Strategic business analysis case study

Case Analysis for Tesla1. Short history and background of the company. Include some of their products and services.2. What problems is the company facing currently? Provide detailed analysis of the company’s operations as well as its competitive landscape. 3. Recommend actions to address problems and offers steps to for these actions.4. Give updates on the company that illustrate the effects these actionable steps would have on Tesla. Use this outline for the paper and use professional sources such as quarterly reports to provide details.
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Keith Escobar
Professor Sheridan
BUS 450
November 13, 2017
I.
Introduction
•
Martin Eberhard and Marc Tarpenning founded Tesla in July of 2003.
•
In February of 2004 Elon Musk joins the company and raises $7.5 million in initial
financing and became Chairman of the Board.
•
Tesla comes to an agreement with Lotus in July of 2005 to manufacture their first
product, to be called the Tesla Roadster.
•
After investing $70 million of his own personal fortune, Musk eventually becomes Chief
Executive Officer of Tesla in October of 2008.
•
In June of 2008, Tesla introduces the Model S after their initial product, the Roadster,
faced continuous challenges and did not sell as they had hoped.
•
Then, two years later, Tesla gets $226 million through its initial public offering.
•
It wasn’t of until February of 2012 that the company reveals a new product, the Model X,
their first SUV.
•
The next new vehicle, introduced in 2014, was the Model 3. This was their most
affordable product to date, starting at around $35,000.
•
One of the biggest problems facing the company was their limitation to sell
independently in many states, including New Jersey, which they addressed and won in
2014 with the help of the State’s Governor.
•
Tesla Energy is introduced in April of 2014 with the release of the Powerwall in an effort
to transition to and store solar energy.
•
In 2015, Tesla find a new ally in the Federal Trade Commission in their battle to sell
independent of third party dealerships.
•
Finally, in 2016, Tesla acquires Solar City to pair with Tesla Energy and move closer to
the goal of providing consumers with their own means of producing and storing their
needed energy.
II.
•
Diagnosis
Many states do not allow Tesla to sell directly to consumers, instead requiring them to
sell through third party dealerships. Texas and Alabama currently uphold this regulation,
however many more states are in dispute over the ban leading to much uncertainty for the
company. In addition, many states simply do not have locations even to view Tesla’s
vehicles.
•
Tax credits are given in every state to consumers who purchase new electric vehicles in
the amount of $7,500 as well as many other states offering additional rebates at the time
of the purchase. While Tesla makes this known and uses it to their advantage for now,
they may be too reliant on these tax credits and must find a way to compete on an even
playing field without receiving help from federal and state governments.
•
While Tesla does offer cheaper options in the Model 3, they still do not have enough
products for the average consumer. Pairing one of their vehicles with the Powerwall and
solar panels as well is an extensive process that is not realistic for many customers. How
can they do so?
•
Tesla has seen countless numbers of backorders and now cancellations due to the wait on
products. This is lost revenue that could have been retained had manufacturing been
expanded to meet the rising demand of its products.
III.
•
Recommendations
To push for sales independent of outside dealerships, Tesla must back and candidates that
support a movement away from fossil fuels as well as consumer sovereignty in
determining where and how they purchase products. As well as increasing marketing in
states where they have no presence.
•
Tesla should prepare for an eventual loss of tax credits and in doing so will be able to
compete and survive on their own with no help from the government. How can they do
so?
•
Tesla must drive down costs for all their products in order for the average buyer to invest
in an electric home in addition to the vehicle in order to accomplish Musk’s goal of an
individual controlled energy system. How can they do so?
•
Invest in and expand manufacturing to avoid backorders and cancellations and capture all
possible sales and revenue. How can they do so?
IV.
•
Update
Through the backing of favorable legislation and candidates, Tesla should be able to sell
directly to consumers throughout the country as seen in New Jersey most recently.
•
Moving away from Individual Tax Credits will improve the health of the company,
making it more favorable to investors, as well as protecting Tesla from potential threats.
•
Musk will have been successful in allowing consumers to create, store and use clean
energy in their own manner independent of fossil fuels.
•
Tesla will be able deliver on every order made within a reasonable time period,
increasing their market share and strengthening the company.
Work Cited
1. Van Den Steen, Eric. Tesla Motors. Harvard Business School, 17 Dec. 2015.
2. Kumparak, Greg, et al. “A brief history of Tesla.” TechCrunch, TechCrunch, 28 July
2015, techcrunch.com/gallery/a-brief-history-of-tesla/slide/34/.
3. “Where you can buy a Tesla.” CNNMoney, Cable News Network,
money.cnn.com/interactive/pf/autos/where-you-can-buy-a-tesla/.
4. “Incentives.” Tesla, Inc, 4 Oct. 2017, www.tesla.com/support/incentives.
5. Logan, Bryan. “63,000 people have canceled their Tesla Model 3 orders.” Business
Insider, Business Insider, 3 Aug. 2017, www.businessinsider.com/tesla-model-3cancellations-how-many-2017-8.

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