Strategy Development
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Strategy Development
Definition of Strategy and Relation to the Company
Strategy is an important element that every organization should have. Strategy refers to the plan of action that has been developed by an organization a long term or overall aims in its activities (Nickols, 2016). The definition of strategy fits the Tesla Motors and its situation. The Tesla motors is one of the automobile companies that has been established to produce different types of motor vehicles (Nickols, 2016). AS it is expected with any new organization, Tesla and managed to come up with strategies that will help it to achieve the overall aim of being the leading producer of motor vehicles. The strategy that Tesla came up with was to disrupt the automobile industry (Nickols, 2016). The disruptive strategy will enable the company to make most of its innovation to become a reality hence attract a high number of customers.
Strategies Chosen By the Management of Tesla Motors
The management of Tesla Automobile Company has developed various approaches which have been significant to its recent development. One of the strategies that have been used by Tesla Company to attain its recent development is market penetration (Mangram 2012). This strategy was the primary method whereby intensive marketing was done to increase the revenues of the company within the markets. The second strategy that was used by Tesla Company is product development(Mangram 2012). This strategy enabled the company to develop new products that will help in generating new sales for the company. Most of these newly developed products are created based on the current technology to meet the market requirement. The third strategy that has been used by Tesla Motors is market development(Mangram 2012). The market development is whereby the company decides to enter into a new market to generate more profits as well as increase global business. The last strategy that has been employed by Tesla motors is diversification. This approach has enabled the company to generate more income by creating new battery products that can be used for a variety of products that are not an automobile.
Company’s Industry and the Main Competitors
The primary industry that Tesla falls in the Automobile industry. The automobile industry deals with the manufacture of motor vehicles, spare parts, and other products. The main competitors of Tesla Motors under this industry include the Ford Motor Company and General Motors (Cornell, & Damodaran, 2014). These competitors have employed certain strategies to help it stay ahead in the market. One of the strategies that these companies have employed is market penetration. Both the Ford Company and General Motors have focused on penetrating new markets to gain new customers who will help to increase the sales of its products. This strategy has been a success for these tow competitors of Tesla Company because both of them have managed to open stores in various areas of the world(Cornell, & Damodaran, 2014). As a result of this issue, these companies have managed to stay ahead in the competition since they have a high number of customers who have increased their revenues. The other competitive advantage of these competitors of Tesla Company is that they have used the Porters Model. The porter’s model has enabled the creation of competitive advantage by lowering the cost of its products to increase the number of customers(Cornell, & Damodaran, 2014). The features that these products have been developed with are different from others which have helped to increase the competitive advantage. The use of the five porter’s forces has been successful in this company because they have managed to maintain a specific level of profitability over the past few years.
Industry Analysis of Tesla
The industry analysis of Tesla Motors can be performed by looking at the potters five forces. Within Porter’s five forces, the first concept is the intensity of industry rivalry. The current intensity of the rivalry is high because there are several companies which have been established and each one of them is struggling to gain a large market share than the other (Stringham, & Miller, 2015). The second issue is the threat of potential entrant. The automobile industry is wide, and there are new companies that are being developed to produce motor vehicles and their spare parts. The third issue is the bargaining power of suppliers(Stringham, & Miller, 2015). The Tesla motors has to rely on various suppliers to provide the required resource for the production of quality products. The forth aspect is the bargaining power of the buyers. In the automobile industry, if the customers enjoy the product, they are a position to ask for discounts or negotiate the prices of the product(Stringham, & Miller, 2015). The last issue the threat of substitute services or products. The automobile industry keeps on evolving especially with the new technology. Therefore, there is a high change that new product can be developed which might substitute the current one in the market. The current situation of the company is that it has developed the required strategies to deal with the competitive market(Stringham, & Miller, 2015). The company has developed obtained resource from various suppliers and has employed skills workforce who will help to ensure that quality products are developed and enable the company to earn a considerable market share.
Performance Goals for Tesla Company
Performance goals are important for any company because they help to show whether it is moving toward the right direction. Different performance goals can be used for this company. One of the performance goals is to increase the revenue of the company. The company should aim to increase its revenue by 20% (Rothaermel, & Zimmer 2014). The second performance goals is to satisfy the needs of the customers. The company has to make sure that the product develops to meet all the needs of the users. This issue can be achieved by producing quality product and services. The last performance goal for this company is to ensure that there is the growth of employees(Rothaermel, & Zimmer 2014). As the employees are working, the company should take them through regular training so that it can improve their skills in line with their career. This aspect will be significant to the company because when the employees obtain news skills often, they will be able to undertake duties that will lead to the improvement of the company.
References
Nickols, F. (2016). Strategy, strategic management, strategic planning, and strategic thinking. Management Journal, 1(1), 4-7. Retrieved from: https://nickols.us/~nickols1/strategy_etc.pdf
Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), 289-312. Retrieved from: https://www.tandfonline.com/doi/abs/10.1080/0965254X.2012.657224
Cornell, B., & Damodaran, A. (2014). Tesla: Anatomy of a Run-up. Journal of Portfolio Management, 41(1), 139. Retrieved from: http://search.proquest.com/openview/1d11db72a141e32e6a8d8eab95087965/1?pq-origsite=gscholar&cbl=49137
Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming barriers to entry in an established industry: Tesla Motors. California Management Review, 57(4), 85-103. Retrieved from: https://journals.sagepub.com/doi/abs/10.1525/cmr.2015.57.4.85
Rothaermel, F. T., & Zimmer, E. R. I. N. (2014). Tesla Motors (in 2013): Will Sparks Fly in the Automobile Industry?. Retrieved from: http://www.simonfoucher.com/MBA/MBA%20622%20-%20Strategy%201/COURSE%20PACK/Tesla%20Motors%20(in%202013)%20-%20Will%20Sparks%20Fly%20in%20the%20Automobile%20Industry.pdf