Tesla, Inc., previously Tesla Motors, Inc., has been a leading company in innovation, sustainability, and automotive solutions. The United States continues to be a highly-regarded market, as evidenced by the increase in Tesla car deliveries (Higgins 2020). The company’s ambition for the future is displayed with the release of every car model including the Model Y in 2020. Tesla and Company CEO Elon Musk’s ambitions led tesla to profits for the first time in the last quarter of 2019 and even in 2020 amid a pandemic (Boudette et al., 2020).
Converting Tesla’s Weaknesses into Strengths
Despite, the change in Tesla’s fortunes, the company still has weaknesses that are a limiting factor to its progress. One of the most crucial aspects is customer service. They are essential in the long waiting time that consumers have to endure after buying a vehicle. This can be decreased by increasing production and increasing distribution. A company needs to designate representatives who are able to manage deliveries and incorporate information regarding consumers.
While production issues (for the Model 3 sedan) appear to be in Tesla’s rearview, the company must set out new strategic goals and execute the expansion of its production line to include semi-trucks, crossover SUV, sports car, and a pick-up truck. It was a positive move to launch the Model Y Cross-Over SUV. Tesla can take this further, focusing its attention on existing products and delaying/abandoning rollouts. Tesla must ensure it’s profitable for 2020 and 2019, despite the profits made in 2019. Tesla needs to reduce costs and invest less capital. It may be possible to lay off employees. These actions will bring in significant profits and increase profitability. It is crucial that the company considers the Chinese market when planning for future growth.
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In January of 2020, Tesla became one of the world’s most valuable auto company’s second only to Toyota with a market capitalization of $107 billion (Shipley, 2020). This valuation is a testament to Tesla’s innovative business model and an indication of the company’s goal to advance its competitive advantage.
The company needs to expand its battery supply chain to keep this momentum going. To meet future demand for electric vehicles, this is vital. This would allow for a reduction in cost and waste as well as simplified manufacturing. Moreover, the company has to continue developing a well-integrated network of superfast-charging stations with convenient payment options for Tesla’s drivers. It will enable the company to beat all-electric vehicle makers.
There are interrelationships among functional areas within an organization
Tesla’s organizational structure can be considered a unitary-form (U-form) structure defined mainly by organizational function (Zhou, 2005). It’s characterized by a function-based hierarchy comprised of functional teams responsible for international and domestic operations. This ensures strict managerial control is a recipe for the company’s growth and would feature as a strength in a SWOT analysis. It uses divisions such as “Automotive” and “Energy Generation” (or based on geographical locations such as the United States, Norway, and China Divisions) to implement marketing campaigns and organizational strategies. It allows seamless implementation of corporate strategy, financial reporting and analysis.
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