Tesla project PPT
21 likes18,474 views
The document analyzes Tesla's strategic position through external and internal assessments, highlighting high threats from substitutes and new entrants in the electric vehicle market. It outlines Tesla's strengths including innovative technology, strong brand recognition, and a focus on R&D, while also addressing past challenges such as production issues and negative press from vehicle fires and autopilot-related incidents. Furthermore, it emphasizes the importance of continuous innovation, public relations management, and diversifying services to enhance profitability amidst reliance on external financing.
Tesla project PPT
- 4. External Analysis (Porter) • Threat of substitute- high • Threat of new entry- • High for already car manufacturers to make electric cars • Low for new car manufacturers • Bargaining power of buyers- moderate • Power of suppliers- • Low (body parts) • High for utility/infrastructure provider • Rivalry among competitors- high
- 5. External Analysis( PESTEL) • Political- • Environmental protection laws to make more environmental cars to meet strict emission levels • US government energy loan program for development and research • Electric vehicles significantly cheaper to own and operate • Economic- • Cost of fuel is rising • 2 percent annual rise in the general level of prices until 2017, diminish the population’s purchasing power and thus damage the GDP • US GDP is rising but compared to the rest of the worlds GDP it is rising at a slower rate. • Social- • Increasing environmental concern • Electric car improves social status of consumer
- 6. External Analysis( PESTEL) Technology- Improving technology, rapid globalization has major effect on automotive car industry Environmental- People are more aware of environmental effect Legal- Introducing energy loan program and putting stress on producing eco- friendly vehicle, several national and local governments have established tax credits, subsidies and other incentives.
- 8. Resources: • Knowledge of R & D team. VRINE (Competitive Advantage) • Technologies/expertise/experience that even other large automotive companies do not have. VRIE • Batteries are becoming much better. VRIE • Experienced CEO, Elon Musk. V • Great location near the best talents. VE • US as a unique position towards special knowledge set, federal government support. VE
- 9. Capabilities • Manufacture internally. • Strong Brand Name Recognition • Talented designs. • The Tesla Stores are similar to the Apple Stores and are an innovative way to market the Tesla cars. • Unlike combustible engines, electric engines have less moving parts and are much cleaner to work with. • Large Production Capacity; Only 20 percent of Tesla Motors factory is used to produce Model S.
- 10. Tesla Motors Historical Events and Emergent Strategies
- 11. Transition from R&D to Production • Numerous logistical issues in the Tesla Roadster’s production model pushed the manufacturing cost to $200,000 while only able to sell for $100,000. • Tesla’s CEO Martin Eberhard was subsequently blamed for this outcome and replaced by CEO Michael Marks who had immense manufacturing experience. • Fallout ensued between current CEO Elon Musk and Martin Eberhard, damaging Tesla’s media reputation and creating a damaging legal battle Tesla Roadster Martin Eberhard with Tesla Roadster
- 12. Strategy Emergence from Event • Developed strategy of anticipating the shift in business structure and pre-emptively reforming their corporate structure to meet new demands • An essential development in corporate strategy as Tesla is now becoming a conglomerate company with the acquisition of Solar City, and the production of their own battery manufacturing facility.
- 13. Tesla Vehicle Fires • During 2013 Tesla responded to 3 separate occasions of vehicle fires • Two fires occurred in the USA when the Tesla ran over objects on the road and the battery was punctured • The third took place in Mexico when the Tesla caught fire after a high speed collision • All vehicle occupants were able to exit the Tesla before the fire ensued • Despite there being hundreds of thousands of vehicle fires world wide every year, Tesla received substantially more media attention than any other reported vehicle fire Tesla Model S on fire in Washington Aftermath of Model S collision and Fire in Mexico
- 14. Strategy Emergence from Event • Tesla is a high profile company exposed to large amounts of media coverage. • Tesla has employed several tactics to manage their sensitive public image These Tactics include 1. Remote software updates 2. Policy of immediately responding to media and significant events 3. Implementation and optional recall of hardware updates, In this case titanium shields on underbody
- 15. Autopilot Deaths • Tesla’s release of their autopilot feature in summer 2016 was met with scepticism and fear from some drivers • First death occurred in June 2016 when a Tesla advocate and video blogger collided with a tractor trailer making a left turn on the highway • Second death occurred in September 2016 when a Tesla rear ended a street sweeper on a Chinese highway • The father of deceased man in second incident filed a lawsuit in order to raise awareness of the issue
- 16. Strategy Emergence from Event • In order for Tesla to be able to competitive they must be constantly innovative • Tesla must continue to revolutionize the automobile industry which means that they will need to take risks with new technologies • The event reinforces the need for Tesla to be constantly remotely updating their software and making improvements upon a released vehicle • The event also demonstrates Tesla’s Public Relations importance in maintain a desirable public image
- 17. Historical Perspective Concluding Comments • Tesla’s business model requires that the corporation innovates and develops constantly • Tesla must constantly be re-evaluating their corporate structure • Management of PR is essential to maintain public interest and faith in the company Tesla CEO Elon Musk Tesla’s future battery manufacturing plant the “Gigafactory”
- 18. • Current business plan: Financial Analysis
- 19. Financial Analysis How does Tesla finance their company? § 2015 debt ratio 0.86 (total liabilities are 86% of total assets) § May 2016: 6.8M shares sold for 1.4B to speed up production of Model 3 § Negative operating profit increases reliance on external financing • Large capital requirements for manufacturing and R&D
- 20. Financial Analysis How profitable is the company? § Negative operating profit § Return on assets average -6.3% • Slow to convert investment into profit § Return on equity average -42% • Favors growth over profitability in short-term
- 21. Financial Analysis What is Tesla’s liquidity? § Negative times interest earned and quick ratio • Assets tied up in R&D and large capital expenditures § 2015 current ratio 0.99 • Liabilities slightly exceed assets § Long-term liquidity reliant on their ability to convert high R&D costs and manufacturing assets into profit
- 22. Alternatives • Diversifying product line to reach more consumers – develop SUVs, pick-up truck, • Increase variety of services domestically: • Introduction of advertising campaign • Expand domestically by adding more services domestically
- 23. Recommendation • Increase variety of services domestically
- 24. Implementation • Implement service stations • Increase charging stations • Increase brand recognition • Construction of brick and mortar in some major cities
- 25. Risks • Additional expenditures in marketing and brick-and-mortar stores financially risky • Already highly leveraged • Focusing a new target market • Losing out on international expansion • Additional outbound logistics from showrooms and in-person ordering (shipping, extra costs)