Running Head: TESLA
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Palm Beach State
Presented To: Dr. Caroll T. Capers
Presented By: Dorraine Wedderburn
March 20, 2018
Running Head: TESLA
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Table of Contents:
1. Existing vision, mission, objectives, and strategies Page: 3
2. Develop vision and mission statement for the organization Page: 4
3. Identify the organization’s external opportunities and threat Page:
4. Construct a Competitive Profile Matrix (CPM) Page: 8
5. Construct an External Factor Evaluation (EFE) Matrix Page:
6. Identify internal strengths and weakness Page:
7. Construct an Internal Factor Evaluation (IFE) Matrix Page:
8. Prepare a (SWOT), (SPACE), (BCG), (IE), and a (QSPM) Matrix Page:
9. Recommend long term objectives Page:
10. Specify recommendations can be implemented, forecast, & timetable Page:
11. Recommend annual objectives and policies Page:
12. Recommend procedures for strategy review & evaluation Page:
Running Head: TESLA
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Vision:
Tesla has been innovating ideas on how to better the company in terms of existing
vision. Tesla existing vision is to create a society where people will be able to drive
electric cars from all over coast to coast. Mr. Elon Musk who is Tesla CEO would like to
gather innovators by creating electric batteries for cars and to be able to charge them at
stations (US News, 2014).
Mission:
Mr. Musk would like to create a way for individuals to power homes, cars and
businesses any time of day using alternative fossil fuels and solar power. This way the
world will be more technology driven and efficient, by cutting out most climate change
problems (Richtel, 2016). In other words having to, “accelerate the world’s transition to
sustainable transport” (David & David, 2017, pg. 517).
Objectives:
An objective of Mr. Musk is to have consumer products that can travel 200 miles
between charges, which has added pressure on other car makers to create something that
is electric as well. Also, bidding at $2.6 billion to own Solar City for a place to complete
the vision of having solar, electric cars and battery storage brought to life. Another is
expanding into Europe the Destination Charging program (Matt, 2016).
Strategies:
Tesla dealerships increased over 40 percent and its supercharged network
expanded by 400 percent as well as introducing advances on the Model S. Also,
production target was set for 35,000, which was achieved due to building 11,627 vehicles
Running Head: TESLA
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all in a year. Since Tesla started to sell vehicles in Australia, sales have doubled in four
countries and regions. A facility named Lathrop is being expanded in California for
aluminum components.
Vision & Mission Statement:
“Tesla’s plan to build a $5 billion “Gigafactory” to create lithium ion cells and
perhaps make alternative energy vehicles a more affordable part of everyday life”
(US News, 2014). “…Accelerate the world’s transition to sustainable transport”
(David & David, 2017). “Tesla’s vision statement is “to create the most
compelling car company of the 21st century by driving the world’s transition to
electric vehicles.” This corporation vision emphasizes the company’s focus on
renewable energy” (Rowland, 2018).
Tesla organization‘s external opportunities and threats:
Tesla innovated the green technology to focus on profound changes and is using
paradigms to do so. Green technology is a central role for Tesla in terms of core strategy
and competition. Due to the confluence of newer technologies the auto manufacturing
business have recognized higher petroleum prices as well as internal combustion engine.
These have provided a way to catapult new entrepreneurial firms going into the electric
and hybrid markets (Steven, 2011).
“Tesla serves an international market and has a global supply chain, but most of
the Model S vehicles are built in North America, so a strong dollar has a slightly negative
net effect on the company’s profitability” (David & David, 2017, pg. 520). Although, the
U.S. dollar dropped Tesla was able to still raise prices only by half that had declined.
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These prices were not retroactive to the previous orders due because it was only applied
to the new orders.
In addition, Tesla has market shares with lithium batteries, which aides in
powering hybrid and electric vehicles. The market shares for lithium batteries are
expected to grow rapidly into 2020 creating more unneeded competition for Tesla. Since
this market is growing because the pie is only at 40%, other auto manufacturers are
looking to get a piece with lithium batteries as well, which will create room for the other
60% to get filled (David & David, 2017).
Moreover, oil prices are dropping due to electric and hybrid cars gaining interest
among consumers. Light Sweet Crude an oil company was doing well in terms of
numbers skyrocketing upwards in the summer of 2014. Currently due to a demand for
electric cars that number dropped by 60 percent since 2014 to 2015 (David & David,
2017). “Nevertheless, many experts in the field have indicated the days of $100 oil are
over, possibly due to better public transportation and more efficient engines, but also
from the growing electric vehicle market” (David & David, 2017, pg. 521).
Also, some of Tesla biggest threats are called Detroit’s Big Three, which are
General Motors (GM), Chrysler and Ford Motor Company (F). In 2015 the president of
GM Alan Batey created the electric Chevrolet Bolt, which was displayed at an auto show
in Detroit. Ford created the Fusion Energi in 2013 as a plug in vehicle with prices starting
at $39,495, but was lowered in 2014 to $35,525. Overall sales in the United States in
terms of hybrid electric cars dropped the year of 2013, while the Lincoln MKZ hybrid
sales were up 34.3 percent from the previous year.
Exhibit 2: Tesla’s Income Statement (in millions of USD)
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Report Date
December 31, 2014
December 31, 2013
Revenues
$3,198
$2,013
Cost of revenue
2,316
1,557
Gross profit
882
1,557
Operating expenses
1,066
517
EBIT
(184)
(61)
Interest & other
(101)
(10)
EBT
(285)
(71)
Tax
9
3
Net income (294) (74)
Source: Based on company documents.
Exhibit 3: Tesla’s Balance Sheet (in millions of USD)
Report Date
December 31, 2014
December 31, 2013
Assets
Cash and equivalents
$1,923
$849
Accounts receivables
226
49
Inventories
954
340
Other current assets
95
28
Total current assets
3,198
1,266
Property, plant, & equipment
1,829
738
Operating lease vehicles
766
383
Goodwill & intangibles
–
–
Other assets
56
30
Total assets
5,849
2,417
Liabilities
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Accounts payable
1,047
412
Other current liabilities
763
457
Total current liabilities
1,810
869
Long-term debt
2,408
586
Other liabilities
661
294
Total liabilities
4,879
1,749
Common stock
–
–
Retained earnings
(1,434)
(1,140)
Treasury stock
–
Paid in capital and other
2,404
Total equity
970
Total liability & equity
5,849
2,417
Tesla
Ford
# Employees
10,000
187,000
216,000
$Net Income
(294)
3,187 M
3,949
$Revenue
3,198 M
144,077 M
155,929 M
$Revenue/Employee
320,000
770,000
722,000 M
$EPS Ratio
(2.36)
0.80
1.65
Market Cap.
25.6 B
64.6 B
60B