Phoenix BUS 475 Project Metrics

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BUS/475v10

WK 2 Apply: SWOT Analysis

BUS/475v10

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Wk 2 – Apply: SWOT Analysis

Name:

Selected Organization: TESLA

Complete a SWOT analysis from a global perspective, if applicable.

Strengths	Weaknesses
· The use of proprietary technology. · Strong market among millenials conscious about climate change. · first to produce fully electric car. · A variety of models such as model S and X. · A CEO with a good reputation and track record. · Use of own distribution channel through its stores.	· Customers are yet to fully adopt electric vehicles. · High cost of production leading to high price. · Longevity of batteries. · Inadequate infrastructure for use of electric cars around the world. · CEO is also head of Space X.
Opportunities	Threats
· Unexploited markets in the developing world. · New advances in technology which can increase battery life. · Production of new low price models. · Increased environmental awareness.	· Various lawsuits which delay and inhibit innovations and global expansion. · Lack of enough government subsidies which drive up prices. · Increased competition from established companies with hybrid and fully electric models.

Analysis

There are several strengths that Tesla has which it can use in exploiting the opportunities which it has today. Tesla is led by Elon Musk who has a good reputation and is well known in the tech industry. The presence of this CEO gives the brand a better image and credibility as it continues in its quest to make the world more electric. Tesla can use the strength of such a brand in the company and the CEO to grow as it exploits the middle class in the developing nations. This is a market which is aware of the company and his work and he can be trusted as he introduces the product there. At the same time, Tesla is popular among millennials and other younger age groups. These younger age groups make marketing easy through social media for promotion of the brand. At the same time, the number of young people in the world who are environmentally conscious is growing. Through the cutting down of marketing costs through use of social media and a larger market around the world, the company can start enjoying economies of scale (Qayyum et al., 2020). The company can also license its proprietary technology to other companies and use the money to subsidize the price of its products to reach a wide range of customers. Tesla is the first company to produce a fully functional electric car and is trusted by the consumer. It should work on getting batteries with a longer life attracting more consumers who can see the practical use of the electric car. The distribution using its stores is a strength which can be exploited through opening up of new stores in the developing nations and other areas where it is yet to venture.

One of the weaknesses that Tesla is currently experiencing is that its CEO is also the CEO of Space X. The company has not had a good performance for many years and this risks ruining the image of the CEO. At the same time, there is the perception that there is conflict of interest and as the leader he needs to concentrate on one company. The company can convert this into a strength by separating the top management of the two and Space X getting a new CEO. The other weakness that Tesla faces today is that its prices are considerably high. The prices can be reduced to make them more affordable through expansion of the market and licensing out the proprietary technology to subsidize the costs (Ingle & Phute, 2016). The company should also exploit social media for marketing purposes and work on getting better economies of scale. Customers around the world are concerned that there is insufficient infrastructure for use of the electric cars. Tesla needs to lobby for governments to come up with infrastructure that will support the use of the electric cars such as charging stations. Tesla can also do this through setting the infrastructure themselves through arranging for the government to give it subsidies. There are customers today who are still wary of using the electric cars. The company can turn this into a strength through creation of awareness using channels such as mainstream and social media.

The threats that the company is facing are substantive and need to be carefully dealt with. There is competition from the established manufacturers who are getting into manufacturing hybrid and electric vehicles. The company can mitigate this threat through capitalizing on the fact that it was the first to produce a fully electric functional vehicle. It is important to show consumers of the quality that the brand brings through aggressive marketing and continued innovation. The company is best placed to compete because it is specialized in production of electric automobiles. There are also lawsuits which delay innovations and expansion (Ingle & Phute, 2016). The company can work towards more lobbying to ensure the barriers that it faces in terms of legislation are minimized. Tesla also needs to work towards scaling up its operations so that it can enjoy economies of scale and this will mitigate the threat of loss of government subsidies.

The action which the company needs to advance its goals and increase its competitive advantage is to increase its production capacity. It is only through an increased capacity that the company can produce mass scale and sell to a wider client base. The economies of scale will enable Tesla to not only be the pioneer in production of electric vehicles but also among the best at considerable prices. The company also needs to expand its stores to developing nations to capture the growing middle class in these countries. At the same time, the company must work towards growth of its infrastructure if it intends to maintain its competitive advantage (Qayyum et al., 2020). Tesla needs to take these actions because consumers are conscious about the environmental protection today more than ever before and they require a relatively lower priced electric vehicles. The presence of infrastructure will also gain the confidence of consumers that they can use the Tesla models for their daily commute.

Citations

Qayyum, A., Usama, M., Qadir, J., & Al-Fuqaha, A. (2020). Securing Future Autonomous & Connected Vehicles: Challenges Posed by Adversarial Machine Learning and The Way Forward. IEEE Communications Surveys & Tutorials.

Ingle, S., & Phute, M. (2016). Tesla autopilot: semi autonomous driving, an uptick for future autonomy. International Research Journal of Engineering and Technology, 3(9).