Tesla Motors Harvard Case Solution & Analysis

SWOT ANALYSIS OF TESLA MOTORS:

In order to comprehensively analyse the market position of Tesla Motors, following strengths, weaknesses, opportunities and threats are identified.

STRENGTHS:

Unique Technology:

Tesla Motors owns the unique technology in the entire automotive industry which has enabled the company to make high performance and fuel effective electric cars. This has enhanced the competitiveness of the company and hence, acts as a strength for the company.

Unique Product:

Tesla Motors is the first company which has introduced an electric car in the entire market, moreover, it was the first one to introduce the concept of EV engine and power train. This acts as strength for the company to attract customers towards the company.

Partnerships:

The top management of the company has made strategic partnerships with gigantic and well renowned multi-national companies which includes Toyota, Daimler and Panasonic. In addition to this, Panasonic is also a supplier of Lithium ion batteries to Tesla Motors, thus, partnership with Panasonic also enables the top management of the company to procure high quality supplies at comparatively low rate.

Continuous Innovation:

The top management of the company is continuously innovating their products at a widespread scale. This enables the company to attract the customers towards the company and hence increases the customer base of the company.

Strong Research and Development:

Tesla Motors has a well-established and strong research and development department, which consists of highly skilled, proficient, technological experts and researches bearing extensive professional experiences in their fields. They acts as a spine for the company in innovation and developing the products of the company.

Customer Loyalty:

The top management of the company has earned high degree of customer’s loyalty from its customers by facilitating its customers with excellent quality products as well as excellent customer care services. Thus, this also enhances the overall customer base of the company.

Effective Distributive Channel:

The company has an effective and widespread distribution system which enhances the overall efficiency of the distribution process. Thus, it enhances the overall effectiveness of the operations of the company.

Eco friendly Products:

The company has introduced electric cars which emits 0% negative environmental externalizes in contrast with conventional vehicles having combustion engines. Thus, this decreases the overall negative environmental externalizes, which also attracts the customers towards the company.

Lean Management System:

The organisational structure of Tesla is a lean management system. This allows the top management of the company in effective and efficient decision making as well as this also reduces the managerial complexities of the top management of the company.

WEAKNESSES:

Small Market Share:

Tesla Motors has a small market share in the overall automobile industry, as compared to its major competitors GM and Ford. Tesla motors has sold only 1200 cars in United States since 2008, which is approximately 1% of the sales made by Ford and GM in United States within last 2 years.

Limitation of Recharging Stations:

Tesla Motors makes electric cars which runs on chargeable batteries. These chargeable batteries needs to be charged at charging stations. The lack of recharging stations in the country decreases the overall demand for the product of the company.

Lack of Brand Awareness:

Tesla is a newly formed company as compared to other well established companies in the automotive sector. In addition to this, Tesla has launched only few models due to which there is lack of brand awareness among the people. This limits the sales of the company to some extent.

Expensive Models:

The cars made by the company are highly expensive, due to which the demand of the product is considerably low. Thus, this also limits the sales of the company to some extent.

Small Target Market:

Tesla has targeted only upper level class of customers as it offers luxurious cars at significant high prices. This has limited the overall revenue and customer base of the company to a certain extent.

No Economies of Scale:

Tesla Motors has not earned economies of scale due to its low customer base and market share. This acts as a weakness for the company and hence, it creates a negative impact in the interest of the company.

OPPORTUNITIES:

Rising Fuel Prices:

Recent rise of fuel prices in the international market creates an opportunity for the company to capture the market by providing fuel independent vehicles (Electric cars) to the people. This would fuel up the overall growth of the company...........................

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