100%(19)19 out of 19 people found this document helpful
This preview shows page 1 - 6 out of 31 pages.
The preview shows page 4 - 6 out of 31 pages.
Tesla MotorsThe strategic approach of the absolute user of purely clean technologyMichail Karatzas‖15055531Module‖Business StrategyProfessor‖Dan Taylor
2Table of ContentsChapters1.0About Tesla032.0Strategic Intent043.0External Drivers of Change054.0Porter’s Five Forces Analysis075.0Resources086.0Competencies097.0Value Chain Analysis128.0Conclusion169.0References18
31.0 About TeslaTesla Motors is an American automotive company that operates in over 30 countries andspecialises in the manufacturing of powertrain components and high-performance, premiumelectric vehicles (EVs) of futuristic design, zero CO2 emissions and low maintenance costs(Tesla Motors, 2015; Baer, 2014; Wang, 2013). The company was founded by Jeffrey Straubel,and Marc Tarpenning in 2003 in California, whilst in 2004 Elon Musk, serial entrepreneur,became the first big investor of Tesla Motors and appointed as a Chairman and ProductArchitect (Tesla Motors, 2015; Baer 2014; Musk, 2015; TED, 2015).Tesla’s mission to accelerate the transition from traditional gasoline-powered transportationto pure electric one aims at curbing the air pollution generated by conventional cars (TeslaMotors, 2015).Tesla vehicles have earned remarkable distinctions such as the Best-selling Large Luxury Carin America in 2014 (Tesla Motors, 2014) and the Best Overall Product Design in theAutomotive market in Australia in 2015 (Crawford, 2015).In 2017, Tesla plans to launch its smallest vehicle so far, named Model 3, in both sedan andcrossover variants, and will cost approximately $35.000 (Moseman, Woodard and Bowman,2015).In the following chapters, Tesla Motor’s strategic intent will be identified and critiqued.
42.0 Strategic IntentTesla implements a diversification and differentiation-focus strategy when penetrating amarket. According to Michael Porter’s Generic Strategies and Bowman’s Strategy ClockFrameworks, Tesla’s strategy falls under the differentiation-focus style as it operates in the EVindustry manufacturing products that are perceived as unique and innovative (Differentiation)by the focus-customers who are willing to pay a premium to obtain them (Porter, 1980;Rugman and Verbeke, 1994; Bowman and Faulkner, 1997).By launching Model 3, Tesla smoothly shifts to a Differentiation strategic style, moving to themiddle-end market segments (Hanaysha and Hilman, 2015). Tesla does not reposition itsbrand but slightly expands its product line expecting the market to embrace Model 3,otherwise the corporate strategy will shift back on Differentiation focus and the marketing ofother vehicles, such as Model S (DeBord, 2015).
53.0 External Drivers of ChangeThe external drivers of change along with the internal impact on Tesla are expressed througha PEST table and a corresponding analysis (RMIT, 2015).PoliticalEconomic+Lower taxation and income creditsfor EVs (Gov.uk, 2016)+Government grants for plug-invehicles (Gov.uk, 2016)+Easier for EVs manufacturers torequest loans/financial support fromgovernments (Tesla Motors, 2015)-Hybrid cars are also qualified for taxcredit regulations (Gov.uk, 2016)-US states, such as Texas has bannedTesla from selling directly toconsumers (Tani, 2015)+High consumer spending andconfidence in countries where Teslaoperates (Trading Economics, 2016)+Charging a Tesla is cheaper thanfilling a conventional car with petrol(Jakuba, 2015)+No fierce competition in the EVsindustry (France-Presse, 2015)-Current Tesla Model S cost $70.000(Tesla Motors, 2015)-Not strong European supercharger