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Tesla Inc.: SWOT Analysis Presentation

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Updated: Jun 14th, 2022

Strenghts

  • Strong Leadership.
  • Well-known and respected brand.
  • Attractiveness for job applicants.
  • Anticipation of social and economic trends.

Among Tesla’s greatest strengths is its strong leadership provided by the company’s CEO, Elon Musk. His experience and impact on society as a visionary proponent of socially attuned technology certainly benefits the organization’s wellbeing. Although the brand is relatively new, it has achieved massive popularity due to its ideas and ambitious goals. Due to the above-named strengths, Tesla Inc. gained another advantage in the area of human resources. The company became one of the most wanted employers. Tesla’s mission aligns with the world’s trends for alternative energy sources and aims to solve the upcoming energy crisis connected with fossil fuels as well as the environmental impact that worries scientists and populations.

Strenghts

Weaknesses

  • Manufacturing and shipment issues.
  • Overreliance on public image.
  • Occasional Internal miscommunication (Thompson, 2018).

Tesla Inc. also has certain weaknesses as an organization. Due to the success of marketing strategies, the company was able to sell many cars on a pre-order basis. However, corporate leaders apparently underestimated the stability and capacity of its manufacturing facilities. The whole production and shipment cycle took longer than expected due to the limited geographical representation of the company. As a stock-driven company, Tesla Inc. seems to be relying heavily on its public image. Such a weakness exposes the organization to losses if it mishandles communication with outer world. As recent events demonstrated, internal communication is also of issue in Tesla Inc. Personnel was unable to coordinate efforts in order to maintain stable production rates.

Weaknesses

Opportunities

  • Diversification of products.
  • Entrance to new markets.
  • Developments in battery technology.
  • Stricter environmental policies.

There are certain opportunities that Tesla may utilize to its advantage. For instance, by increasing the range of products it releases, the company may achieve substantial financial gains in future, provided the products find its buyers and are competitive. Discovery of new markets could also become a positive change for Tesla Inc. since the rise of environmental awareness increased the pool of potential customers. Battery technology that is currently based on li-ion energy storage limits the current usability of electric cars. If a new technology emerges, the market for electric vehicles could grow and Tesla could use that to its advantage. In Europe and the US, environmental policies become harsher on car owners, forcing them to buy more environmentally friendly cars. Tesla Inc. offers a solution to this issue.

Opportunities

Threats

  • Dependency on stock value.
  • Insufficient tangible assets.
  • Interest of large car companies in the electric vehicle market.
  • Demand issues (Bomey, 2017).

Dependency on stock value could turn out to be a threat as a negative reaction to company’s actions will trigger an immediate response from shareholders. A decrease in stock value is highly detrimental to a company such as Tesla Inc. as it does not have enough tangible assets. The latter could also become a threat as Tesla is a relatively small company in terms of manufacturing capacity and entrance of big players could lead to value loss. Mercedes Benz and other large brands with their high production volumes and R&D may leave Tesla behind. As Bomey (2017) suggests, Tesla’s products have a limited audience and the market saturation with the company’s products could soon reach the limit.

Threats

SWOT-Based Strategy

  • Focus on increasing product range.
  • Involvement with social and environmental activities.
  • Update the staffing policy.
  • Refinement of public image.
  • Acquisition of tangible assets.

In accordance with the presented SWOT analysis, the proposed strategy should take into account several items. Since the company suffers from the limitations imposed by completive environment it needs to develop other car models. In order to further enhance its image and raise stock value, Tesla Inc. should engage in more projects important for society and nature. To address its weaknesses and threats the company needs to reassess communication protocols among its employees to ensure smooth operations. In addition, the process of public image construction should not depend too much on actions and words of its CEO and be more related to Tesla’s achievements. Acquisition or creation of tangible assets could help the company strive towards becoming more grounded and resistant to stock market fluctuations.

SWOT-Based Strategy

Strategies to Maximize Profits

  • Integrated cost-leadership differentiation:
    • Underlined economy for premium segment.
    • Concentration on unique product properties (Hitt, Ireland, & Hoskisson, 2013).
  • Horizontal growth:
    • Increases production output;
    • Helps expand into other markets.

As for different strategies that could help the company increase its competitive potential and maximize its profits, business and corporate level ones could be applied. Integrated cost-leadership differentiation could assist Tesla Inc. in capitalizing on the unique properties of their products advertised to a specific narrow audience and concentrating public attention on the long-term economy. Horizontal growth is applicable as it helps to occupy new markets and address the rising demand with increased production rates. These strategies address the company’s needs on business and corporate level effectively as they are based on deep understanding of the company’s needs.

Strategies to Maximize Profits

Communication Plan

  • Sustainability as a perspective and a goal.
  • Broad vision and focused objectives.
  • Shaping future together with stakeholders.
  • Investment in human potential = financial gain.

A viable communication plan should allow Tesla Inc. to ensure the alignment of goals and objectives of the company and its stakeholders. It should be based on the several principles listed on the slide. Sustainability should shape the basis of each message to stakeholders and remind them the ultimate goal of all company operations. Breadth of vision should dictate the ambitious nature of Tesla’s leadership and objective should clearly be defined for stakeholders to further their trust. Future profits and mutual gains could in this case be explained as an effect of collaboration with special value assigned to every person’s impact.

Communication Plan

Ethical Efforts

  • Production of cars harmless to environment.
  • Permission to use Tesla technologies for advancing sustainable future (Tesla Inc., 2014).
  • Development of products with high social value.

The actions of Tesla Inc. have an embedded ethical value due to the nature of their products. Their cars that do not harm the environment and, therefore, make living conditions better by reducing pollution. In order to achieve sustainable future, Tesla allowed using its patents to any company who shares the same goal. In addition, the company creates social value by trying to address other social problems such as accessibility of cars for disabled people by developing driverless vehicle technology. Doing all that, Tesla Inc. definitely assumes the role of a responsible corporate citizen. These actions produce a sizable positive effect on the company’s image which transforms into brand recognition and, ultimately, sales.

Ethical Efforts

References

Bomey, N. (2017). . USA Today. Web.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competiveness and globalization (10th ed.). Mason, OH: South-Western Cengage Learning.

Tesla Inc. (2014). . Web.

Thompson, C. (2018). Business Insider. Web.

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