Reference no: EM131995640

CASE : Tesla Motors in 2016: Will Its Strategy Be Defeated by Low Gasoline Prices and Mounting Competition?  By Arthur A. Thompson

CASE ANALYSIS

INTRODUCTION

You've already examined several cases from the text. Your course project will require a careful reading of the case titled "Tesla Motors in 2016: Will Its Strategy Be Defeated by Low Gasoline Prices and Mounting Competition?" in your textbook.

Tesla introduced its first vehicle, the all-electric Roadstar, in early 2008. Then, in 2012, Tesla released its ground-breaking Model S Sedan, a fully electric luxury sedan with an all-glass roof and several other luxury features.

Purchases of the Model S steadily increased, and it became the best-selling large luxury vehicle in the United States, surpassing Mercedes Benz. Tesla's CEO Elon Musk envisioned a bold and bright future, including a desire to "accelerate the world's transition from...gasoline-powered motor vehicles to...electric vehicles."

In 2016, however, Tesla began to face three particular challenges that could potentially impede Musk's vision for the company: low gasoline prices, growing competition, and the ability to provide its cars at a sufficiently lower price.

Amid these challenges, will Tesla be able to achieve its strategy to become the world's biggest and most highly regarded producer of electric vehicles?

PROCEDURE

Read through Case 16: "Tesla Motors in 2016: Will Its Strategy Be Defeated by Low Gasoline Prices and Mounting Competition?" in the back of your textbook.

Carefully go through all chapters covered in your course and analyze the Tesla case within the frameworks available. Because this situation is fluid, there's no correct or incorrect answer; what's important is your application of course materials and the process of your analysis. Begin with a SWOT analysis, and then read through and thoroughly answer all the questions.

When conducting your SWOT analysis, feel free to review the many business articles on Tesla, the stock chat message boards (for sentiment), and any source of information you feel is helpful. Remember to provide citations for any material you quote verbatim.

Your paper should provide answers to the following questions:

1. Create a SWOT analysis for Tesla. Refer to both Table 4.3 and Figure 4.2 in your textbook. List Tesla's strengths, weaknesses, and potential opportunities and threats. Be sure to include these in your paper by either listing them or creating a diagram similar to Figure 4.2. Then write your conclusions and implications of the analysis. Lastly, provide at least two recommendations based on this analysis. Explain your reasons for these recommendations

2. Based on what you've read about Mercedes-Benz acquiring a stake in Tesla and strategic partnerships from your text, what are the potential pitfalls of this alliance? Do these pitfalls apply in Tesla's case, given their patent policy? Explain why.

3. What type of diversification strategy does the launch of Tesla Energy represent: related or unrelated? Explain why. Does Tesla Energy's new business meet the three tests of corporate advantage?

4. What kind of vertical integration strategy did Tesla choose for its distribution and supply chains: backward or forward integration? What are the advantages of its chosen strategies? What are the disadvantages?

5. In reviewing Tesla's manufacturing strategy, does the part of Tesla's value chain it outsources make strategic sense? Explain why or why not.

6. Which of the five generic strategies is Tesla pursuing with its marketing strategy? Explain.

7. What are the key elements of Tesla's culture? What problems do you foresee that Elon Musk will have in sustaining that culture amid growing competition? Explain.