Tesla Motors Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Threat of substitutes:

Threat of new substitutes is low in the automobile industry especially for Tesla Motors. Tesla Motors is known to be the only company that is engaged in manufacturing of automobiles with zero emission sports cars. Furthermore, it can better serve those customers who are uneasy by the pollution in the environment; hence, they will appreciate the notion followed by Tesla Motors.

Rivalry within the industry:

Despite more substantial capital investment, rivalry within the industry is very high as so many companies are planning to enter in the industry. Other automobiles brands are also focusing on the production of electric vehicle cars and investing their money in research and development.

SWOT analysis:

Strengths:

According to the CEO of the company, Tesla Motors is like a special force that only recruits best from the best. The company has competency in making different and unique designs for cars like the recent Model S and Model X. In addition to that, Model S is known to be the safest car. Further, the company is building their cars in California; consequently, it has an advantage to make the best use of the engineers from California. EV cars are known to be a mixture of gasoline and computer based car, therefore; it can be best made in California, not in Detroit.

The company is known to be the first one fully manufactures EV known as Roadster. Further, the company also supplied its equipments to other companies like Toyota as well and it has built strong expertise in technology along with electric transmissions. In addition to that, the company has an expertise in developing all the vehicles in-house. Additionally, the platform made for Model S can be used for the future and upcoming models as well.

Weaknesses:

One of the major weaknesses of Tesla Motors includes higher costs of production as the sub-assemblies are fully developed; thus it is not able to achieve economies of scale. Another major weakness of the company is the higher prices charged for their products as compared to the competitors and contenders who are engaged in the sale of combustion engine powered vehicles. In addition to that, the company has not yet build brand recognition among the general public as a brand is known to be luxurious brand and associated with upper-middle class.

The company is not very large therefore it is not able to achieve economies of scale. Further, the company often faces problems from the supplier’s side when the demand for products increases. In addition to that, the company is engaged only in the manufacturing and selling of electric cars despite the fact that consumers are still not sure about electric vehicles. The infrastructures for electric vehicles are not available like the gas stations for gasoline cars. The company is not very old as it was established just ten years back therefore; there is a limited operating history of Tesla Motors.

Opportunities:

The government is supporting the concept of zero-emission cars across the world as it knows the concept will be environmental friendly. The company is taking measures to improve the quality control processes that will in turn decrease the manufacturing costs of the company. In addition to that, the oil prices are increasing and there will soon be a shortage of oil in the future, and then the consumers will shift towards electric cars. Further, companies like Toyota and Daimler have decided to purchase equipments from Tesla Motors, which will increase the interest of other companies too; thus they will decide to do the same. Moreover, the company can use its batteries for other purposes as well like in storing power from solar panels. The swapping and charging stations in United States are not standardized; so the company can make charging stations for their own automobiles and for the other brands as well, which will make Tesla Energy Company along with a car firm as well.

Threats:

As bigger automobile companies like Toyota and General Motors are inclining towards the concept of hybrid electric cars, hence it is imposing bigger threat to Tesla as well. In addition to that, the oil prices can decrease drastically in the short-run, which will increase the consumer’s interest towards gasoline cars. Further, the competitors of Tesla Motors are moving a step forward in the technologies related to energy, and these technologies include ethanol, hydrogen powered cars and natural gas. The company is using a price skimming strategy that is not so successful in the industry. Further, the company has challenged the hundred year’s old concept of combustion engines that can counter back them; and this will give tough time to Tesla Motors.....................................

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