TESLA CAR COMPANY
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Competitive advantage refers to conditions that enable a firm to produce quality commodities at a lower price than its competitors. Conditions and strengths allow a firm to generate more value for its stakeholders through competitive advantage. Thompsons strategic management model highlights the strengths and pressure of competitive forces as one of the threats to the car industry (Smith and Outfitters 99). There are few buyers of the car in the industry. Nowadays, individuals are allowed to hire or lease a vehicle through rental services. Clients rent these cars and use them for a short period when the need arises.
Moreover, the driving forces in industry matters. The car industry’s major driving forces are product innovation, technological change, cost and efficiency changes, and changes in buyers’ attitudes and lifestyles (Smith and Outfitters 101). Taking technology as an example, the emergence of the internet has changed the industry forever. The challenges in the automotive sector lie in economic and technological spheres. Right now, there is no clarity in the car industry on how to overcome them. Thirdly, the market position of the competitors also threatens the industry. It deals with the overall level of competition in the industry (Smith and Outfitters 102). To dominate the market, you must strategize on your target group. The manufactures in the industry differ in pricing policy, market segments, and quality of the product. These factors will force the company to invest a lot in research and development and marketing to remain competitive.
Tesla possesses internal strength that helps it to have a competitive advantage in the car industry. One of the strengths in the supply chain of Tesla’s battery. Currently, it produces more batteries, which has high kWh than other car companies. As the company makes more battery more cheaply, the cost of purchasing the storm continues to decline. To some degree, this has contributed to its business advantage (Delgado 331). By partnering with Panasonic cells and its continuous improvement of battery chemistry and the packs, the company produces the quality battery. Secondly, the firm’s software update such as backup cameras, stop sign control, dashcam viewer, and walkaway door lock has helped the company thrive. These improvements attract more customers to the brand (Delgado 335). Thirdly, it’s branding. The company has the right image of producing quality products. It develops superb models that meet consumers’ expectations. In 2019 the company sold tesla model 3 as an electric car more than three times better than other companies that deal with an electric vehicle.
The organizational structure of Tesla enhances robust managerial control in the operations of its business. One of the structures is centralization. Since the company’s product is dispersed geographically, its implementation depends on managers’ decision making. The company minimizes its control of overseas offices (Krivoruchkina 185). Secondly, it uses geographical division to implement organized financial records and marketize its products (Krivoruchkina 185). Thirdly, it applies departmentalization as a way of classifying and organizing its work activities. The hierarchy based involves functional groups that supervise its operations. Its global hierarchy is Chairman- Finance- Technology- Global sales and services- Engineering and Legal.
Similarly, the chain of command, which refers to the authority line, has three basic concepts: authority, responsibility, and unity of command. Next is a formalization, which means how the tasks within Tesla are standardized and how policies guide the employees’ roles. Lastly is the span of control (Krivoruchkina 185). It explains the number of employees to be supervised by a manager effectively and efficiently. It is also used to control the number and levels of managers the firm can operate.
Organization design is influenced by some contingency factors such as strategy, environment, size, and organization age. The company was found in 2003 and had 48016 employees by the end of 2019, and it is excelling in the market. The management team should continue with the organizational design since it is helping the company to achieve. Elon Musk is a leader who has a concern for results. He usually works on concrete and achievable objectives as he believes in the vision (Jeff et al. 3). Elon is a leader who is persistent in his job and is self-driven to achieve his set objectives. He enhances organizational efficiency by working with those who are ready to deliver. He achieves efficiency by gathering aggressive people around him to strategize how a firm should be successfully run. (Jeff et al. 3) Furthermore, according to Blake and Mouton’s managerial grid, Musk always decides his best to have high productivity. He quickly decides as he looks unto the future of the organization.
Nevertheless, sometimes he is a poor leader, according to the Blake model. One of the dimensions Blake looks into leadership is that a leader must have a concern for people. Elon, at times, does not consider others’ needs and interests. He has a poor ability to observes others’ emotions, and his empathy for people is low (Jeff et al. 3). As a leader, you must give listen to your workers and tolerate their weaknesses. It is usually advisable that you know the best time to talk to tour employees without annoying them, but Elon lacks these to attack without a clear plan.
One of the advantages of Elon’s leadership style is that he inspires and motivates his team. He is vision-oriented, which his team likes since it helps them achieve their goals and objectives (Jeff et al. 3). Again, his leadership style is focused on challenging the status quo. To achieve new things, you have to change your types of doing things. He uniquely does stuff while ensuring that the set goals of a company are achieved. On the other hand, he can quickly fire a team member who does not meet the standards expected from him or her. The employees who are laid off might end up being unemployed for a while. Also, working with a leader who sometimes fails to listen to you creates fatigue for the employees.
references
Smith, D. and Outfitters, N.T., 2017. Engaging in change management: transformation through sustainability strategy at Norm Thompson Outfitters. In Ants, Galileo, and Gandhi (pp. 93-108). Routledge.
Delgado, M., 2018. Firms in context: Internal and external drivers of success. The new Oxford handbook of economic geography, pp.324-344.
Krivoruchkina, E.V., 2016. KEY ELEMENTS OF ORGANIZATIONAL COMPANY DESIGN. In ECONOMICS, MANAGEMENT, LAW: SOCIO-ECONOMIC ASPECTS OF DEVELOPMENT (pp. 185-187).
- https://www.businessinsider.com/tesla-challenges-in-2018-2018-4
- http://panmore.com/tesla-motors-inc-vision-statement-mission-statement-analysis
- https://www.forbes.com/sites/jasonwingard/2019/04/10/elon-musk-and-the-pitfalls-of-creativeleadership/#6bb2f5ff3f3e