Tesla Case Analysis

Summary

Since 2003 Tesla Motors vision has consisted of the following: “create the most compelling car company of the 21st century by driving the worlds transition to electric vehicles.” This vision, while it puts forth big dreams and fantastic goals, is largely being realized in the company. Tesla Motors is certainly leading the world in the production of electric vehicles (EVs). Whether they are transitioning the world to an all EV fleet is something that is subject to debate. While they have successfully captured the hearts of a generation as being the very epitome of a “cool car,” they face many barriers to their goal of seeing zero fossil fuel burning vehicles. Since the article has been written, Tesla has steadily driven on in its growth and stability. Providing proprietary electric parts to other car companies, keeping careful watch over their patents, and avoiding most competition, Tesla has experienced solid growth.

Tesla is a company that operates more like a technology firm than an Automaker. To simplify, Tesla is the Apple of the Auto industry. Their approach to business focuses on innovation, luxury, styling, and steady growth. Elon Musk, a co-founder, the CEO, and the product architect of the Roadster, has led the organization in a variety of very wise business moves. Seeing the company’s early problem of not having access to the massive amount of capital needed to achieve their design and production goals, Musk secured investments from a wide variety of places. He also has quietly emphasized the production of EV parts, a very effective area of revenue for Tesla, during his tenure.

Tesla exists in a very tedious sector. They maintain control of their market niche, however if they seek to expand and threaten the sales of their competitors in other essential sectors of the Auto industry, Tesla can easily be crushed. This is simply due to the fact that Tesla is so small and fragile at this point. They have extremely high design costs, and high operating costs. Basically, it costs Tesla a lot of money get to the sale of their vehicles.

Key Issues

It would be very helpful for Tesla to be engaged in Total Quality Management practice. This is the practice of the company being focused on the satisfaction of their costumers, cutting costs, and the reducing the amount of time required to introduce their products. Tesla is currently properly focused on the satisfaction of their costumers; however, they could be more concerned with the other two facets of this practice. Cost cutting and time reduction for roll-outs. Tesla’s designs are great but it takes forever for them to manufacture them. This is a huge weakness of the company.

It seems that Tesla is very successful in linking information networks. They have assembled a large network of suppliers and have allowed their suppliers access to their confidential information and made sure these suppliers have a mutual benefit in Tesla’s success. Musk is largely the architect of this network as he has allowed very large and serious investment from suppliers and customers including, Panasonic, Daimler, and Toyota. Tesla walks a fine line in working with huge names like these.

Product substitutes are virtually non-existent for Tesla’s roadster, and limited in Tesla’s other models. There are several autos that can be considered competitors to Tesla’s vehicles, but when you’re talking to someone who knows cars, they will tell you that there is really no company like Tesla. To own a Tesla is a source of very unique prestige that is not delivered when someone owns a funny looking BMW.

Cite this page