Tesla Case Study

Document Type:Case Study

Subject Area:Management

Document 1

Therefore, it can be stated that Elon Musk's contributions were the turning point for Tesla. This is supported by the losses reported in the financial years from 2007 to 2009 as opposed to the progressions seen in the financial years from 2010 to 2012. Key Issue Identification The current business model utilized by Tesla is a hybrid of differentiation and blue ocean strategies. As a proof to this argument, the differentiation strategy utilized by Tesla is witnessed where the company is striving to produce unique models of cars that can make the company remain competitive in the market. For instance, Tesla is producing a range of electric powered cars as opposed to the current models with internal combustion engine systems. Provide Credible Alternatives The best alternative to the company's limited resources is the adoption of a cost leadership strategy.

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Through cost leadership, the company will be able to minimize its operational expenses thus maximizing its revenue from the sales of its highly demanded electric cars. Cost leadership is a very effective strategy for firms which are focusing on the upside growth while reducing the downside risk. Clearly, this proposal will assist in improving the company's net financial income because Tesla is already making a large volume of sales as supported by the exhibits for the financial years from 2010 to 2012. Secondly, Tesla needs to adopt a research and development strategy whereby the firm will be acquiring potential employees and training them according to the specific needs of the company. As a company which is looking forward to becoming a market leader, there is an urgent need of implementing cost leadership because the company will be soon establishing subsidiaries across the world.

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In addition, the company requires a team of skilled and competent employees who can assist the company in achieving its long-term development objectives. Implementation and Execution Cost leadership is a very simple strategy to implement. The management of Tesla will only need to reduce the operational expenses by adopting lean production. Here, the firm will consider minimizing wastes by recycling the end products and using them in the subsequent procedure. Lastly, the firm is at a great risk of the threat of substitutes because customers can simply switch to car models with an internal combustion engine. According to the SWOT analysis, the strengths of Tesla include uniqueness of the car model, exposure to an extensive unexploited market, and the presence of innovative management.

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