Discussion: Tesla
Tesla is leading a whole new revolution in the current dynamic market, by globalizing the products manufactured by and formulating strategies to maintain its marketing position. There always are several elements in the company’s competitive environment which affects the integrity of the operations of the company (Cagle, 2019). Electric vehicles and batteries have never been more advanced than they are now owing to Tesla Motors, which has dedicated enormous resources to R&D. The recent advances in the automobile industry have focused on building more ecologically friendly electric vehicles in an effort to reduce pollution. Tesla Motors has risen above the competition by creating electric vehicles with enough torque and running on renewable energy (Kim, 2020). The following section discusses the cased based scenario of Tesla covering various aspect such as, Tesla’s strategy, stakeholder analysis, innovation, environmental and external analysis, vision, strengths, its long-term goals, and sustainable competitive advantage. This will help in providing a detailed overview of the company.
“Tesla” is a multinational company that designs, manufactures, and produces electric-powered automobiles and their components. Zero-emission sports cars are currently being manufactured by only one vehicle manufacturer (which is totally different from the current vehicles in the market). This technological edge has now grown in respect of the premium car market. Strategic planning is a method for determining a company’s long-term goals derived from its vision, mission and planning to achieve its goals (Aiitha & Nagra, 2021).
However, strategic management encompasses the entire process from planning strategies to implementation. Administering the strategic plan’s action plans, projects, as well as lifecycle is crucial for achieving long-term objectives of the company. Continuous evaluation of the corporation’s systems and processes, as well as external factors might have an effect upon the company’s operations, is essential to strategic management (Akakpo, Gyasi, Oduro & Akpabot, 2019). In order to meet organisational goals, foresight and perseverance are essential.
Organizational structure, present strategies, and company-wide implementation are all aspects of strategic management that must be considered when formulating corporate objectives and ensure that they are carried out consistently throughout the firm. When it comes to describing strategic management, implementing plans into action is essential. Both methods of strategic management make use of management theory and practice. Higher management is responsible for deploying strategy into effect, although any employee can provide several new innovative insights, goals, or concerns about the firm. Strategists are employed by many companies to help them strategize and plan in order to better their own performance (Almuzel et.al, 2018).
Using its broad differentiation, Tesla’s objective is to create the transition to renewable energy sources (Andersen, Dauner, Lang & Palme, 2017). A corporation must thus demonstrate its competence by making sure that the items it sells are capable of meeting client expectations while also taking into account the interests of other parties, including as suppliers, government agencies, and the company’s own employees. To safeguard the firm’s long-term viability, Elon Musk, CEO of Tesla Inc., has decided to investigate alternate renewable energy options for the company.
Strategy Analysis
In order to reduce carbon emissions into the climate, one of the ways the corporation uses strategic management is to produce electric vehicles. The firm adopts a supply chain management method in which the corporation owns the whole supply chain from manufacturing to distribution, unlike other vehicle manufacturers. Model 3 as well as Model X are only two examples of innovative ideas that the company has come up with as a result of a growth strategy in which it invests heavily in research and development. It is one of the most recent breakthroughs that will allow automobiles to drive themselves and be fuelled by electricity rather than petroleum (Bilbeisi & Kesse, 2017). Additionally, the required charging infrastructure must be established so that automobiles may be fully charged in 30 minutes or less. As a result, the company is the only one to provide drivers with such a long driving range while requiring the least amount of time to recharge. The corporation makes electric cars to reduce greenhouse gas emissions from automobiles as part of its effort to protect humanity from the severe effects of climate change. Reduced dependence on oil for power and the availability of alternative renewable energy sources are the company’s goals. Wind and solar power, which can be stored in batteries and used at a later time, will be used by Musk to provide electricity to the whole world’s population. Organizational management and product offerings are geared on enhancing the company’s brand and public image while also integrating corporate citizenship (Cagle, 2019).
As a result, the business is able to strike a compromise between maximising profits while also taking social welfare into account. Tesla’s competitive strategy in the car market aims to appeal to both high-end as well as customers at the entry-level. Using this basic strategy, Tesla separates itself from the competition by expanding its research and investment each year in order to establish a highly inventive unique environment for growing returns on an economic scale (Cagle, 2019). Thus, this is how Tesla’s strategy, strategic planning and strategic management complements each other providing the company competitive advantage in the market.
Customers, investors, employees, suppliers, shareholders, government as well as financial institutions are among Tesla’s most important stakeholders. Informing these organisations about the performance of the company involves more than just sharing financial information; it also involves informing them about the company’s goals, aspirations, strategies, milestones, critical challenges, and significant successes. Informing these organisations about the company’s performance involves more than just sharing financial information; it also involves informing them about the company’s goals, aspirations, strategies, anniversaries, critical challenges, and significant successes (Du & Li, 2021).
A corporate social responsibility strategy that emphasises the long-term viability of Tesla’s vehicles, energy storage systems, and power generation products which benefits the company’s stakeholders. These CSR actions help the company compete with the likes of Toyota, Honda, General Motors, and Volkswagen (Gali, 2020). Products and management methods of Tesla put a strong emphasis upon the aspect of social responsibility. This approach to CSR benefits stakeholders while also enhancing the company’s corporate and brand image. As far as Tesla Inc.’s corporate social responsibility efforts are concerned, the firm and its products take precedence. It is widely agreed that the company’s electric cars are a suitable alternative automobile pollution. The role of business citizenship cannot be emphasised in this perspective. As a result, the company may more easily meet its overall responsibilities (Hashmi & Biesebroeck, 2016).
Strategic Analysis
Tesla Inc.’s automotive firm rapidly responds to community issues. Communities have an important part in influencing a company’s brand image through their substantial lobbying activities and responses towards the corporation. The preservation of the natural environment is one of the group’s primary objectives. By utilising the company’s electric cars (batteries), solar panels (supplied by the company’s partner SolarCity), this case study addresses these difficulties. For example, many individuals enjoy how environmentally friendly these products are. The access to cutting-edge technology that this particular stakeholder group need is met by Tesla’s corporate citizenship initiative as well. Elon Musk, Tesla’s CEO, stated in 2014 that the company would let anybody to use its patents. As a result of corporate social responsibility activities utilising this technology, the local populace is immediately affected (HBR, 2022).
Customers have a direct impact on Tesla’s earnings since they care about the quality of the products and how much they pay. Due to the significant impact of the initiatives of the company, the corporation inculcates a high value in reference to these stakeholders in respect of its CSR initiatives. The company is always focusing upon various innovative methods to reduce expenses in order to satisfy these interests. For Tesla, Inc., a key success element in its automotive and energy solutions businesses is its workforce, which the company considers an essential part of its CSR strategy. Employees also are a part of organization and thereby they are often provided the chance to do so (Jiang & Lu, 2018). CSR interests of the company involve a good amount of salary as well as inclusion of wide range of job options. The aspect of competitive remuneration plan, as well as HR initiatives for skill development and professional development, are all part of Tesla’s corporate responsibility strategy to meet these needs.
It is crucial for these stakeholders to have an impact on the company’s value. The success and expansion of the company are important considerations for investors and shareholders. By focusing on long-term plans that aim to alter the automotive/transportation as well as energy markets. The company’s decision to let other companies and people to utilise its technical patents, for example, is likely to raise market demand for electric cars and associated items (Jing, 2020). Tesla, Inc. is impacted by the actions of the government. Governments have an important role in the economy by imposing requirements, setting boundaries, and presenting possibilities. Compliance with regulatory requirements, as well as commercial contributions to economic growth, are priorities for this stakeholder group. Tesla’s corporate social responsibility approach fits these objectives because of its worldwide development aspirations and good sustainability record.
Most Tesla shareholders, on the other hand, have a positive view of the company’s corporate social responsibility activities to date. CSR activities may be bolstered by corporations in order to better serve their shareholders as well as the areas in which they reside. As an example, Tesla, Inc. may want to adopt new community development initiatives in order to increase its CSR effectiveness in pleasing its local communities. Investors and stockholders alike want to reap the benefits of the automobile industry, which is why the firm has to step up its worldwide growth efforts. Tesla’s CSR reputation should improve as a result of these suggestions.
When Edison’s innovation originally challenged gas lighting, existing corporations copied the filament technology from the electric bulb to enhance their gas lighting efficiency fivefold, depriving Edison’s new company of income for 12 years as well as nearly bankrupting him. Disruptive innovation experts refer to this type of endeavour to boost a failing technology as the final gasp of a dying sector, and they are correct: Edison and electric illumination ultimately won. Since much of their wealth and business comes from developing countries where people place a larger importance on maintaining a positive social image than combating climate change, the conventional auto manufacturers appear to be repeating this disruption by refusing to accept newer hybrid technologies in favour of older Internal Combustion Engines (ICE) (Jing, 2020). Tesla is a corporation that has been at the vanguard of this technological revolution and it has embraced it. As Tesla is demonstrating, a Silicon Valley start-up can overcome several, apparently overwhelming economic issues. The relationships that Tesla has formed have allowed it to take advantage of other companies’ knowledge and infrastructure, rather of having to keep reinventing the wheel. During recent decades, the global spread of information and technology has had a significant impact on the innovation landscape. Furthermore, cross-pollination generated by the worldwide dissemination of information and technology provides favourable network effects, allowing countries that receive technology to progress their own research and development. Globalization has been greatly aided by technological developments. In reality, one of the primary drivers of globalisation has been the advancement of technology. Increasing economies of scale and the size of the market required to break even force businesses to go global (Kim, 2020).
Inventor and Entrepreneur Elon Musk Electric car company Tesla is the world’s most valuable. There are a number of projects in the works that aim to revolutionise the automotive and energy industries. A total of over 361 patents have been submitted by Tesla in the arenas of electric cars (including vehicle design and solar roofing), battery packs and EV chargers. As a result, every few weeks, the software in the company’s vehicles may be improved. When compared to the old automobile business paradigm, where the product remains unchanged for its lifetime, this is a radical shift in strategy for the industry. It streamlines the purchasing process, empowering the consumer. When it comes to car ownership costs, it takes use of its expertise in battery technology. The recent valuation of $700 million clearly depicts the organizational effectiveness of its operations (Kim, Paek & Lee, 2022).
There are several advantages to using Tesla’s battery-powered automobiles over their gasoline-powered counterparts. There are an estimated 20 components in each car, compared to the 2,000 in a typical internal combustion engine. The total cost of ownership for consumers is significantly reduced as a result of this simplicity. Battery-related technology will be integrated into Tesla vehicles as a result of Tesla’s recent acquisitions, which include new battery manufacturing businesses and battery-related technologies. Despite the fact that other manufacturers are scurrying to obtain the necessary competence in electric batteries, they will fall behind as the industry expands (Kudachimath & Ragashetti, 2015).
It aligns with the major market trend of the day – turning green in order to combat global warming. Tesla already enjoys a significant lead in certain markets from a marketing perspective. When it comes to Tesla’s innovation journey, the king is technology, and analysts have lauded the company’s breakthroughs for their ability to alter the automotive industry. Furthermore, they have the endurance to eliminate long-standing worries about distance. In 2020, Tesla expects to have delivered over 500,000 vehicles throughout the world – and it’s just intending to increase that number even further (Liu & Meng, 2017). Despite the fact that the United States has been Tesla’s primary target market, the vehicle maker is now looking to expand its business. The populations of Europe and China are of particular interest to them. Tesla is expanding its product portfolio as well as its geographic reach. The second-generation Roadster and the Cybertruck, for example, have been added to its illustrious roster. This shows how, company from its globalization and technological innovation lead the company to a whole new level.
A company’s present and long-term goals are outlined in a vision statement. A company’s goal, strategy, culture, and basic values must all be in sync if it is to achieve its vision. Non-profit organizations and government agencies, in addition to businesses, utilise vision statements to help guide their work. Organizations use vision statements to outline their long-term and short-term goals. There must be alignment between a company’s vision, purpose, strategic planning, and fundamental values (Liu, 2021).
Tesla has been the most successful manufacturer of electric and gas-powered automobiles. Founded by Elon Musk, Tesla’s goal is to create a mainstream market for electric vehicles and expedite the transition to environmentally friendly modes of transport. To that end, Tesla aspires to become the most innovative automobile manufacturer of the 21st century. The business, which was founded in 2003, turned a profit in 2013. It is indeed clear from the company’s continued expansion that the market appreciates its automobile and energy storage solutions (HBR, 2022). This situation demonstrates that the company’s mission statement is on target. In essence, the corporate mission statement directs Tesla’s business choices, such as what the firm must do to achieve operational effectiveness. In contrast, Tesla’s corporate vision statement dictates the company’s future growth. For instance, the corporation aspires to be a global leader in electric car manufacturing. Because of its strong brand image and growing popularity, Tesla is well-positioned in the global electric vehicle industry to thrive. Tesla’s operational success as well as business development may be gauged by how well it fulfils its corporate purpose and vision goals (Mangram, 2012).
Since its founding, Tesla, Inc. has been true to its corporate goal and vision statements, focusing on the production of electric vehicles and the accompanying products like solar panels as well as rechargeable batteries. In light of recent market and business developments, however, the corporation has revised its corporate mission statement whilst maintaining its corporate vision statement in place for the time being. These advancements are clearly seen within the current strategies as well as managerial efforts that have been implemented. Tesla’s goal was to “speed up the world’s transition to sustainable transportation,” which was a major aspect of his vision. At the time Elon Musk became CEO in 2016, the company’s main focus was on accelerating the transformation to renewable energy sources throughout the world. Renewable energy is now the focus of the company’s business strategy, as indicated by this new statement. Battery and associated energy storage solutions are relevant in areas more than only the electric car business, as the new company goal acknowledges. There are a few important aspects to Tesla’s mission statement: these include to accelerate the whole process, transforming the word and using renewable energy (Moritz et.al, 2015).
Tesla’s corporate mission statement includes the phrase “to accelerate,” which emphasises the company’s role in driving the industry towards innovative technology for long-term sustainability and renewable energy-based goods and services. It is also asserted in the mission statement that the corporation is certain that it would be able to create a dominance over the worldwide market in confluence of the electric vehicles and related products in the future (Perkins & Murmann, 2018). The company’s vision statement emphasises the importance of the worldwide market in this component. As a result, Tesla, Inc.’s corporate mission statement has significantly changed from the concept of “sustainable transportation” towards the concept “sustainable energy” to reflect the company’s current strategic goals. The corporation, for instance, used to concentrate only on the production of electric vehicles. An in-depth look at this corporation’s financials reveals that it has expanded its product line to include batteries as well as other future-proof renewable energy solutions in response to rising consumer demand (Cagle, 2019).
According to Tesla’s stated aims, the company’s mission statement is adequate. It appropriately covers the company’s product line, its market segmentation, and its strategic position in the marketplace. Nevertheless, it does not give a clear picture of Tesla’s long-term organisational strategy. As a result, it is recommended that the organization’s mission statement be updated to provide additional information about how the company plans to achieve its corporate goal.
As a result of its involvement with Tesla, the automobile, energy generating, and energy storage industries are all included in this lawsuit. Customers and community-based groups are also influenced by these industries’ external variables. Considerations like as the cost-effectiveness of technology in the transportation industry influence Tesla’s customer base as well as market share. By incorporating the findings from the PESTLE analysis into strategic planning, the organisation may increase its long-term performance (Rimmer, 2018).
The political aspects have a significant impact on business and industry. For example, trade policies may limit the industry’s performance as well as the company’s earnings. Tesla, Inc.’s financial results can be improved with the aid of government incentives. Carbon dioxide emissions from the company’s operations and products have decreased as a result of this external effect. As the number of free trade agreements rises, so do the opportunities for worldwide expansion for the company. The remote or macro-environment benefits Tesla’s broad competitive strategy including aggressive growth strategies, which include market penetration (Cagle, 2019).
With regard to the company’s economic factors, market development, trade levels, currencies that have an impact upon the automobile industry are all included in this list. Growth in the solar energy industry, for instance, affects the potential for solar panel sales to increase (Kim, 2020). The decreased costs associated with Tesla’s batteries significantly helps the company’s bottom line approach. Growing interest in renewable energy sources benefits the company’s bottom line. However, the financial success of the corporation is jeopardised because of concerns with economic stability, particularly in Europe and Asia (Shao, Wang & Yang, 2021).
Further, due to the social and cultural aspects that affect a firm, managers must design a plan to take advantage of an external element. Researchers have found room for improvement in the global vehicle sector after conducting a thorough investigation. Tesla Inc. has a wide range of business opportunities because of the development in popularity of low-carbon lifestyles and the rising need for renewable energy (Cagle, 2019). This will include utilizing the opportunity based upon increasing popularity of low-carbon lifestyles, promoting renewable energy, including distribution of its wealth, etc.
With respect to the technological factors, there is a high rate of technological advancements which can be threat and opportunity for the company and thereby providing benefits in terms of automation and increasing popularity of online mobile systems. An opportunity and a danger are presented by the rapid advancement of technology. In light of the increasing rate of adoption, Tesla has a chance to improve its product technology. The same external issue, though, poses a significant threat to the corporation in relation to the possible obsolescence of technology utilised in its goods. Nevertheless, a rising level of company automation opens up new possibilities is a significant factor to be considered here. Within the case of Tesla, for instance, increased automation of the business operations provides potential for further development in future. As a result of the growing popularity of online mobile systems, the corporation’s automobiles should incorporate these technologies more frequently (Shao, Wang & Yang, 2021).
Concerning the environmental factors, materials utilised in the manufacturing operations of the organisation are subject to changes in supply due to environmental trends. With respect to the case of Tesla, Tesla’s market is highly affected by the following ecological external factors: such as changing climatic conditions, environmental initiatives approach, etc. Environmental variables are key influences on Tesla, Inc.’s industrial environment (Liu & Meng, 2017). Because of environmental concerns, increased environmental initiatives, and increasing waste disposal rules, the corporation may use these factors to advertise its electric automobiles (Shiu, Bonacina & Binninger, 2017). It is thought that the company’s electric cars, batteries, and solar panels may be used to specifically address these external factors associated with the corporate sustainability and ecologically beneficial products. These findings are determined by the nature of Tesla’s products, and demonstrate that the electric car company has considerable development prospects.
A company’s operations and growth are influenced by laws and legal systems, which have an impact on management decisions. For example, Tesla’s marketing approach complies with all applicable laws and regulations. Relationships between HR and the business are also governed by the legislation of the company (Cagle, 2019). Expansion of worldwide patent protection, dealerships in other locations, and other factors must be factored into Tesla, Inc.’s business strategy. Tesla will be able to expand its foreign operations with confidence now that its patents have been extended to include more countries. It is possible that the company’s electric automobiles and energy technologies products may be boosted depending on the energy consumption standards that client firms have to meet (Teece, 2018).
There are a number of ways in which the firm might continue to develop. For instance, international expansion is made simpler by free trade agreements. As a result, expanding the company’s global reach is highly suggested. In order to expand the company’s market share beyond the United States, enhancing market intensity being recommended. This move might reduce market risk, given Tesla’s minimal overseas sales efforts. Consequently, this is how the outside world affects Tesla and its ability to operate as a result thereof.
One of the world’s leading automobile and energy solutions companies is Tesla, Inc. (previously Tesla Motors, LLC). Global automobile and renewable energy markets’ long-term viability for Tesla. Thus, a change is expected to improve strategic efficacy in the face of a powerful competitor. Automobile manufacturers such as General Motors Company, Toyota Motor Corporation, Nissan Motor Company, Ford Motor Company, BMW, and Volkswagen are all competing against the company’s brand and inventive character in the international market. In the electric car industry, the corporation benefits from worldwide expansion. For example, a company’s income and stability can be increased by expanding into overseas markets (Thomas & Maine, 2019).
Internal variables provide a business its competitive edge and long-term viability by enabling it to compete with other businesses. For example, a strong brand can help the company’s worldwide expansion strategy. Tesla’s competitiveness as an automaker is shaped by the following strengths, as shown in this case study of the company: depicting a high degree of originality, well know brand image and reputation and inculcating production process control measures. As a result of the release of the world’s first all-electric sports car, Tesla, Inc. has established itself as a business with a high rate of innovation (Valentin, 2019). The company may produce things which are both competitive and profitable if it follows this internal strategy. When the organisation has a strong sense of identity, it is much easier to bring in new customers and keep them loyal. The stringent control Tesla has over its manufacturing processes is due in part to the centralization as well as hierarchy that characterise the company’s organisational structure. Among other things, the company produces automobiles and many of the parts that go into them. This is a favourable asset to the degree that external parties are not involved (VF, 2022).
There is room for further improvement within Tesla’s international operations. For the company to produce technologically superior products that compete with its rivals, it has to keep investing in R&D. In 2020, Tesla sold the most plug-in vehicles and the most battery-electric vehicles for passengers. The firm has a 16 percent share of the plug-in market (which comprises plug-in hybrids) and a 23 percent share of the battery-electric market (which is totally electric). One among the most well-known automotive manufacturers in the world is now a significant player in the electric vehicle sector. Brand image has been a major factor in the company’s recent success in conquering major challenges and creating a devoted customer base. For investors and customers alike, there is no mass-production automobile company that can beat the brand’s good impression (Kim, 2020). For automobile manufacturers, cost overruns, delays, and poor dependability are considered bad news, especially when making high-end products for customers who have become accustomed to expecting the best. Many people give up at this time. A strong brand image may be the reason Tesla has not fallen to this fate. A large number of customers have been early adopters, which has sparked interest among automobile companies. Due to the obvious view of the company’s strong brand image, unfavourable press stories concerning the company’s reliability have had no effect on sales. It appears that the strong link with owning a Tesla outweighs the inconvenience of breakdowns and delays in car deliveries. Electric cars and their components are the focus of Tesla’s test engineering and design efforts. Because of its computer-aided design capabilities and commitment to long-term reliability and performance, Tesla has been able to speed up the process of creating new products. In addition, the company’s primary skill is identifying methods to expand while also helping to localise the design of their goods (Zhao, 2021).
Another positive development is the expansion of a firm whose electric vehicles outperform diesel and petrol in terms of quality, enjoyment factor, and aesthetic appeal. As a result, Tesla is not only a bystander in the electric-vehicle movement, but the driving force behind it. Oil firms would like us to think that every electric car on the road contributes to a cleaner environment and cuts emissions regardless of how the vehicle’s battery packs are recharged or how they were built. As we move toward a world where cars are electric, self-driving, and shared, the more internal combustion engines are phased out and replaced with electric ones, the better it will be for everyone. . This is how company can inculcate its strengths into building corporate image and growth.
Notwithstanding its size, Tesla is among the most vertically integrated automobile firms in the world. In addition to keeping all of its sales in-house, Tesla has developed much of its fundamental technology in-house and depends very little on external suppliers than many of the other big manufacturers, which are sometimes better defined as auto parts assemblers. Instead of relying on third-party suppliers like Bosch, ZF, Denso and Johnson Controls to provide the batteries, electric motors, on-board chargers, and electronics, Tesla has built its own Gigafactory in Nevada to create all of these components in-house (perkins & Murmann, 2018).
The Tesla Roadster was among the company’s first cutting-edge as well as high-performance electric sports automobile when it was unveiled in 2008. For Elon Musk, co-founder and chief executive of Tesla Motors, the goal is to accelerate the transition from a fossil fuel-based economy toward one based on solar power, which is the major, but not sole, sustainable option (Rimmer, 2018).
The firm is able to maintain a long-term competitive edge because of its vast product range and strong brand image in the market. The firm has also been able to obtain a significant part of the electric vehicle industry by differentiating its products. In addition, Tesla has built in-house expertise in the testing and design of electric cars and their components, as well as their development. Additionally, Tesla’s core manufacturing locations help the business maintain a solid market position. “Our goal is to sell 20 million electric automobiles annually by the year 2030.” Focusing on electric vehicle (EV) powertrain systems as well as elements is a key element of Tesla’s secret to success. More than 30,000 Superchargers (charging stations) have been installed at around 3,100 places as of 2021, with 438 stores and galleries, 100 service centres, and more than 30,000 locations (HBR, 2022). For Tesla, keeping up with the times means developing new products that appeal to a larger spectrum of customers. There are now Tesla Motors sites in the United States and China in order to maintain their position in the niche market.
Model 3 battery packs and energy storage devices are manufactured in Tesla and Panasonic’s Nevada-based Gigafactory, which was developed to keep costs low for the company’s lithium-ion battery packs. Mercedes Benz and BMW are among the premium automakers entering the electric car market. Electric vehicle sales are expected to account for 29.5 percent of all new automobile sales by 2030, according to industry analysts. As a result of Tesla’s computer-aided designs, as well as their durability and strength, new products have been developed more quickly. In addition, the company’s primary skill is identifying methods to expand while also helping to localise the design of their goods (Rimmer, 2018). Tesla’s fundamental resources and talents are a strong team that is focused on creating novel goods, sophisticated technical updates, distinctive product design that provides a competitive edge and distinction to customers, etc. Using these tools, the business has been able to build up a sizable consumer base. Thus, this is how the company ensure that its long-term goals are achieved by consistently working towards innovation and development.
Tesla’s competitive advantages involve the use of cutting-edge technology, expansion into other sectors, the establishment of a supercharger network, excellent design, and an organisational culture founded on honesty.
It is through differentiation that Tesla has been able to gain a competitive edge. In this aspect, Tesla produces items that set it apart from other electric car manufacturers. For instance, the company’s automobiles are equipped with ecologically sound technologies. Since moving away from internal combustion engines to lithium-ion batteries, the corporation has made an effort to reduce pollution and save the environment. With this strategy, Tesla may tap into the expanding market for environmentally-friendly automobiles. Additionally, the approach provides a competitive edge because it concentrates on the product’s distinct features (Gali, 2020).
Furthermore, it appeals to electric car buyers who are early adopters of cutting-edge technology. Customers in this sector are frequently well-to-do individuals who are willing to pay a premium for cutting-edge technology. Using this method has allowed the company to grow and lower manufacturing costs at the same time. In order to reach a larger audience in the vehicle industry, differentiation has given way to wide differentiation as a result of this expansion (Jiang & Lu, 2018). As previously stated, Tesla has expanded its company to have included solar panel manufacturing and energy storage solutions. By increasing its investment in R&D and developing new goods, the company hopes to widen its marketing reach and boost its brand value. For example, Tesla’s cost of battery cells continues to fall due to the Gigafactory scaling up production and more coming online, as well as the fact that most manufacturing processes are located under one roof at the plant. The most significant advantages of the Supercharger network are its vast distribution and seamless integration for road trips, as well as how simple it is for Tesla drivers to use the network. Electric car manufacturer Tesla supplies its consumers with high-quality goods and excellent customer service. All-electric transportation has been derided by other manufacturers (in all sectors), but Tesla has built a strong brand around electric vehicles that many didn’t think was achievable. Tesla’s “Full Self-Driving” system is becoming better and better each quarter, with new capabilities constantly being added to the system. Autonomous driving neural networks are trained using photos from Tesla owners’ cars as they drive around. The Autopilot/Full Self-Driving capabilities of Tesla’s vehicles are always being improved (VF, 2022).
Tesla’s goods are high-quality and distinctive. Because Tesla’s goods are superior than those of other manufacturers, pleased consumers are unlikely to switch to them. Loyal clients are willing to pay a premium price for high-quality items because they believe they are worth it. In addition, customer loyalty makes it harder for new firms to enter an established industry (creates barriers to entry) (Valentin, 2021). As a result, other electric vehicle (EV) manufacturers will find it difficult to enter the market and compete with Tesla. This brand will come to represent high-quality electric automobiles in the future. This will help the company to achieve its competitive advantage with inculcating principles of sustainability.
Conclusion
To conclude, Tesla being known for its environmentally clean and environmentally friendly products, is amongst the leading electric vehicle manufacturers in the world. Furthermore, an external market research is required with respect to the automobile sector which further in determining the production and its demand of electric vehicles which are on the rise in the current times as a result of increasing environmental concerns. Tesla uses a premium vehicle niche differentiation strategy and is now pursuing a broad differentiation approach to drive the market to a whole new level. Rather than relying solely on paid advertising and online sales sites, the company relies on media exposure and supplier ties to differentiate its goods. It is the company’s inventive and hardworking culture, fostered by effective long-term strategies, that fuels its success in the many markets and arenas. As the company’s economic success empowers it with free cash flow and strategic momentum, incorporating strong operational capabilities, Tesla aims to follow its objective of accelerating the world toward sustainable energy.
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