Tesla has definitely brought innovation into the world of car manufacturers, although its way towards success was not entirely smooth, as evident from the case study under analysis. However, nowadays, many people think of shifting to driving an electric vehicle and, particularly, a Tesla one. To a great extent, such decisions are influenced by the company’s new and advanced technologies, as well as its proper positioning on the market.
The company has its strengths and weaknesses and responds to opportunities and threats from the business environment. Tesla’s primary strengths include its ability to grow rapidly due to people’s significant interest in its innovative products and a unique position in the market. However, it also has some weaknesses, which are primarily of economic nature. Particularly, due to the need for innovation, the company has to make significant investments in research, and it results in low revenues. Tesla Motors, Inc. has an excellent opportunity to lower costs of production by investing into batteries manufacture. Besides, it can benefit from the introduction of the new and cheaper Model 3. Finally, the business is threatened by other car manufacturers that also produce electric vehicles and have more financial capabilities to sustain competition in the long run.
Tesla was founded by Elon Musk, an ambitious person with numerous short- and long-term dreams and plans. His life is full of learning new information and implementing the knowledge in innovative projects. In addition, his business behavior and leadership style have been somewhat impulsive, and Tesla is not an exception. For instance, Musk has fired three CEOs for the last several years and started to lead the company himself. Such decisions might constrain Tesla’s strategic options because they eliminate the opportunity for the inclusion of other people’s ideas.
For the last time, Tesla has been in a difficult situation, and to survive, it should incorporate new short-term business objectives. First, executives should review ways to decrease the cost of production to reduce each vehicle’s final price. It can be done through finishing the company’s production of batteries. Secondly, Tesla can change its approach to selling its vehicles abroad. Currently, Tesla cars are sold through in-house stores, although the company can allow franchising. Finally, in the short run, the company should consider moving production abroad, closer to final consumers, to decrease market prices for its vehicles.
As it has already been mentioned previously, the Tesla’s weaknesses are extensive investments in new technologies research, and the opportunities include the introduction of the new model, which may be more popular with consumers due to a lower market price. Apparently, these aspects are somewhat interrelated. To take advantage of possibilities, Tesla leaders need to find ways to continue investing in research and to come up with sources of finances. Such include emissions of new shares and franchising of retail stores abroad.
Since Tesla is facing some threats, it can use its strengths to mitigate or reduce them. Although some other major car manufacturers also produce electric vehicles and are its competitors, they do not have such advanced technologies implemented in their products and are not as popular as Tesla. Therefore, company’s leaders can use the potential for innovations and growth as a way to reduce the threat from competition. Besides, a unique position of Tesla allows it to offer a greater diversity of products that have higher chances to be purchased by the target audience that is confident in the quality of this particular electric car manufacturer.
In spite of its innovations, the Tesla Company has faced some major difficulties recently and is still struggling with getting over them. However, much due to natural endowments of its founder, Elon Musk, the company is likely to start doing better soon. Besides, by using its strengths and opportunities, Tesla has a great potential to overcome its threats and weaknesses.
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