Ch. 2 - Strategic Planning for Competitive Advantage

SWOT Analysis of Tesla

Tesla has six Gigafactories around the world. The California, Shanghai, Berlin and Texas factories are responsible for vehicle manufacturing.

The Nevada and New York factories are responsible for the production of battery packs and solar roofs respectively.

Strengths of Tesla:

The Most Valuable Automobile Firm

Strong Flexible and divisional Organization structure 

Strong Market Segmentation, Targeting and Positioning

Effective Marketing Strategies: Tesla is worldwide famous for its 0$ marketing strategy. 

Innovation: Tesla is involved in research of alternative energy such as, hydrogen cell power-powered electric cars, hybrid cars and plug-in hybrids.

Market Dominator: Along with Ford and GM, Tesla is recognized as one of the “Big Three” players in the electric car market.

Weaknesses of Tesla: 

Tesla is a one man show: Tesla = Musk and he is a controversial CEO that directly affects the company value with his constant antics. 

Tesla has a lot of debt to pay down, which limits its ability to take on more debt. 

Falling Estimates: Despite all the recent news about increasing demand due to price cuts, earnings estimates have steadily been falling. 

Mechanical Complications: The manufacturing of their Model X got delayed due to frequent innovative changes. 

Battery Shortage: The battery scarcity directly affects the sales of electric vehicles and energy storage systems.

Employee Turnover Rate: It has a high employee turnover rate.

Opportunities for Tesla: 

Untapped Markets: Great opportunity in the Indian market and the continued growth of the development of Solar roofs and battery packs.

Affordable Cars Market: Tesla recently launched Model 3 which is a more affordable version of Model S.

In-house Battery Production: Tesla can launch its own battery cells which will reduce the dependency of Tesla on Panasonic, its primary supplier of batteries.

Technological Developments: Operations can be automated to diminish costs. It’s technology enables the company to obtain data from customers.

Autonomous Driving Technology: Tesla’s autopilot technology has gained it fame for its safety and convenience.

Environment-friendly Cars: Consumers are becoming more environmentally conscious.  

Threats to Tesla:

New Entrants: Companies VW, Audi, Jaguar, BMW are all making competing cars. Tesla as it can lose its buyers to these new entrants.

Controversies: Tesla has been accused of being a racist workplace. It has been accused of false advertising in South Korea. It has been the subject of several lawsuits and controversies arising from statements and acts of CEO Elon Musk and from allegations of creative accounting, whistleblower retaliation, worker rights violations, air pollution, unresolved and dangerous technical problems with their products some of which have resulted in the driver's deaths. Tesla Deaths Total as of 1/30/2023: 348 / Tesla Autopilot Deaths Count: 19. 

For trading info, please click here: TSLA NASDAQ.

This completes our SWOT analysis.