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Tesla Motors strives to offer superior products to its customers and exploits advanced technology in differentiating their brands. The company expresses its core competencies through value chain activities which create customer value. The value chain allows Tesla to identify its weaknesses and strength in its operations and functions that add value to marketing and development of products. Most of the value chain of Tesla Motors is managed and controlled internally. The company maintains control over all aspects ranging from the customer operations and research to product development and manufacturing. The value chain activities can be separated into primary activities and supportive activities.
The most important component of Tesla Motors is their internal system of manufacturing. The company controls every aspect ranging from designing to tooling. This is facilitated by their efficient processing system initiated in their central plant in California (Praem, 2014). The system allows the company to enhance efficiency in production as well as reducing waiting time.
All the manufacturing process and activities of Tesla cars are at Fremont factory, northern California. The process of production is highly automated using robots that have the capability to multi-function producing about 83 cars every day ("TESLA Motors - External Analysis, 2016). This reduces the overhead cost and makes the manufacturing process more efficient and profitable. Additionally, the engineering and design team of the company are located in the same location.
The company pursues an integrated model of distribution which differs from the traditional leadership model. The company has established their stores across more than 18 countries where the customers can access their products quickly. Their stores are strategically located in major malls and shopping streets and are primarily designed to be informative("TESLA Motors - External Analysis, 2016). Their production is based on the demand and personalized online orders. This works because the customers are willing to wait until their cars are produced.
Tesla Motors does not use the traditional marketing strategies and does not employ any advertising agencies. It developed a network of their stores that are situated in the malls and other areas such that they interrelate with their customers directly. This facilitates the creation of clients awareness.
The company owns various service centers in other regions such as Asia, Europe, and North America among others. To improve the importance of their products, the company has constructed and stretched out free networks of super-fast charging stations for the electric powered vehicles. In addition, the firm offers a 50,000-mile warranty to their customers to enhance their customers confidence in their cars (Praem, 2014).
Tesla Motors adopt the horizontal organizational structure in managing its operations. This type of organizational structure gives the company an advantage because it facilitates the faster decision-making process(Praem, 2014). In addition, the structure facilitates better as well as enhances the process of communication which reduces the delay in the production and distribution process. Further, the structure is comprised of a small team of management that has strong leadership.
Due to the faster growth of the global market, the company uses the high street performance in its process of hiring and employing a workforce of talented individuals. Tesla provides their employees with shares such that the managers adopt the strategies that enhance the growth of the share prices (Praem, 2014). In addition, the employees become more engaged because they feel that they own the company and its success is their success.
The production process of Tesla Motors employs advanced technology. Tesla heavily relies on innovations and uses them through processes of customer facing, development, and manufacturing (Praem, 2014). All aspects of creativity and innovations are imperative, and they play a significant role in the teslas long term goals and progressive growth.
The company has developed a virtuous relationship with relevant contractors such as the Panasonic where both parties mutually benefit from each other regarding important information. In addition, the relationship allows Tesla to have a short-term contract with other suppliers in situations where Panasonic fails to supply the right components (Praem, 2014).
Tesla Company is well known in the automobile industry for its advanced innovations, particularly in introducing a first fully electric-powered sports car globally. This made the company to acquire a unique position the automotive market (Dalvagas, 2016). This factor is a strong point that motivates the firm to develop highly competitive and lucrative vehicles. Tesla uses a robust and unique technological proficiency in the area of train drive and electric transmissions and has the capability to execute the vehicle manufacturing process entirely in the house even the required sub-assemblies (Kissinger, 2016). Its brand is a potent symbol of renewable energy solutions and innovations which facilitate the corporations capability to entice and maintain consumers. Additionally, Tesla supplies to other businesses such as Toyota, the rate of sales growth is high and has active control on the production of vehicles.
The company exhibits limited presence in the marketplace. For example, the company concentrates more on the United States market where it generates most of its income. Its presence in other regions like China, Europe, as well as other developing nations where demand for the electric powered vehicles is increasing is small (Kissinger, 2016). This weakness limits the companys growth capability based on the rapid overseas markets economic growth. Another weakness for Tesla motor is the limited supply chain which prevents it from expanding into those markets rapidly. Additionally, teslas vehicles are more luxurious compared to cars that have engines that combust internally (Dalvagas, 2016). The high prices inhibit Tesla Motors from growing its revenue faster in the current markets. The company has to reform its strategies regarding expanding its operations as well as growth globally.
The rapid economic growth of nations where demand for environmentally friendly vehicles is increasing and the company has insignificance presence there opens opportunities for Tesla to expand its operations globally. Furthermore, there is growing support by governments all over the world for vehicles that are environmentally friendly such that they offer exemptions from duties and subsidies (Kissinger, 2016). In relation to that, the company has the opportunity of expanding its supply chain such that it would support the global expansion process of production as well as the sales operations. Additionally, Tesla has an opportunity to enhance its performance through strategies of diversification (Kissinger, 2016). This external strategic factor encompasses establishment of new business to alleviate the companys exposure to various risks in the automobile market.
Despite the fact that Tesla motors have a unique position in the automotive industry, the market is highly competitive. Automotive firms compete against each other aggressively. Considering the high prices of its products, the current competitors are other companies that sell luxurious vehicles with standard internal combustion engines such as the BMW and Daimler among others (Dalvagas, 2016). Additionally, bigger companies such Nissan with greater financial and marketing capabilities are venturing in the production of electric powered vehicles. Further, the company faces a threat regarding the dealership regulations. Currently, Tesla sells its products directly to the consumers without involving any dealers. However, in some countries there exist regulations that prohibit companies from selling their products directly without dealership involvement (Dalvagas, 2016). Such states include Texas and Virginia. Due to the threats, the company must demonstrate its competitive advantages to retaining its profitability regardless of the aggressive competition from other large firms in the automotive industry.
Tesla Motors Company has a strong value chain that makes it very competitive in the automotive industry. The inbound logistics, production, outbound logistics, as well as the marketing and sales are integrated with a unique technology that ensures profitability and customer satisfaction. Its usage of unique technology and environmentally friendly vehicles some of its strengths, and the company has an opportunity to extend its operations to other regions since demand for EPV is high. The main weakness of Tesla is its absence in the global market while the major threat is competition from major automotive firms.
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