Strategic Issues at Tesla Motors:
Answer firs. Set, then one in end to help me understand
Tesla Motors: Charging into the Future?
Will post what preliminary work I found to help out near the bottom .
In a four or five-page analysis answer the following questions :
- Should Tesla continue to compete in the automobile market, or should it allow itself to be bought out?
As it stands, Toyota already owns a significant amount of the firm's shares.
- If it does choose to compete, would a different approach provide the company with a better market share and position within the industry, as compared to a focus on the relatively high-end and environmentally conscious segment of the market?
- Can a firm with a Silicon Valley approach succeed in the more traditional automobile sector?
- Should Tesla expand its focus to include trucks and SUVs, or stick to just high-performance and luxury cars?
- What market segments should it pursue?
- To combat the debt and increase sales, how should Tesla pursue its expansion on the retail side of things?
- Is complete control of the stores better than franchising to dealerships?
- Another issue the key decision makers, such as CEO Elon Musk, face is how to address the maintenance of the cars, the network it would require, and how that fits in with the firm's strategy.
Since its inception in 2003, Tesla Motors has made significant breakthroughs in the electric vehicle (EV) market with its proprietary power-train technology. Its first Roadster model provided a driving experience that was on par with a traditional gas engine and was the precursor for considerable success in the automobile market over the last few years. However, as the production of the most recent Roadster model winds down, Tesla is faced with a challenging situation that might determine the future direction of the company and ultimately its survival.1
In July 2012, Tesla released its EV family sedan, the Model S, priced at the upper range of the luxury vehicle market.2 This sedan represents Tesla's first foray into the family segment of the automobile market, providing a significant opportunity for company growth. Tesla currently takes only limited orders for the vehicles and expects the production capacity to be built up over the next few years. This model is intended to serve as a good introduction of Tesla's EV capabilities to the public and allay concerns about performance and reliability of EVs before its Model X crossover is introduced into the market.3 The Model X will not be ready for delivery until 2014, but it will be the first mid-sized vehicle produced by Tesla. Between these two vehicles, Tesla has an impressive product pipeline lineup that has the potential to appeal to middle-class consumers and to expand Tesla's current consumer base comprising high-net worth early adopters. However, Tesla is not the only manufacturer looking to develop EVs. Most automobile manufacturers have developed or are in the process of developing their own EVs—the Chevy Volt being the most well known. Toyota is developing an all-electric version of its RAV4 as part of a contract with Tesla.4 Currently, Tesla's vehicles have greater range and offer better performance, but these major automakers represent a significant threat to the viability of Tesla.
*Address what you deem to be the MOST pertinent issues
1. How to move forward and in which direction?
Tesla could maintain its status as a niche manufacturer of high-quality, high-performance EVs, or it could seek to leverage its first mover advantage and therefore gain market share with expanded, affordable access to EVs in the greater automobile market. Tesla is limited in its ability to manufacture vehicles due to its size and access to resources, which puts it at a disadvantage in comparison to other automakers. However, if Tesla fails to act in a decisive way, it risks losing its technological advantage and opens the door for other manufacturers to develop their own EV models and crowd Tesla out of the lucrative automobile market.
2. How will Tesla maintain its technological lead over its competitors?
3. How will Tesla shift from targeting early adopters to reaching the larger consumer market—and should it?
4. How will it deal with the lack of infrastructure to support these new vehicles?
Finally, how will Tesla deal with the environmental effects of more EVs on the road and will these effects ultimately conflict with its founding principles?