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 - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels, there is backlash against globalization, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , 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 -
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.
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.
Innovation driven organization
– Battery Tesla is one of the most innovative firm in sector. Manager in Tesla Motors: Burning Up the Road to Market Domination or Doom Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Battery Tesla digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Battery Tesla has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
Learning organization
- Battery Tesla is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Battery Tesla is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tesla Motors: Burning Up the Road to Market Domination or Doom Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Organizational Resilience of Battery Tesla
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Battery Tesla does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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 -
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.
No frontier risks strategy
– After analyzing the HBR case study Tesla Motors: Burning Up the Road to Market Domination or Doom, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Tesla Motors: Burning Up the Road to Market Domination or Doom that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tesla Motors: Burning Up the Road to Market Domination or Doom can leverage the sales team experience to cultivate customer relationships as Battery Tesla is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Battery Tesla is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tesla Motors: Burning Up the Road to Market Domination or Doom can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Tesla Motors: Burning Up the Road to Market Domination or Doom HBR case study mentions - Battery Tesla takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Battery Tesla supply chain. Even after few cautionary changes mentioned in the HBR case study - Tesla Motors: Burning Up the Road to Market Domination or Doom, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Battery Tesla vulnerable to further global disruptions in South East Asia.
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.
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.
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.
High cash cycle compare to competitors
Battery Tesla has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Battery Tesla can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
Using analytics as competitive advantage
– Battery Tesla has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Tesla Motors: Burning Up the Road to Market Domination or Doom - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Battery Tesla to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Battery Tesla can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Battery Tesla can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tesla Motors: Burning Up the Road to Market Domination or Doom suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Battery Tesla can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tesla Motors: Burning Up the Road to Market Domination or Doom, Battery Tesla may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Environmental challenges
– Battery Tesla needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Battery Tesla can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Battery Tesla is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Battery Tesla in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Battery Tesla
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Battery Tesla.
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.
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.
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.
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.
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.