BUS9048M Strategy Making

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BUS9048M Strategy Making 1 | P a g e

Abstract The current study sets the scene, analyses the strategic challenges confronted by the companies, and examines the internal and external factors that have contributed to their current predicaments. The implications of the company's study, which takes into account Tesla's strategic position, are discussed at length. These consequences include the expected future trends, opportunities, and challenges. Then, we'll describe several viable alternatives, discussing their relative merits and outlining our plans for moving forward with them. After that, we looked at the strategic obstacles and external pressures that our company faced. Then, we do a Tesla analysis of all the potential risks our company faces. The study also includes suggestions for how to monitor success with the use of Tesla KPIs. 2 | P a g e

Table of Contents Abstract ..................................................................................................................................... 2 Introduction .............................................................................................................................. 4 Strategic issues confronting the organisation ......................................................................... 4 External/environmental factors .............................................................................................. 5 PESTLE Analysis ............................................................................................................. 5 Internal factors (resources, capabilities) ................................................................................ 7 SWOT Analysis ................................................................................................................. 7 Resources ........................................................................................................................... 8 Capabilities ....................................................................................................................... 8 Future trends for business ...................................................................................................... 8 Future trends for Tesla business in terms of opportunities .......................................... 8 Future trends for Tesla business in terms of Threats .................................................... 9 Implications of the strategic analysis for the strategic purpose of the organisation ............ 10 Potential competitive advantage .......................................................................................... 10 Alternative strategies for business ....................................................................................... 12 Execution of the selected strategy ........................................................................................ 13 Strategy Map .................................................................................................................. 13 KPI (Key performance indicator) ................................................................................. 13 Recommendations .................................................................................................................. 14 Conclusion ............................................................................................................................... 14 References ............................................................................................................................... 15 3 | P a g e

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Introduction Martin Eberhard and Marc Tarpenning founded the company in 2003 in San Carlos, California. Tesla Motors, Inc. (NASDAQ: TSLA) is a car manufacturer that focuses only on electric automobiles. The company, formerly known as Tesla Motors, changed its name in 2017. In the nineteenth century, Serbian-American inventor Nikola Tesla made substantial contributions to contemporary technology. Even though Thomas Edison's "direct current" technique was inefficient, it paved the path for the modern alternating current (ac) power circuit. In the history of electrical engineering and related sectors, Tesla is universally recognised as a seminal figure. Because of his work, he is now well-known among engineers. The initiative was considered a technological success despite its brief runtime (1996-1999) and GM's comparatively modest production. The two were anxious to build on their prior success, and Eberhard and Tarpenning were no exception. Musk has been Tesla's public face since even before he joined the firm in 2004 ( Monika et al., 2021). His $30 million investment earned him immediate promotion to president. While Sergey Brin and Larry Page founded Google, Musk was a crucial contributor to the company's initial finance in 2006. Strategic issues confronting the organisation It has always been challenging to stamp detailed patterns onto metal when working with large components. Aluminium parts with complex ridges or other characteristics must be linked using a different process, such as riveting, because welding distorts the metal. Robots are used in several stages of Tesla's manufacturing process, including the pouring of liquid aluminium into a mould and the subsequent removal of the finished product. Despite the fact that Sandra Munro, CEO of Munro & Partners, has previously been critical of Tesla's production methods, she has been effusive in her support of the company's recent successes ( Park et al., 2021). When we first started assisting them with their autos, they were not already Musk fans. There were serious structural problems, and weld slag was visible throughout the building. The price of oil dropped dramatically between 2015 and 2018. Economists agree that oil prices will stay below $80 per barrel for the foreseeable future. Extraction of crude oil in a cost-effective and straightforward manner was essential. Low petrol costs have led to a precipitous drop in demand for electric cars. Modern gasoline-powered cars and trucks have better gas mileage than in the past because of rules aimed at reducing greenhouse gas 4 | P a g e

emissions. However, it is feasible that a fully charged electric automobile can drive no more than 300 miles ( Qian et al., 2019). Automakers across the world have rushed to produce their own high-end electric vehicles in response to the overwhelming success of Tesla's Model S, Model X, and Model 3. Tesla was afraid someone was going to try to harm him. Other automakers are working on producing electrified commercial semi-trucks. As of yet, Tesla has not demonstrated it can reduce prices without reducing earnings. Over a three-year period, the firm saw an increase in both car sales and leasing income, yet it still experienced a loss. In February, the business anticipated a prosperous quarter ( Qian et al., 2019). Tesla's continual loss of profit might be attributed to the company's high expenditures associated with developing and promoting new products and keeping track of leased vehicles. In 2017, the average loss per car sold was $1.63 billion, a significant drop from earlier years. There are major concerns about the firm. External/environmental factors PESTLE Analysis Every potential influence on a company is factored into the PESTEL analysis. Considerations range from the political and economic to the social and technological, as well as the environmental and legal. 5 | P a g e

Source- Ni et al., 2023  Political Factor- The bottom line and the company's policy choices are affected by Tesla, Inc.'s environmental effect. Because they use less fuel, Tesla's electric vehicles are better for the planet. Therefore, a sizable tax credit is available to EV purchasers. Businesses have benefited from the government's emphasis on environmental protection.  Economic Factor- Luxury makes and models account for the vast bulk of sales. The global economy has profited from the rising popularity of electric vehicles. Between 2016 and 2017, the automotive industry around the world grew at a dizzying rate. Rising need for transportation has made mass production of inexpensive automobiles feasible ( Kobeissi et al., 2023).  Social Factor- A Tesla may be easily identified in traffic. Eco-friendly vehicles may be fashionable and feature-packed, as they have demonstrated. To better adapt to the local market, this study will examine the characteristics of local investors, customers, and employees. Tesla has benefited from the public's increased focus on green energy and sustainability.  Technological Factor- Tesla automobiles are famous for their cutting-edge engineering. There is strong demand for these high-priced, state-of-the-art automobiles. Vehicles have a smaller carbon footprint when they use less petrol. The availability of state-of-the-art equipment is another attractive feature. However, technological development keeps moving forward. Competitors might quickly imitate your advantages ( Rutland et al., 2020).  Legal Factor- As Tesla expands worldwide, the firm will need to implement new rules and procedures to ensure continued compliance. In third-world countries, the eco-friendly Tesla holds a lot of potential.  Environmental Factor - Tesla is in a better position to care about the environment than its competitors. The corporation provides financial backing to expanding environmental programmes that address climate change and promote moral resource use. 6 | P a g e

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Internal factors (resources, capabilities) SWOT Analysis Source- Cancela et al., 2019 SWOT Analysis Strengths The motors, batteries, and autonomous driving technology included in Tesla vehicles are state-of-the-art. The business puts a premium on original R&D efforts. Because of its innovative goods and environmentally friendly ethos, Tesla is becoming a household name. The name has become synonymous with cutting-edge eco-friendliness and efficiency. Weaknesses Tesla's future rests on the success of its electric car offerings, yet this market area is still relatively undeveloped. This demonstrates the company's ability to adapt to the needs of its clientele. It is no secret that Tesla is struggling to deliver the Model 3 to buyers ( Song, 2022). The additional output the firm has made to meet the demand has caused shipment delays and decreased revenues. Opportunitie s As consumer tastes shift, government incentives increase, and environmental regulations tighten, the global market for electric vehicles is projected to grow fast. If Tesla seizes this opportunity, it can increase consumer happiness and, in turn, its profits. Tesla has done exceptionally well in wealthy nations, but the company is missing out on a huge potential in emerging economies. The corporation is considering expanding its sales and distribution networks in these regions to better compete for clients there. Threats Tesla has competition from both well-established corporations and up-and- coming enterprises. There's a chance that Tesla's rivals may be difficult to beat because of their higher market shares, easier access to cash, and lower prices ( Fiaschi and Talluri, 2019). A downturn in the economy or a change in interest rates might hurt Tesla's sales and bottom line. The items may see reduced demand as a result. 7 | P a g e

Resources Tesla utilises a variety of unconventional or high-priced materials in his endeavours. Both new entrants and established rivals will experience a competitive edge as these resources become increasingly accessible. In order to effectively compete with Tesla in the business sector, rival companies would need to make substantial financial investments. In order to effectively compete with Tesla Company, one must either replicate their ideas or develop novel products that offer comparable functionality ( Basri et al., 2023). The aforementioned scenario presents the possibility of a severe breakdown within the existing industrial infrastructure. Capabilities The trustworthiness of the Tesla name is an invaluable commodity. That's important too, because it helps set the target company apart from its competitors. Despite the presence of multiple competitors, some of which also make electric and hybrid vehicles, Tesla has carved out a position for itself in the market. Tesla is widely regarded as a frontrunner in the industry thanks to its pioneering technological developments and dedication to social and environmental responsibility. The automotive industry's brand reputation affects a variety of metrics, including consumer interest and sales volume ( Wang et al., 2023). This is why many car companies put a premium on maintaining a good reputation. Future trends for business Future trends for Tesla business in terms of opportunities • Vehicles whose software and hardware are more tightly interwoven. With the introduction of EVs, the concept of software-defined vehicles (SDV) emerged. In a so-called "software-defined vehicle," changes may be sent to the computer code that manages the car's brakes, steering, engine, and power distribution from miles away. • Robust battery management solution for compact battery packs Developing a reliable battery management system (BMS) poses significant challenges. To commence, it should be noted that lithium-ion batteries possess a limited range of acceptable operating temperatures and voltages. The efficiency of a battery can be influenced by two factors: voltage and temperature ( Qin et al., 2021). Hence, there exists a limited timeframe during which a specific battery can be utilised without compromising safety. • Complementing each other, Sic MOSFET and Si IGBT 8 | P a g e

Aside from having a larger bandgap, SiC material also has a greater thermal conductivity, breakdown electric field, and electron velocity than Si. Increases in switching speeds, operating temperatures, electrical resistance, and leakage current may be unintended consequences of the improvements. Power efficiency is improved, component size is decreased, and switching speed is increased because to SiC's negligible leakage current. Future trends for Tesla business in terms of Threats  Low gas prices Consumer interest in Tesla waned when gas prices fell. Gasoline-powered automobiles are now cheaper than Tesla's due to the recent decrease in gas prices. Low gas costs that encourage people to keep driving older cars would be bad for TSLA shares ( Ly et al., 2019).  Increased electric vehicle competition The inception of the electric car market predates the establishment of Tesla. There exists a possibility that Thomas Davenport, during the year 1834, constructed an electric vehicle, thus preceding the endeavours of Tesla. Despite their impressive features, the Chevrolet Bolt and Nissan Leaf faced challenges in terms of market acceptance due to their high costs and limited driving ranges ( Thomas and Maine, 2019). • It is possible Tesla's huge costs may never be recouped. Elon Musk's notable reply consisted of the statement, "considerable amounts of financial investments will be allocated." Numerous stakeholders express a desire for substantial capital expenditures; however, these investments must undergo a process of justification prior to obtaining approval. This assertion holds particular validity within emerging markets, where numerous enterprises have endeavoured but ultimately encountered failure. Implications of the strategic analysis for the strategic purpose of the organisation To make this a reality, we need more Tesla dealerships. Due to the expensive expense of repairs, Tesla owners are reluctant to risk using their vehicles. This suggests that Tesla is aiming for a tipping point. The substantial outlay required to set up production facilities, Supercharging stations, reasonably priced vehicles, and maintenance hubs is a major challenge ( Zhou, 2023). The government may be approached for assistance. 9 | P a g e

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Source- Zhang et al., 2019 They are now assisting in the development of new electric car components and, if Tesla is successful in convincing regulators, may assist in the future building of factories and Supercharging stations. The money saved may be used to roll out entirely new service nodes. Establishing, stocking, and preparing the command center's personnel should begin immediately. Tesla may teach its personnel internally during construction so that they are ready to meet customers as soon as the service centres open. The data is then broken down and sent to other service nodes. In addition to the trucks, the centres may also bring additional equipment to deal with the issue ( Ciappi et al., 2019). Customers would be happier if they did not have to wait around for repairs to their Tesla if the company took reservations in advance. Potential competitive advantage The VRIN/VRIO study is a form of strategic analysis and evaluation that businesses may use to analyse their resources, strategic value, and competitiveness. 10 | P a g e

Source- Shinde et al., 2020 VRIO Analysis Valuable Tesla Motors is well-positioned to take advantage of possibilities both within and beyond the company as a result of the expertise of its employees. A committed team of employees who each offer something special to the table is essential to a company's growth, development, and success. Tesla Motors has been well-known in the automotive industry over the years thanks to the outstanding quality of its vehicles. Rare Tesla Motors is a global company that operates in many different areas. As a result of entering new markets, Tesla Motors has seen a rise in both sales and profitability ( Li and Liu, 2023). The bottom line, reputation, and influence on a worldwide scale have all improved as a consequence. Inimitable One of Tesla Motors' strongest selling points is the exceptional quality of its products. Perhaps the increasing demand for Tesla Motors' products might be related to their exceptional quality. The fact that this data is well protected and only the company's top brass has access to it is a major selling point. Organization Because of the technological and integrative advances, it has made, Tesla Motors has a leg up on the competition. The corporation may be able to improve the administration of its global operations by implementing new strategies and updating its technological infrastructure ( Monika et al., 2021). Tesla Motors' innovative technologies and well implemented advantages have put it years ahead of the competition. Alternative strategies for business Switching from aluminium to steel might reduce Tesla's maintenance costs. Steel is more affordable than other materials, allowing us to reduce the price of the vehicle. Steel is 11 | P a g e

superior to aluminium because it does not deform as much when struck. Steel may have dents and scratches repaired. Steel is 2.5 times as heavy as aluminium because of its greater density. As time passes, it is expected that the Tesla model's range would diminish. Tesla's reputation for making lightweight vehicles would take a hit if the business started using just steel ( Park et al., 2021). In order to reach the latter objective, Tesla intends to open service centres staffed by Tesla- trained technicians who, in theory, should be able to fix Teslas at a cheaper cost than independent repair shops that do not employ Tesla components. Prices at independent garages tend to be greater. If the cheap prices are kept even after repairs and natural calamities, the customers will be happy. It is reasonable to presume that Tesla's sales and service departments are trustworthy given that the company deals in automobiles ( Qian et al, 2019). If enough consumers complain, Tesla may reconsider its position. Source- Ni et al., 2023 Execution of the selected strategy Strategy Map Through strategic planning, businesses choose their long-term objectives and the paths they'll follow to achieve them. This way of thinking may also be referred to as a company strategy. It lays forth the organization's end aim and strategy for getting there. The timeframe for reaching this objective is open-ended; it might occur over the next five years or it could take 12 | P a g e

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the next eighty. It further establishes the city as an important economic hub on the global stage ( Kobeissi et al., 2023). Source- Rutland et al., 2020 KPI (Key performance indicator) The KPIs of tesla are as follows: -  Financial Metrics and KPIs  Process Performance Metrics and KPI  IT KPIs  Human Resource and Staffing KPIs  Customer Experience Metrics and KPI  Marketing KPIs  Sales KPIs It is possible that everything an organisation does serves its objective. The vision is expansive, but it wo not come to fruition until the goal is reached. These two goals are complementary to one another. It reassures everyone involved and lays out the best course of action for the company to take in order to realise its full potential ( Cancela et al., 2019). Marketing, digital, branding, communication, and reputational actions are all critical for a company to use to gain and maintain its consumers' trust, which is vital to the firm's success. 13 | P a g e

This is true even if the company's main concentration is on a single service or product. A corporation has no choice but to strictly adhere to this approach if it wants to flourish ( Cancela et al., 2019). These techniques are crucial to making a profitable investment and should not be overlooked. Recommendations The use of Tesla-owned service centre and repair shops is encouraged. The vehicle's range would be drastically reduced, in my opinion, if we used steel instead of the aluminium alloys that are now in use. Tesla's premium driving experience would suffer if the company were compelled to produce cheaper, less athletic vehicles. The report confirms that development on technology for fully autonomous cars is impeded by the existing state of affairs. The parked car may be damaged if other drivers were careless or involved in accidents. Tesla needs to bring car maintenance in-house to save time and money searching for new parts. If Tesla's financial problems remain, the business may opt to significantly lower the pricing at which it delivers its products and services ( Song, 2022). It would refuse to provide maintenance on clients' cars if it became obvious that doing so would benefit the customers, they had worked so hard to earn. Conclusion According to the research, the company has to form a new division responsible for vehicle maintenance. Future need for new assembly lines requires equivalent transportation and distribution infrastructure, similar to the supply of car parts. It is possible to send the part if it is tiny enough, but it is not advised owing to the post office's unreliability. Due to insufficient funds, this is currently not possible. The components may be manufactured using the materials once the structure has been completed. To finish the product, they use both human and mechanised effort. Investing in product development time and resources is crucial in this new industry. Prioritising service and maintenance is essential. References Basri, E.I., Basri, A.A. and Salim, F.N.D., 2023. Study on the Effects of Individual Pitot Tube Inlet of a Bladeless Tesla Microturbine using Numerical Analysis. CFD Letters , 15 (7), pp.14- 30. 14 | P a g e

Cancela, S., Calle, J.D. and Fernández-Hernández, I., 2019, April. CPU consumption analysis of TESLA-based navigation message authentication. In 2019 European Navigation Conference (ENC) (pp. 1-6). IEEE. Ciappi, L., Fiaschi, D., Niknam, P.H. and Talluri, L., 2019. Computational investigation of the flow inside a Tesla turbine rotor. Energy , 173 , pp.207-217. Fiaschi, D. and Talluri, L., 2019. Design and off-design analysis of a Tesla Turbine utilizing CO2 as working fluid. In E3S Web of Conferences (Vol. 113, pp. 0-0). E3S Web of Conferences. Kobeissi, H., Adusumilli, G., Ghozy, S., Kadirvel, R., Brinjikji, W., Albers, G.W., Heit, J.J. and Kallmes, D.F., 2023. Endovascular thrombectomy for ischemic stroke with large core volume: An updated, post-TESLA systematic review and meta-analysis of the randomized trials. Interventional Neuroradiology , p.15910199231185738. Li, R. and Liu, S., 2023, April. Chooser Option Pricing of Tesla in Terms of Monte-Carlo Simulations. In FFIT 2022: Proceedings of the International Conference on Financial Innovation, FinTech and Information Technology, FFIT 2022, October 28-30, 2022, Shenzhen, China (p. 196). European Alliance for Innovation. Ly, J., Kelly, S., Xi, Y., Ashikyan, O. and Chhabra, A., 2019. Role of 3 tesla MR neurography and CT-guided injections for pudendal neuralgia: Analysis of pain response. Pain physician , 22 (4), p.E333. Monika, K., Chakraborty, C., Roy, S., Sujith, R. and Datta, S.P., 2021. A numerical analysis on multi-stage Tesla valve based cold plate for cooling of pouch type Li-ion batteries. International Journal of Heat and Mass Transfer , 177 , p.121560. Ni, T., Si, J., Li, F., Guan, W., Pan, C., Li, D. and Pan, M., 2023. Performance analysis on the liquid cooling plate with the new Tesla valve capillary channel based on the fluid solid coupling simulation. Applied Thermal Engineering , p.120977. Park, J.E., Cheong, E.N., Jung, D.E., Shim, W.H. and Lee, J.S., 2021. Utility of 7 tesla magnetic resonance imaging in patients with epilepsy: a systematic review and meta- analysis. Frontiers in Neurology , 12 , p.621936. Qian, J.Y., Chen, M.R., Gao, Z.X. and Jin, Z.J., 2019. Mach number and energy loss analysis inside multi-stage Tesla valves for hydrogen decompression. Energy , 179 , pp.647-654. 15 | P a g e

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Qian, J.Y., Wu, J.Y., Gao, Z.X., Wu, A. and Jin, Z.J., 2019. Hydrogen decompression analysis by multi-stage Tesla valves for hydrogen fuel cell. International Journal of Hydrogen Energy , 44 (26), pp.13666-13674. Qin, Y., Xiao, Y. and Yuan, J., 2021, September. The Comprehensive Competitiveness of Tesla Based on Financial Analysis: A Case Study. In 2021 International Conference on Financial Management and Economic Transition (FMET 2021) (pp. 462-469). Atlantis Press. Rutland, J.W., Loewenstern, J., Ranti, D., Tsankova, N.M., Bellaire, C.P., Bederson, J.B., Delman, B.N., Shrivastava, R.K. and Balchandani, P., 2020. Analysis of 7-tesla diffusion- weighted imaging in the prediction of pituitary macroadenoma consistency. Journal of Neurosurgery , 134 (3), pp.771-779. Shinde, N., Salema, Z. and Sakarwala, B., 2020. An Investigation of Non-Return Valves as Possible Sources of Pump Failure and A Comparative Analysis with Tesla Valves. International Journal of Engineering Research & Technology , 9 , pp.71-80. Song, J., 2022, March. Quantitative Analysis of Tesla Inc. in the Context of the Covid-19. In 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022) (pp. 662-666). Atlantis Press. Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production , 235 , pp.653-663. Wang, F., Lin, X., Lin, C., Huang, G., Li, M. and Zhu, L., 2023. Ability of three-dimensional 3-Tesla ultrashort echo time magnetic resonance imaging to display the morphological characteristics of pulmonary nodules: a sensitivity analysis. Quantitative Imaging in Medicine and Surgery , 13 (3), p.1792. Zhang, Y., Su, J., Zheng, L., Li, R., Zhao, L., Yu, B., Cheng, J., Zeng, B. and Xu, X., 2019. Analysis and elimination on common‐mode interferences generated in the series‐resonant converter system of high‐power tesla pulse driver. IET Science, Measurement & Technology , 13 (7), pp.949-958. Zhou, Z., 2023. Tesla Marketing Analysis. Academic Journal of Business & Management , 5 (2), pp.171-177. 16 | P a g e

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BUS9048M Strategy Making

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