Tesla Motor, Inc. possesses a variety of issues that impact their company’s potential to be successful. The current issues that are impacting Tesla Motor, Inc. ’s ability to be successful is that they’re only creating electric sports car, the Tesla Roadster and Model S, their administrative system is unstable and their company is in major debt.
The decisions and actions by the Managers that lead to the problems confronting the company is that their administrative system is unstable, which leads to not having a secure decision on their products for the business. The company had to go through many CEOs until they have someone who can make a big impact on the company. The article states that “In August 2007, Martin Eberhard was replaced as CEO by interim CEO Michael Marks, who was then replaced in December 2007 by Ze’ev Drori as CEO.
In October 2008, Elon Musk succeeded Drori as CEO and Chairman of the Board. Musk was not a full-time CEO. “ Opportunities •Because the price of gasoline and oil are increasing, customers may consider into buying an electric car since the price for an electric car is not such a big problem •Having a variety of models, instead of just creating sports cars, and that could be more suitable in the automotive market •Consider in collaborating with other battery companies to have advanced battery technology Threats A company possibly develops a vehicle that uses other natural resources such as natural gas, hydrogen powered cars, or ethanol •Strong automobile companies, such as GM, Ford, Toyota, and Honda entering the industry with hybrid electric cars (Toyota Prius, Ford Fusion, GM Volt, and Honda Civic Hybrid Sedan) •People will change their minds about wanting to get an electric car when gas/oil prices lower. Industry Analysis/Task Environment Using Michael Porter’s competitive strategy, the company can be evaluated the as “high, medium or low” in the five areas: “Potential entrants, buyers, substitutes, suppliers, and lastly, other stakeholders. The rivalry where this company stands is high due to competing with GM, Toyota, Ford, and Honda (GM Volt, Toyota Prius, Ford Fusion, Honda Civic hybrids). The threat of potential entrants is low because there are no new manufacturers that could out beat the electric cars. The threat of substitutes is medium. Other companies such as GM, Toyota, Ford and Honda provide hybrid cars, and many people are switching to public transportation due to high cost of gasoline and using less electricity. The bargaining power of buyers is medium because many people are trying to “go green. Lastly, the threat of other stakeholders is medium as well. Strengths (mentioned from article) •Leadership in electric power technology. The Tesla Roadster had a battery pack capable of storing 53. Kilowatt hours of usable energy, almost double the energy of any other commercially available electric vehicle batter pack; •Competencies in electrical engineering, software, and controls as well as vehicle engineering and manufacturing; •Ability to combine electric powertrain expertise with electric vehicle design and systems integration; •Rapid customer-focused product development; Ownership of its sales and service network; •Brand leadership in high-performance, long-range electric vehicles; •Long-term financial support from a $465 million loan facility agreement under the U. S. Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program; and •Efficient research & development process. Cumulative capital expenditures and R&D for the Tesla Roadster totaled only $125 million Weaknesses •Tesla Motors, Inc. is not well-known to the public, meaning that the company is not recognizable to the world like other car brands, Toyota, GM, Chevrolet, Honda. The company’s revenues increases, but never receives profit. •Supplies with the car parts are likely to become a problem if the request of the parts rises •The Tesla Roadster has not been on demand that long, that the sales of these electric cars are still determined to see how long it will last in the automobile industry Implementation Because the company has gone through a few changes in the management area, what I would recommend the management to do is find someone who will commit to the company and show that the company can improve and be successful in the future.
Elon Musk is one person who performs very well in management, but he is only part time CEO of the company. Also, because the company is not recognizable to the public, and their procedure of letting people know about their company is short, the company should consider in advertising, using social media websites to get the customers’ reviews, opinions, ideas, and/or input on their products. Not only can they get customers’ input, the company could also announce their products through videos by posting it on YouTube, or hand out promos so customers would become interested.