2. 1888 2003 2008 2010 2012
TRACKING TESLA
2
Nikola
Tesla
patents
powertrai
n design
built
around
AC
induction
motor
Tesla
Motors
incorpor
ated
Tesla
Roadster
launched
with 0-60
mph
accelerati
on in
3.7
seconds
and 245
miles per
charge on
a
IPO raised
US
$226M
(NASDAQ:
TSLA)
at
$17/share
and closed
at
$23.89
(+40.5%)
The
world’s first
premium
electric
sedan is
launched
– Model S
3. 2013 2014
TRACKING TESLA
3
Model S
named
Motor
Trend’s
Car of the
Year and
achieved
5- star
rating from
the U.S.
National
Highway
Traffic
CEO Elon
Musk
unveils two
dual motor
all-wheel
drive
configurati
ons of
Model S
that further
improve
the
vehicle’s
Announce
ment of
Battery
Swap
Pilot
Program
Nevada
selected as
site for
Panasonic
and Tesla’s
new
battery
Gigafactory
Tesla
shares
some of its
patents to
promote
open
source
developme
nt of
electric
cars
5. About Tesla Motors
• Founded in 2003 by engineers in Silicon Valley.
• The Tesla Roadster hit the streets in early 2008 as a
car with no equal.
• Electric car with into torque, incredible power, and zero
emissions.
• Accelerate the world’s transition to sustainable
transport.
6. Vision
Tesla’s vision statement is “to create the most compelling car company of the
21st century by driving the world’s transition to electric vehicles.” This vision
emphasizes the company’s focus on renewable energy. The following components are
significant in Tesla’s vision statement:
Most
compelling
Car
company
21st Century
The world’s
transition
to electric
vehicles
Tesla’s mission statement was “to accelerate the world’s transition to sustainable transport.” However, in
mid-2016, the company changed it to “to accelerate the world’s transition to sustainable energy.” This new
mission statement indicates a slight but significant shift in the company’s business, to address market
opportunities for renewable energy. Tesla’s mission statement has the following notable components:
Acceleration
The world’s
transition
Sustainable
energy
Mission
7. Hambrick Model
Arena
• both niche (premium) and low-priced (common) products
Vehicle
• In-house mass production, Reducing headcount to tackle
financial crunch, no independent dealership
Differentiator
• Silicon Valley Roots, 18650 form factor for batteries, fast
and light cars with all-glass panoramic roof
Staging
• only 3 models launched in a decade, but company
has expanded almost thrice its original size.
Economic
logic
• logic- lowest cost of in-house production,
discounted purchase from struggling manufacturers
8. Competitors Identifaction
Main Competitor of Tesla is Fisker.
Karma starts at $96000 and repeated trouble safety wise. Fisker is not safe compare to
Tesla.
Chevrolet and Nissan both have EVs, but neither have Sports car and that’s the main
positive point for Tesla.
Sales of Chevrolet and Nissan are down compare to Tesla Motors.
The Tesla models are the only ones that offer superfast charging. (Three of the models-
Chevy Volt, Toyota Prius Prime, and BMW i3 Rex-can use gasoline, however.)
Market Structure
• Market Structure- Oligopolistic dominance in the
market (freedom of entry and exit, limited
competitors, homogeneity)
9. Value Chain
Inbound
Logistics
Operations
Outbound
Logistics
Marketing and sales Service Centres
Raw
Materials
come from
suppliers
Batteries
from
Panasonic
Manufacturing
done in house.
Manufacturing
and Engg. under
one roof
Online sales
and company
show rooms
Sales is not done
on commission
Marketing does
not stress the
value of
environmentally
friendly by
rather speed,
quality, comfort
and luxury.
Independent
from sales
Licensed
Tesla service
centres
Tesla rangers
are mobile
service
centres
Tesla Valet
Service -
Wireless
Software
updates
done
remotely
10. COMPETITIVE ADVANTAGE AND
SOURCE OF VALUE CREATION
Parameters Tesla model S Nissan Leaf BMW5
MSRP 61,070 19,650 48,725
Time 0-60 mph 5.6 10.3 6.1
Horsepower
(5000 rpm)
302 110 240
Range (miles, EPA) 208 75 N/A
Volume (cu ft.) 120 116.4 116
U.S Sales Jan-June
2013
10,500 9,839 25,891
11. Business strategy
1. Develop a high-end, high performance sports car
to prove that electric vehicles are both stylish and
efficient. Use the sports car to develop core
intellectual property and patents.
2. Introduce a premium sedan that competes with
brands like BMW, Mercedes and Audi
3. Produce hundreds of thousands of low cost
premium electric vehicles for mass adoption
12. Product portfolio/scope
• PRIMARY ACTIVITY (LUXURY SEDAN EV
MANUFACTURING)
• SECONDARY ACTIVITIES (COMPONENT SUPPLIER OF EV)
SCOPE
• PRIMARY EV CAR MANUFACTURING
• SECONDARY ACTIVITIES (COMPONENTS SUPPLIER)
BOUNDARY OF FIRM
VERTICAL
• Raw material comes from
supplier:
• Manufacturing
• Distribution and retailing
• Evaluation
HORIZONTAL
• Economies of scale
• Economies of scope
• Learning curve
• Diversifications
• Geographic scope
13. FUNCTIONAL STRATEGY AND
ALIGNMENT
• There is a high alignment of functional and business
strategy of Tesla and is very different from its competitors.
• Tesla builds Roadster which was low volume high price of
around $ 109,000. Model S, Model X targeted the broader
luxury market, Model 3 aimed at higher volume segment
which is showing its gradual alignment toward economies of
scale and reaching to affordable segments of society.
• The company operates enormous factories to capture
economies of scale, they build electric power trains
components for vehicles for other automakers, including
the smart ED2 for two electric drive.Instead of independent
dealership like other car manufacturers, Tesla built a
network of company- owned stores with salesperson on
salary rather than on commission. This functional strategy
is aligning with high degree of Vertical integration of
business strategy.
15. Government & Institutional
relationship
• In June 2017, Tesla made a "last-minute push near the
end of the Albany legislative session to expand its
sales force in New York. However, Tesla and the
legislature got pushback from the auto dealers. A New
York State Legislature bill (A.8248/S.6600) would
allow Tesla to operate 20 sales locations in the state,
up from its current 5. The dealers attacked the bill,
arguing that it would hurt their business because
Tesla does not sell through dealers. According to the
New York Law Journal, "Tesla . . . has its own in-house
lobbyists, according to disclosures filed with the
state's lobbying entity
17. Balanced Scorecard
Through the use of the balanced scorecard, an organization can link
long-term and short-term activities through constant feedback,
which Musk said was a large part of Tesla’s strategy, “I think it’s very
important to have a feedback loop, where you’re constantly thinking
about what you’ve done and how you could be doing it better”
18. Congruence Model
• Batteries from
Panasonic
• Tesla’s team includes
specialists from the car
industry and people from
Silicon Valley who contribute
to innovation process
•Learns from others’
experiences to improve the
handling of the car and
efficiency of the cabin
• No competition between
employees,since salaries
are paid instead
ofcommissions
• Wireless Software Updates
• Sold 10,500 model S cars
in 2013 and is expanding
sales to Europe
• Centralized decision
making, sincedecisions are
made at top level by VP’s
• Key decisions and actions
of the company are
largely decided Musk and
is personal beliefs
•Innovative, learning,
•Frequentl new ideas
that comeing from
innovative culture
Culture Structure
People
and Skills
Work
19. Tackling Changes/ Pitfalls
• Misconceptions of Electric Cars
• Recharge time at home and cost(62 miles an hour while)
• Low number of charging stations
20.
21. • When Elon Musk took over, he made many
changes to the way Tesla had been
operating up until this point, and essentially
restructured the company from the top
down.
• Goals of a company are meaningless without
the proper financing and resources to
achieve them in the short-run. In addition to
this, the issues of financial stability in the
fledgling years of each company. Tesla has
also had problems with this, but has
received a considerable amount of
government assistance.
22. • As of 2015, the total amount of government subsidies
that Elon Musk’s three companies (Tesla, SolarCity,
Space-X) received was estimated to be roughly $5
billion, with $2.9 billion going to Tesla (at the time was
Tesla Motors), and $2.5 going to SolarCity, where on
rough $20 million directed towards Space-X.
• Ever since Tesla and SolarCity merged, this possibly has
an even bigger financial impact on the company. The
specifics of the merger indicate that the deal was
valued to be around $2 billion, and was done with the
intentions of linking supply-chains of the two companies
(Hull & Martin, 2016). Musk explained that the idea
behind the merger was to help make an integrated
product and a one-stop shop for people looking to
eliminate fossil fuels
• This vertical integration likely implies that the subsidies
Tesla (and what was previously SolarCity) receives are
going to be utilized to help Tesla in the production and
development of the Model 3, and that the links insupply
chains will help lower costs.
23. • Tesla has suffered from issues relating to delivery
failure and component shortages in 2012 and 2016
specifically, which was a direct result of Tesla’s limited
supply chain and their inability to obtain the products
from anywhere else.
• Along with the Model 3 is the construction of a one
billion dollar battery factory, or gigawatt factory, that
Tesla and Panasonic have built in Nevada. The idea
behind the gigawatt factory is that it will be a “facility
where we work together with our suppliers to integrate
battery material, cell, module and battery pack
production in one location”
