Meriam Mehaya

Professor Anzenberger
MGT 490
May 8th 2018
Table of Contents
Company Background………………………………………………………………………..……….3
Old Mission Statement, New Mission Statement………………………………..………3
Vision Statement …………………………………………..………………………….….3-4
EFE Matrix…………………......……………………………………………………………………….…4
IFE Matrix………………………………………………………………………………………………..…5
Internal and External Factors Analysis…...…………………………………………….…5-7
SW, WO, ST, WT………………...………………………………………………………….…8
Space Matrix……………………………………………………………………………………….…8-10
All Aggressive Strategies from Space Matrix. ……………………………….…11
IE Matrix…………………………………………………………………………………………………...11
Grand Strategy…………………………………………………………………………..……………..12
Recommendations………………………………………………………………………………….…13
References…………………………………………………………………………………………………14
Company Background

Tesla Motors, Inc., an American company which was named after the scientist Nikola Tesla, was
founded in 2003. Tesla Motors Inc. is headquartered in Palo Alto, California. Tesla Motors
creates, manufactures and designs electric vehicles which are made up of advanced powertrain
components. The motor company was first inspired by a group of engineers from Silicon Valley,
Marc Tarpenning, Martin Eberhard and Ian Wright. Due to the lack of funds available to invest in
their dream car, they reached out to Elon Musk who had already founded PayPal, SpaceX and
Zip2. While the Silicon Valley Engineers were keen on producing just their sports car, Musk was
convinced and eager to create a car which was highly sophisticated yet environmentally friendly
due to the fact that he believed oil is a finite resource which will run out by 2020. With his
theory, he has said that the price of oil will rise which will leave consumers creating a demand
for electric cars.

Old and New Mission Statement

Tesla’s old mission values is it “Tesla’s mission is to accelerate the world’s transition to
sustainable transport.”
Tesla’s revised mission statement hasn’t been changed much as opposed to the old mission
statement with just one word being changed which actually makes a whole lot of difference.
That is replacing “transport” with “energy”.
New Mission Statement: “Tesla’s mission is to accelerate the world’s transition to sustainable
energy.”
Their mission statement comes to focus on the idea and thought that we must reduce our
carbon fuels dependence and stroll towards an energy efficient world. Tesla is seeking to
accelerate the process of creating an environmentally friendly place with electric friendly
vehicles. Tesla Motors holds a strong innovation stance in which they believe they can make all
the difference in the world.

Vision Statement
Their Vision Statement is “Create the most compelling car company of the 21 st century by
driving the world’s transition to electric vehicles.”
A company which focuses on their concern for having a better environment and sustainable
future and creating their brand image from this helps add to their value to the public. Although
Tesla focuses on creating a sustainable future, their vision statement doesn’t necessarily explain
or show the business aspect of their position. It’s not clear on where they would like to be in
terms of a business or financial position and this part is primarily important especially when
dealing with an expensive eco-friendly vehicle. Tesla Motors should recreate a vision statement
that mentions both the environmental aspect and financial position of the company to give
customers a better understanding of what their aim is.

External Factor Evaluation (EFE) Matrix

The External factor evaluation matrix was calculated to have a weighted score of 2.56 which is
close to average. Tesla can use its opportunities and threats to better perform and to better
fund and expand their company portfolio.
IFE Matrix
The Internal factor evaluation matrix had a weighted score of 2.53 which compared to the EFE is
similar. As mentioned for the EFE, it’s important for Tesla to use their strengths and weaknesses
to expand in markets as they already have a strong brand image.

Internal Factors Analysis

Strengths:
 People are familiar with the Tesla Motor Brands and its reliability which essentially
becomes their dream car.
 They have a great engineering and technological background, the Silicon Valley
engineers who were the root of this brand.
 With previous founded companies, having a CEO who is experienced in managing a team
adds value to a company as its employees know how to work together and around
situations.
  With their first electric vehicle being their most expensive vehicle in order to generate
high sales and reinvest that money into newer production for less pricey products is a
smart idea.
 Their vehicle catches the eye and support from environmentally friendly people who are
rooting for a sustainable future just like Elon Musk is.
 Tesla has unique designs which differentiates them from other competitors.
 They allow you to test drive their vehicle if you’re over 21 so that you can feel how good
it is to drive a Tesla and essentially buy one.
 They have reliable suppliers which helps their manufacturing process.

Weaknesses:
 With luxury items, there’s always an alternative, and with that being said Tesla Motor’s
faces a weakness as their products comes off as highly priced compared to other Electric
Vehicles.
 They lack dealership opportunities around the world mainly due to dealership
regulations especially in the U.S. This contributes to any losses they may incur.
 There’s a long waiting time (about 2m months) before you receive your Tesla and this
may be an issue for someone who is in a rush to get their vehicle.
 There isn’t enough charging stations so this may throw people off in purchasing a Tesla
as they may think they will run out of energy with no place to charge their car.
 They have a weak product demand forecasting which results in missed opportunities.
 They have gaps in their products range and should think about producing competition
priced vehicles.

External Factors Analysis

Opportunities
 There’s room to grow for Tesla Motor’s and one way is to expand their market
segmentation. They have a large international market potential.
 Lower operation costs by expanding to markets in places such as China or India.
 Collaborate with the government to create more environmentally friendly products for
communities. Be their local suppliers.
 Increase market share
  Faster production can attract new customers in obtaining a new vehicle instead of having
room to switch to another vehicle.
 Mobility services such as Uber for lower ride sharing services would benefit the
environment and customers as this would reduce the costs of rides since oil prices are
rising.
 Stabilize a free cash flow system to allow greater investment and room to grow in
product segments.
 Develop mainstream options for the lower and middle class economy customers.

Threats
 Oil prices fluctuate which may pose a threat if prices are super low leaving customers no
need to switch to EV.
 Aggressive competition from other EV such as Ford Motors, General Motors position a
threat.
 Rising costs of raw materials can hurt Tesla’s profitability as they may either increase the
selling price of the EV or settle for lower profits.
 Currency fluctuations may be a problem as the U.S dollar is lower compared to the
British Pound or the Euro leaving them with better opportunities of expanding to Europe
and Asia.
 Dealership regulations set back Tesla from receiving further potential customers.
 With luxury products or services, the demand for them may decrease at any given
moment leaving companies unsure of what they want at what given time.
 Weak funding production can be a downfall when not having enough funds to generate
projects or invest in products.
 TOWS Matrix
Strengths Weaknesses
S1: Strong Brand Portfolio W1: Gaps in Product Range
External Factors S2: Environmentally Friendly W2: Weak Product Demand
S3: Reliable Suppliers W3: Lengthy Waiting Times
S4: Engineering and Technological W4: Lack of Raw Materials
Expertise W5: Highly Priced Compared to competing
S5: High Sale and Revenues EV
Internal Factors

Opportunities SO Strategies: WO Strategies:

O1: Global Sales Expansion -With the technological expertise, Tesla - Outsource certain operations to reduce
O2: Business Diversification should focus on new product development costs and reinvest in other activities.
O3: Faster Production and create faster production. (S3, S4 + O2, (W5, O1, O2)
O4: Mobility Service O3) - Showcase the importance of
O5: Government Exemptions - Expand in newer markets in different
environmental cars and how much
countries such as China (S1, O1)
customers can save in the long run which
- Work with the Government to create
more environmental friendly tools such as will benefit both them and the
energy efficient amusement parks (S4, S3, environment. (O5, W4)
O5)

Threats ST Strategies: WT Strategies:

T1: Aggressive Competition - Design products which fit the needs - Stick through with a strategy to reduce
T2: Low Market Target of different consumers to attract costs and increase revenue. (W5, W1, T1,
T3: Oil Prices different segmentations and classes. T2)
T4: Dealership Regulations (S1, S4, T2) - Expand in obtaining more facilities to
T5: Liability Laws
- Work with local city councilors to create faster production. (W3, T1)
expand Tesla Motors dealerships for
better access of purchasing a Tesla
vehicle. (S2, T4)

Space Matrix

Financial Strengths: (+)

Return on Investment: 4
Revenue: 5
Inventory Turnover: 3
Cash Flow: 4
Leverage: 2
Working Capital: 3

Industry Strengths: (+)

Technological Know How: 5
Growth Potential: 5
Productivity: 4
Financial Stability: 5
Resource Utilization: 5
Profit Potential: 3

Environmental Stability: (-)

Risk Involved in Business: -5
Competitive Pressure: -4
Rate of Inflation: -5
Technological Changes: -2
Demand Variability: -3
Price Range of Competing Products: -5

Competitive Advantage: (-)

Product Diversity: -3
Market Share: -3
Product Quality: -1
Customer Loyalty: -1
Control over Suppliers and Distributors: -4
Capacity Utilization: -2
Totals and Averages:
Financial Strengths Average = 4 + 5 + 3 + 4 + 2 + 3= 21/6 = 3.5
Industry Strengths Average = 5 + 5 + 4 + 5 + 5 + 3= 27/6 = 4.5
Environmental Stability Average = (-5) + (-4) + (-5) + (-2) + (-3) + (-5) = -24/6 = (-4)
Competitive Advantage = (-3) + (-3) + (-1) + (-1) + (-4) + (-2) = -14/6 = (-2.33)

X-Axis
Competitive Advantage (CA) -2.33
Industry Strengths (IS) 4.5
= 2.17
Y-Axis
Financial Strengths (FS) 3.5
Environmental Stability (ES) -4
= -0.5
Aggressive Strategies from Space Matrix

Tesla Motors would benefit from strategies such as expanding their business in different
markets and creating a diverse portfolio to give customers space to choose from. Looking at the
space matrix graph pictured above you can see that Tesla Motors is placed at the competitive,
aggressive quadrant. Although Tesla Motors has an aggressive and competitive matrix, they
need to focus on expanding their brand and increasing their investments and using their
technological and engineering expertise to create a more competitive and aggressive brand.

IE Matrix

The Internal-external matrix consists of 3 quadrants. I, II, IV which is growing and building. III, V,
VII which is holding and maintain. Followed by VI, VIII, IX which consists of harvesting and
divesting. Tesla Motors falls in quadrant V with a medium average growth. The EFE weighted
score is 2.56 with similarity in the IFE with a weighted score of 2.53. There is plenty of room to
grow for Tesla Motors to move into quadrant I.
Grand Strategy Matrix

Recommendations
Recommendations

The Tesla Motors company is placed in quadrant I, holding a strong competitive position. Their
innovative designs set the brand aside but leaves weaknesses for the company and areas to
grow. Compared to other competing brands such as Ford Motors and General Motors, Tesla
Motors sales aren’t as high compared to the two companies. Projected below in exhibit 4 is the
rival firms and Tesla Motors. Tesla’s revenue was $3,198 million as opposed to General Motors
who racked in $155,929 million. Looking at General Motors diversification in the markets
compared to Tesla, Tesla should take some notes on how to expand with their company to
project the same revenue or at least similar revenue as General Motors or Ford Motors at the
least.
Recommendations

Looking at the SWOT analysis and areas of growth, Tesla should focus on expanding their

markets. Having a wider product range for consumers gives them options when finding exactly

what they’re looking for. To produce more than one priced range electric vehicle gives leverage

to Tesla as more consumers will be prone to purchasing a vehicle within their price range. Tesla

should create a lower economy brand such as the Lexus which is a higher priced brand than its

parent company Toyota or Porsche being a part of the Volkswagen brand which many people

turn to as it’s not highly priced. This will help generate revenue which can be used to invest in

the Tesla Motors company. Another recommendation for Tesla is to create more

advertisements to better expose their company to those who may not know the brand or even

encourage those who would want to buy it but would like more exposure from the company. To

better expose the company, Tesla should focus on international expansion and lead the markets

in other developing countries to have leverage and more of a global presence.

References:

https://wccftech.com/tesla-mission-statement-updated/

Strategic Management Marriott Cases - Fred. R. David