Strategic Posture of the company Harvard Case Solution & Analysis

Mission:

The mission statement of the company is “Move from a mine-and-burn hydro carbon economy towards a sustainable solar electric economy” (Elon Musk).

The mission statement of the company depicts that the top management of the company focuses on facilitating its customers with high performance, stylish, lavish, and energy effective electric cars.

In addition to this, the mission statement also depicts the view of top management to eliminate the negative environmental externalities emitted by vehicles as well as to a culture of using pollution free and environmental friendly vehicles.

Objectives:

The objectives of the company are as follows:

  • To serve its customers with high quality and high performance electric cars.
  • Reduce the environmental externalities caused by motor vehicles.
  • Reduce the dependence of the economy on foreign oil.
  • Build energy efficient, high-tech vehicles.
  • Ensure overall growth of the company
  • Facilitate its customers with excellent quality products and exceptional customer care services.

Strategies:

The company follows following strategies:

  • The company follows Silicon Valley Approach i.e. the top management of the company focuses on constant growth of the company as well as timely innovation of its products.
  • The company uses cost effective strategies in order to provide high quality vehicles at affordable prices.
  • The company focuses on providing its customers with excellent quality products and exceptional customer care services.

BOARD OF DIRECTORS:

The board of directors of the company consists of the following:

Elon Musk: Chairman, Product Architect and CEO.

Brad W. Buss: Director of the company

Robyn M. Denholm: Director of the company

Ira Ehrenpreis: Director of the company

Antonio J. Gracias: Director of the company

Steve Jurvetson: Director of the company.

Kimbal Musk: Director of the company.

TOP MANAGEMENT:

The top management of the company consists the following.

Elon Musk: Chairman, Product Architect and CEO.

JB Straubel: Chief Technical officer of the company

Deepak Ahuja: Chief Financial Officer of the company.

EXTERNAL ENVIRONMENT OF THE COMPANY:

Demographic segment:

The demographics of the industry are as follows:

  • 5% of the GDP of U.S economy is controlled by the automobile industry of USA.
  • The economy consists of mostly upper class customers.
  • EV and hybrid cars are generally consumed by a customer age segment of 30 – 45 years.
  • A major share of the entire industry is dominated by 3 players of the industry namely, Ford, GM and Chrysler.

Socio Economic Factors:

Since Tesla is operating in various countries all across the world, therefore the company faces various social and economic factors. The business of the company is affected by various socio economic factors in different markets all across the world. Different markets have different customer segments who have different attitudes towards purchasing, which also affects the business of the company.

These attitudes involve need for luxury cars, need for high quality cars at affordable prices, need for high quality cars at high prices as well as need for environmental friendly cars. Thus, these factors affect the business of the company at a wide spread scale.

Political/Legal Segment:

The Government of USA has shown high degree of support to the EV sectors by providing various subsidies and grants to the EV department. The US Department of Energy has provided efficient technologies to allow the company to produce electric cars at affordable prices.

In addition to this, the environmental care department of USA has also shown its support towards EV by providing various facilities, technologies, grants and subsidies. Moreover, federal tax credit is also provided to the buyers of the EV cars. Thus, this significantly affects the operations of the company.

Economic Segment:

Generally, in USA, people buy cars on rental basis, therefore it took them approximately 5-7 years to pay off the complete cost of car. In addition to this, the recession in 2008 had decreased the overall demand of cars in USA.

Moreover, rising fuel price is also decreasing the overall demand of motor vehicles in the economy. People are focused more towards buying economic vehicles rather than buying luxury cars. Thus, these economic factors affect the overall business of the company.

Technological Segment:

The technological segment has a significant impact on the operations of the company. The major issue of the technology of EV industry is to build an entire infrastructure in which battery charging stations would be located efficiently and effectively. In addition to this, a high degree of technological advancement would be required in order to make effective and efficient chargeable batteries..........................

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