regulators and legislators.(DEBoard, 2015)

Situational Analysis (SWOT)

Strengths

            Rising Revenues: After the successful launch of new models, the company’s car sales have increased significantly given the satisfaction of the customers. Thus, it will improve the financial strength of the company.

            Brand Image: Tesla Motor has a range of respected brands in list of its products. The quality product provided by Tesla Motor is recognized by the local and international buyer.

            Strong Partner Ships: Tesla Motor has good relations with other auto makers. Recently, Daimler and German automotive company acquired 10% stake in Tesla Motor.(Motor, 2010)

Weaknesses

                Limited Scale: Tesla Motor is a growing company and has been facing difficulties to compete with old automotive giants. Its production scale is small and the sales volume is also small.

            High Priced product: Due to less effective costing strategies and lack of economies of scale, Tesla Motor has to sell its product at a higher price, which will affect the customer base.

Opportunities

                Government Support: Government supports those companies that manufacture environmental friendly cars. With financial and non-financial support from the government, the company can increase its production facility and revenue.

            Large International Market: Tesla can increase its operation in more countries as there is heavy demand of fuel efficient vehicles especially in oil importing countries.

Threats

                Large manufacturers: The major car manufacturers are investing heavy funds in the innovation and development of the new cars, which threatens the existing models of Tesla Motors.

            Strong Laws: In the automotive industry, there are very strong laws and regulations for the manufacturer, in the case of violation or noncompliance, heavy penalties can be posed to the manufacturer.

Industry Analysis (PEST)

Political:

  • Plug-in Hybrid and all electric hybrid qualifies for a $2500 to $7500 federal tax credit, and this is because the government appreciating environmental friendly cars.
  • The US department of Energy granted $465 million loan to Tesla in 2009 to increase its production facility and customer base.

Economical:

  • The cost of operating the traditional fuel car is high due to the increasing fuel and oil cost. Moreover, it has positively affected the electric vehicle.
  • Steady economic growth and lower inflation rates as well as good performing stock market would increase the purchasing power of the customers.

Social:

  • The customers are concerned regarding the environmental damages, which is moving towards a electric power vehicle. Furthermore, the traditional cars are more expensive as compared electric power vehicles.
  • The customers of the company prefer using old brands and are very loyal with their brands, therefore it is difficult to attract the customers from such companies. (Devonshire Research Group, 2016)

Technological:

  • New charging stations have to be deployed by the government on highways and other parts of the city.
  • The department of transportation has created new power station, which charges the electric batteries on public accessible areas............................                                                                                                                                                                                                                                                                                                         This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
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