The Tesla Case Study

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The Tesla Case Study

1. What are the key elements of Tesla Motors’ Strategy

Tesla Motors’s main goal is to be one of the companies in the global scene that deals with electric cars. In addition to being powered by electricity, Elon Musk, the company’s CEO, also hopes that they will be affordable enough to compete with the other models in the industry, even if these models are not electric

Another strategy by Tesla motors was to make sure that they developed the best models in time. To Tesla, having the good models was seen as a sign that the company was making progress in the innovative ways. This kind of progress would come to be of importance to the company in general. Thirdly, Tesla had some good marketing strategies. These involved developing demand for the products that Tesla motors was producing, building long term brand awareness about the brand among potential and current customers of Tesla motors good management of the existing customer base and finally, getting feedback from the customers about the models that Tesla was making. These strategies, along with making sure that the production was sustainable were among the strategies adopted by Tesla.

2. Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates the competitive approach that Tesla is employing?

The competitive strategy that best suits the mode of Tesla’s operation is the best cost provider strategy. Under this strategy, a company seeks to provide the best cost for the goods and services that it produces. However, it also seeks to make sure that the goods that are produced are of good quality, so as to match the cost that the company s offering. Tesla can be seen to do this since one of its main aims is to make sure that the cars that it produces are consumed by most of the customers worldwide. In addition, it also seeks to make sure that the best prices are offered for these cars. Tesla to make sure that this is followed by having the best leaders on the leadership board. Usually, the top management is tweaked and changed conveniently when things are not running so smoothly. Additionally, Tesla has a good understanding of the market around it. This includes the brands that compete with Tesla’s brands at the same price. Tesla makes sure that these brands are at the same level with the ones that it produces for the same price. There is also a tendency by Tesla motors to make sure that the models they produce are the best quality, and that they can compete favorably with those from other companies

3. Are you impressed by the strategy Elon Musk has crafted for Tesla? Why or why not?

Elon Musk’s strategy for Tesla is impressive to me for a number of reasons. One of the reasons is that it is quite optimistic. The plan seems to hope not only for progress in the near future but for greater progress much later. This optimism is due to the fact that Elon Musk focuses on the environment. Currently, the environment is one of the issues that should be of major focus globally. Elon Musk is using one of the best platforms that there is to be an environmentalist. Tis is both impressive and necessary. Another impressive strategy that Elon Musk uses is the focus on both hardware and software in the development of the cars. This makes sure that the product that is seen in the end is one of the best and is good in quality. In addition, the cars that are developed are often both stylish and efficient. The initial focus when the company began was to make sure that there was enough of a viable product for the market needs. However, a lot has changed since then. The flexibility shown by these changes is also quite admirable. Elon Musk aims to make sure that with time, Tesla s a good model, environmentally and also one that s comfortable, stylish and sustainable. The latest models have been a good example of the good use of this strategy.

4. What is your assessment of Tesla’s financial performance as shown in case Exhibit 1? Use the financial ratios in the Appendix of the text in calculating a revealing set of financial ratios and interpreting them.

From this exhibit, it is clear that Tesla is currently doing well as time goes by. The rates of sales for the different models of cars that are produced each year is rising with time. This is an indication that the market that Tesla Motors is aiming for is responding positively as time goes by. The period of time given here is 2012 to 2015. The divisions in this case are quarterly. There is at least an increase of 1000 vehicles during each quarter period. In some cases, this number is higher. The table does not tell us of the situation in other companies that could be competing with tesla. However, based on this table alone, it is possible to conclude that Tesla is doing well as per the market standards that it has set. In addition, the company is getting better as more features are included in the models that are produces in the subsequent times. My assessment of the company based on this table is that financially, Tesla Motors is on the right path. If the same strategies are used for future marketing and the future models produced, it is likely that the company’s financial status will remain stable. However, tesla should also make sure that they continue to keep an eye on competition, especially from other also well establiushed brands that are in the market currently.

5. What do we learn from the data in case Exhibit 2? Does the data provide additional valuable information? Why or why not?

Exhibit two is about the income statement data in the company. In my opinion, the data in this exhibit provides additional valuable information. Apart from the income statement in the company, there is also the balance sheet. This is an important sheet in the financial management of the company. The sheet also shows the various expenses that the company incurs across different f areas. In addition, cash flow data s provided in this document. To me, this is additional valuable information about Tesla, in addition to that in exhibit 1. The information is important as it makes the analysis of the various aspects of the finances at the company easier. If well kept, this information can also be used as a future predictor for the company, especially regarding the finances.

6. What grade would you give Elon Musk for his handling of the battery pack fires and battery-charging fire in the residential garage of a Model S owner?

Tesla has, over the years, perfected the battery production. The evidence for this is the fact that in the past, the company has had very few complains regarding their batteries from customers. In addition, some of the aims of the company include to make sure that each and every part of the it is made in the best ways possible. This, has however, ben impossible under certain circumstances, for example, in the case of the model S owner that was given. In this case, a fire broke out as a result of the battery. It was clearly mostly the fault of the manufacturers. The company would have acquired huge losses from this case. However, Elon Musk handled it in a way that suggests professionalism. There were also efforts by the company to make sure that such a case would not happen again for the company’s vehicles. Based on this, I would give Elon Musk a grade B. It would have been an A, however, it is important to see that there was negligence on his part in some ways. Without this negligence, the said occurrence would not have appeared

7. What are the issues/problems that Elon Musk and other members of Tesla’s top management team need to address?

8. What, if any, changes/adjustments in Tesla’s strategy would you recommend that Elon Musk consider?

9. What is your outlook for Tesla’s future performance and its prospects for revolutionizing the global automotive industry’s use of gasoline-powered engines versus battery-powered engines?