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Design and Evaluation of Tesla, Inc.'s Business Model and Strategies

Introduction Section 1: Business Model Canvas Design Section 2: Execution of Business Strategies Section 3: Evaluation of Business Model Section 4: Comparison with Competitor Conclusion References

Introduction This assignment examines the nuances of Tesla, Inc.'s business strategy and model and assesses how they affect the company's standing in the electric vehicle market. Tesla's importance in this sector cannot be emphasized since the globe is on the verge of a revolutionary transition towards clean energy and sustainable transportation. Elon Musk launched Tesla in 2003, and since then, the company has come to represent innovation, renewable energy, and electric cars. The company's business strategy has completely changed our understanding of sustainability, technology, and transportation. Using Osterwalder and Pigneur's Business Model Canvas, this assignment seeks to break down the essential elements of Tesla's business model and thoroughly analyze each component's role in the company's performance. In the electric car sector, Tesla is a trailblazing company changing the transportation environment and pushing conventional manufacturers to adopt sustainable practices( Wolff et al.,2022). Section 1: Business Model Canvas Design Customer Segments Tesla caters to a broad spectrum of consumer demographics, which reflects the popularity of sustainable energy and electric automobiles worldwide. Customers looking to lessen their environmental impact include eco-aware individuals, tech enthusiasts drawn to state-of-the- art technology, buyers of luxury cars seeking high-end electric vehicles, operators of commercial fleets seeking economical and environmentally friendly transportation, and governments and municipalities seeking public transportation options( Schlagwein et al.,2022). Value proposition Sustainable development and innovation form the cornerstones of Tesla's value proposition. The company delivers cutting-edge electric cars with advanced features and technology, giving customers a one-of-a-kind driving experience( Suta et al.,2022) . Another critical aspect

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of Tesla's value offer is its dedication to environmental sustainability, which enables customers to match their transportation preferences with their ecological ideals. Revenue Streams Its multiple revenue streams reflect Tesla's varied product and service offerings. The company's primary source of income is car sales. Its model lineup includes the Model S, Model 3, Model X, and Model Y. Apart from automobiles, energy goods like solar panels and energy storage solutions are how Tesla makes money. Recurring revenue is also derived from software and services like the Full Self-Driving package. Channels To efficiently reach its varied client segments, Tesla utilizes various distribution methods. Customers can explore and purchase vehicles in person at Tesla Stores and Galleries. Customers can configure, order, and reserve vehicles directly from Tesla's website through online sales and reservations. Additionally, Tesla now sells to government agencies and operators of commercial fleets. The company has partnered with local dealerships in certain regions to improve accessibility. Customer Relationships Tesla prioritizes building relationships with its customers. The company's over-the-air software updates that improve vehicle performance, safety, and features exemplify its dedication to continuous consumer interaction. Responsive customer care strengthens bonds with customers by quickly attending to consumer questions and service requirements. Key Activities Key activities at Tesla include a broad range of crucial tasks that support the company's business strategy. One of these is investing heavily in R&D to consistently innovate and create sustainable energy solutions and electric car technology. Tesla runs its Gigafactories factories to mass-produce electric cars and energy goods. In addition, building out the Supercharger network is essential to facilitating long-distance driving and offering Tesla users quick and easy charging. Safety, autonomy, and feature enhancement of Tesla vehicles are contingent upon the company's continuous software development.

Key Resources Specific resources are necessary for Tesla to fulfill its goals and deliver on its value promise. The basis of Tesla's competitive edge is its vast portfolio of technology and intellectual property, which includes patents and trade secrets. The Gigafactories, or Tesla manufacturing sites, are essential for producing energy and electric vehicle products. Engineering, design, and software development professionals are highly qualified and specialized workers critical to sustaining product innovation and quality. Tesla can invest in continuous operations, expansion, and research & development because it can access significant financial resources. Key Partners Tesla works with several essential partners to improve its business plan. Vital battery providers like Panasonic and LG Chem supply the lithium-ion batteries that run Tesla's electric cars. When it comes to providing premium car parts and materials, component suppliers are essential. By working with local and national governments, Tesla can comply with regulations and obtain incentives and rebates that increase consumer access to its products. Energy storage initiatives benefit from partnerships with utility providers, consistent with Tesla's commitment to sustainability. Cost Structure For Tesla to remain financially sustainable, its cost structure is essential. Expenses are linked to raw materials, production, quality control, and the manufacturing and materials process. Much of Tesla's cost structure goes towards R&D, which supports continuous innovation and product development. Expenses related to sales and marketing are necessary to advertise Tesla products and keep the brand visible. The total cost of operations includes operating expenditures for stores and service centers and investments in expanding the charging infrastructure, such as the Supercharger network. Section 2: Execution of Business Strategies The company's main strategic goals, which are focused on developing clean energy and sustainable transportation, are closely matched with Tesla's business model. Together, the Business Model Canvas elements facilitate and support these tactics. Tesla's Proposal for Clean Energy and Sustainable Transportation:

Accelerating the global switch to sustainable energy is Tesla's main strategic objective. The business sees a future in which producing and consuming clean energy will become the norm, and mobility will be electric and sustainable. This goal shapes Tesla's business strategy and strategic choices( Schlagwein et al.,2022). Alignment with Strategy: Customer categories: Tesla's wide range of customer categories demonstrates the company's dedication to enabling affordable, environmentally friendly transportation for many people. Tesla can expand its customer base and realize its sustainable future goals by offering electric automobiles to various demographics and preferences( Pillai et al.,2022). Value Proposition: Tesla's approach is directly supported by its value proposition, which focuses on cutting-edge electric vehicle technology, environmental sustainability, and an entire ecosystem. Tesla's dedication to the environment and state-of-the-art technology support its clean energy and sustainable mobility mission(Vig et al.,2022). Income Streams: Tesla's vision, which embodies the company's goal of bringing electric vehicles to everyone, is strongly linked to the company's main income stream, car sales. This objective is complemented by energy-related goods and services revenue, broadening Tesla's customer base beyond automobiles. Channels: Tesla's distribution channels are made to make it easier for the company to interact directly with customers and successfully convey its sustainability message. Tesla's approach is enhanced by its partnerships and online presence, which offer accessibility and education. Customer Relationships : Tesla's emphasis on continuous customer involvement and community building complements its business strategy by encouraging brand loyalty and advocacy. Involved and devoted customers will likely support the shift to sustainable transport. Key Activities: Tesla's purpose is directly supported by investments in R&D, manufacturing, the expansion of the Supercharger network, and sustainability programs. These initiatives depend on encouraging innovation, expanding the market for electric cars, and advancing renewable energy( Saxena et al.,2021).

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Essential Resources: Tesla can spearhead the shift to clean energy and sustainable transportation thanks to its financial resources, experienced personnel, manufacturing facilities, and intellectual property. Key Partners: Working with battery and component suppliers, governments, utility companies, and partners in charging infrastructure helps Tesla achieve its objectives. These collaborations give it the resources and assistance it needs to fulfill its mission. Cost Structure: Tesla closely monitors its costs to ensure the business can fulfill its goals. Resources are allocated, and investment objectives align with the company's clean energy strategy and sustainable mobility. Section 3: Evaluation of Business Model Tesla is positioned as a leader in the electric vehicle (EV) sector and beyond thanks to several noteworthy features in its business strategy. Strengths of the Business Model: First-Mover Advantage: Tesla enjoys a considerable first-mover advantage due to its innovative role as one of the first automakers to concentrate on electric vehicles. Tesla created a strong brand presence and a reputation for innovation thanks to its early entry into the EV market. The company's dedication to pushing the limits of EV technology serves as the foundation for its first-mover advantage( Schoder et al.,2022). Brand Recognition: Innovation, sustainability, and a forward-thinking outlook are all associated with the Tesla brand. The company enjoys a devoted and passionate fan base for its automobiles and its larger goal of hastening the global switch to sustainable energy. In addition to their widespread reputation, the vibrant community of Tesla enthusiasts and owners is a potent source of demand and consumer loyalty. Innovation in Electric Car Technology: Something that separates Tesla from its competitors is its unwavering focus on innovation in electric car technology. The business constantly

pushes the boundaries, whether in autonomous driving capabilities or battery technology. With the addition of Over-the-Air (OTA) software upgrades, the Full Self-Driving package, and the Autopilot feature, Tesla can stay ahead of the curve in automotive technology. Weaknesses of the Business Model: Production Scalability: Tesla's difficulty with production scalability is one of the company's significant vulnerabilities. Despite its aggressive production goals and quick expansion, the company has needed help growing its manufacturing processes. Problems with quality control, production delays, and scaling up to meet demand have all been issues( Pathak et al.,2022). Competition: There is growing competition in the electric vehicle sector. Conventional automakers are making significant investments in the development of electric vehicles, including General Motors, Ford, Volkswagen, and others. Although Tesla was formerly a unique participant in the industry, well-established manufacturers with substantial resources and distribution networks now pose a serious threat to the company( Saxena et al.,2021). Regulatory Obstacles: There may be obstacles to electric car regulations. Modifications to governmental rules and policies, such as tax breaks or fuel economy requirements, may impact the market environment for Tesla. Furthermore, regulatory agencies are placing stricter restrictions on safety and autonomous driving technologies as EV usage rises. This might raise compliance costs and complicate the development of fully automated driving capabilities. Dependency on External Partners: Tesla's business model depends on several external partners, including suppliers of batteries and components, even though essential collaborations have their advantages. Supply chain vulnerabilities may arise from this dependence on outside sources. For instance, a hiccup in the supply chain may affect output, affecting delivery schedules. Additionally, expenses may be impacted by suppliers, which may have an impact on Tesla's profit margins. Section 4: Comparison with Competitor When contrasting Tesla's business model with traditional automakers' electric vehicle (EV) initiatives, it is clear that there are both notable similarities and differences.

Similarities: ● Focus on Electric Vehicles: Traditional manufacturers and Tesla are realizing the increasing significance of electric vehicles. Their common objective is to switch to electric cars as part of their more extensive business plans. ● Customer Segments: Both companies want to attract a diverse range of customers, such as environmentally aware individuals, tech enthusiasts, and those looking for sustainable modes of transportation( Wolff et al.,2022). ● Brand Recognition: Well-known automakers frequently have a devoted following of customers and strong brand recognition. Whereas established manufacturers have long-standing brands connected to dependability and trust, Tesla's brand is recognized for innovation and sustainability. ● Infrastructure for Charging: It is well acknowledged that the expansion of the EV market depends on the development of infrastructure for charging EVs. Differences: ● First-Mover Advantage: Tesla has a considerable first-mover advantage since it joined the EV industry years before other established automakers. Tesla has built a solid brand presence and a reputation for EV innovation thanks to its early entry. ● Innovation: With technologies like Autopilot and Full Self-Driving, Tesla is known for pushing the limits of electric vehicle technology. Conventional automakers need to catch up in terms of innovation and technology. ● Distribution approach: While traditional manufacturers mostly rely on dealership networks, Tesla has a direct-to-consumer sales approach with a strong web presence. This distribution disparity may impact the engagement and purchase experience of customers. ● Production Scalability: Tesla has needed help increasing output to keep up with demand, which has caused delays. Conclusion Tesla's business strategy is an intriguing fusion of creativity and difficulties. Strong brand awareness, Tesla's innovative role as a first mover in the electric vehicle sector, and ongoing EV technological advancement are the model's main selling points. Notable assets include its

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devoted client base and devotion to sustainability. On the other hand, drawbacks include challenges with expanding production, growing rivalry from conventional automakers, complicated regulations, reliance on outside partners, and high investment needs. It is still possible that Tesla will be successful in the long run in the electric car market. It has a competitive advantage thanks to its well-known brand and technological superiority. But Tesla needs to deal with production scalability, handle escalating competition, and adjust to changing rules to maintain a long-term position in the market. Tesla is ideally positioned to influence the direction of clean energy and electric vehicles in the future because of its devoted customer base and strong emphasis on sustainability. Tesla's inventive spirit and agility make it a critical component in the industry's long-term success as the world progresses toward sustainability.

References Gafarov, R., 2019. Evaluation of the financial position and the performance of Tesla, Inc (Doctoral dissertation, Masarykova univerzita, Ekonomicko-správní fakulta). Hernández-Chea, R., Jain, A., Bocken, N.M. and Gurtoo, A., 2021. The business model in sustainability transitions: A conceptualization. Sustainability , 13 (11), p.5763. Kumari, D. and Bhat, S., 2021. Application of artificial intelligence technology in tesla-a case study. International Journal of Applied Engineering and Management Letters (IJAEML) , 5 (2), pp.205-218. Lugtu Jr, R.C., 2019. Tesla: Testing a Business Model at its (R) Evolutionary Best (Doctoral dissertation, DE LA SALLE UNIVERSITY-MANILA). Pathak, P., Yadav, V., Pillai, S., Das, S. and Kansal, G., 2022. Unveiling the Success Behind Tesla’s Digital Marketing Strategy. In Emerging Technologies in Data Mining and Information Security: Proceedings of IEMIS 2022, Volume 1 (pp. 251-260). Singapore: Springer Nature Singapore. Saxena, N. and Vibhandik, S., 2021. Tesla's Competitive Strategies and Emerging Markets Challenges. IUP Journal of Brand Management , 18 (3). Sudian, D.A.P.B., Sutopo, W. and Hisjam, M., Global Business Strategy in Electric Car Vehicle Industry: A Comparative Study between Tesla Inc. vs Rivian LLC. Vig, S.G., Suta, A. and Tóth, Á., 2022. Corporate Reporting of CO2 Emission Disclosures in Electric Vehicle Manufacturing: an Overview of Tesla Inc. Chemical Engineering Transactions , 94 , pp.391-396. Wolff, B., Schlagwein, D. and Schoder, D., 2022. How Resource Openness Supports Industrial Transformation and Competitive Advantage: The Revelatory Case of Tesla. In Pacific Asia Conference on Information Systems (p. 1).

10ES2023_11012220.edited

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