Tesla’s Automotive & Energy Saving Industry

Overview:

This study aims to analyse Teslas’ internal environment factors and forces by the 7S framework and the Four Actions Framework to evaluate their capabilities and resources. PESTEL model is used to analyse the external environment and identify the gaps/opportunities that Tesla would require to meet to launch a fuel-cell-powered vehicles through Blue Ocean strategy.

Tesla’s Mission

Since Tesla’s mission is radically to change the transition mechanism to sustainable eco-friendly. It illustrates that Tesla is focusing on R&D, Innovation and customer needs. And to do that, it emphasises the environmental forces caused by the external environmental factors and forces. The new Chinese after-sales market is an opportunity for Tesla by adapting to the correct segmentation according to the environmental factors, and forces. However, there are future risks arising due to legal and political factors and forces. The conflicts may occur because of the conflicts between China and the US. 

Moreover, they need to consider the customer needs and demands that have shifted, such as increasing the demand for safety and ease of use. Their division into 3 segments on Model S, X, and 3 in 2019 increased sales revenue by 13% and the costs of Modes S and X units increased by 16% compared to 2018. But by adding the new intangible product -the buyback- their cost decreased by 6%. Hence it explains that Tesla had one right product and service at the right time and the right places, whereas the other two products declined in sales due to the wrong segmentation in 2018.  But, according to MarketLine, Tesla’s gross margin decreased due to the automotive Gross Margin impacts from 2018 to 2019. Their costs of energy storage reduced by 2% compared to 2018 because of the increase in rechargeable lithium-ion batteries sales (MarketLine, 2021).

Lithium-ion batteries meet the customer’s digital demands and need however, via Blue Ocean strategy, they will be able to find the opportunities and by creating a slack plan to increase sales in Model S and X. And all they need to do is to position them where it meets customers taste and needs and by pricing them correctly not too high and not to low that will not fit and cover the unit’s costs, transportation, income tax and any other costs. Otherwise, it will decline sharply again and will offset the Model 3 increase. Also, they need to increase the budget for training and focus on recruitment to employ people who are more skilled and more familiar with the technology in the 21st century and its trends. Especially those roles that have the most impacts on the results by making decisions. Their in-house resources counted as intangible assets of the company, so Tesla needs to focus on their internal culture and align it with the external environment culture. The Red Ocean can help to compete with the competitors by offering Model S and X at the same price with the same features.

The Hydrogen-fuel-cells are going to be one of the top best-selling products due to their specific feature. The battery-powered vehicles most pone is that they take very long to recharge and take about 1 hour to refill. 

• Strategic vision outlines the desired future at which the company hopes to arrive, VISIONS ARE THE GOALS

Whereas the hydrogen-fuel-cells create energy/power in 5 minutes. So, they need to focus on their innovation strategy and process to create an interaction between project and products “Prod-Ject”

PESTEL: External Risks and Opportunities

Refrences:

Tesla Financial Report: . Available at: https://finance.yahoo.com/quote/TSLA/financials?p=TSLA

McKinsey: Unlocking Success in Digital Transformation. Available at: https://www.mckinsey.com/business-functions/organization/our-insights/unlocking-success-in-digital-transformations

McKinsey: Capabilities. Available at: https://www.mckinsey.com/business-functions/mckinsey-implementation/our-insights/how-the-implementation-of-organizational-change-is-evolving