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Tesla Motors
Tesla Motors aims to accelerate sustainable transport by bringing compelling electric cars to mass markets. It was founded in 2003 and currently produces the Roadster sports car and Model S luxury sedan. Tesla's core competencies include generating enthusiasm for its brand, utilizing cutting-edge technology, and a willingness to take risks. These competencies help Tesla differentiate itself from competitors and create value for customers. However, Tesla faces future challenges as larger automakers adapt and resistance emerges to Tesla's sales model as it aims to reach broader markets.
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Tesla Motors
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- 2. PRESENTATION FLOW AGENDA 2 INTRODUCTION 3 COMPANY OVERVIEW 5 STEEPLED 4 POSITIONING 6 PORTER’S FIVE FORCES 7 INTERNAL ANALYSIS 8 TESLA’SCORE COMPETENCE 1 RESEARCH TOPIC 9 LESSONS 10 FUTURE CHALLENGES
- 3. RESEARCH TOPIC TESLA MOTORSINC How does Tesla’s core competencies and other internal factors affect it’s success in its external environment? 3
- 4. INTRODUCTION ANALYSIS 12850 “to accelerate theadvent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible” 31 Different Countries Mainly US, Japan, Norway 64% Increased its market share 2002 Founded in Silicon Valley by Elon Musk, Marc Tarpenning, and Martin Eberhard $52400 “Motor Trend Car of the Year Award”. 4.2 Sec to 100 KM/h 5 Star Safety 30 Min Charging 8 Year Warranty 300M (482 KM) Range Units Sold in 2013 2,964 Employees 760 % Improvement 4
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- 6. TESLA PRODUCT ROADMAP COMPANYOVERVIEW I Founded in 2003 By Martin Eberhard, Marc Tarperinning I Elon Musk Joined With Series A Investment in February 2004 I Tesla Roadster Shipping since 2008 sold over 1,800 in over 300 countries Over 13 million miles driven I Tesla Roadster Shipping since 2008 sold over 1,800 in over 300 countries Over 13 million miles driven 2013 VEHICLEMARKETING 20 KWh EU VERSION APAC VERSIONMODEL X RIGHT HANDED DRIVE, ALL WHEEL DRIVETHIRD GENERATION EU & ASIA MARKETING LAUNCHESRIGHT HAND DRIVE COUNTRIES SECOND TIER CITIES STORE, SERVICE CENTER AND SUPERCHARGER NETWORK EXPANSIONS 2014 -20152015-2016 I Tesla Model S Available since mid 2012 20,000 Expected Unit sales per year Worlds first EV Sedan 21,000 DELIVERIES MARKET SHARE GAINS & PRODUCT EXTENSION HIGHER VOLUME AT LOWER PRICE POINT SOURCE:TESLA 6 “ONLY A DESIRABLE CAR CAN ACHIVE SUCCESS.”
- 7. MEET THE KEYPEOPLE COMPANY OVERVIEW CEO CTO CFO CHIEF DESIG 7 ELON MUSK JB STRAUBEL DEEPAK AHUJA FRANZ VON HOLZHAUSEN SPACE X PAYPAL SOLARCITY INNOVATOR OF THE YEAR FORD, KINMATIC MAZDA. AUIDI. GM “Revolutionary in every sense” ELON MUSK
- 8. EX GM-TOYOTA FACTORY AKAJUDO Economics COMPANY OVERVIEW 8
- 9. COMPANY OVERVIEW TESLA’S MISSION AClean Start Where the company takes a Silicon Valley approach to constantly innovate Committed to Electric On the belief that their products should offer the most efficient and sustainable path to the future Build Around the Driver on the belief that their products should offer the most efficient and sustainable path to the future Sparking the Revolution to lead the way and be fun to drive. 9
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- 12. Buy or DO? COMPANYOVERVIEW 12
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- 14. TESLA MARKET POSITIONING POSITIONING Internal Combustion HybridElectric Plug-in Hybrid Pure Electric Performance Vehicles ROADSTER Premium Vehicles MODEL S MODEL X Small Premium Vehicles GEN 3 Family Vehicles Subcompact City Vehicles SOURCE:TESLA 14
- 15. SERVICE CENTER GEOGRAPHICALDISTRIBUTION POSITIONING 15
- 16. SUPERCHARGER NETWORK POSITIONING 16 2013 -2015 ZERORENT COST & ALMOST ZERO ELECTRICITY COST MAGNET TO HIGH END CONSUMERS & FREE OF CHARGE
- 17. AVAILABLE MODELS ANDSALES POSITIONING SOURCE:HYBRIDCAR.COM Existent PEV & PHEV Models OEM Model Type First Year on Market Sales to Date Smart Fortwo Electric Drive BEV 2011 564 Tesla Roadster BEV 2008(N/A) 1650 Tesla Model S BEV 2012 12850 Toyota Rav4 EV BEV 2012 600 Toyata Prius Plug-in PHEV 2012 16963 BMW Active E BEV 2012(N/A) 969 BMW i3 BEV 2013 0 CODA coda sedan BEV 2012(N/A) 78 Detroit Electric SP:01 BEV 2013 0 Fiat 500e BEV 2013 0 Fisker Karma PHEV 2012 1800 Ford Focus Electric BEV 2011 1583 Ford C-max Energi BEV 2012 4856 Ford Fusion Energi BEV 2012 1584 GM Volt PHEV 2010 41050 GM Spark EV BEV 2013 27 Honda Fit EV BEV 2012 384 Honda Accord Plug-in Hybrid PHEV 2013 200 Mitsubishi I-MIEV BEV 2011 1390 NIssan Leaf BEV 2010 29332 Expected Market Entrants OEM Model Type First Year on Market Sales to Date Audi A3 e-tron PHEV 2014 0 BMW i8 PHEV 2014 0 BYD e6 PHEV 2014 0 GM Cadillac Ev PHEV 2014 0 Mitsubishi Outlander PHEV PHEV 2014 0 Nissan Infinit LE BEV 2014 0 Porsche Panamera S E-Electric PHEV 2014 0 Tesla Model X BEV 2014 0 17
- 18. 2013 Vehicle ExpectedSales IncreaseinSales -0,3 0 0,3 0,6 0,9 1,2 Unites 0 25000 50000 75000 100000 GeneralMotors Chrysler TeslaMotors ToyotaMotor HondaMotor Nissan Audi Volkswagen MitsubishiMotor MazdaMotor HyundaiMotor BMW Mercedes-Benz VolvoCars Subaru KiaMotors Jaguar Porsche Oct 2012 Oct 2013 %Change %64 INCREASED SHARE SOURCE:AUTODATA 18
- 19. 2013 INDUSTRY &TESLA GROWTH POSITIONING 2013 Q1 Sales 0 1250 2500 3750 5000 Model S S Class BMW 7 A8 1.4622.338 3.077 4.750 SOURCE:CNN NEWS SOURCE: HYBRIDCARS.COM 19
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- 21. PEV IN THEFUTURE POSITIONING SOURCE:Electric Vehicle Market Forecasts 21 Estimated Cost of EV Batteries SOURCE:Electric Vehicle Market Forecasts EIA Oil Scenerious
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- 24. STEEPLED MACRO FACTORS 1. SOCIALFACTORS OIL Instability, Climate Change, Environmental issues 2. TECHNOLOGICAL FACTORS Battery Pack 5. POLITICAL FACTORS Tax Incentives, Energy Loans, 6. LEGAL FACTORS Carbon Credit Sales, Safety, Emission 3. ECONOMIC FACTORS Decreased Aluminium costs 7. ETHICAL FACTORS Environmentally Minded Consumers 8. DEMOGRAPHIC FACTORS Stagnant, or Negative Growth Rates,& Adoption Rates 4. ENVIRONMENTAL FACTORS Zero emission laws increase Tesla’s Profits 1 1 3 3 1 5 4 2.5 Weighted Five Scale Measurement (Max 5) 24
- 25. EXTERNAL ANALYSIS PORTER’S FIVEFORCES TESLA MOTORS INC 25
- 26. “Industry structure drivescompetition and profitability, not whether an industry produces a product or service, is emerging or mature, high tech or low tech, regulated or unregulated.” -Michael E. Porter, “The Five Competitive Forces That Shape Strategy” Harvard Business Review (2008) PORTER’S FIVE FORCES EXTERNAL ANALYSIS 26
- 27. PORTER’S FIVE FORCES PEVLUXURY SEDAN EXTERNAL ANALYSIS Economies of Scale Network Externalities Access to Distribution Raw Materials Technology and Knowhow High Elasticity of Demand Observability of Prices Industry Growth Concentration Switching Cost Availability of Substitutes Price Value of Substitutes Price Elasticity of Demand Close Complements Price Value of Complements Elasticity Demand of Buyers Relationship Related Trans. Availability of Substitutes Volume of Purchase Importance of Price Supplier Concentration Few Input Substitutes Relationship Specific Invest. Purchase Volume Price Discrimination of Sup. 2.17 2.35 3.65 3.48 2.81 Weighted Five Scale Measurement (Max 5) 27 Average 2,89 Threat of Entrants Intensity of Existing Rivalry Bargaining Power of Suppliers Bargaining Power of BuyersThreats of Substitutes and Complements
- 28. PORTER’S FIVE FORCES GENERALAUTOMOTIVE INDUSTRY EXTERNAL ANALYSIS Economies of Scale Network Externalities Retaliation, Toughness Reputation,Distribution Access to Raw Materials Sellers Concentration Significant Cost Differences Differentiation Elasticity Loyalty Availability of Substitutes Price Value of Substitutes Price Elasticity of Demand Close Complements Price Value of Complements Elasticity Demand of Buyers Relationship Related Trans. Availability of Substitutes Volume of Purchase Importance of Price Supplier Concentration Few Input Substitutes Relationship Specific Invest. Purchase Volume Price Discrimination of Sup. 4.10 4.47 4.38 2.14 3.53 Weighted Five Scale Measurement (Max 5) 28 Average 3,72 Threat of Entrants Intensity of Existing Rivalry Bargaining Power of Suppliers Bargaining Power of BuyersThreats of Substitutes and Complements
- 29. PORTER’S FIVE FORCES MODELS IN LUXURY SEDAN INDUSTRY EXTERNAL ANALYSIS Economies of Scale in Producing PEVs, Government Protection with ZEV Credits and Energy Loans, Entry Barriers in Battery and Power- train Technology No Direct Competition, Significant Signs of Growth in the PEV Market, Current Manufacturers or Possibly Start-ups Could Enter in the Future Internal Combustion Engine Luxury Sedans, Internal Combustion Engine Vehicles, Public Transportation, High Oil Prices Limited Market for PEV Luxury Sedans, Fragmented Social Class that can Afford the Model S, Customer Loyalty In-house Protection of S Model Frame and Power-train, Contract with Panasonic for Automotive Lithium-ion Batteries, Finding Other Partners for Batteries 29 Threat of Entrants Intensity of Existing Rivalry Bargaining Power of Suppliers Bargaining Power of BuyersThreats of Substitutes and Complements
- 30. PORTER’S FIVE FORCES MODELS IN INDUSTRY EXTERNAL ANALYSIS Economies of Scale in Producing PEVs, Government Protection with ZEV Credits and Energy Loans, Entry Barriers in Battery and Power- train Technology No Direct Competition, Significant Signs of Growth in the PEV Market, Current Manufacturers or Possibly Start-ups Could Enter in the Future Internal Combustion Engine Luxury Sedans, Internal Combustion Engine Vehicles, Public Transportation, High Oil Prices Limited Market for PEV Luxury Sedans, Fragmented Social Class that can Afford the Model S, Customer Loyalty In-house Protection of S Model Frame and Power-train, Contract with Panasonic for Automotive Lithium-ion Batteries, Finding Other Partners for Batteries 30 Threat of Entrants Intensity of Existing Rivalry Bargaining Power of Suppliers Bargaining Power of BuyersThreats of Substitutes and Complements
- 31. EXTERNAL TO INTERNAL EXTERNALANALYSIS 31 MACRO ENVIRONMENT STEEPLED TASK ENVIRONMENT PORTER’S FIVE FORCES INTERNAL ENVIRONMENT CORE COMPETENCE ANALYSES TESLA
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- 33. TESLA’S CORE COMPETENCIES INTERNALANALYSIS Resources S * Innovative technology * battery pack * Innovative Technology * Differences, uniqueness * Technology * User forum on Tesla website * CEO Musk * Openness/ friendliness of the company / CEO * Own sales distribution W * R&D cost overwhelmed revenue * Limited manufacturing scale * Limited budget for marketing activities * Recent technical issues * Only available at Tesla own networks * Limited distribution Capabilities S * Industry leader as battery and electric engine technology * Cutting edge manufacturing * Create unique positive images * Word of mouth * Awards * A lot of publicity of CEO * Customer satisfaction * Exclusive services W * Only making electric batteries and engines * Share the information with partners * Production delays * Technical issues * Only reaches to limited consumers * Tesla is responsible for everything *Limited external services R&D MANUFACTURING MARKETING AFTER SALES 33
- 34. TESLA’S CORE COMPETENCIES INTERNALANALYSIS 34 Generate Self-reinforcing Enthusiasm for the Brand Create and Utilize Cutting Edge Technology Willing and Able to Take Risks
- 35. TESLA’S CORE COMPETENCIES INTERNALANALYSIS Generate self- reinforcing enthusiasm for the brand Create and utilize cutting edge technology Willing and able to take risks EXTENDABILITY COMPETITOR DIFFERENTIATION $ CONSUMER VALUE TESLA 35
- 36. CUSTOMER VALUE Newly categorizedproducts Customer Service Tesla Forum Generate Self-reinforcing Enthusiasm for the Brand EXTENDABILITY Publicity Loyalty Potential Customers COMPETITOR DIFFERENTIATION The first EV Sport car, Luxury Sedan Own distribution network CEO, Elon Musk TESLA’S CORE COMPETENCIES INTERNAL ANALYSIS 36
- 37. CUSTOMER VALUE Pioneers PEVSport Car and Luxury Sedan Safe, Fun Drive experience EXTENDABILITY Partnership with Panasonic on battery cells OEM for Daimler and Toyota COMPETITOR DIFFERENTIATION Pioneer EV Sport car, Luxury Sedan Competitive position in the EV market Create and Utilize Cutting Edge Technology TESLA’S CORE COMPETENCIES INTERNAL ANALYSIS 37
- 38. CUSTOMER VALUE Newly categorisedproducts Partnership with Panasonic EXTENDABILITY Publicity CEO Musk’s Capabilities to EV industry Wealth individuals to mass market COMPETITOR DIFFERENTIATION Take challenges to create new values in the industry Willing and Able to Take Risks TESLA’S CORE COMPETENCIES INTERNAL ANALYSIS 38
- 39. Evaluation of Tesla’s CoreCompetence TESLA MOTORS INC 39
- 40. EVALUATION OF CORECOMPETENCES REMARKS Being “willing and able to take risks” allowed Tesla to find its position in the market, and more importantly, force others to take notice. Infrastructure investment shows this, and is supported by their vision. “Generate self-reinforcing enthusiasm for the brand” has helped Tesla focus on R&D through better resource allocation. This overcomes limitations in the external environment related to potential substitutes and larger budgets of competitors. Tesla’s use of “cutting edge technology from top to bottom” is a sign of commitment related to the values of Elon Musk and helps them succeed. “Unintended?” benefit of technological laws, Moore’s etc. 40
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- 42. FUTURE CHALLENGES FUTURE CHANGE ANDRESISTANCE Large firms are slowly adapting Tesla’s sales platform has found resistance How does “buzz” apply to products for the broader market? 42
- 43. 43 40 80 120 160 200 Jan 10 Mar13 Sep 13 Maximum 193,37 Battery Case Later StockValue Ontrackforsuccess Decline/Failuretogrow Internal&Externaliscorrect;Teslaexpandstothegeneralmarket Internal&Externalisincorrect;thelargerenvironmentturns Stagnation InternalorExternalisincorrect;Teslastruggles FUTURE CHALLENGES FUTURE
- 44. Don’t underestimate thevalue of a vision1 Starting with a niche and expanding is viable2 Some external environments, despite initial assumptions, provide opportunities3 If you provide an exciting product, especially a premium product, consumers will generate buzz themselves 4 Products are quickly becoming more “technological”, and managers should account for this5 EVALUATION OF CORE COMPETENCES LESSONS 44
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