Tesla Motors was founded in 2003 and produces all-electric vehicles and powertrain components. It released its first car, the Roadster, in 2008. Tesla aims to develop electric vehicles, provide technological leadership in EVs, and foster sustainability. It faces competition from other automakers but has first-mover advantage in luxury EVs. Tesla's strategy focuses on product development, market expansion, and strategic partnerships to achieve growth while overcoming challenges around infrastructure, costs, and brand recognition.

1. Burcu Durmuşoğlu
Büşranur Akgül

2. Company Background
- Tesla Motors was founded in 2003 by a group of engineers in Silicon
Valley.
- Tesla designs electric vehicles and electric vehicle engine parts,
producing and selling.
- First car Roadster produced in March of 2008.
- The company had 35 issued patents and approximately 280 pending
patent application in 2011.

3. Vision and Mission
Vision:
Hoping to develop a greater worldwide acceptance of electric vehicles.
Mission:
To create efficient electric cars for driving aficionados.

4. Tesla’s Objectives
• Tesla desires to develop alternative energy electric vehicles for people who love
to drive.
• Tesla has focused on a high-priced, high- performance electric vehicle that
competes against traditional performance cars.
• Provide technological leadership in the field of electric vehicles, and foster
sustainability and social responsibility.
• Achieve both growth in sales and profits.

5. Corporate Level Strategy
Market development
• Tesla focus on expanding in different markets.
Product development
• Improving battery charges due to increase the way that is driven.
• Focusing on the production of new cars that have higher passenger
capacity.

6. Strategic Partnerships

7. Competitors of Tesla

8. Business Level Strategy
Cost Focus
Differentiation
Focus
Cost
Leadership
Differentiation
Stuck in
the Middle
BroadNarrow
Cost Differentiation
Tesla

9. Corporate Culture
- Tied to the environmental/green movement.
- Most staff work in an open room with no walls.
- Innovation is top priority.

10. External Environment
Political-Legal Forces
- Budget cuts in the “discretionary spending” area that
includes alternative energy.
- Government supports on loan programs through electric
vehicles.
Economic Forces
- Countries that have macroeconomic conditions cause to
high-level of income has created more demand for higher-
priced luxury vehicles.
- Chancing the cost of oil.
- Alternative energy is currently more expensive to produce
than conventional energy.
Socio-cultural Forces
- The “Green Movement” encourages people to use resources
that are renewable
- Realizing conventional energy cause to more “carbon
footprint”.
- Consumer perceptions of electric vehicles are a huge
challenge to adoption.
Technological Forces
- Lack of EV-charging infrastructure in the world.
- The continuous shift toward green energy.
- Power of battery.
- Electric vehicles are a newer technology.
Societal
Environment

11. Rivalry among
Existing Firms
Fierce Competition
Potential Entrants
Threat: Low
- High barriers of entry.
- Reputation is important in car
industry.
Substitutes
Threat: Low
- Low number of company that
can produce substitutes of
Tesla.
Buyers
Power: Low
- Customer behavior.
- High cost for company.
Suppliers
Power: Strong
- Low number of supplier.
- Supplier’s product is unique.
Five Forces Analysis

12. Internal Environment

13. Marketing
• Infancy in the market.
• Preferring a customized sales approach.
• First-mover advantage.
Market Development
• The high price tag cause to a narrow market segment.
• The low cost of maintenance and fuel.
• Government tax credit for buying fuel-efficient vehicles.
Price
• Minimal product offering.
• The complex and proprietary components of electricity cars.
• Extensive intellectual property portfolio.
Product

14. Marketing
• A test drive in customer location and organize vehicle delivery.
• Word of mount advertisement instead of traditional advertisement.
• Lacking the appropriate physical infrastructure for service vehicles.
Promotion
• Regional sales representatives.
Place
• Limit the power of battery supply chain.
• Partnership with Panasonic.
• Agreement with Lotus.
Distribution Channel
• Lack of brand name recognition.
• Won Globe Sustainability Innovation Award 2009.
Brand Reputation

15. Finance
• Total revenues are increasing steadily.
• Loan from the US Department of Energy at the beginning.
• Enough liquid assets to satisfy current obligations.

16. Research and Development
• Strong R&D capabilities.
• High R&D costs.
• Unique resources in technology.

17. Operations and Logistics
• Intellectual property and patents.
• Strategic partnership with Daimler and Toyota.
• Owning own distribution channel.
• Many vendors are the single source.
• Limited production facility.

18. Human Resources
• Strong leadership with the CEO, Elon Musk who founded PayPal and
SpaceX.
• Working with top-quality engineers.
• Small number of employees.
• High intellectual capital.

19. Information Systems
• Software that can be updatable and used on multiple future models.
• Online ordering.

20. SWOT ANALYSIS
Strengths
-Tied to the green movement.
- First-mover advantage.
- Intellectual property and patents.
- Strategic partnership with Daimler and Toyota.
- Strong leadership.
Weaknesses
- Infancy in the market.
- The high price tag.
- Lack of physical infrastructure.
- Lack of brand name recognition.
- Many vendors are the single source.
Opportunities
- Government supports on loan programs through electric
vehicles.
- Increasing the cost of oil.
- The continuous shift toward green energy.
- Threat of new entry is low.
- Threats of substitute products is low.
Threats
- Decreasing the cost of oil.
- Alternative energy is currently more expensive to
produce than conventional energy.
- Lack of EV-charging infrastructure in the world.
- Fierce competition.
- The bargaining power of suppliers is strong.
SWOT

21. Strategic Alternatives

22. Growth through concentration new product
development
Pros:
• Increase number of customers.
• Creates value for existing customer and new customer thereby using differentiation focus
strategy.
• Provide a competitive advantage in the automotive market.
• Increasing product portfolio.
• Increasing market share.
Cons:
• Different competitors will be added to current competition.
• R&D cost.
• Too much expansion can result in efficiencies.
• Risk of changing consumer buying behavior.

23. Stability strategy through pause/proceed with
caution
Pros:
• Enables the company to focus on its current product the Model S.
• Lower risk.
• Pay off debt without new cost and gain from current product.
Cons:
• Possible loss of market share by competitors who are using growth
strategy.

24. RECOMMENDEND STRATEGY
Corporate Level:
• The growth strategy through concentric (related) diversification.
• Tesla can acquire its cell supplier to reduce its manufacturing cost due
to increase profits.
• Strategic alliances with local distributors such as Doğuş Automobile
due to sell Tesla’s car.
• Corporate structure can be divisional structure rather than functional
structure.

25. Business Level:
• The recommended strategy is concentrating on differentiation
strategy rather than differentiation focus strategy due to a broader
market segment.
Functional Level:
• The recommended strategy is protecting patents that already have
and adding new patents to stand in the first mover position.
• Focusing on early adopters and environmentalists.