INDEPENDENT UNIVERSITY, BANGLADESH
SCHOOL OF BUSINESS & ENTREPRENEURSHIP
Semester Course Code Course Title Section
Summer 2023 MGT 201 Principles of Management 02
Date of Submission: -2023
Report on Tesla, INC.
Prepared for
Seeratus Sabah
Prepared by:
Name: ID:
Mohammad Sufyan Rahman 1920498
Sumaiya Tabassum Mahi 2030365
Jesika Ahmed Tuli 2022850
Rezaul Islam 2120881
Krisma Bazi 2010132
Mohaimenul Islam 1822088
Zaiem Ahmed 2020419
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Table of Contents:
3
Research Method
Executive Summary 3
Introduction- Company Overview 4
General External Factors 4
Political Conditions 4
Economic Conditions 5
Social Conditions 5
Technological Conditions 5
Legal Conditions 5
Environmental Conditions 5
Specific External Factors 6
Customers 6
Suppliers 6
Competitors 6
Pressure Groups 6
SWOT Analysis 7
Stakeholders of the Company 8
Critical Stakeholders of the Company 8
Customers 8
Employees 8
Investors/ Shareholders 9
Government 9
Communities 9
Organogram of Tesla 10
Organizational Structure 10
Leadership Style 11
Conclusion 11
References 12
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Research Methods
The term paper is based on the large electric vehicle company Tesla, INC. Our research source is
mostly secondary. The data for this term paper is collected from research through Google. The websites that
are related to Tesla were surfed and resources were collected. A data which we collected are summarized in
this paper.
Executive Summary
In this report, we have analyzed the large profit organization Tesla, INC. We have a brief introduction
overview of tesla, specifying its operations, products and their mission and vision.
We collected information from their official websites, annual reports, and interviews. We evaluated their
organization and identified the specific general and external factors of Tesla and how it affects the organizatio
(PESTLE Analysis).
We identified the stakeholders androm
f them we selected the critical stakeholders that affects Tesla’s decisions
like customers, competitors, suppliers etc.
We analyzed the organization structure, is the organization Mechanistic or Organic
. We concluded the report
by giving our opinions and the future of Tesla. We gave the links from where we collected our research
. from
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Introduction- Company overview
Tesla, INC is currently the most promising and booming company in the electric vehicle industry. It is located
Palo Alto, California and was founded in 2003 by engineers Martin Eberhard and Marc Tarpenning. Elon Mus
is the main investor by owning 98% of the company and currently is the chairman a CEO. Tesla apart from th
model series vehicles they also sell powerpack, Powerwall, megapack, solar panels and solar roof tiles. They
take pride in being one of the most environmentally friendly companies in the industry. The cars run
electrically charged batteries which can be charged by a Tesla supercharger or at home.
Tesla holds a market share of 17% in the electric vehicle industry among competitors like Chevrolet, Hyundai
and Nissan. Tesla has profitable quarters but never really has a profitable year. The reason for being a succe
company is for selling affordable and good quality cars to customers which leads to the company making a lo
Tesla’s Model X, S and 3 are all best sellers and their demand is quite high around the world. The Unique sel
points of Tesla are its auto pilot feature, design, fuel storage and instrument panel.
Tesla has also done charity work for the community. Rebuilding electrical grids of islands suffering from natur
disasters to installing solar and electrical in less developed islands or places. This stands out to the general p
and attracts potential customers.
The corporate mission of Tesla is “to accelerate the world’s transition to sustainable energy”. Elon M
explained that Tesla’s main goal is to produce products that are technologically advanced and that supports
sustainable energy and are eco-friendly.
st
Tesla’s vision statement is “to create the most compelling car company of the 21
century by driving the
world’s transition to electric vehicle.
General External Factors
“PESTLE” stands for Political, Economic, Social, Technological, Environmental and Legal Factors. This analy
a framework or tool used by marketers to analyze and monitorsethemacro-environmental (external marketing
environment) factors that have an impact on an organization.
Political conditions:
Political conditions are rules and regulations set by the government to either stop a business from becoming a
monopoly or stop businesses from charging high prices or policies on trade. The government are now prioritiz
electric vehicles and are giving them incentives to support them. This gives Tesla an opportunity to utilize the
incentives and increase their productivity and profits. Global trade agreements like free trade gives Tesla a sc
to expand their business internationally not having to pay extra costs or hidden costs. The political stability of
America is favorable and it would help Tesla to penetrate the market easily and it would let them implement
growth strategies.
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Economic conditions:
Tesla’s opportunity is the decreasing battery costs and the contract with Panasonic also gives them
discount. This allows them to make more profit compared to the competitors. Renewable energy costs are als
decreasing which give Tesla an opportunity cost as then more people will invest in ecofriendly cars which give
Tesla an edge. However, the threat that Tesla will face is the weak economic stability and infrastructu
problems of a lot of countries mostly of Europe and Asia. Tesla vehicles are not suitable for narrow roads or
heavy traffic and thus a lot of Asian customers do not use Tesla.
Social conditions:
The people of this generation are more tech-savvy and prefer doing everything on their phones and on
internet. From purchasing items to giving reviews, all can be done through the internet. This gives T
advantage because they sell most of their vehicles through pre-orders online.
Technological changes:
Tesla is a capital-intensive organization and relies less on labor force. They use state of the art machinery to
make their vehicles. These increases efficiency and productive and makes the products more effectiv
However, as tesla is changing their technology frequently some of the functions may become obsolete due to
it. People who had old Tesla models may miss out on updates due to this. Tesla takes pride in their interactiv
touch instrument panel and also how the cars are fully automatic. Due to increasing online mobile systems Te
have integrated a lot of things in the panel. Everything that can be done in a phone can also be done in the ca
like making calls, playing games, sending messages etc.
Legal conditions:
All companies must follow rules and regulations set by the government and Tesla has done its 4Ps,
resource management and business partnerships under legal constraints. Tesla is mostly situated in the Unit
States but they use the international patent protection as an opportunity to expand their business abroad. Mo
countries have energy consumption regulations that people have to follow and thus Tesla can advert
energy vehicles and energy battery products. A unique feature of Tesla is they directly sell their products to
customers either from their physical dealership or online. However, a lot of states do not allow direct sale to
customers and so they have to sell their vehicles through a dealership and also have to pay a commission.
Environmental conditions:
The current global trend is living eco-friendly and thus a lot of people are switching form carbon lifestyle to
renewable energy. They are supporting the environment by using vehicles that produces the lowest to neglige
amount of carbon monoxide and this is where Tesla gets to promote their electric vehicles to the p
customers. Due to the increasing wealth distribution in developing market, Tesla can increase its fina
performance.
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Specific External Factors
The specific external factors are the factors that have a direct influence on the company and its de
Customers, suppliers, competitors and pressure groups are the most common ones.
Customers:
In the age of technology, Tesla have utilized everything at their disposal to attract as many customers as they
can. Elon Musk the CEO, is quite active in social networks like Twitter or Facebook. He listens to the custome
queries, ideas and even complaints. Tesla does not really need to advertise or promote their products. Due to
Tesla cars being so unique compared to other electric automobiles, people are automatically attracted
. Tesla
does not have a single main target market as each of their vehicles attracts all types of customers. Tesla Mod
S attracts mostly businessmen or executives whereas the Model X attracts families because of the car being
to hold up to 5-7 people and it is also very spacious.
The Model 3 is the least expensive among the 3 vehicles
and it attracts all types of customers mostly the young people looking to buy their first car. Due to the vehicles
being eco-friendly and tech-savvy, may nature lovers and young people follow the trend and becomes potent
customers.
Suppliers:
Tesla works with many suppliers as they don’t use the same materials or technology for each vehicle
. Inteva
Products supplies one of the most important parts of a Tesla model which is the instrument panel. AG
automotive and Brembo supplies windshields and brakes respectively.
Fisher dynamics, Panasonic, Harada and Sika are also some of the important suppliers of Tesla.
Competitors:
Tesla does have quite a few competitors but they are yet to reach the high status of Tesla. In their early days
their only competitor was the Nissan LEAF but now there are competitors who are either selling hybrid vehicle
or pure electric vehicles like Chevy Volt. In 2018 the US News listed the top 8 Electronic Vehicle where Tesla
Model S and Model 3 were in second and fourth position respectively. They ranked Chevrolet Volt as the top
of this generation but this list becomes irrelevant after viewing the 2018 EV sales (See Appendix B). The peo
preferred Tesla Model 3 over Volt as the graph shows. 2018 was by far one of the best years for Tesla in the
market in the United States. The Model 3 alone sold over 139,000 units across the US. Tesla’s other models
Model S and Model X also had a lot of units sold compared to most of their competitors. Tesla may have a hig
demand and a high market share but they are still yet to have a profitable year. It may be because Tesla has
been investing in Giga factories and the fourth one will be in Berlin.
Pressure Groups:
Tesla hasn’t had any problems with the environmental groups as the organization is eco-friendly. However, T
did have encounters with labor pressure groups. Tesla being a capital-intensive organization has less people
working but the labor union has stated that the workers are being overworked and that they are unable
discuss problems. Elon Musk apologized to the union and stated that the factories are a safe workplace. He t
the labor union that he will be hiring more employees so that the current employees don’t feel like they are
being overworked.
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SWOT Analysis of Tesla
“SWOT” stands for Strengths, Weaknesses, Opportunities and Threats. These are the internal and ex
factors which help understand the strategy of any business.
Strengths:
Energy EfficiencyTesla
- is a leading pioneer when it comes to electric vehicles due to its prominent u
renewable energy sources like solar power.
Partnerships -Tesla is cooperating with major corporations such as Southeast APDA, Yes Energy, and other
Tesla's renewable energy efforts and presence in the worldwide market are aided by these partnerships.
Highly innovative Tesla’s
- design is top class. And they put a lot of attention into the engineering and design
their electric vehicle to ensure that their customers are as comfortable as possible.
Strong Brand ImageThe - market has faith in the company's ability to generate sustainable energy and
profitable products. It has become extremely well-known.
Weaknesses:
Limited Presence On - the one side, Tesla is attempting to establish itself in a very competitive vehicle sector,
while also attempting to expand globally.
Premium Product RangeTesla - is a well-known, high-end clean energy brand. When it comes to elec
vehicles, one of the challenges they may encounter is pricing and consumer trust.
Succession StrategyElon
- Musk has established himself as the face of Tesla, and the company is widely rega
as a one-man show. Elon Musk, on the other hand, has a lot on his plate.
Opportunities:
Autonomous Driving Technology Tesla's
- autopilot system is well-known for its safety and convenienc
Consumers and the stock market will regard it as trustworthy. Tesla's autopilot research is continually evolvin
Environment-friendly carsAs - consumers become more environmentally concerned, the demand for m
electric vehicles is growing, as is the need to reduce the use of gasoline-powered vehicles.
Battery Production TechnologyTesla - intends to produce its battery cells in-house. This will be great for the
company as it will reduce its production costs
.
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Threats:
Increased Competition There
- is a lot of research going on for renewable-energy cars, and several big firms l
BMW and Volkswagen are vying to be Tesla's competitors.
New technologies Energy
- is being utilized in automobiles in new and inventive ways. High operational costs
and slim profit margins might result from competitive pressure.
Long-Term SustainabilityFor - a clean energy automobile firm, long-term sustainability is critical. Due to Tesla
unpredictable manufacturing conditions and weak EV support infrastructure in North America and several are
of Asia, this is a possible concern.
Stakeholders of the Company
Customers
Competitors
Suppliers
Government
Media
Communities
Pressure groups
Investors/ Shareholders
Critical Stakeholders of the Company:
Customers:
Customers are probably the most important stakeholders of Tesla; their actions influence the decisions Tesla
makes. Tesla already makes affordable electric vehicles compared to its competitors but still try to minimize it
costs as much as they can. The customers wanted an affordable and minimalist version of the . Mode
Compared to the Model S the Model 3 has everything including the speedometer in the instrument panel, this
led to the high number of pre-orders and sales of the Model 3 in the year of launch. Another example is when
Tesla reduced their cost by making their own battery cells instead of buying it from Panasonic.
Employees:
Tesla currently has 48,016 employees and it is quite low compared to other competitors because Tesla has 3
Giga factories. Tesla had to increase their employees in 2016 and 2017 because of the allegations made by t
labor union that the workers were being overworked and the workplace was not safe. Thus, to make up for th
allegations and to prove that employees are a critical success factor they added more employees. Tesla offer
skills development and leadership development program for the new employees as well as learning experienc
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through collaborative programs with partner firms. If the employees are empowered and motivated then the
efficiency and productivity will increase.
Investors/ Shareholders:
Tesla’s operations used to depend on its investors, all of the financing were done through the investors. The
investors and shareholders all had specific goals which were profits and growth. An example of how
expanded their business was when they allowed other firms to use their technology patents which increased
the market demand for electric vehicles. The three main shareholders of Tesla are Elon Musk (CEO), Jeffrey
Straubel (CTO) and Deepak Ahuja (CFO) who own 38.6 million, 306,398 and 64,000 shares respectively. All
investors are quite satisfied with Tesla’s performance over the years and is also interested to work with them
for the foreseeable future.
Government:
The government sets rules, requirements, policies and opportunities for businesses like Tesla. Tesla tak
decisions based on what boundaries government has set, suppose if Tesla is becoming a monopoly then the
government can limit their sales or give them a trade ban. Reports say Tesla is somewhat successful becaus
the government giving them subsidies at the national and state level, federal tax credits for consumers buying
electric cars and solar panels, fuel efficiency standards that help bring millions in revenue for Tesla. Tesla has
denied this statement and said they were successful on their own and that the government gives this treatme
to most of the businesses. Another example would be that company’s supply chain management for
automobile production has to comply with government policies on material sourcing.
Communities:
Communication is probably the most critical stakeholder as it decides the market share of Tesla. Th
communities decide if they want to buy or promote Tesla’s products depending on its decisions. If Tesla does
any controversial acts then the community can decide to ruin their brand image and lower the market share.A
few examples would be communities are satisfied with the environmental friendliness of the products and the
company allowing other organizations to use its patents. In 2019 Tesla announced they would be launching a
electric truck and this seemed like a failed attempt to the community. However, in November 2019 T
presented their electric truck (Cybertruck) to the public and everyone had confused reactions. It did
futuristic but all the features seemed irrelevant. Before the unveiling the preorders were quite high but later it
dropped and this shows how much the community can affect Tesla, (See Appendix . C)
Other stakeholders are not that critical as Tesla can still operate their business regardless of their effect. Tesl
has many suppliers so it would not matter if one of them were to charge higher prices because they can go to
another one. Moreover, they are already making their fourth Gigafactory so in the future they make
manufacture everything on their own. Tesla’s competitors are not up to their level yet, none of them have yet
to truly go head to head with Tesla. The features Tesla have, along with the affordable price and their
market share are impossible to be done by another company. Pressure groups are also not much of a force f
Tesla as they have already recovered from their past labor union case and there are currently no faults.
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Organogram of Tesla
Zach Kirkhorn
(Chief Financial Elon Musk
Officer) (Chief Executive
JB Straubel
Officer) Energy: 1 SVP and VPs
(Chief Technology Officer)
Franz Von Engineering and Production: 9 VPs
Holzhausen
(Chief Designer) HR and Communication: Chief People
Office and 3 PVs
Legal and Finance: General Counsel
and 4 VPs
Sales: 2 VPs
Software: Director of Artificial
Intelligence and 1 VP
Organizational Structure
Tesla hires less but skilled people. Thus, it is rarely needed for the employees to be working in cross-function
teams. Tesla has functional departments where specific employees work in specific departments. Due to hav
less employees, all of them are assigned to different departments and there is no need for cross hierarchical
teams. However, employees can talk to other managers or employees of other departments if the need any
help. In Tesla there is no chain of command. Elon Musk himself sends emails to his employees that they shou
feel free to talk to him. Tesla have a centralized structure. Employees are allowed to share their ide
concerns with their managers and the CEO but ultimately, it’s the CEO’s overall decision. Tesla has hig
formalization and there are set rules and regulation for each job. The tasks and goals are specified clearly for
each employee. Therefore, Tesla follows a Mechanistic structure.
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Leadership Style
Tesla does followan autocratic leadership style but at the same time also follows democratic leadership style.
The decisions are made by the CEO; however, Elon Musk is more engaging in the business. He has asked a
his employees to go to him regarding problems or concerns about the business. He believes every o
should be faced head on no matter the risks involved. In an interview some of Tesla’s employees stated how
Musk prioritizes learning and would talk to his engineers and employees to gather more knowledge. He is als
a resilient leader and the example of that would be continuing Tesla’s operations even though it has not been
profitable for the past couple of years.
Conclusion
We can conclude that Tesla is stable in the current electric vehicle industry and is yet not threatened by any
competitions. All the general external factors apart from a few does not affect Tesla in a negative way rather
most of the factors are favorable for Tesla. The specific external factors also have a positive impact
organization and Tesla give top priority to them. The critical stakeholders
do influence Tesla’s decisions but in a
positive way. The organizational structure is quite rigid and assists in the processes of Tesla and it also works
a comparative advantage for them. The leadership style of Elon Musk is the most important part of
organization, and it is the main reason for Tesla having a good brand image and a high market share.
Tesla are the market leaders for the Electric vehicles in US and Globally. They have captured the market and
also attracted tons of customers. Their unique and innovative vehicle ideas are one of their main unique sellin
points. Their one bad year will not stop them from being at the top and they also backed it up with necessary
precautions. Tesla already has a proper plan ready for the future and is also ready to face the imm
competition that will emerge in the near future.
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References
https://www.tesla.com/
https://www.tesla.com/ns_videos/tesla-impact-report-2019.pdf
https://ir.tesla.com/financial-information/quarterly-results
https://www.academia.edu/36282427/Tesla_case_study.pdf
https://www.edrawmax.com/article/swot-analysis-
of-tesla.html
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