Tesla Motors # 1

Situational Analysis Competitive Analysis Industry Analysis
Strengths
Experienced management team
Strong R&D department
Tesla enjoys high innovation with its emphasis on performance and
aesthetics of the car, efficiency, superior battery technology, and
performance
Weaknesses
Tesla lacks brand name recognition relative to its competitors
Tesla has a limited operating history
Tesla has to deal with safety concerns in some of its electric cars
Threats
The use of electric cars will require consumer behavior changes, which
is difficult to guarantee
Tesla is confronted by strong competition as more auto manufacturers are
shifting their attention towards environmentally friendly cars
The economic slowdown may hurt its car sales given that electric cars
are still comparatively expensive
Opportunities
Consumers are increasingly becoming sensitive to environmental issues
Economic incentives that have led to acceleration consumer adoption of
electric vehicles
Tesla can exploit the growing support from governments across the globe
on environmentally friendly vehicles such as exemptions
Tesla can exploit a large international market potential to increase
market share In today’s auto market, manufacturers provide a wide
range of vehicles models that utilize alternative fuels and advantaged
technologies. Some of the vehicles set to be unveiled in the market
include compressed natural gas vehicles, plug-in hybrid electric
vehicles, hybrid electric vehicles, all electric cars, bio diesel
vehicles, and ethanol flex-fuel vehicles
Tesla enjoys a competitive edge over its competitors’ dues to that
fact that the cars are:
Environmentally friendly and have zero emissions
High performance
Enhanced battery technologies and driving range
Electric car is highly energy efficiency relative to gasoline cars
Tesla is still in its growth stage and is unlikely to stabilize compared
to its competitors such as General motors and Toyota Motor Corporation
Barriers to entry:
Economies of scale
Technological innovations
Brand loyalty
Regulatory issues Global electric cars sales forecasts project
different market penetrations rates ranging from 6-9% by 2015 and 22% by
2020
Market penetration will highly depend on the battery pack costs,
competitive technologies, charging infrastructure, oil prices,
manufacture investments in production, and consumer attitude
(skepticism)
The U.S. automobile industry represents about 5% of private sector GDP
Close to 76% of the market is shared between Ford, Chrysler, and GM
18% of sales recorded in the U.S. are from Japanese car makers
Hybrids sales less than 5% of car sales in the market
# 2
Tesla has enjoyed growth in its overseas market sales and also benefits
from economic incentives and government regulations. Tesla has also
successfully established brand community of owners who are highly
enthusiastic about the brand. Furthermore, the company’s strategy of
pricing has not been successful in the auto industry. The electric
vehicle industry is typified by lower-than-expected demand, which may
forces startups to shut down. Tesla has consistently been able to offer
top of the range electric vehicles that do not sacrifice speed, comfort,
handling, design, and environmental friendliness.
# 3
Tesla seeks innovative ways that fosters sustainable business model that
creates shared value and fosters competitiveness and innovation.
However, Tesla has been encountering challenges in its supply chain,
with negatively impacts on its capability to expand. The reported fire
accidents have also yielded to reduced consumers’ confidence on Tesla
cars. The reported fires in damaged Model S
raised safety concerns on the use of lithium ion batteries and may a
source of ethical concerns in the future.
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