Integrated Business: Contingency Plan and Executive Presentation

2

Tesla SWOT Analysis

Natasha Harris

Department of Accounting, University of Phoenix

BUS/475: Integrated Business Topics

Michael Portillo

January 12, 2022

Tesla SWOT Analysis

Tesla has a great concept when saving the earth's atmosphere and purifying the air. They believe that by mass-producing electric cars, people will continue to join the world of electric vehicles and develop an electric ecosystem. The company strives to accelerate the world's transition to sustainable energy. Tesla wants the world to get away from relying on fossil fuels and join towards zero emission. To support their theory and not be a statistic, Tesla manufactures products that are accessible and affordable, thus accelerating the advent of clean transport and energy production. ("About Tesla," 2021). The problem with this is that Tesla's are very expensive and contradict the affordable theory. This is because Tesla uses a higher-priced segment of the market, enabling Tesla to be viable in the short term and achieve its mission in the long run.

As mentioned above, Tesla has an objective to be more energy efficient. You can assume this is one of their strengths. In addition to pioneering the field of electric vehicles, the Tesla brand is very influential and highly innovative. Because of this, Tesla continuously seeks endless amounts of opportunities. They have earned the trust of the consumers with their autopilot technology. Autonomous driving has made consumers feel safe and is considerably convenient. The demand for electric vehicles sales has increased, so for Tesla, the opportunity to provide such a product has increased as well. Tesla has also taken the initiative to create other energy-efficient products, so they have the opportunity to reduce production costs. They hope to create more job opportunities that will potentially help the economy with these costs.

According to Tesla's SWOT analysis of 2021, one of Tesla's weaknesses is that they have a problem with the imbalance between supply and demand. Tesla reported that it could not meet the production requirements, costs, resource management, and expansion. This is very contradictory to what they portray as a strength. Tesla's are very expensive and are only affordable to the upper class. It puts a damper on how fast consumers will convert to energy-efficient vehicles and help Tesla reach their goal. Another huge weakness is that Elon Musk hasn't dedicated enough time to Tesla. He has other ventures and projects that he is involved in. When trying to achieve a goal, you have to be focused. A few things that I would do differently to convert these weaknesses into strengths would first be to dedicate my full attention to one objective at a time. When a business fails, no matter how big or small, there should be an evaluation or redirection to get back on track. Secondly, I would try to find ways to reach other sectors of the market, not just the high price range. This would allow more consumers to purchase your product and thus, help you achieve the goal of a faster conversion. New model Tesla's are ranging in the $100,000 and above. Tesla's profit margins are higher than GMC, Honda, and Toyota, selling half as many cars like them. That says a lot. I would research ways to produce the exact quality vehicle with the same features that consumers love to decrease the margin.

The organizational structure at Tesla is a traditional one. It has a managerial focus with limited operational expansion. Elon Musk uses this corporate structure to facilitate extensive control over the organization. His company uses the functional or U-form organizational structure. The structure is grouped based on business functions and is listed by which is more significant: function-based hierarchy, centralization, and division. Function-based at Tesla is as follows 1. Chairman & CEO, 2. Finance, 3. Technology, 4. Global Sales and Service, 5. Engineering, and lastly 6. Legal. Interrelationships among these divisions are necessary. Suppose a lack of communication could reflect poorly on the business performance. SWOT analysis can be affected when there is an absence of understanding between these relationships. Everyone has a job to do and a weight they must carry to keep running smoothly. It is crucial to know where you are strong and what needs improvement.

References and Citations

About Tesla. (2021).  https://www.tesla.com/about

Meyer, Pauline (2018). Tesla Inc.’s Organizational Structure & Its Characteristics (Analysis).  Tesla Inc.’s Organizational Structure & Its Characteristics (Analysis)

Tesla SWOT Analysis 2021. (2021).  https://pmarketresearch.com/tesla-swot-analysis-2021/#_Toc3358