Strategy Development
Tesla
Tesla Motors Strategy Development
As applied in business, a strategy is a plan of action designed to achieve a specific goal. This may involve developing new products, entering new markets, or expanding into new geographic regions. The purpose of a business strategy is to create value for the company. To create value, a business must first understand its customers and what they need or want. The company must then find a way to provide that product or service in a way that is better than the competition (Vynakov et al., 2016). This could involve creating a unique selling proposition or finding a niche market. Once the company has a clear understanding of its customers and place in the market, it can begin developing a plan to achieve its goals. This plan will involve setting targets and taking actions to reach those targets. The success of a business strategy depends on its ability to give the company a competitive advantage and help it to achieve its goals.
The chairman and CEO announced Tesla Motors’s strategy in 2006. A process is like an organization’s roadmap, and for Tesla Motors, its roadmap incorporated building a sports car, building an affordable car, and more affordable vehicles, and at the same time providing a generation option of zero-emission electric power and telling no one (Chen & Perez, 2018). The plan relates to strategy definition as it involves achieving desired outcomes, and the bridge to achieving that is the master plan (Vynakov et al. 2016). With this, Tesla Motors can maximize the organization’s strengths and minimize the competitors’ strengths.
Summaries of the Selected Strategies
The fully electric vehicle market is rapidly growing. Tesla Motors’ management develops new strategies to compete in this competitive market. The reasons behind its growth are new regulations on vehicle emissions and safety, technological advancements, and shifts in customer expectations and needs (Gilson & Abbot, 2017). In the beginning, the founder and CEO of the company launched a mission that stated: “to have the sustainable transport accelerated by bringing compelling mass-market electric cars to the market as fast as possible.” The purpose has served as the backbone of the successful business model of Tesla Motors (Gilson & Abbot, 2017).
To achieve the recent development, Tesla Motors did not build a relatively affordable car that could market and mass production, but the company took the opposite approach. It focused on creating a compelling vehicle. The Tesla Roadster was Tesla’s inaugural high-performance electric supercar (Vynakov et al., 2016). After its brand got established and a concept car was delivered to the market, Tesla Motors reinforced its business model. It is a business model based on a three-pronged approach to selling its electric vehicles, servicing, and charging.
Tesla Motors has also adopted several strategies in recent years to increase its future value. One of these is expanding its product offerings beyond electric vehicles to include batteries, solar panels, and home energy storage systems. This move has helped the company to become a one-stop shop for sustainable energy solutions and position itself as a leader in the industry. Another strategy Tesla has adopted is investing in autonomous driving technology. This has the potential to not only make its cars safer and more efficient but also open up new revenue streams by providing independent ride-hailing services. Tesla’s expansion into new product categories has helped it to gain a competitive edge and position itself as a critical player in the sustainable energy space. Its investment in autonomous driving technology is also a major differentiator that could lead to significant growth in the future.
The Automobile Industry and Tesla’s Key Competitors
The automotive industry is very competitive, with numerous companies all vying for market share. Tesla Motors is a relatively new entrant to the industry but has quickly established itself as a leader in electric vehicles. The company has also expanded beyond cars to offer batteries, solar panels, and home energy storage systems. The automotive industry is significantly shifting as companies move towards electric and autonomous vehicles. Thanks to its innovative products and cutting-edge technology, Tesla is well-positioned to take advantage of these trends.
Tesla Motors, founded in 2003, operates in three industries; energy storage, energy production, and automotive. The firm deals with storage systems and energy generation in addition to the USA’s design, production, leasing, and sales of electric vehicles. Therefore, the company provides services to automotive companies like selling battery technology. The major Tesla Motors competitors are Ford Motor Company, General Motors, Honda Motor Company, Tata Motors, Toyota, and other electric vehicle manufacturers such as Nissan and BMW (Gilson & Abbot, 2017). The traditional car companies are increasing their offerings when it comes to hybrid gasoline-electric cars as well as pure electric vehicles.
Companies like Ford Motor Company, Tesla’s competitor, have become among the world’s leading automobile brands through the strategy of intelligent management and leadership. It is a company aiming to become a mobility company that is the world’s most trusted. Its process involves a consistent focus on operational efficiency. General Motors is also a competitor to Tesla, and its sustainability strategy is synonymous with the company’s business strategy. The business strategy of General Motors is to deliver transportation solutions that are simpler, safer, and sustainable for its customers (Mangram, 2022). These car competitors use a variety of strategies, depending on their strengths and weaknesses. Some, like General Motors, have been investing heavily in electric vehicle research and development, while others, like Nissan, have focused on making their electric cars more affordable for consumers. BMW, meanwhile, has been investing in both areas.
Automobile Industry Analysis
In the automotive industry, especially the electric car industry, the market for electric vehicles gets driven by various factors. Among the factors include the increase in fuel-efficient demand, low emission, high-performance cars, and the government’s stringent rules and regulations (Gilson & Abbot, 2017). The rules and regulations are toward emissions from the car getting anticipated to drive the market trend of the electric vehicle. Regarding market share, the hybrid electric vehicle holds approximately 48% of the percentage based on the electric vehicle types.
In 2022, Tesla is still a leading player in the electric vehicle market, with a market share of around 20%. Its main competitors are General Motors, Nissan, and BMW. Tesla has maintained its position as a top electric vehicle manufacturer thanks to its continued innovation and investment in new technology (Kolodny, 2022). The company has expanded its product offerings beyond electric vehicles to batteries, solar panels, and home energy storage systems. It has also invested heavily in autonomous driving technology, which is expected to become a significant growth area in the coming years.
Tesla Motors Performance Goals
Tesla’s performance goals for the next one- and five-year period are to increase market share in the electric vehicle market to 30% by 2023, launch autonomous ride-hailing services in at least 10 major cities by 2025, and become the leading provider of sustainable energy solutions by 2030. These goals are ambitious but achievable, thanks to Tesla’s strong position in the electric vehicle market and its continued investment in new technologies (Maurer, 2020). The company’s market share could be increased through aggressive marketing and expansion into new markets. Its autonomous driving technology could be used to launch ride-hailing services in major cities, providing a new source of revenue. And its sustainable energy solutions could help it to gain a significant share of the growing market for renewable energy.
References
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors. In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Gilson, S. C., & Abbott, S. (2017). Tesla Motors (A): Financing Growth. Harvard Business School case study (218-033).
Kolodny, L. (2022, April 3). Tesla delivers 310,048 electric vehicles in the first quarter. CNBC. Retrieved July 24, 2022, from https://www.cnbc.com/2022/04/02/tesla-tsla-q1-2022-vehicle-production-and-delivery-numbers.html
Mangram, M. (2022, July 5). The globalization of Tesla Motors: A strategic marketing plan analysis. Retrieved July 24, 2022, from https://www.researchgate.net/publication/254322834_The_globalization_of_Tesla_Motors_A_strategic_marketing_plan_analysis
Maurer, R. (2020, August 4). Elon Musk’s goals for the next five years. Tesla Daily. Retrieved July 24, 2022, from https://www.thestreet.com/tesla/news/elon-musks-tesla-goals-for-the-next-five-years
Vynakov, O. F., Savolova, E. V., & Skrynnyk, A. I. (2016). Modern electric cars of Tesla Motors company. Автоматизація технологічних і бізнес-процесів, (8,№ 2), 9-18.
