1.
What are the key elements of
Tesla’s strategy?
·
Electric Vehicle Focus
·
Innovation and Technology
·
Direct-to-Consumer Sales
·
Autonomous driving
2.
Which one of the five generic
competitive strategies discussed in Chapter 5 most closely approximates the
competitive approach that Tesla is employing?
·
Differentiation Strategy
i. Innovative technology. Known for cutting-edge technology, including
advanced battery systems, electric drivetrains and autonomous driving.
ii. Design and Performance. Sleek design, high performance and
acceleration capabilities
iii. Brand Image. Tesla is often seen as synonymous with electric
nobility
3.
Are you impressed by the
strategy Elon Musk has crafted for Tesla?
Why or why not?
·
Elon Musk’s strategy for Tesla
has been widely acknowledged as ambitious and disruptive within the automotive
industry.
·
As for going green energy, I am
impressed with what Electric vehicles can bring to the environment. However, I
believe that the technology is incomplete and the infrastructure to support the
initiative is not properly laid out. We are still dependent on coal power plants
to charge our Electric Vehicle. Our renewable energy is still not stable enough
to supply us with electricity. And the charging station for our Electric
Vehicle is not properly set up or strategically located for us to charge.
4.
What is your assessment of
Tesla’s financial performance as shown in case Exhibit 2? Use the financial
ratio information in Table 4.1 of Chapter 4 to assist you in calculating a revealing
set of financial ratios and interpreting them.
·
Total Current Ratios = Total
Current Assets / Total Current Liabilities
·
2019: 12,103 / 10,667 = 1.13
(Ratio is higher than 1; shows the firm’s ability to pay current liabilities
using assets that can be converted to cash)
5.
Are Musk’s plans to build a
second production/assembly plant in Shanghai (with production beginning in
2020) and a third one in Germany (with production starting in 2021), followed
by two plants in the United States to build the Model Y, the Cybertruck and
probably the Tesla Semi (with production beginning in 2022) too ambitious or
too risky? Beyond the company’s means to finance?
·
To ambitious. Considering that
the sales of the competitors are slowly gaining grounds, the expansion of Tesla
poses too ambitious and too risky at the same time.
6.
What do we learn from the data
in case Exhibits 3 and 4? Is Tesla’s executive team too overconfident about the
company’s ability to compete successfully against all of the many new electric
vehicle models that the major automobile manufacturers have recently introduced
and are scheduled to introduce in the remainder of 2020 and in 2021–2022?
·
Tesla still leads the way in Electric
Vehicle sales as shown in both Exhibit 3 and Exhibit 4. However, as the demand
for more Electric Vehicle rises, competition in the field of Electric Vehicle
has become wider as well. Cheaper and of the same quality is becoming more
evident in the previous years and albeit, succeeding years. Tesla’s executive
team is too confident about the company’s ability to compete successfully that
may pose a risk in the company’s profit and marketability.
7.
What are the issues/problems
that Elon Musk and other members of Tesla’s top management team need to address
as of mid-2020?
·
Production and supply chain
·
Profitability and finances
·
Global expansion
·
Autonomous driving technology
·
Customer services relations
·
Workforce management
·
Environmental and Regulatory Considerations
8.
What, if any,
changes/adjustments in Tesla’s strategy would you recommend that Elon Musk
consider? You answer should include all of the recommended actions Musk and
Tesla should take to deal with the issues identified in question 7.
·
Operational Efficiency. Continue
to improve operational efficiency to meet growing demands and minimize
production challenges.
·
Financial Stability. Maintain
focus on achieving sustained profitability while strategically investing in
research and development.
·
Global Expansion. Prioritize regulatory
compliance and stay informed about evolving regulations in different regions.
·
Autonomous Driving. Enhance
transparency and communication about the development of autonomous driving
technology.
·
Competitiveness. Monitor competitors
closely and be ready to adapt to changing market dynamics.
·
Customer Service. Prioritize customer
satisfaction through effective customer service and prompt issue resolution.
9.
What is your outlook for
Tesla’s future performance and its prospects for revolutionizing the global
automotive industry’s use of gasoline-powered engines versus battery-powered
engines?
·
Positive Outlook
i. Leadership. Tesla has established itself as a leader in the electric
vehicle market, with a strong brand and a reputation for innovation.
ii. Demand for EVs. There is a global trend toward increased adoption of
vehicles due to environmental concerns, government incentives and advancements
in battery technology.
iii. Autonomous Driving Technology. Tesla’s focus on autonomous driving
technology positions the company for a potential competitive advantage in the
future.
·
Challenges
i. Competition. Traditional automakers are increasingly entering the electric
vehicle market, posing a threat to Tesla’s market dominance.
·
Tesla’s outlook is influenced
by its ability to address challenges, maintain its competitive edge, and
navigate the evolving landscape of the automotive and energy sectors. The company’s
success has already contributed to changing industry dynamics but the ultimate revolution
in the use of gasoline-powered engines versus battery-powered engines will
depend on a combination of technological advancements, market forces and
regulatory support.
·
Tesla’s revenue multiplied over
the last five years. With the launch of Tesla’s highly anticipated Model Y, though
coincided with the outbreak, Model Y demand is still high. And forecasted to have
a solid increase by year 2025 for Tesla.
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