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Tesla Motors
Presented by:
Group 4
Kajal Patil (PGP09192)
Navneet Singh (PGP09207)
Margesh Patel (PGP09216)
Anup Sharma (PGP09233)
Vishnu (PGP09244)
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Introduction
Founded by Martin Eberhard & Marc Tarpenning & Elon
musk joined Tesla’s board of director as Chairman in feb
2004
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Why Tesla? CEO: Elon Musk:
Tesla being at • Running 2 multi billion
crossroads right now: Dollar businesses parallely, is
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a celebrated iconic persona
• Introduced 1st mass
• His ability to tell story of his
production EV
company & get people
• Diversifying product excited about their product
categories with Solar city as with maintaining a loyal
Tesla Home & Batteries customer base is very
important
Innovative &
Competitive landscape
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• Competing in highly
matured industry of
automobile but challenges
established producers by
being 1st to produce Electric
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Auto Vehicles
External Analysis - PESTLE
Legal Environmental
Social Technological
Political Economic
Politicians Priced in Increased brand Advanced Government All products &
reluctant on premium loyalty, people’s engineers providing huge services of Tesla
increasing segment for environmental selected by Tesla subsidies & tax thrive to provide
threshold earlier models & awareness & along with high benefits on EV’s, environmetal
production limit favoured by favoritism importance on free municipal sustainable
for tax benefits people with towards digital platform parkings & solutions
on EV’s environmental innovative & from start, interest in
concerns, sustainable advantages of ELectric filling
moreover its solutions talent pool from stations
prices of are rocket scientists
higher than the from Spacex &
available models use of AI
to which they
compare
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Industry & Company Life Cycle
More than 100,000 EV’s
sold in year 2018 &
2017 - $11 Billion in
BMW, Volkswagen 15 year old company
sales
introducing their electric
vehicles
Having necessary
dimensions &
Negative cash flows
infrastructure setting up
in places
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External Analysis - Porter’s 6 Forces
• A vertically integrated producer with most processes carried out in-house
• Relying on suppliers for components & raw supply elements being easier to replace than
Moderate
Bargaining power of Suppliers(
whole outsourced tech Threat of
Low ) :
• With good performance & achieved targets of model X & model 3, suppliers willing to
substitute
be associated more
Threat of new entrants • Tesla made its patents public, established automobiles entering EV segment
(Moderate) • More no of companies willing to enter due to rising green movement
Strong Moderate
• Small no of firms Bargaining
Strength
Competition:(strong) of • High aggressiveness of firms of
Power
complements• Low switching costs
buyers
Strength of • Use of present talent pool from existing engineers of Spacex, AI tech & brand value
complements;(strong) • Solar city complementing mission of Tesla with sustainable solutions 6
Internal & External Analysis - SWOT Analysis
•First mover in fully electric sports car
•Supplier to other automakers like toyota •Higher prices than similar
•Strong tech expertise in the area electric combustion engine powered
cars
Strengths transmissions and drive train
•Ability to develop vehicles completely in
Weakness •Dependence on continuing
house innovation
•Current platform developed for Model S •Less awareness as compared
can be used for future crossover model to Audi, Toyota or Mercedes
•Growing support by
•Competition from large auto companies in governments in the form of
electric and alternative fuels exemptions from duties
•Selling to average public seems difficult to •Increasing oil and gas prices
Threats achieve
•The strategy for price skimming has not
Opportunities •Large international market
potential
been used in the auto industry •Increasing support and
•Increasing IC engine efficiency awareness for green
automotives
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VRIO Framework
Resources Value Rare Imitable Organization
Access to Critical Raw Material Yes Yes, as competitors Can be imitated by Yes
have to come to competitors
agree
Opportunities for Brand Yes, new niches are No, most of Yes can be imitated by the Yes can be imitated by the
Extensions emerging in the competitors competitors competitors
market targeting niche
Ability to Attract Talent Yes, Tesla strategy Yes, as talent is Difficult to imitate To a large extent yes
built on innovation critical to firm's
growth
Customer Network and Loyalty Yes, 23% customers Yes, firm invested to Tried by competitors. Company leveraging on
contribute more than build customer None successful customer loyalty
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84% revenue loyalty
Internal Analysis - Core competencies
First mover advantage in the EV industry
Unique direct-to-customer selling model
DEVELOPMENT OF ‘GIGAFACTORY’: ramped up production to 5000 per week
Highly cohesive ecosystem
Large network of supercharger stations
In house software development: autopilot data - machine learning
•Business of “doing good” ; principle of reciprocity
Branding and marketing •3rd highest mentions (among automobile companies) across social media
•CEO is a mainstream personality
Customer loyalty
Operates their own chain of stores
Cross fertilization of knowledge: Amalgamation of tesla & Spacex employees 9
Competitive Landscape - Financials
2014 2015 2016 2017 2018
($ in million) Compare
Act Act Act Act Act
DIO 148.2 147.3 137.8 85.4 122.6 41.4 Total 33,600 50,580 76,230 1,03,076 2,30,620
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Marketing & Sales
Strong brand value
Differentiation Strategy
Marcandise sold
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Contd…
● Personal Branding
○ Never be too busy for media
■ Simplification
■ An antagonist
■ Exaggerations
■ Catchy ideas
○ Sharing successes & failures both with audiences (Real & Relatable)
■ Buying 1 million sports car, totaling it into the wall, without even having insurance
■ An idea he later called dumb saying he will take Tesla private add $420 per share via Twitter in September 2018 and then getting fined
$40 billion
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Contd…
● Dream Big & Focus on the future, not present
○ Colonize Mars make humans a multiplanetary species but none of these goals seem impossible.
● Don't make profit your no.1 priority
○ Idealistic goals (During financial crisis put his own money into Tesla)
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Contd..
● Introduce audience to your persona and business
○ Cameos (Big bang theory, Soft park, Ironman), reveal true personality (Vintage personal branding)
● Being involved in multiple businesses and continue to amaze people
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Future Plans
Abandon physical retailing locations
and move to online-only sales.
•Lower the company’s operating expenses
•According to Elon Musk, online-only sales will
reduce price of all models by 6%.
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Recommendations
• Franchise Laws
• state and local regulations that create a regulatory moat
around online vehicle sales
• the mainstream new car buyer is not ready for online-only
Not go forward with vehicle sales
online only sales
• the ability to view and test drive a vehicle
• the complexity of financing options and credit approval
• Creation of new costs
• model is not viable for a mass-produced vehicle
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Referrences
● https://www.energy.gov/eere/electricvehicles/electric-vehicles-tax-credits-and-other-
incentives
● https://cleantechnica.com/2019/01/15/breaking-trump-changes-his-mind-on-electric-vehicles-
now-evs-are-a-big-win/
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Thank you
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