Project Deliverable 3: Exploiting Innovation Due Week 7 and worth 150 points From the same case that you have chosen for Deliverables 1 and 2, you will determine the company’s top advantage(s) and rec
Running head: case 13: tesla motors: disrupting the auto industry 0
Case 13: Tesla Motors: Disrupting the Auto Industry
Introduction
Tesla Motors is a leading brand globally; this automotive company has headquarters in California that designs and manufactures electric cars, other electric vehicles, and the related component. The company gained significant attention from the consumer after producing the Tesla Roadster, a total sports car model S, a total luxury sedan. The paper will make a discussion on the strategies used by Tesla Company to deal with the market and approaches that help them sustain their position in the market.
Definition of Strategy and its suitability with the Tesla Company
The strategy is this is a Greek word, which means developing some designs that help in achieving some long-term and overall aim; this is the art and science of panning the available resources to use them in the most effective ways (Yuan, Lu, Tian, & Yu, 2020). While talking about Tesla, it can be stated that it effectively fulfills the demand of word strategy. As Tesla is one of the biggest labels, the people working for this company have up-to-the-mark abilities to develop the most successful strategies. The strategy makers are betting that Tesla will control the bottleneck and the profit center for the industry's well-being. The strategies made in Tesla account for the system level; technology and innovation are always the company's priorities. The organization's innovation strategy is transforming the whole automotive industry (Alfred, Gyasi, Oduro, & Akpabot, 2019).
Summary of Strategies Chosen by Tesla Company to Lead
The basic strategy of Tesla is quite popular as the CEO shared it with everyone back in 2006; he was clear about the approach he will use to get along the industry and gain people's attention. He said that he would sell sports cars and made them affordable for consumers over time. To better understand the strategy of Tesla, one must separate it in 2 different pillars, more like the headline-grabbing moves (for example, launching the Cybertruck) and the big bets that are the core company products. Here one can understand that the launch of Cybertruck is more like a marketing tactic that attracts consumers globally. While the second part of the strategy, launching core products like models S, 3, Y, and X is the strategy to transform the industry. In 2007, the first phase of this strategy was completed, while phase 2 in 2013 by the development of model S. Both these stages helped in propelling the reputation of Tesla and manage the share price (Jiarui, 2020).
Identification of Tesla’s Industry and Determination of main Competitors
The main competitors of Tesla include Ford Motors, General Motors, and Volkswagen. All these companies are doing well in the automotive industry; many people are fond of vehicles designed and manufactured under these brands. Currently, Tesla just overtook the position of Volkswagen in being the second most valuable carmaker after Toyota. Each competitor uses different approaches and strategies to stay in highlights of the automotive industry; TOGETHER 25 is the strategy currently used in Volkswagen; it is all set to sell electric cars, offensively aiming to outsell Tesla (Wilmot, 2020). On the other hand, GM (General Motors) plans the production outlook for 2023 to help the organization stay updated with the new trends in the industry. At the same time, Ford is setting a new vision to get more successful in the future. The new strategy is to focus on the near-term profitability to develop a more competitive industry position.
Analysis
The strategies which the competitor companies are using can make them successful at some point. Getting along with the new technology and using different strategies to gain customer interest is making this industry more competitive. Ford’s new strategy to consult with the partners and stakeholders is undoubtedly a practical approach that will strengthen the relationship more; the passenger vehicle and future redesign will gain customers' attention. On the other hand, GM is on the right path to achieve the goal of increased sales with the strategy. However, there are some approaches which make Tesla better than its competitors such as Tesla is way ahead in the field of technology and innovation, the most robust R&D department is making it way better and affordable vehicle for the people (Alfred, Gyasi, Oduro, & Akpabot, 2019).
Performing Industry Analysis for Evaluating the Company’s Current Standing
Understanding the strategies used in Tesla, it can be stated that the company can conquer the world by focusing on the key strategy. The company has the ability and resources to enter in other industries as well. The following is the industry analysis for Tesla’s CEO.
General Environment
The general vehicle industry is an external factor that could have a positive or negative impact on the business strategy of Tesla. The following are some key segments to define the industry.
Global Segment
With time, the company achieved enough popularity, and the goal of achieving the 0 emissions electric power, which is why the company is focusing on supercharges powered by superchargers. Expansion in the global network is assuring the rapid success that is made up of the functional electric vehicles of Tesla.
Socio-cultural
The innovation of company Roadster is the catalyst that allows the production of some more effective vehicles, just like Model S 2013. The more affordable cars are broadening the public's portion to have the opportunity to drive efficient electric cars. This company is allowing consumers to use solar panels that avoid the increased cost of fuel.
Technological
The company is becoming the rapid player of the automobile industry and impacting the renewable transportation energy sector. Sales of Model S increased by around 55% in 2015. The demand and desirability of this brand’s vehicle are rapidly increasing. The use of green energy services and technological advancement gives the ultimate rise to a competitive market for the customers (Yuan, Lu, Tian, & Yu, 2020).
The proposition of Three Performance Goals for Next One and Five Years
Goals for One Year
To reach the 321,000 vehicle sales until the end of 2020
To manufacture more than 50,000 cars in coming one year
To use 100% green approaches and meeting carbon emission goals
Goals for Five Years
To be the top-rated car in the consumer reports within the next five years
To be the first automotive company that offers total green cars
To expand globally and getting more substantial consumer base in the upcoming five years
Rationale/Purpose
The rationale behind choosing these goals is, the company is already working effectively in the market, and they are also using different strategies to gain the attention of customers. Tesla is already on the road to success. However, the company needs to sustain this position in the market. Thus, it is essential to develop more cars and use technology to make vehicles more convenient for customers. Going global and starting other manufacturing plants may help in increasing the sales of the company.
Conclusion
All in all, Tesla is a huge brand, gaining customers' attention and becoming more and more popular. Analyzing the company policies, it is identified that the company wisely develops strategies to be the best in the industry; however, the company should achieve these goals at the top.
References
Alfred, A., Gyasi, E., Oduro, B., & Akpabot, S. (2019). Foresight, organization policies, and management strategies in electric vehicle technology advances at Tesla. In Futures Thinking and Organizational Policy, 57-69.
Jiarui, Z. (2020). Is it an excellent choice to invest in Tesla? In 2019 International Conference on Education Science and Economic Development (ICESED 2019)., 12.
Wilmot, S. (2020, January 24). No, Tesla Isn't Bigger Than Volkswagen. Retrieved July 27, 2020, from https://www.wsj.com/articles/no-tesla-isnt-bigger-than-volkswagen-11579861802
Yuan, Y., Lu, L., Tian, G., & Yu, Y. (2020). Business strategy and corporate social responsibility. Journal of Business Ethics 162, no. 2, 359-377
