TESLA Harvard Case Solution & Analysis

Tesla Case Study Solution

Problem Statement

Tesla Motors is one of the famous electronic vehicle manufacturer company, which has occupied a great position in the United States Car Market. The company Tesla plans to expands its business and increase its overall revenue generation. The next step that Tesla strategies on is to enter the China’s Car industry and take over the market. However, due to its poor experience in Singapore, Tesla is in doubt that whether it is the right time to enter the China market, and the company does not wish to face the same experience as in Singapore.

Analysis

After studying the case, the correct and appropriate tool used for conducting such analysis would be the SWOT and PEST. SWOT, which would help in analysing the internal environment of the company, while PEST would help in understanding the external environment. PEST would generally help in determining the China’s political, economic, social and technological factors that influence on Tesla entering the market.

SWOT

Strength:

The strengths of Tesla Motors is that it has the strong brand name for producing cars and for providing benefits to the world in which it would not produce emission on pollution. The company has dominated the United States luxury and long-range electronic car. The company is known for bringing innovations to the car industry by bringing an electronic powered car. Tesla also has high control on the electronic vehicle production.

Weakness:

The weakness of the company lies in the high prices that it charges for their car. The cost for manufacturing the electronic car is high, and due to this the prices charged to the customer is expensive. The company had an overall of three electronic models not providing many varieties to the customers for it to choose to buy. The company also had limited market presence in which its source of revenue generation was only from the United States.

Opportunities:

The company has great opportunities to expand its business to countries, which are developed,and have  a  good economy. The company can expand its business by improving its supply chain expansion, which would result in high sales and more revenue generation. The demand is greatly increasing day by day for the electronic vehicles, as it does not require a lot of money to be spent on fuels and for reducing emission on car pollution.

Threats:

The threats which the company faces are the increased competitors which are manufacturing the electronic vehicle and also the competition from a fuel powered car producing company which acts as an alternative. The other threats are the decrease of oil prices which makes the fuel powered cars more favoured to buy. Governmental changes in rules and policies such as imposed on taxes, dealership, and additional registration fees and among few others could prove to be great threats for Tesla Motors.

PEST

For determining whether the Tesla Company has a good opportunity in China, the best tool used for analysing the conditions would be PEST.

Political:

The political conditions of the Chinese seems to be favourable for the electronic vehicle companies to enter the China car market. The government of China seems to take various actions on the reduction of pollution in China. One of thosesteps was to introduce and promote the use of electronic vehicles in the country. The government is providing tax credits to those who are purchasing EV and issuing potential subsidies to the Electronic vehicle manufacturers for conducting its business in China.

Social:

The social factors, which influence the Electronic vehicles, are that the people’s demand for such vehicles has been increasing day by day, as the popularity prefers low-carbon lifestyles and wanting to have social recognition. The electronic vehicle’s main function is to provide corporate social responsibility in which it provides social welfare.

Economic:

The economic condition in China is very much favourable since its one of the top ranked country in having largest GDP of the world. The economic condition of China is that people of China have high income and have a proper road infrastructure, andit is one of the largest exporter of commodities in the world.

Technological:

The technological factor significantly influences in the selling of electronic cars. The technology keeps on changing, and it is imperative that the Tesla Motors keeps on adapting and making innovations on its electronic cars. China lacks the technology on manufacturing electronic cars, so this provides a great opportunity to the Tesla Motors..................

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