Foundation to Business Strategy

STUDENT ASSIGNMENT COVER SHEET

Module Name and Level	Foundation to Business Strategy- Level 2
Module Code	BC12-2
Assessment No.	01
Assessment Type & Weighting:	Assignment - Pair&  50 % weighting

ASSESSMENT BRIEF: Assessment 1 has two components - the report and an individual viva:

The written report has a weighting of 70% and the viva has a weighting of 30%

Note: 

v It is mandatory for a student to pass both components.

v A failure in any one of the components would result in a failure in the assessment.

v Non-appearance in the Viva would amount to a fail in that component.

Read the attached case and write a report(word limit 2500 +/- 10%, excluding references) that addresses the following tasks:

1.   A review on the need and importance of environmental analysis by organizations using relevant academic literature.

2.   An evaluation of the trends in the macro environment that would influence the U.S. Automobile Industryusing PEST Model.

3. Analysis of the competitiveness of U.S. AutomobileIndustry using Porter’s Five Forces Model.

4.     Analysis of the SWOT for Tesla Motors, Inc.

Tesla Motors, Inc.

Tesla Motors, Inc. is in the business of developing, manufacturing, and selling technology for high-performance electric automotive and power train components. Hoping to develop a greater worldwide acceptance of electric vehicles as an alternative to the traditional internal combustion, petroleum-based vehicles that dominate the market, Tesla is the first company that commercially produced a federally compliant electric vehicle with the design styling and performance characteristics of a high-end performance automobile. Tesla currently offers one vehicle, the Roadster, for sale, as well as supplying electric power train components to Daimler for use in its Smart EV automobile. Additionally, Tesla has a partnership with Toyota Motors to develop and supply an electric power train for Toyota’s Rav4 SUV.

Company Background

Tesla Motors was founded in Silicon Valley in 2003 by Martin Eberhard and Marc Tarpenning to create efficient electric cars for driving aficionados. The founders acquired their first round of financing from PayPal and Space X founder Elon Musk who subsequently took over as CEO in 2008. The company unveiled its first car, a two-seat sports car named the Roadster, in 2006 after raising $150 million and going through four years of technological and internal struggles. Powered by a three-phase, four-pole AC induction motor, the Roadster has a top speed of 130 mph and accelerates from 0 to 60 mph in under four seconds, all completely silent. Production of the Roadster began in March of 2008 with a first-year production run of 600 vehicles. In June 2008, Tesla announced that it would be building a four-door, five-passenger sedan called the Model S to be built in California and be available for sale in 2012. The Model S is slated to retail for approximately $57,400 and be offered with battery options for 160-, 230-, or 300-mile ranges per charge. The company went public in June 2010 with an initial public offering at $17 a share, raising about $226.1 million in the first stock debut of a car maker since the Ford Motor Company held its initial public offering in 1956.

Strategic Direction

Tesla desires to develop alternative energy electric vehicles for people who love to drive. While most car companies are developing small, compact electric cars, Tesla has focused on a high-priced, high-performance electric vehicle that competes against traditional performance cars such as those offered by BMW and Porsche. The company has also devoted many resources to research and development in an effort to produce an electric power train that has both long mileage between recharges and the high performance that car enthusiast’s desire.

Tesla’s main objectives are to achieve both growth in sales and profits, provide technological leadership in the field of electric vehicles, and foster sustainability and social responsibility. The company desires for growth are served with its development and sale of the Model S vehicle that is expected to retail for almost half of the Roadster price and thus create higher demand and revenue. The company further strives for growth through its strategic partnerships with Toyota and Daimler to supply electric power trains to those companies for use in their electric vehicle designs.

Tesla’s Competition

Tesla’s products participate in the automotive market based on its power train technology. It currently competes with a number of vehicles in the non-petroleum powered (alternative fuel) automobile segment from companies such as Mitsubishi, Nissan, General Motors (Chevy), Toyota, BMW, and Honda to name a few. Within this market segment, there are four primary means of power train propulsion which differentiate the various competitors in this market:

Proprietary Technology

As electric vehicles are a newer technology, Tesla’s innovation has led it to have some unique resources in technology and intellectual property over its competitors. Tesla’s proprietary technology includes cooling systems, safety systems, charge balancing systems, battery engineering for vibration and environmental durability, customized motor design and the software and electronics management systems necessary to manage battery and vehicle performance under demanding real-life driving conditions. These technology innovations have resulted in an extensive intellectual property portfolio—as of February 3, 2011, the company had 35 issued patents and approximately 280 pending patent applications with the United States Patent and Trademark Office and internationally in a broad range of areas. These patents and innovations are not easily duplicated by competitors.

Tesla’s Future: Success or Bust?

In a nutshell, Tesla has limited sales in a limited market, and is making low margins due to high product costs and the lack of economies of scale. However, if oil prices continue to climb toward US$200 a barrel and new electric cars, such as the Chevy Volt and Nissan Leaf, catch on with consumers, the upside for Tesla could be enormous. Can Tesla reach the tipping point? Or will it become just a footnote in automotive history? Time will tell.

To get solution visit our websitewww.arabessay.com