Chat with us, powered by LiveChat Assignment: This assignment covers the second half of the Strategic Audit. Read, study and apply this section to TESLA This - School Writers

Assignment: This assignment covers the second half of the Strategic Audit. Read, study and apply this section to TESLA This

Assignment: This assignment covers the second half of the Strategic Audit. Read, study and apply this section to TESLA

This is the second half of the Writing Assignment. Think of yourself as a CEO writing an important paper to your Board. You are not a student listing all that you think might possibly be relevant.

  1. PLEASE NOTE CHANGED REQUIREMENTS:
    1. This second paper should not exceed four pages, double-spaced, one inch margins, 11 point font size, your choice of font.
    2. Please number pages. Please title sections. Cover page, index page and reference pages do not count for the 4 page limit.
    3. No papers in excess of four pages will be graded.
    4. Use footnotes throughout the paper to credit your sources; list your references at the end to better identify your sources. Use quotations properly. Failure to document will be consider prima facie plagiarism.

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Strategic Audit of a Corporation: TESLA

Name

Course/Unit

Institution

Date

Strategic Audit of a Corporation: TESLA

Introduction

The historical presentation of Tesla as a company has been one founded on success in strategy implementation and strategy-focused decision making. The company’s vision has been looking into futuristics product development since its beginning. As an American automaker founded by Elon Musk, Tesla has proved that its conceptual growth from an electric car from an idea in Silicon Valley is one of its best inputs. The company is drive develop better serving automobiles than gasoline cars aiming at increasing efficiency with each of its newest product development. This is an innovative and creative thought process that was advanced from the inspiration of Nikolai Tesla.

Current Situation

Under the ownership and leadership of Elon Musk, the company’s HQ is currently in Palo Alto, California moving to Texas, US HQ (Clayton, 2021). With more than four international branches worldwide and distribution to more than 38 countries (Tesla.com, n.d).

Current Performance

Looking at Tesla's annual performance ending December, 2020, it showed a total revenue of 31.5B, 6,63B gross profit, 1.95EBIT, 21.7B net tangible assets, 721 net income, and -3.23B capital ventures. From the annual report and the 2020 latest income statement, the company has an increase of 28% in net revenue from the last year/ At the same time, the operating income increased by 2339% against a net income increase of 184% hence a better cash flow (Stock Metric, 2021).

In 2021, as of July, the company reported a better performing Q2 at a revenue of $12B which is $0.7B higher than that of 2020 with 3.5% of the revenue coming from the credit sales regulation. This is attributed to be the lowest with the last four quarters. Q3, whose release date has been announced, marks delivery of 240,000 vehicles out of the 238,000 produced. In this production, Model 3/Y was in higher demand at 232,025 having been delivered in comparison to Model S/X at 9,275 which was above the initially estimated demand of 8,941 used in production (Tesla, 2021). However, at a closing market of +0.82%, selling at $791.94 with stable fluctuations in the year, with a market cap of 7$93,339.62M the company’s performance is expected to retain its high-performing trend (BBC News, 2021).

Strategic Posture: Mission, Objectives, and Strategies

The most strategic approach by Tesla to product development as noted is the extreme interest in taking a risk with product development that is not common in the major market spaces and thus setting themselves as a unique brand to watch out for. As such, the mission is to “accelerate the world’s transition to sustainable energy” a dream that is taking shape slowly (Musk, 2013). A such the objective is to be a company is driven by sustainable quality development as shown in their Daily Tesla videos. The videos exhibit one language, maintaining quality, clean energy, show their refusal to compromise.

The company uses a mix of strategies in its implementation within the broad differentiation concept. As a generic strategy, the company’s aim in this strategy is to have a competitive advantage through product development. The launch of its first electric sedan, Model S in 2012. Attaining five stat rating as the car of the year in Motor Trend’s 2013 Car, its entry provided an opportunity for competitiveness presentation. This continued to be seen in 2014 with the release of a 2-dual motor all-wheel-drive version of the same model maned 85D that would become one of the fastest 4-door care production in history. The trend would spill over to 2015 when the release of Model X cemented the company’s prowess inconsistency of creative production. With increased production and consistency in production, the company expanded to Netherlands, Fremont, and Lathrop California and with this expansion they have partnered with Panasonic for the production of a new auto vehicle, Model 3S launched in 2019. The model would become the first-ever electric car that reached over 1M sales globally followed by the production of Model Y in 2020 with the expectation of long-range 7-seater Model Y to be released in 2021 (The Cars Magz, n.d).

This is however not the stop for the company, larger quantities production of electric car production means lithium-ion cells in larger quantities. This has prompted the company to create a gigafactory looking to produce more than the world’s output. A wide acceptance of the company abroad and home continues to be a success story that has elevated and led to more sales over the years with slow but quick acceptance of autopiloting as an attractive feature unique and trusted by the users. In addition to its continuous success, the corporation has entered into a partnership with NASA for the Launch America project which combines the working of Tesla Model X, SpaceX, NASA, and Apollo (Carter, 2020).

External Environment: Opportunities and Threats, SWOT

Using the Porters model is an opportunity that taps on the attraction of its customers through the attraction of using environmentally friendliness that emphasizes unique consciousness of social issues. The adoption of these issues allows for high market end capitalization with cost-consciousness pegged on initial high capital investment. These can be seen through the high initial price, as shown in the table below, the promise of lower cost per mile, for a lifetime of product use is a strategy that is target-oriented to the customer needs.

Vehicle Model

Price List

Cost/Mile

Model 3

$37,990 – $54,990

$152 – $184

Model Y

$49,990 – $59,990

$187 – $273

Model X

$79,990 – $99,990

$228 – $328

Model S

$74,990 – $94,990

$184 – $273

However, there are two major threats that the company has faced. Tesla was ordered to pay close to $137M for abusing a black worker in the Fremont plant. The employee claimed to be in a hostile work environment and racially discriminated against and verbally abused (BBC News-a, 2021). This affects the reputation of the company as it brings to attention its human resource policies. In addition, the US has opened an investigation against the Tesla autopilot after 11 reported crashes with active Traffic-Aware Cruise Control just before the collisions. This is likely to raise fear among the customers and thus creating a reputation that would turn away customers from the product or call for returns. This threat would mean more than 200,000 potential “time bombs” within this year alone.

Analysis of Strategic Factors (SWOT)

Tesla leadership is led by 12 key executives under the guidance of Elon Musk as the executive officer. With an education and a background of creativity, as a leader, the promotion of green technology is an opportunity that provides out-of-the-box thinking for the staff as well. Being a leader with preferred innovation in this area, the vocalizing of the support of this by the leader allows the aligning of expectations and objectives. A such, there is clarity that all executives would follow and thus the development of a converging focus for advancing the company’s success. Positions within the company are strategically developed to allow education of people, architecture development, and careful monitoring of competitors for optimization of competitiveness. In consideration, management in the company is centered through the development of innovation in a way that caters to product development by pushing boundaries to achieve the goals of sustainable and quality green energy implementation. The planning aspect can be seen through sharing of knowledge and identification of skilled people for the specific leadership roles.

Strategic Alternative and Recommended Strategy

The company is exhibiting a successful integration of one specific strategy of differentiation central to the social issues and thus the development of a product based on solving a specific issue. The result is a matching mission to objective planning and circumference of the inputs and outcomes around this singularity. In this way, Tesla has been successful in its venture and strategy development.

References

BBC News. (2021). TESLA: TSLA. Retrieved from https://www.bbc.com/news/topics/c8nq32jwjnmt/tesla

BBC News-a. (2021). Tesla must pay $137m to racially harassed former workers. Retrieved https://www.bbc.com/news/business-58807212

BBC News-b. (2021). Tesla Autopilot: US opens official investigation into self-driving tech

Carter, J. (2020). Tesla Model X, SpaceX, NASA, and Apollo: Get Ready for This Week’s Iconic ‘Launch America’ Event. Forbes. Retrieved from https://www.forbes.com/sites/jamiecartereurope/2020/05/22/tesla-model-x-spacex-and-nasa-all-american-icons-combine-for-an-all-american-launch/?sh=d84f91a35bf2

Clayton, J. (2021). Tesla: Elon Musk says company headquarters will move to Texas. BBC World News. Retrieved from https://www.bbc.com/news/technology-58838874

Musk, E. (2013). The Mission of Tesla. Retrieved from https://www.tesla.com/blog/mission-tesla

Stock Metric. (2021). Tesla, Inc. (NASDAQ:TSLA) Annual Report 2020. Retrieved from https://www.stockmetric.net/nasdaq/tsla-annual-report-analysis/

Tesla. (2021). Tesla Q3 2021 Vehicle Production & Deliveries. Business Wire Investor Relations: Press Releases. Retrieved from https://ir.tesla.com/press-release/tesla-q3-2021-vehicle-production-deliveries

Tesla.com. Retrieved from https://www.tesla.com/

The Cars Magz. (2021). 2021 Tesla Model Y: New Design, Price, Specs, and Release date. Retrieved from https://thecarsmagz.com/2021-tesla-model-y/

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