Tesla Motors: Burning Up the Road to Market Domination or Doom SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tesla Motors: Burning Up the Road to Market Domination or Doom
Ten years after its founding, California-based Tesla Motors is close to becoming one of the world's premier luxury car manufacturers. Its innovative design - using carbon fibre and aluminum rather than steel to construct body and parts - and technology - lithium ion battery packs rather than gasoline for power and a simple powertrain to provide maximum acceleration - make its models treasured options for eco-friendly and tech-savvy consumers as well as wealthy professionals. Relying almost entirely on word-of-mouth promotion through social media, the company sells its cars through factory stores in upscale malls rather than through dealerships and has built service centres to provide free battery charging. However, just as it is expanding into Europe and Asia and is contemplating buying its own factory to secure its battery supply, three of its cars have burst into flames following collisions, although no one has been injured. In addition, analysts claim that the company has been covering up its lack of cash flow by using non-generally accepted accounting principles for reporting its revenue. The CEO knows that the company has tremendous potential but is struggling with public relations problems arising from the crashes and questions about its financial stability and return on investment to investors.
Swot Analysis of "Tesla Motors: Burning Up the Road to Market Domination or Doom" written by Dante Pirouz, Karam Putros includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Battery Tesla facing as an external strategic factors. Some of the topics covered in Tesla Motors: Burning Up the Road to Market Domination or Doom case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Tesla Motors: Burning Up the Road to Market Domination or Doom casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, geopolitical disruptions, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Tesla Motors: Burning Up the Road to Market Domination or Doom
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tesla Motors: Burning Up the Road to Market Domination or Doom case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Battery Tesla, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Battery Tesla operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tesla Motors: Burning Up the Road to Market Domination or Doom can be done for the following purposes –
1. Strategic planning using facts provided in Tesla Motors: Burning Up the Road to Market Domination or Doom case study
2. Improving business portfolio management of Battery Tesla
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Battery Tesla
Strengths Tesla Motors: Burning Up the Road to Market Domination or Doom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Battery Tesla in Tesla Motors: Burning Up the Road to Market Domination or Doom Harvard Business Review case study are -
Highly skilled collaborators
– Battery Tesla has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Tesla Motors: Burning Up the Road to Market Domination or Doom HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Sales & Marketing industry
– Tesla Motors: Burning Up the Road to Market Domination or Doom firm has clearly differentiated products in the market place. This has enabled Battery Tesla to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Battery Tesla to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Battery Tesla is one of the leading recruiters in the industry. Managers in the Tesla Motors: Burning Up the Road to Market Domination or Doom are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Tesla Motors: Burning Up the Road to Market Domination or Doom Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Battery Tesla are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Battery Tesla has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tesla Motors: Burning Up the Road to Market Domination or Doom Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Battery Tesla is present in almost all the verticals within the industry. This has provided firm in Tesla Motors: Burning Up the Road to Market Domination or Doom case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Battery Tesla is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Battery Tesla has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Battery Tesla to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Battery Tesla has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Battery Tesla has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Battery Tesla has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Battery Tesla in the sector have low bargaining power. Tesla Motors: Burning Up the Road to Market Domination or Doom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Battery Tesla to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Tesla Motors: Burning Up the Road to Market Domination or Doom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tesla Motors: Burning Up the Road to Market Domination or Doom are -
Slow decision making process
– As mentioned earlier in the report, Battery Tesla has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Battery Tesla even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Battery Tesla is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Battery Tesla needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Battery Tesla to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom, it seems that the employees of Battery Tesla don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Battery Tesla has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Battery Tesla has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Battery Tesla 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tesla Motors: Burning Up the Road to Market Domination or Doom, in the dynamic environment Battery Tesla has struggled to respond to the nimble upstart competition. Battery Tesla has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Battery Tesla products
– To increase the profitability and margins on the products, Battery Tesla needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Battery Tesla needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Dante Pirouz, Karam Putros suggests that, Battery Tesla is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom, is just above the industry average. Battery Tesla needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Tesla Motors: Burning Up the Road to Market Domination or Doom | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tesla Motors: Burning Up the Road to Market Domination or Doom are -
Manufacturing automation
– Battery Tesla can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Battery Tesla in the consumer business. Now Battery Tesla can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Battery Tesla can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Battery Tesla to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Battery Tesla can use these opportunities to build new business models that can help the communities that Battery Tesla operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Battery Tesla to increase its market reach. Battery Tesla will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Battery Tesla can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Battery Tesla can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Battery Tesla can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Tesla Motors: Burning Up the Road to Market Domination or Doom, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Battery Tesla is facing challenges because of the dominance of functional experts in the organization. Tesla Motors: Burning Up the Road to Market Domination or Doom case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Battery Tesla in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Loyalty marketing
– Battery Tesla has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Battery Tesla has opened avenues for new revenue streams for the organization in the industry. This can help Battery Tesla to build a more holistic ecosystem as suggested in the Tesla Motors: Burning Up the Road to Market Domination or Doom case study. Battery Tesla can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Tesla Motors: Burning Up the Road to Market Domination or Doom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Battery Tesla can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Battery Tesla needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Battery Tesla.
Technology acceleration in Forth Industrial Revolution
– Battery Tesla has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Battery Tesla needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Battery Tesla can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom .
High dependence on third party suppliers
– Battery Tesla high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Battery Tesla with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Battery Tesla demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Battery Tesla business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Battery Tesla needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Battery Tesla can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Tesla Motors: Burning Up the Road to Market Domination or Doom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tesla Motors: Burning Up the Road to Market Domination or Doom is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tesla Motors: Burning Up the Road to Market Domination or Doom is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tesla Motors: Burning Up the Road to Market Domination or Doom is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Battery Tesla needs to make to build a sustainable competitive advantage.
