Introduction
As the industry leader in electric vehicles, Tesla has established a strong reputation and brand as a company at the forefront of environmentally responsible transportation. Tesla is recognized for its innovative engineering, which includes its electric drivetrain, which is regarded as one of the most advanced in the industry (Bruijl et al., 2018). Furthermore, Tesla’s focus on AI research and autonomous driving technologies improves the safety and driving experience of its vehicles. Due to Tesla’s present low production capacity, it can take longer to meet the demand for cars. Research findings demonstrating a 9 percent decrease in capacity indicators from 2021 corroborate this theory (Lin, Lu, & Xu, 2022).
One of Tesla’s most important prospects may be the growing demand for environmentally friendly and sustainable transportation. When more people become aware of the negative environmental effects of traditional gasoline-powered automobiles, consumers may be more likely to consider purchasing an EV. One of Tesla’s largest external concerns may be the intensifying competition for electric vehicles (EVs). New competitors are entering the market, and established automakers are investing heavily in EV research and development.
SWOT Analysis Strategy
Because it has complete control over all production and delivery phases, Tesla can highlight vertical integration in this approach (Lin, Lu, & Xu, 2022). The company can reduce costs and increase productivity as a result. With the help of vertical integration, Tesla will be able to prevent bankruptcy, increase production efficiency, and reduce economic risks. Vertical integration will also help Tesla strengthen its position as a market leader, increase revenue, strengthen its reputation, increase sales and competitiveness. The main advantage of such a process is to reduce the costs of the enterprise. For example, the elimination of intermediaries reduces the costs of the company and at the same time improves the quality of the goods produced.
With a wider selection of products and services, the company may tap into new markets and increase revenue. Appearance of new equipment, upgraded technological standards and innovative product groups – all this is an incentive to expand the product line on the basis of technological progress (Ellul, 2018). The emergence of new needs among consumers also directly affects the need to improve the assortment. The novelty of Tesla’s products will demonstrate the degree of compliance of the manufactured goods with modern market conditions and current trends. It will be able to provide a competitive advantage if Tesla produces something that competitors do not produce. However, this indicator is changeable, so Tesla should regularly work on creating and delivering new goods and services to the market.
Government subsidies and incentives for buying electric cars are a major source of Tesla’s sales and income worldwide. Therefore, as a strategy, Tesla can minimize the influence of the state. Mandatory is the supervision of state standards and ensuring the uniformity of measurements, which he organizes and conducts work on mandatory certification of industrial products. However, at the moment, measures are relevant to mitigate the sanctions pressure that has an impact on business. At the same time, support measures should be implemented in stages. In order to influence the investment process, for example, a reduction in the tax burden can be used (Hitt, 2020). This will make it possible to achieve a weakening of the hypertrophied attention of officials of control bodies.
In recent years, there has been a tendency in developed and developing countries around the world to radically rethink the concept of the transport process and the process of vehicle management. Therefore, creation of fully autonomous vehicle will solve the problem of improving transport efficiency and road safety. Therefore, Tesla should adhere to the strategy of developing a qualitatively new approach to solving the problems of creating and developing intelligent transport systems. Successful development and practical application of ITS will allow Tesla to minimize threats.
Competitiveness Strategy
To expand on its strengths, Tesla should continue investing in innovation and R&D for its electric drivetrain, autonomous driving technology, and AI research. This will help the business maintain its competitive advantage in the electric car market in addition to improving the driving experience and safety of its vehicles (Liu, 2021). Tesla should keep promoting the growth of renewable energy sources, as recommended by Pathak et al. (2022), to take advantage of the desire for sustainable and ecologically friendly mobility.
The relatively expensive cost of Tesla vehicles in comparison to conventional gasoline-powered cars is one disadvantage. To address these issues, Tesla should continue working to make its cars and energy storage devices less expensive (Lin, Lu, & Xu, 2022). This objective might be attained by lowering the cost of raw material acquisition and raising the automation and productivity of the production process. The deployment of these complexes should solve the most pressing problems facing Tesla.
Profitability Strategy
Due to the formation of programs and plans to reduce costs, companies achieve positive results. In this case, first of all, expenses are optimized, which directly affect the final cost of products (works and services). For example, this is a change in suppliers of goods and services, renegotiate contracts on more favorable terms, and purchase cheaper raw materials. In addition, it is possible to reduce expenses by optimizing the staff, reviewing the terms of remuneration and bonuses. Moreover, it is possible to reduce overhead costs, for example, to move to offices that are remote from the center and more affordable.
Maximize profitability is possible by increasing receipts for individual items that are included in other expenses. These include receipts related to the provision for a fee for temporary use (temporary possession and use) assets of the organization. In addition, money from the sale of industrial ideas, rights to invention patents, and other types of intellectual property is considered as other income (Williams, 2021). Profits through involvement in other organizations’ permitted capitals, such as interest and other income from securities, may also be able to boost Tesla’s bottom line.
Communications Plan
In the process of communicating competitive strategies with the client, it is important for the seller not to get into describing the advantages of the product, emphasizing the disadvantages of competitors’ goods. Balance is important here: a correct story without derogatory descriptions of other companies, objective advantages of Tesla’s offer. This is the only way to build the client’s trust, emphasize interaction with them. Long descriptions, tedious monologues confuse both visitors and sellers themselves; it is necessary to briefly explain the most important product features.
Communicating competitive strategies to employees should be aimed at resolving potential conflicts of interest. The interaction is carried out in order to solve a problem or promote effective collaboration on a project and a competitive strategies task (Tesla Inc., 2021). Effective working interaction will allow to identify obstacles and provide feedback, but the main goal is to achieve an improvement in the current competitive strategy. At the same time, working interaction should be an exchange of information about the plan, even if it is transmitted in a non-verbal way and only by one manager.
To communicate profitability strategies to customers, it is necessary to form a vision of their service. It’s worth telling them what Tesla is going to achieve as a result of interacting with them. The next point will be to discuss the new vision and mission and values that will define every aspect of customer service (Gerus et al., 2022). After that, it is necessary to implement a new strategy for customer access to the organization. To communicate profitability strategies to employees, Tesla needs to use meetings of the CEO with department directors and department heads. This is a great opportunity to directly inform them about the results of the company’s activities and current projects on profitability strategies, discuss plans for the future and resolve any issues that arise. Then managers can quickly and easily pass information down the boss – subordinate chain so that eventually this information reaches every employee. This will promote an open dialogue and exchange of experience between departments, will help employees to expand the circle of contacts and learn about the most effective approaches to profitability strategy.
Corporate Social Responsibility
The head of Tesla is the moral leader of the company, setting the general climate and determining the degree of ethics of actions. Elon Musk’s highly moral behavior encourages employees to follow ethical standards. Ethics courses include advanced training and professional retraining programs for Tesla employees (Pathak et al., 2022). The purpose of such courses is to increase the general culture of behavior, as well as to bring employees to the idea of moral responsibility and moral consequences of their actions.
From the data of the Tesla report, it follows that the actual sales volume is higher than planned, and the selling price was lower than planned. At the same time, the amount of actual revenue is more than planned, and the cost of sales, on the contrary, is lower than planned. All of these factors increased the actual profit compared to the planned one. It can be concluded that the company’s profit has increased as a result of efforts after factor analysis of sales profit in two different ways, including both the method of absolute differences and the method of chain substitutions.
Sources
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Ellul, J. (2018). The technological system. Wipf and Stock Publishers.
Gerus, S., Jones, G. A., Parish, E., Phillips, P., & Williams, M. F. (2022). Tesla, Inc. A study of public accounting and related economic concepts, p. 72.
Hitt, M. (2020). Strategic management: Concepts and cases: Competitiveness and globalization. 13th ed. Cengage Learning.
Pathak, P., Yadav, V., Pillai, S., Das, S., & Kansal, G. (2022). We are unveiling the success behind Tesla’s digital marketing strategy. In Emerging technologies in data mining and information security: Proceedings of IEMIS 2022, Volume 1 (pp. 251-260). Singapore: Springer Nature Singapore.
Lin, P., Lu, Y., & Xu, Z. (2022). Tesla’s dilemma and future development trends. In 2022 7th international conference on financial innovation and economic development (ICFIED 2022) (pp. 2174–2180). Atlantis Press.
Liu, S. 2021. Competition and valuation: A case study of Tesla Motors. IOP conference series: Earth and environmental science, 692.
Tesla Inc. 2021. Impact Report 2021. Web.
Williams, L. 2021. What will Tesla do next? Investment monitor. Web.