Tesla Final
Tesla Final
Tesla Final
Galaly
Presented By:
Table of Contents
History of Tesla Motors
Current situation
Board of Directors
Organization
3
4
BCG 6
Environmental Scanning
Internal factor analysis
10
TOWS Matrix
12
13
Corporate Strategies
14
18
20
History
Tesla Motors, Inc. is an American company that designs, manufactures and sells
electric cars and electric vehicle powertrain components. Named after the
scientist Nikola Tesla, Tesla Motors ($TSLA) was founded in 2003. Exactly who
founded Tesla Motors can be discussed, but it was probably by a group of intrepid
Silicon Valley engineers Martin Eberhard, Marc Tarpenning, and Ian Wright. Their
goal was to build an electric vehicle with the same performance as a Porsche and
more environmental friendly than a Toyota Prius. The problem was that the founders
didn't have the money needed to realize their idea, so they contacted Elon Musk,
who decided to invest in the company. Elon Musk had earlier founded the
companies Zip2, PayPal, and SpaceX. The difference between Elon Musk and the
founders was that Elon Musk wanted Tesla Motors to become an improved General
Motors with several car models, while the original founders wanted to design only a
sports car. Elon Musk became interested in electric cars because he is well aware
of peak oil. The idea behind peak oil is that oil is a finite resource we will run out of.
Elon Musk believes the production of oil will begin to decrease after year 2020. As
the production of oil decreases, the price of oil will increase and more people will
buy electric cars.
Current Situation
Tesla Motors headquarters is in Palo Alto, California. Its goal is to speed up this
transition from gasoline cars to electric cars, thus their vision is
"Create the most compelling car company of the 21st century by driving the
world's transition to electric vehicles."
To create this improved car, they couldn't begin with an inexpensive electric car - it
would have been too expensive. So they had to begin with an expensive sports car:
the Roadster. The idea behind this decision was that the profits from the Roadster
would pay for a less expensive car: the Model S, and profits from the Model S would
pay for an even cheaper car. Tesla Motors had produced the Roadster, only 2500
were sold and you can no longer purchase a new one. Afterwards they produced the
model S, About 2,650 Model S cars were sold in the U.S. during 2012, and 4,900
units during the first quarter of 2013, allowing the Model S to become the top
selling plug-in electric car in North America during the first quarter of 2013, ahead
of the Chevrolet Volt with 4,421 units, and the Nissan Leaf with 3,695. Among other
awards, the Model S won the 2013 "Motor Trend Car of the Year", the 2013 "World
Green Car", Automobile Magazine's 2013 "Car of the Year" and Time Magazine Best
25 Inventions of the Year 2012 award.
Tesla Motors has over than 2,000 employees
Current Mission:
Tesla Motors designs and sells high-performance; highly efficient electric sports cars
with no compromises. Tesla Motors cars combine style, acceleration, and
handling with advanced technologies that make them among the quickest and the
most energy-efficient cars on the road.
Board of Directors
ELON MUSK Chairman, Product Architect and CEO
Brad W.Buus Director
IRA Ethrenpreis Director
Antonio J. Gracias Director
Steve Jurveston Director
Harald Kroeger Director
Kimbel Musk Director
Organization
ELON MUSK CEO
JB STRAUBEL Chief Technical Officer
DEEBAK AHUJA Chief Financial Officer
FRANZ VON HOLZAUSEN Chief Designer
JAY VIJAYAN Chief Information Officer
Financial Situation
Income Statement
(Q1-Q3) 2013
2012
2011
2010
2009
Total revenues
1,398,277
413,256
204,242
116,744
111,943
Cost of Selling
Gross profit
1,098,604
383,189
142,647
86,013
102,408
299,673
30,067
61,595
30,731
9,535
163,523
273,978
208,981
92,996
19,282
184,080
150,372
104,102
84,573
42,150
347,603
424,350
313,083
177,569
61,432
(47,930)
(394,283)
(251,488)
(146,838)
(51,897)
Interest income
97
288
255
258
159
Interest expense
(26,705)
(254)
(43)
(992)
(2,531)
Other expense
18,018
(1,828)
(2,646)
(6,583)
(1,445)
Item
Details
Research and
development
administrative
(56,520)
(396,077)
(253,922)
(154,155)
(55,714)
1,230
136
489
173
26
Net loss
(57,750)
(396,213)
(254,411)
(154,328)
(55,740)
BCG
BCG matrix is a framework created by and named after Boston Consulting Group to
evaluate the strategic position of the business brand portfolio and its potential. It
classifies business portfolio into four categories based on industry attractiveness
(growth rate of that industry) and competitive position (relative market share).
These two dimensions reveal likely profitability of the business portfolio in terms of
cash needed to support that unit and cash generated by it. The general purpose of
the analysis is to help understand, which brands the firm should invest in and which
ones should be divested.
The four main categories are as follows:
In our case Tesla Company current case is Question Marks as the earning and
profits are growing but the cash flow is currently negative and its strategy is to
invest.
Environmental Scanning
Strengths:
Very Good Calibers, Strong R&D department, Innovation According to the CEO
Elon Musk, Tesla Motors is like the Special Forces, such as the Navy Seals.
Since the Special Forces are only recruiting the best, so does Tesla Motors.
Experienced CEO, Strong management team; The CEO Elon Musk has earlier
founded companies like PayPal and SpaceX, so he has a good track record.
Tesla Motors can design really good cars. The Model S won the 2013 Motor
Trend's Car of the Year award, which is a competition that began in 1949, and
the Model S might be the safest car ever according to crash tests.
Great Location near the best talents. They are building their cars in California
- not in Detroit. An electric vehicle is like a hybrid between a computer and a
gasoline car, so they can find many computer- and electrical engineers in
California. The area is also more innovative than Detroit.
The Tesla Stores are similar to the Apple Stores and are an innovative way to
market the Tesla cars. (Innovative Marketing idea, stores) Innovative Sales
Channel Model.
Unlike combustible engines, electric engines have less moving parts and are
much cleaner to work with.
Weaknesses:
Tesla Motors are only selling electric cars, and people are still suspicious of
electric cars.
Few Supercharges. The infrastructure around electric cars does not exist.
Tesla Motors are doing their best to change this by building Superchargers,
which are like gas stations but for electric vehicles only.
8
Low battery range. The batteries have to improve. Historically, the batteries
have improved by eight percent a year, but there's no guarantee that they
will improve in the future.
Opportunities:
The world is running out of oil. As the price of oil increases because of the
limited supply, more people will buy electric cars. Resources are renewable
and more available, most efficient vehicle.
Can use their battery technology in other areas, such as storing power from
solar panels.
Threats:
Very Strong Competition. More and more auto manufacturers are releasing
their own environmental friendly cars. Since these companies are larger than
Tesla Motors, they (not all) have more financial resources, thus they can
survive longer if the price of oil doesn't increase in the near future. Lower
cost competitors or imports. Competition in the field; established luxury auto
heavyweights like BMW, Mercedes, and Lexus expected to join the fray soon.
Electric vehicle related accidents may scare away customers. For example, a
fire in one of the batteries is generally front-page news. On the other hand,
there are more than 750 accidents per day related to combustion engines and that's not front-page news.
Economic slowdown. Electric cars are still expensive and a new recession, like
the one in 2008, may limit the demand.
10
Strengths (3.7)
Internal Factors
Strong R&D
department
Calibers
Wg
t.
Rati
ng
0.4
5
Wgt.
Scor
e
Comment
1.8
Strong
Management Team
0.3
1.2
Excellent Designs
0.1
0.3
Great Location,
close to best
calibers in the US
0.0
5
0.1
Large Production
Capacity
0.1
0.3
11
Weaknesses (2.2)
Internal Factors
Wg
t.
Rati
ng
Wgt.
Scor
e
Relatively High
Priced compared
to fuel cars
0.2
5
0.75
Few Charging
stations
0.2
0.4
Low Battery
Range
0.3
0.6
Slow Charging
Process
0.3
0.3
Lack of Brand
Recognition
&Limited
operating history
0.0
5
0.15
Comment
12
Wgt
.
Rati
ng
Wgt.
Score
0.35
0.05
0.2
0.1
0.6
0.1
0.3
0.2
Comment
Threats (2.4)
External Factors
Wg
t.
Rati
ng
Wgt.
Score
0.3
0.6
Economic slowdown
0.15
0.3
0.3
0.6
0.15
0.6
Comment
13
resource pool
Awareness of
importance of EV is not
well propagated
0.1
0.3
Strengths
Weaknesses
S1: Strong R&D
W1:Relatively High Priced
Extern department Calibers
compared to fuel cars
al Factors EFAS
S2: Strong Management
W2: Few Charging stations
Team
W3: Low Battery Range
S3: Excellent Designs
W4: Slow Charging Process
Internal Factors IFAS
S4: Great Location, close W5: Limited operating
to best calibers in the US history
S5: Large Production
Capacity
Opportunities
SO Strategies:
WO
-Focus on new product Strategies:
O1: The world is running out of oil.
development with new
Electricity is a renewable energy.
technologies
and be ahead
-Outsourcing some
O2: People care more about
of the market
operational activities to a
environmental issues
(S1,3,5+O1,2)
low Cost (O5,W1)
O3: Can use their battery technology in
-Expand in new
other areas, such as storing power from
markets(S1,3,5+O5)
-Promote the awareness of
solar panels.
-Develop
new
products
in
environmental friendly
O4: The growing support by governments
an industry different than
cars(O1,O4,W1)
across the globe for environmentally
the company's core
friendly vehicles
operation (S1,S5+O3)
O5: Large International Market Potential.
Particularly Europe, Asia, and Canada.
Threats
ST Strategies:
WT Strategies:
-Develop
new
products
-Follow
Cost reduction
T1: Very Strong competition with less
attracting the different
strategy to decrease
operating Costs
segments (S1,5+T5)
costs(T1,W3)
T2: Economic slowdown
-Develop new
-Sell the company with a
T3: Limited supply for raw materials
technologies to decrease
good bargain
T4: Limited Experienced resource pool
overall
operating
costs
(T1,T2+W3,W2,W1)
T5: Awareness of importance of EV is not
(S1,5+T1)
well propagated
TOWS Matrix
14
Corporate Strategies
1- Growth Strategy: Market Development (Horizontal
Growth):
An effective idea for growth is entering new markets. If you have access to more
customers, you can sell more products and at the same time concentrating on its
primary line of business. You can target new markets by opening additional retail
locations, adding an online presence, selling internationally or reaching new types
of customers.
Tesla should keep focusing on its Niche segment as the current status but expand in
different markets such as Europe & Asia in order to increase revenues. Expansion in
new markets avoids the fierce competition in USA.
As an example, in 2012, the Chinese bought over 19 million vehicles, while the U.S.
market only bought 14 million. China is already the world's largest auto market and
it's set to grow even bigger in coming years. Chinese central planners have said
that they want to have 5 million electric cars on the road there by 2020. That's only
seven years away.
It currently has facilities in the United States and throughout Europe where parts are
being manufactured and assembled. Since they have limited resources, you must
be very selective of the location for its expansion
o
Advantages
15
This not only affects sales through name recognition, but also helps recruit
local employees, sign on new distributors and work with media in each
Disadvantages
shifts
Needs good monitoring globally to efficiently manage crises.
Large capital needed to start the expansion.
customers.
Increase Brand Awareness.
16
sales patterns
Compete more broadly in your industry.
Disadvantages:
products
Older models with fewer features become less desirable and eventually
obsolete.
Advantages:
Enables the company to focus on its new product the Model S
Gain Some Profit to overcome previous losses
Focus on internal issues and enhancing internal processes
Disadvantages
Possible loss of market share
Loose opportunity for potential investments for a growing industry
Delayed to cope with the rapid technology changes
17
Advantages
Transferring skills & capabilities from one business to another
Sharing facilities or resources to reduce costs
Opportunities to achieve economies of scale and scope through skill
transfers, lower costs, common brand name, technology, etc.
Opportunities to expand product or service offerings and preserve unity in
businesses
fully utilize existing resources and capabilities like the Skills in sales &
marketing, general management skills & knowledge, distribution channels,
etc
Disadvantages
Complexity and difficulty of coordinating different, but related businesses
(e.g. Philip Morris General Food and Kraft subsidiaries)
one team to achieve this goal, so below is how are we going to cascade the
business functions among all the departments.
New Mission:
Tesla Motors designs and sells high-performance, highly efficient electric all kind of
cars with no compromises. Tesla Motors cars combine style, acceleration, and
handling with advanced technologies that make them among the quickest and the
most energy-efficient cars on the road.
Marketing:
Follow product development marketing strategy by:
Dividing market into segments and target each segment separately, different
distribution channels.
Doing marketing researches to identify customers needs and best areas to
penetrate.
Building brand equity.
Promotions.
Broad Price ranges.
19
Human Resources:
Information Systems:
Logistics:
Create & maintain strong, reliable & fast supply chain to react conveniently to
customers demand
Finance:
Purchasing:
Hold good deals with new suppliers needed for the new products providing
20
Peer benchmarking
Compare your own intelligence function against industry peers using GIA (Global
Market Intelligence) Survey results in terms of
Annual budget
Level of development
Number of employees within the intelligence team
An example is from an industrial company that invited GIA to help run a megatrends
workshop to identify new business opportunities from trends that were identified
beforehand. The workshop resulted in 41 new business ideas, which was later
counted as part of their KPIs for their market intelligence activities. So the business
opportunities or new ideas generated can be one set of KPIs, even if they will not
show up as revenues immediately.
Social Media fan growth rates, engagement rates, and response rates
Having a large number of fans is a solid measurement of your companys social
marketing success. Fan growth helps track the increase in the number of fans
or followers of your page, but it does not necessarily determine whether your
social efforts are effectively engaging your target audience
The engagement rate for Facebook is calculated as the sum of likes,
comments, and shares on a given day divided by the number of posts that a
page made on that day. That number is then divided by the total number of
fans that like that page
The Response Rate is a percentage calculated as the number of times the page
responds to user posts or questions on their page, divided by the total number
of posts or questions. Your goal is to have a high RR in order to show customers
that you are actively listening and responding
Onsite market interviews
21
Operational
Drive
Financial
Outcome
Speed-tomarket
Increase
product revenue
Product
adoption
Increase
product margin
Product
launch
Lower cost of
sales
22