MPM701A Business Process: Performance of Tesla Motors

Company Performance (Tesla motors):

Analyses and discuss the overall economic and/or social and environmental performance of the company for the past two years before the launch of the new product/service.

Your analysis and discussion should highlight how the company has either succeeded or failed to strengthen its competitive advantage over the past two years.

Answer:

Introduction

Tesla Incorporated is one of the most valuable companies in the stock market judging from the billions of dollars invested. The company was started by Elon Musk in conjunction with other inventors such as Martin Eberhard in the year 2003. It is however important to note that, the company first went public in 2010, with the investments being directed towards building new models (McDermott, 217, 48). Unfortunately, the motor vehicle market is saturated with big players such as General Motors. It is hence for this reason that the company had to seek ways of dealing with the big players.

Competitive Advantage

In the two years preceding the company’s launch of the first car saw deep research in ways to deal with competitors. It is at this point that the company adopted porter’s generic strategy to deal with competition. The big players in the automotive industry such as General Motors had mastered several tricks to navigate the competitive industry. It is hence for this reason that Tesla chose to invest in advanced technology as a way of dealing with competition (Guillaume 2014, p. 18). The decision to invest in advanced technology proved critical in the company’s penetration of the competitive market.

According to McDermott (2017, p. 30), in the fiscal year 2017, Tesla Inc. was able to produce and deliver around one hundred and three thousand units. The numbers might not seem very high compared to the sales made by General Motors and other competitors. It is, however, a positive indication of the progress made by the company over the years. In the past, the company found it difficult to penetrate certain markets due to skeptics with poor understanding of the market. The use of advanced technology has, however, played a huge role in swaying the masses. A high investment in technology has played a huge role in boosting the company’s fortunes.   

 The electric car market has been gaining popularity in the recent past with other brands seeking ways of entering the market. Tesla has, however, improved its ratings in the field by positioning itself as a key player in the energy industry and the sharing economy. The company has built a gigantic factory with the aim of producing batteries in Nevada (Gross 2016, p. 309). The company is slowly positioning itself as the ultimate player once electric machines become popular. The differentiation approach has played a key role in improving the company’s competitive advantage.

SWOT Analysis

Tesla has however been able to grow over the years, thanks to its ability to identify its strengths compared to other players. The use of advanced technology in its products has played a huge role in improving the company’s fortunes. According to McDermott (2017, p. 28), the company has been able to grow thanks to its ability to focus on this strength. Unfortunately, overlooking the middle income earners in its products is likely to prove a challenge, hence one of its weakness. The company has over the years focused on top earners and may in the end lose its dominance in the industry.

A recent decision by the company to produce low cost models is however one of the opportunities that exist in the company. The company has the potential of dominating the electric car market with the introduction of low cost brands. The newly built battery factory in Nevada should also be spread to other parts of the nation. In doing this, the company is likely to improve its ratings amongst various parties (Seifer 2015, p. 32). Unfortunately, changing technology is likely to prove the biggest threat to the company. The company has over the years invested in advanced technology to power their vehicles. The ever-changing technology field is however likely to prove the biggest threat to the company’s growth.  

References

Gross, M. (2016). A planet with two billion cars. Current Biology. 26(8), pp. 307-310.

Guillaume, D. (2014). Tesla: Inventor of the Electrical Age. Canadian Journal of History. 49 (2), pp. 12-45.

McDermott, E. (2017). Examining the effects of policy interventions on increasing electric vehicle adoption in California. Master's Projects and Capstones. 567 (2), pp. 3-68.

Seifer, J. (2015). Tesla: Inventor of the Electrical Age. The Historian. 77 (2), pp. 5-56.