LEEDS BUSINESS SCHOOL
COURSEWORK ASSESSMENT
BUSINESS PERFORMANCE MANAGEMENT
MODULE
GROUP ASSIGNMENT
ASSIGNMENT DETAILS
LOI KWONG WEI/ CHAI KOK VUI/
STUDENT NAME KENNY WONG VOON PHIN/ WARREN HO YEE
XIN
BBM01202001/ BAF09192001/ BAF09192005/
STUDENT ID BAF01202001
BACHELOR OF ACCOUNTING AND FINANCE &
PROGRAMME/ YEAR BUSINESS MANGEMENT 2019&2020
EMAIL ADDRESS
6 APRIL 2020
DATE OF SUBMISSION
MARKS
I declare that all material in this assignment is my own work except where there is clear
acknowledgement or reference to the work of others and I have complied and agreed to the
University statement on Plagiarism and Academic Integrity.
Signed………….. Date……….
*By submitting this assignment and cover sheet electronically, in whatever form, you are
deemed to have made the declaration set out above.
Contents
1.0 About TESLA..................................................................................................................................1
1.1 Introduction.................................................................................................................................1
1.2 Objective.....................................................................................................................................1
1.3 Chart of Organization..................................................................................................................2
1.4 Mission and Vision......................................................................................................................2
1.4.1 Mission.................................................................................................................................2
1.4.2 Vision....................................................................................................................................3
1.5 Strategy goals..............................................................................................................................3
1.6 Corporate plan.............................................................................................................................4
1.6.1 Key Partners.........................................................................................................................4
1.6.2 Key Activities.........................................................................................................................5
1.6.3 Key Resources.......................................................................................................................5
1.6.4 Value Porpositions................................................................................................................5
1.6.5 Customer Relationships........................................................................................................6
1.6.6 Channels...............................................................................................................................6
1.6.7 Customer Segments of Tesla.................................................................................................6
1.6.8 Cost Structure.......................................................................................................................7
1.6.9 Revenue Streams..................................................................................................................7
2.0 How the performance measurement and management system was implemented while using the
Business Simulation Platform?..............................................................................................................8
2.1 Impact of performance measurement and management system to the company............................10
3.0 Benchmarking against competitors organisation..........................................................................11
4.0 Financial Performance...................................................................................................................13
4.1 Measuring profitability..................................................................................................................13
4.2 Measuring liquidity........................................................................................................................14
4.3 Measuring activity.........................................................................................................................14
4.4 Measuring Risk..............................................................................................................................15
5.0 References.....................................................................................................................................16
1.0 About TESLA
1.1 Introduction
Tesla Motors ('Tesla') is a worldwide venture that
structures, creates and showcases electric powered vehicles and
segments. By and by, it is the main vehicle maker selling zero-
discharge sports autos in sequential creation (rather than idea
vehicles or prototypes). It is currently extending this
mechanical bit of leeway to the extravagance vehicle car
advertise. Tesla's strategy of selling smooth, eco-
accommodating structures at high edges echoes Apple
Computer's business model, and varies extraordinarily from its industry peers Chrysler, Ford
and General Motors in Detroit, which have been attempting to advance their maturing lines to
satisfy the increasing needs for electric and half and half vehicles (Sun, 2011).
1.2 Objective
Major objective of this report as shown below:
To empower the Tesla's employees towards accomplishment of unrivalled principles
of work execution.
Advancing a two path arrangement of correspondence between the chiefs and the
workers for explaining assumptions regarding the jobs and accountability, conveying
the practical and authoritative objectives, giving a normal and a straightforward input
for improving representative execution and persistent training.
Advancing self-improvement and progression in the vocation of the representatives by
helping them in securing the ideal information and abilities.
1.3 Chart of Organization
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1.4 Mission and Vision
1.4.1 Mission
Tesla’s mission statement was “to accelerate the world’s transition to sustainable
transport.” However, in mid-2016 under Elon Musk’s leadership, the company changed the
corporate mission to “to accelerate the world’s transition to sustainable energy.” This new
statement indicates a slight but significant shift in the company’s business, to address market
opportunities for renewable energy. In a way, the new corporate mission recognizes the
relevance of the firm’s batteries and related energy storage products in markets in addition to
electric vehicle market (Tesla,2020). Tesla Inc’s mission statement has the following notable
components:
The world’s To sustainable
To accelerate
transition energy
1.4.2 Vision
Tesla’s vision statement is “to create the most compelling car company of the 21 st century
by driving the world’s transition to electric vehicles.” This corporate vision emphasizes the
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company’s focus on renewable energy. Specifically, the corporation addresses the electric vehicle
market as a major a venue for facilitating growth of the global renewable energy market. The
following components are significant in Tesla Inc.’s vision statement:
The world’s
Most
Car company 21st Century transition to
compelling
electric vehicles
1.5 Strategy goals
1. Market expansion has become a crucial 2. Key investment should be placed in
requirement for further progress of improvement of existing services and
Tesla Motors in the automobile innovating new products through heavy
industry. Targeted customer should be emphasis upon research and
mid 20’s and early 40’s aka Y development (R&D) for gaining a
generation. competitive edge.
3. The luxury car segment will gain 4. Comparatively lower entry-level prices
attraction from the younger of the products will ensure an enhanced
professional, for being a symbol of their share of customer in the current market
sustainable stature. place.
5. With the introduction of lower priced
electronic vehicle, the Tesla Motors will
witness 5% increment in the market
share within the next 5 years.
Table 2: Strategy goals of Tesla company
1.6 Corporate plan
Tesla Business Model Canvas
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Diagram 1: Tesla Business Model Canvas
1.6.1 Key Partners
Toyota Manufacturing - Tesla and Toyota build an alliane which dedicated to developing
electric vehicles, parts and production systems.
Panasonic - Collaborating to build Tesla’s Gigafactorys which a large scale of battery
and solar cells manufacturing in New York and Nevada.
Government - US government provides federal tax incentives of about $3750 to client
depending on state.
1.6.2 Key Activities
Research & Development - Providing breakthrough technologies and innovational
designs that were in association with Tesla vehicles.
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Design - modern design that includes lightweight body, durable and long lasting battery
life.
Sales & Marketing - Invest heavily in executing sales and marketing efforts includes
establishing company-owned stores.
1.6.3 Key Resources
Electric Vehicles and Technological Knowledge
A) Superior Engines design - high performance vehicles, pollution and noise free vehicles.
B) Engine components : Lithium-ion battery system, induction motor.
Comparison Chart 1: Tesla Induction Motor vs Typical IC Engine
Tesla - Induction Motor Typical IC Engine
Weight - 31.8 kg Weight - 180 kg
Power - 270 KW Power - 140KW
Weight/Power - 8.5 KW/kg Weight/Power - 0.8KW/kg
1.6.4 Value Porpositions
Advanced Electric Vehicle Technology
Supercharging and destination.
High miles per charge.
Autopiot option.
1.6.5 Customer Relationships
Customer Service Experience - Tesla provide self service website which customers
can build their own desire car, add features and so on. Which this is an unique
shopping experience.
Free/low-cost charging station network - charging stations are designed to
supercharge Tesla vehicles that get charged in just 30 minutes.
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1.6.6 Channels
Tesla utilizes to channel and markets its technology:
Self service online store (website).
Conferences & sales events.
Retail stores & galleries which Tesla, Inc. retail stores and galleries are designed and
built to showcase Tesla vehicles and maximize customer experience.
1.6.7 Customer Segments of Tesla
Tesla’s engineers and designers have designed vehicles appropriate for every customer
groups.
Folowing customer segments as below :
Green Community
Autopilot
Mid - price range
Fast sports car enthusias
1.6.8 Cost Structure
In 2018, with a revenue of $21.46 Billion and cost/expense about $22.5 Billion. Tesla had net
loss about $1 Billion.
The following are Tesla expense and cost structure:
Cost of material, labor & manufacturing overhead (COGS): $ 17.4 Billion, 81% of the
revenue
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Selling, general & administrative Cost: $ 2.8 Billion, which is 13% of the revenue
Research & development Cost: $ 1.46 Billion, which is 7% of the revenue
Restructuring Cost: $ 135 Million, which is 1% of the revenue
Interest expense, taxes and others: about 3 % of revenue
1.6.9 Revenue Streams
In 2018, the total annual revenue of Tesla was $21.4 Billion. Which is the high level break
down of Tesla’s revenue.
I) Automotive Segment revenue – it includes sales of all vehicle models, access to charging
network, software updates, after – sales services, sales of EV components, retail merchandise,
etc.
Here is a further breakdown in the automotive segment.
Vehicle sales: $ 17.6 Billion
Vehicle leasing: $ 883 Million
Services and other: $ 1.39 Billion
= Total: $ 19.91 Billion
II) Energy generation & storage segment – it includes sales of solar energy systems and
storage products such as solar roof panels, etc.
= Total: $ 1.55 Billion
2.0 How the performance measurement and management system was
implemented while using the Business Simulation Platform?
Areas measures
of performance
of a business
Human
Supplier Strategy
Resoures
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Tesla companies can use performance measurement and management systems to
check the performance of suppliers because the performance of suppliers will affect the
operation of the company in many aspects. For example, sales of the company and cost of the
material. Firstly, we will choose the suitable supplier after finding the right supplier and
signing the contract, the relevant department can start to monitor and control the performance
of the supplier until the contract is signed. If the supplier needs to renew the contract, the
company can evaluate the performance according to the previous performance and the
performance appraisal and management system can analyze the potential and performance of
the supplier in detail for Tesla company. Besides, the company should base on below area to
process the evolution the supplier performance including quality, quantity delivery, on-time
delivery, early delivery (just-in-time users do not like early deliveries), cost, and intangibles.
After the supplier performance is certified, the company can provide high quality products,
on-time supply and stable prices. After the supplier performance is certified, the company
effectively provides high quality products, get on-time supply and stable selling prices or
cost.
Furthermore, human resource management involves both the development of
individuals and the organizations. Human resources departments can use systems to analyze
and monitor employee performance such as job analysis and staffing, measurement and
evaluation of labour force performance, implementation of employee incentive systems,
employee professional development, and labour force maintenance. The ability and
performance system of the employee can be evaluated, so the human resources department
can assign jobs or adjust the work department of the employee according to the evaluation
result of the employee. At the same time, it will call make the operation of the company more
efficient and find out professionals or expert in every field. In contrast, If the employee is not
performing well, the formula can provide timely training or dismissal because it can make the
operation of the company more efficient. In addition, the system can set a reward system for
the human resources department, so that the system can accurately analyze the employee's
performance to figure out the employee's deserved reward.
Besides, strategic control means that performance measurements and feedback loops
guide management action. The company can use the system to evaluation the strategy their
set previously and check for wheatear have changed or not. If the strategy inability the
company can follow the performance measurements result to designing a new strategy can
lead to desirable results. After that, we can use the system to control and monitor the strategy
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and the company can follow the stragety to achieve the goal. Other than that, Telsa company
use the system to analysis the target market and market needs so after get the analysis data
the company can improve their strategy. For example, one of the Tesla company strategy goal
is targeted customer should be mid 20’s and early 40’s aka Y generation, so they can follow
the result’s system provide to control or monitor the target market and check this strategy
they used were work or not.
2.1 Impact of performance measurement and management system to
the company.
After the simulation applied, Telsa Company should more profitably because they have
strictly control and monitor the company operation. Moreover, changed on the net income
because of the company choose the good performance supplied and good manage the
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employee performance. The company have a supplier performance is certified will make
changed, it is because the company will get good quality of material from the supplier. Other
than that, the company also can to produce high quality product to the customer and this will
can help the company increase sales. Besides that, the company can get a stable selling price
and profit because Tesla company can control the costs. The appendices shown, the Tesla
company profit and loss statement during the period 2016 to 2019, the company get the loss
net income and that is mean they inefficiency in managing its operation of additionally
management its prices and/or give product or services at a value considerably below its costs.
Besides, the Tesla company can decrease their expenses because the company have
evaluation the employee performance. The human resources department can decide whether
to fire an employee based on the performance of the system so that the company doesn't
waste resources. At the same time, if the employee performs well, the company can pay the
benefits according to the standards reward so that the company will not pay the extra
expenses. Furthermore, the company design a well strategy can make the company easily to
achieved their mission because the company can according to the results of the system to
make accurate improvement in all aspects. For example, one of the strategy goal of Tesla
company lower priced electronic vehicle, the company design one strategy makes the cost of
sales lower so the selling price and cost balanced. However, if the Tesla company have
created a good strategy can attract more investor invest their company and the value of the
company also will increase.
3.0 Benchmarking against competitors organisation
Benchmarking is often known as a well structured comparison between identical
products, services or manufacturing processes on some different dimensions of performance.
By using benchmarking, it provides recommendations based on which is better preferred or
giving a ranking amongst the other counterparts. A company would be required to involve a
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third party who possesses the ability to collect data in order to construct the comparison and
feedback given on a confidential basis.
In the automobile industry, for the rise of demand, there are many new market
participants joining in the industry once in a short while and for most cases indicate that it
would be bringing disruption in the technological and business landscape entirely. For the
entry of Tesla, it has successfully created this dramatic shift and intended to transform the
sector. As traditional automakers have been relying heavily on third-party suppliers, instead
Tesla's has developed a fully self-reliant business model that has disrupted conventional ways
of doing business. For the most of Tesla's production and R&D for the autonomous,
connectivity, and electrification sectors are conducted in-house, the company remains
immune to price fluctuations exerted by Tier-I participants. This additionally, gives the
company complete freedom to modify components and customize them as per internal
requirements. For instance, Tesla is the only automaker who can generate its own processor
chip. Meanwhile traditional OEMs rely on the expertise of external Tier-I and Tier-II market
participants for development and integration.
Unlike a lot of other automotive companies, as the world has moved towards
electricity and autonomy, Tesla’s has prepared to design one of the most compelling business
models for his company that desired to build self-driving cars. They operate a fleet of
vehicles in a city where there are lots of riders who can access the service using smartphones,
run those vehicles day and night, 24/7, and power them with electricity. While other firms
could enter the same space by offering similar products, they could be known as Ford and
Volkswagen who have collaborated with a technology platform company Argo AI to provide
a range of services and testing self-driving vehicles that are going to solve numerous
problems that the modern society is having now which is from congestion to safety to
productivity. Ford’s Rich explained that the lifespan of full self-driving cars ties to his
expectation that Ford’s autonomous vehicles will be powered by internal combustion engines.
However, Ford isn’t selling these cars to individuals any time soon. Instead, it plans to use
the cars in autonomous fleets that will be used as a service by other companies, including as
delivery vehicles. Ford sees the “initial commercialization of AVs to be fleet-centric.
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Tesla took a unique approach to getting its first vehicle in the market. Instead of
trying to build a relatively affordable car that it could mass produce and market, it took the
opposite approach, focusing instead on creating a compelling car. Our first product was going
to be expensive no matter what it looked like, so we decided to build a sports car, as that
seemed like it had the best chance of being competitive with its gasoline alternatives. Tesla's
business model is based on a three-pronged approach to selling, servicing, and charging its
electric vehicles. For example, Tesla believes in creating a better customer buying
experience, hence it has taken the advantage of Internet facilities to operate sales, in which it
allows the customer to customize and purchase a Tesla online.
For car servicing, Tesla employs mobile technicians who are also called Tesla
Rangers service vehicles from the car owner’s house. In fact, some of its company built
electric cars such as the Model S can wirelessly upload data for view and fix some problems
online without needing any technician to physically touch the car.
While other gasoline alternatives automotive companies are still relying on refueling
at traditional gas stations, Tesla’s has invented its own companies Supercharger stations,
which can generate electricity for cars and allow drivers to fully charge their Tesla vehicles in
about 30 minutes for free. The reason behind this strategy and investing on these stations, is
none other than to speed up the adoption rate for electric cars.
4.0 Financial Performance
As at 31 December 2019, Tesla Inc. revenues have increased by 15% which is
$24.58B. Net loss has decreased by 12% which is $862M. The revenues reflect the
automotive segment in an increase of 16% which is $23.05B, other segment increase from
$3.05B to $6.16B, China (Country) segment increase of 70% which is $2.98B. Lower net
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loss reflects selling, general and administrative to have a decrease of 10% which is $2.14B
(expense).
4.1 Measuring profitability
Based on the annually income statement of Tesla, it shows that the most profitable
year is at the year 2019, as the gross profit is the highest compared to the past 3 years. The
operating income and net income is lower than the past 3 years from 2016 – 2018.
4.2 Measuring liquidity
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Based on the annually balance sheet of Tesla, it shows that the most liquidity year is
at the year 2019, as the total assets, total liability, and total equity has the highest amount
compared to the past 3 years from 2016 – 2018.
4.3 Measuring activity
Based on the annually cash flow of Tesla, it shows that the most activity year is at the
year 2019, as the cash from operating activities has the highest amount compared to the past
3 years from 2016 – 2018.
4.4 Measuring Risk
Type Of Risk Explanation
1. Debt Tesla has a rising amount on debt and
corresponding interests which leads
them to suffer losses.
2. Operational trouble Elon Musk does not have other real
automobile manufacturing
experience.
3. Competition Tesla is aimed to be caught up by
other companies for electric vehicles.
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4. Loss of interest People requested refund their money
for Model 3 investments.
5. Lack of future funding Tesla’s might use up options for
future funding where they will need a
greater deal sooner than later.
6. Expensive materials The price for cobalt, lithium, and
neodymium for electric vehicles is
now more expensive compared to 3
years ago.
Table 2 : Type of risk of Tesla company
5.0 References
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