Strategic Plan: Tesla Inc Writing Assignmnet Paper (Term Paper Sample)

Strategic Plan: Tesla Inc.
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Executive Summary
Tesla is an automobile juggernaut founded in 2003 by Martin Eberhard and Marc Tarpenning and based in California. The company currently manufactures two fully electric vehicles, Models S and X. Its main competitors include Toyota, Audi, Honda, Ford, Nissan, and Mitsubishi. The main strengths include high safety ratings, best superchargers, selling through showrooms only, and location in a tech hub. It can take advantage of opportunities like soaring oil prices and increasing environmental awareness to widen its market share. The major challenges, however, stem from the fact that more firms are entering the electric automobile manufacturing industry and will likely pose stiff competition. Tesla believes that it will be the most reliable automobile manufacturer in the future and deliver the hope of a fully sustainable industry. It is recommended that the company should broaden its range of products, as well as venture into new industries to lower its risks. Tesla’s history, products and services, SWOT analysis, financial outlook, and strategies will be discussed.
Strategic Plan: Tesla Inc.
Overview of Tesla, Inc. (TSLA)
The primary objective of forming the company was to make purely electric sports automobiles, with funding being obtained from a broad range of sources. The most notable contribution by an individual came from Elon Musk, the famous co-founder of PayPal who also acted as the chairman of the new venture from 2004 (Liu, Kang, Wu, Chen, & Hon, 2014). Tesla’s first car, Roadster, was released in 2008 to worldwide praise and excitation. The car was highly efficient and did not produce any tailpipe emissions since its system does not rely on an internal-combustion engine. Its motor is powered by rechargeable lithium-ion cells. The company also provides batteries and solar panels for utility, commercial, and home purposes.
Company History
The idea to start Tesla was inspired by the recall and destruction of GM’s electric cars in 2003. The founders established a gap that needed an urgent attention and decided to seize the opportunity. Incorporated as Tesla Motors, the company first relied on funding from Eberhard and Tarpenning until the Series A funding. They wanted to commercialize electric cars and secure a portion in the mainstream market in the automobile industry by availing affordable and environmentally friendly compacts and sedans. Subsequent rounds of funding saved the firm from bankruptcy until it received a low-interest loan of around US$465 million in 2007 (Bilbeisi & Kesse, 2017). In 2010, Tesla became the second American automotive maker to launch an initial public offering after Ford. By 2013, the firm financed most of its operations through stock offering and bonds, and sales. It has an aggressive expansion program with the aim to manufacture 500, 000 units annual by 2018 (Bilbeisi & Kesse, 2017). It is now the most valuable car maker in America.
Products and Services
Tesla's products include electric vehicles, batteries, and solar panels. The firm's current models of cars are the Roadster, Model S, Model X, and Model 3. The Roadster was its first all-electric model but stopped production in 2012. It is expected to come back into the market in 2019. Model S is an award-winning fully-electric sedan released in 2012 (Liu, Kang, Wu, Chen, & Hon, 2014). By 2015, the model had already dominated the plug-in electric car market and was now the best seller in the world. A year later, it became the second all-time best seller in the electric car segment, after the Nissan Leaf. The car has been sold in many countries outside the US, including Spain, Norway, and Netherlands. Model X is a crossover SUV whose full-scale retail began in 2015 (Liu, Kang, Wu, Chen, & Hon, 2014). It has also ranked as a top seller in the plug-in electric car segment. The firm’s third generation model, Model 3, was announced in 2014 and would start full-scale production by September 2017 (Lehtinen, 2015).
Tesla also makes battery products like the Powerwall home and industrial battery packs. It has different models tailored for commercial, home, and utility purposes. To avail quick charging services for their customers, the company introduced Supercharger stations. By 2017, the car manufacturer had 5,487 superchargers globally. The Superchargers are capable of providing up to 120 kW of power. Tesla cars are manufactured with hardware that allows the supercharging. Another service that Tesla introduced was battery swapping though reviews found it to be unpopular among car owners.
Operations
The headquarters of Tesla are in California, but the company has over 50 showrooms around the world. To enhance its rail strategy, the firm hired George Blankenship, who was a former executive at Apple. Though it initially had an office in Michigan, it was closed due to the financial challenges that the firm was facing, and the employees who had been posted there moved back to the head office. Immediately after its inception, Tesla opened retail stores in Los Angeles, New York, and California and later expanded to Chicago, Colorado, Denver, Washington, and Seattle. The firm was quickly expanding, and by 2010 it opened a powertrain development facility near its headquarters in Palo Alto. The initial production of around 20000 Model S automobiles was done at California in partnership with Toyota (Bilbeisi & Kesse, 2017). In partnership with Panasonic, the firm is erecting a Giga factory for battery manufacturing in Nevada (Chen & Perez, 2015). Tesla has manufacturing operations in Canada, Europe, Asia, and Australia.
Vision and Mission
Tesla’s initial vision was to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles” (Tesla, n.d.). Its mission was to “accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible,” (Liu et al., 2014). The mission and vision statements of Tesla were reviewed after the company's management realized that their initial ideas were very ambitious for a new firm. The revised vision statement is to “use the latest innovation to provide the most efficient line of electric automobiles for everyday drivers around the world” (Tesla, n.d.). It also revised its mission statement: "To accelerate the advent of sustainable transport by bringing compelling mass market electric cars to our valued customers from all around the world as soon as possible. Using advanced technologies that make them among the quickest and most energy-efficient cars on the road. We strive to create the best working environment for our employees" (Tesla, n.d.). It has been working aggressively toward achieving these goals and objectives within the projected timelines.
Corporate Values and Culture
To stand out from the rest of the automobile crowd, Tesla embraces some values and organizational culture elements in their daily activities. Employees are valued more than anything else as the management believes that they hold the success of the firm. Innovation, creativity, open-mindedness, and customer-centeredness are also fundamental values. Some of the elements of Tesla's corporate culture include doing the impossible, thinking like owners, constantly innovating, moving fast, and reasoning from first principles.
The culture adequately supports the value of innovation and enables the firm to go beyond the limits to develop high-tech products that attract the attention of people all over the world. It thus boosts its generic competitive strategy. However, one shortcoming of this overtly aggressive and overambitious culture is that there is a lot of pressure on the employees to stretch beyond their normal capabilities. The human resource department is always strained because any performance issue is solely blamed on them. Problem-solving may also be an issue because of the rigid structure established by the culture of streamlining operations with the customer demands. Nonetheless, employees who have been with the company for quite a while have often admitted that the pressure and constant desire to achieve beyond the standard heights have positively affected their productivity.
SWOT Analysis
Strengths
Tesla enjoys a broad array of strengths. First, it has been producing cars that have been rated as the best in the industry in many ways. For example, Model S has been rated as the best performing all-electric car in the market, as well as being considered by the National Highway Traffic Safety Administration as the safest. Second, the Tesla Superchargers are the fastest chargers available for any electric car models, and thus the competitors find it difficult to match the efficiency. Third, it has been relying on the showroom model of selling, which is regarded as appealing to many customers. Fourth, it is located in California, which is a technology hub and thus accessing computer and electrical personnel is easier than in many other areas in America.
Weaknesses
One major weakness is the inability to meet the current demand of electric cars due to limited resources. Second, there is limited infrastructure for charging the cars in the market thus posing a challenge for customers. It is easier for gasoline car owners to access a petrol station than it is for the electric ones. Third, the battery supply is also limited, and Tesla struggles to keep up with the market demand. The battery life is also insufficient for customers who travel a lot (Praem, 2015).
Opportunities
One key opportunity that Tesla should seize is that oil is becoming scarce and pricey (Praem, 2015). Seemingly, electric cars may become the household name in the future as people may shift their a...