Week 3 Assignment 1
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Strayer University
BUS499 Business Administration Capstone
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Week 3 Assignment 1
Tesla, Inc., previously Tesla Motors, is an American producer of electric automobiles, photovoltaic panels, and automotive and residential energy storage batteries. Martin Eberhard and Marc Tarpenning, American entrepreneurs, formed it in 2003 (Liu, 2021). It was founded to develop an electric sports automobile. Today, Tesla is the largest growing brand worldwide in 2021 with its core product, electric cars, leading the electric car sector globally. Tesla’s strategy for adapting to changing circumstances is to create new services and commodities that appeal to a broader range of buyers (Liu, 2021). Tesla Motors has branched out its activities overseas, inclusive of the various sites within the US and China; their objective is to remain competitive in the specialized sector. The company’s long-term aims remain unknown based on the data obtained.

Globalization

Globalization is a phenomena that affects the social, cultural, political, and legal spheres. Globalization, according to Lui (2021), is the process through which commodities, innovation, data, and employment expand across international borders and cultures. From an economic standpoint, it signifies to the global interaction of countries encouraged by free commerce regulations. Globalization provides various organizations and corporations with numerous advantages improving their competitive potential (Liu, 2021). They can reduce expenditure in operating resources by exploiting international variations in cost of resources labor and more critically, taxes and tariffs. The overall outcome is increasedget access to millions of new consumers with reduced operation costs.

Nevertheless, when addressing the reasons for Tesla going global, they are numerous, but the core factors included market accessibility, efficiency in production, and fulfilling the company’s objective. The objective of Tesla, Inc., according to its website, is to create and market a product that enables a far more self-sustaining use of the environment (Liu, 2021). Environmental problems are critical in the transportation business; according to Akakpo et al. (2018), the transportation sector accounts lasted for approximately 70% of worldwide oil consumption and over 55% of greenhouse gas emissions that damage the environment (Akakpo et al., 2018). As environmental issues are global in scope, it is critical to encourage the use of electric cars globally, not only in the United States. As a result, one of the reasons Tesla Motors is expanding abroad is to accomplish its objective.
From a market availability perspective, Lui (2021) reported a significant net loss for the quarter ended March 2011; total sales were stated as approximately $50 million, but net losses totaled almost $49 million . It indicated that expanding into the worldwide market was important for the firm to raise prospective sales and earn profits (Liu, 2021). Tesla Motors was able to receive a variety of privileges from the Norwegian and various US state governments, which aided the firm in becoming the country’s best-selling brand (Liu, 2021).
Further, the Chinese government gives various benefits to Tesla Motors that enable the firm to sell its cars more profitably in the Asian market. Moreover, there are strong cultural and technological settings in China that present a significant chance for the organization to develop (Liu, 2021). Due to government rules in some nations, selling automobiles in specific foreign countries allow the firm to earn a higher profit per vehicle sold, making its approach to growth more appealing to the business.

Technology

Tesla faces stiff competition from a slew of established automotive brands. Coupled with the amassed fanbase or community throughout their lengthy existence, Tesla faced immense competition as a new startup company. The Tesla brand’s most precious asset was its reputation and prestige. Through the current CEO, Elon Musk, the company’s competitive edge stems from his active and personal involvement in social media. Tesla keeps the public informed about its goods and innovative services throughout its research and manufacturing processes. While most businesses utilize social media posts as marketing platforms, Tesla uses frequent and consistent updates to communicate their company’s narrative or operations (Cao et al., 2021). Thus, it exploits social media to gain a positive rapport with the public in the form of transparency. Tesla also prospers as a result of its good sentiments. The business advocates for ecologically sustainable technologies and shares its enthusiasm with the social media community (Cao et al., 2021). It establishes a visceral connection with the business.
Moreover, it should be noted that though, Tesla is an automotive company, it can also be regarded as a Tech. company due to the immense exploitation of computer software and hardware in their products. Tesla’s innovative entertainment platform, customer experience, and self-driving technologies are all powered by software (Teece, 2018). Tesla has been using over-the-air upgrades for years, but other automakers are only now beginning to experiment with the technology. Tesla vehicles are equipped with operating systems that have been created and are continually being enhanced by Tesla employees and technicians. Tesla also manufactures a variety of other sorts of technology, including photovoltaic arrays, solar rooftop tiles, several varieties of energy storage devices, electric charging infrastructure, computers, and important computer components for automobiles (Teece, 2018).

Industrial Organization Model

Market structure is critical for adaptable company strategies to succeed in a competitive climate. Competitive strategies should be successful and well-designed in the business’s environment. Market structures also provide information about the competitive market in which the business or corporation competes. The market structure’s features influence the competitive strategies in a marketplace. Nevertheless, Tesla’s primary goal is to accelerate the transition from relying on the hydrocarbon energy source to a sustainable, solar-electric economy. Currently, the electric vehicle-manufacturing sector is classified as an ’emerging industry.’ Typically, an emerging sector comprises a few businesses and is dependent on breakthrough technology. Thus, based on the appreciation of Tesla’s marketplace, it can be argued that it is oligopolistic. The reasoning is founded on the fact that it has few dealers of the same product, and currently Tesla is the leading retailer and manufacturer in the US. The company has the determining control over the value of input resources. The notion primarily addresses battery cells that enable the company to create luxury electric vehicles whilst selling them in the price range of a midsize vehicles.

Resource-Based Model

RBV (resource-based model) is a strategic instrument and system used by businesses and institutions to explore and exploit strategic resources to create a long-term competitive advantage. The RBV categorizes corporate resources as tangible or intangible; thus, according to Arbelo et al. (2020) among the tangible resources, Tesla, Inc’s property covers all places declared and leased by the company for manufacturing and warehouse operations. In addition, any packing facilities declared or leased are considered physical resources beneath the land. Additionally, the equipment used by the company is regarded as a tangible resource that comprehends of all manufacture, bundling, and other running equipment (Arbelo et al., 2020). It is noteworthy that the company’s tools are considered as an addition of its product range and integrates economies of scale.
Also, materials comprise all raw resources and bundling materials used by Tesla Motors to assemble and pack its goods. The materials are tangible and easily reachable by competitors for industrial operations among other applications. Tesla Motors suppliers include all materials and items utilized to support the company’s packaging and production processes. Finally, supplies also comprise all items and materials required by other Tesla Motors operations to achieve corporate goals and targets.
The intangible resources include the company’s brand; Tesla Motors’ brand name is instituted on years of offering high-quality commodities and warranting consumer confidence. Competitors are unable to imitate the company’s brand status, which is founded on its organizational culture and exceptional customer relationship. Other intangible resources include intellectual property rights that protect Tesla Motors’ production techniques and product originality, preventing competitors from duplicating or accessing its exclusive product blend, components, and inputs. It ensures Tesla Motors’ uniqueness and renders its products competitive. The combination of both tangible and intangible resources has allowed the company to augment its revenue generation, allowing for increased diversity and efficacy.
Vision
Tesla’s mission statement is “to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles (“About Tesla”, 2022). The statement acknowledges that the world has advanced to a state where sustainble energy should take priority. Tesla’s emphasis is on utilizing renewable energy to drive all forms of automobiles. The vision statements include “most compelling automobile company” and “migration to electric vehicles,” both of which are important for the firm to accomplish its mission statement.

Mission

Tesla’s original mission statement stated, “to accelerate the world’s transition to sustainable transport” (“About Tesla”, 2022) Nevertheless, in 2016, under Elon Musk’s management, the company’s mission was altered to “to accelerate the world’s transition to sustainable energy.” The new proclamation reflects a understated but fundamental move in the company’s business strategy to exploit sustainable energy investment opportunities. In some ways, the new goal acknowledges the company’s other activities such as battery cells’ development and related energy storage technologies’.

Stakeholders

Tesla’s significant stakeholders include stockholders, government and financial firms, and the general public. The company’s vision, objectives, targets, milestones, significant challenges, and big successes are communicated to various organizations (Cao et al., 2021). Tesla Motors Inc. has kept in touch with its stakeholders through social media, as previously mentioned, and the corporate website. The corporation announces its yearly audit of operations on its website; it typically includes financial statistics, assets and assessments, risk factors, commodities, amenities, networks, and structures (Cao et al., 2021). The firm also interacts with its stakeholders by holding yearly shareholder conferences with webcasts for those unable to attend in person. They also hold quarterly “Q&A” conference calls, and factory tours for those captivated in their production process and processes.
 
 
 

Sources

1. Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning
2. About Tesla. Tesla.com. (2022). Retrieved 22 April 2022, from https://www.tesla.com/about.
3. Akakpo, A., Gyasi, E., Oduro, B., & Akpabot, S. (2018). Foresight, Organization Policies and Management Strategies in Electric Vehicle Technology Advances at Tesla. Futures Thinking And Organizational Policy, 57-69. https://doi.org/10.1007/978-3-319-94923-9_3
4. Arbelo, A., Arbelo-Pérez, M., & Pérez-Gómez, P. (2020). Profit Efficiency as a Measure of Performance and Frontier Models: A Resource-Based View. BRQ Business Research Quarterly, 24(2), 143-159. https://doi.org/10.1177/2340944420924336
5. Cao, J., Chen, X., Qiu, R., & Hou, S. (2021). Electric vehicle industry sustainable development with a stakeholder engagement system. Technology In Society, 67, 101771. https://doi.org/10.1016/j.techsoc.2021.101771
6. Liu, S. (2021). Competition and Valuation: A Case Study of Tesla Motors. IOP Conference Series: Earth And Environmental Science, 692(2), 022103. https://doi.org/10.1088/1755-1315/692/2/022103
7. Teece, D. (2018). Tesla and the Reshaping of the Auto Industry. Management And Organization Review, 14(3), 501-522. https://doi.org/10.1017/mor.2018.33