Essay about Tesla Motors Essay-2443 Words
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Tesla Motors is an organization based in Silicon Valley whose core operations include making designs, producing and selling all electric vehicles (EVs) and electric vehicle power-train components. Presently, it’s the leading automaker manufacturing and selling a zero-emission sports vehicles in mass production. The organization also engages in engineering production and development of zero-emission top of the range sedans, referred to as the Model S mass produced in Fremont, California. It also manufactures and sells electric power-train components its strategic partners who are also automakers and these are Toyota and Daimler. The organizations corporate governance is made up of a Board of Directors which has established high quality standards for the Company’s directors, officers and employees. Inherent in this thought is the importance of apt and prudent corporate principles of governance. It’s the responsibility of the organization’s Board of Directors to play the role of judicious fiduciary for Tesla Motors stockholders and to consistently supervise all administrative protocols of the Company’s ventures. Set guidelines have been put in place and subject to alterations on a need be basis as the Board of Directors may deem fit in considering suitable options relative to the best interests of Tesla Motors or as necessitated prevailing bylaws and legislative directives.
Tesla Motors Inc. is a company that has applied radically new and innovative technologies combining electrical, mechanical and software engineering developments to produce highly advanced electric power trains and electric vehicles. Tesla Motors has realized high research and development productivity levels through visionary leadership which has motivated its human capital to pro-actively innovate in areas that matter thus opening up huge and uncontested consumer markets in the electric automotive industry (US manufacturing competitiveness initiative 2012). Tesla Motors’ robust technical leadership has necessitated for the production of all electric cars with superior designs leaving other players in the global automotive industry in awe. Tesla’s models have proven to be of a far more superior design compared to fossil fuel based auto-motives in performance, design and range.
Organization principles and guiding principles
According to Schwartz and Xia, the company adheres to its positive organizational mission who states that the aim is, “To increase the number and variety of electric cars available to mainstream consumers in order to speed up humanity’s move from a mine-and burn hydrocarbon economy towards a solar electric solution.” Tesla Motors’ guiding principles towards this end have been and continue to be offering consumers with competitive and innovative products by making the best of the contemporary global trend towards green energy in an industry blamed for adverse climatic conditions (US manufacturing competitiveness initiative 2012). To continue expanding its market presence in the US and the world at large while at the same time consistently producing novel products which are already exhibiting high demand. Investing in an organizational management structure and personnel with successful track records and is passionate towards ensuring Tesla Motors is a respected brand in the industry. Ensuring continued profitability and growing profit margins while ensuring phenomenal growth trends. To consistently continue to create strategic partnerships with like minded automotive industry players to strongly position Tesla Motors for future success.
Tesla Motors distinctive competencies
Tesla Motors management team has showed continued commitments towards maintaining on its entrepreneurial philosophy. By ensuring the human resource at Tesla Motors works in an environment with a highly charged atmosphere allows and continuously motivates a continuous output flow from its in-house creative talent via small focused teams (US manufacturing competitiveness initiative 2012). Such teams have proven to have the ability to work around challenges by coming up with timely and well calculated decisions. The organization’s management has been proactive towards ensuring these highly skilled and talented teams by offering the competitive remuneration packages, equity and benefits.
Its founders, Elon Musk and JB Straubel shared a common belief; the two renowned entrepreneurs understood and accepted that advances in consumer electronics could be applied in new and innovative ground based transportation developments (teslamotors.com 2014). This shared belief breathed life into Tesla Motors Inc. The two individuals exhibit very different character traits from one another with JB Straubel being described as a soft spoken engineer who prefers to shun publicity. On the other hand, Tesla Motors CEO, Elon Musk is considered as being a frenetic and voluble individual (teslamotors.com 2014). As such, one of the organizations core talents are in its executive team which boasts of these two individuals who with high degrees of professional experience have shown exemplary leadership qualities that are not only visionary but also committed to strong work ethics (files.shareholder.com 2011). As such the company has realized high levels of phenomenal success due to their ability to organize an executive team comprising of members with exceptional experience, skills and talents who have previously worked with other various leading market brand names in the automotive industry such as such as Daimler, Mazda, Ford and Toyota. The executive team also has members with a great deal of experience working with the IT industry giants such as Google and HP.
This dynamic team has allowed for the company to incorporate innovation, research and development, attract exceptional human capital with great talent, enormous potential and futuristic skills necessary to enable Tesla Motors to redefine the contemporary automotive industry (teslamotors.com 2014). The executive team is comprised of Elon Musk, the Tesla Motors CEO, co-founder and product architect. He has been in-charge of product design and development since the organization’s inception in 2003 (Ohnsman, 2013). J. B. Straubel is Tesla’s chief technical officer with as wealth of experience co-founding and working with Volacom an aerospace company. He is charged with evaluating novel technologies, Tesla’s systems testing as well as overseeing engineering and technical designs at the organization (teslamotors.com 2014). Tesla Motors’ chief financial officer is Deepak Ahuja who has previously worked with heavy weights in the automotive industry such as Ford and is well conversant with all aspects relevant to the automobiles industry, from marketing and sales to acquisition and divestitures. Franz Von Holzhausen is the chief designer at Tesla Motors and his obligations include overseeing the design direction at the organization with regard to all future design concepts as well as production cars (teslamotors.com 2014). Prior to joining Tesla Motors, he was the Mazda’s design director in the company’s design center in North America. He also held a position in the same capacity at America’s General Motors. Jay Vijayan is Tesla Motors’ chief information officer and has been at the fore front of enabling the organization to structure, develop and ensure timely delivery of systems to enable Tesla products and production processes are the best in the industry. Other executive members include, Jerome Guilen, Gilbert Passin, Dairmuid O’Connel, Arnnon Geshuri and Peter Carlson (teslamotors.com 2014).
This Silicon Valley bases organization primarily designs, produces., markets and sells the Tesla Roadster and Tesla model S all electric cars as well as electric automotive power-train components. The organizations core business operations are split into two distinct segments power-train development services and sale of Tesla products (Ohnsman, 2013). It is important to note that the organizations main source of revenue comes from electric vehicle sales and translate to 90% of Tesla Motors revenues. The electric car sales operations is further subdivided into electric cars, options and related sales wing and the other which is the electric car power-train components and related sales wing.
Tesla Motors second business segment is concerned with business development services. The organization develops electric power-train systems for other motor vehicle manufacturers, namely Daimler and Toyota (Bullis, 2012). Tesla Motors is in a strategic partnership agreement with the two global leaders in the automobile manufacturing industry to develop, manufacture and sell Tesla based electric power-train systems for their own all electric vehicle versions to rival Tesla models in the near future (US manufacturing competitiveness initiative 2012).
Tesla Motors is strategically well positioned in the global electric vehicle market segment as a high end EV manufacturer and dealer. Tesla Motors has over the past few years managed to phenomenally gain a competitive edge over other all other incumbents who have been in the industry for much longer through Tesla Motors’ direct-to-consumer sales strategy which also incorporates, stores and service centers strategically located in North America, Asia and Europe, innovative consumer financing options, and unparalleled technological innovations (Bullis, 2012).
Tesla Motors’ direct-to-consumer all electric car sales are in a strategic vantage point and they hold a sizable degree of advantage over other conventional motor vehicle dealerships. Nearly all other automobile manufacturers are expected by state law to ensure they sell their cars through franchised car dealerships (Bullis, 2012). Tesla Motors is considered to be the first company able to sell their products directly to their targeted consumer base since it a relatively young company and as yet has no franchised dealers. Tesla Motors sells its electric cars directly to its customers via strategically located showrooms of which the organization fully owns and operates (Ohnsman, 2013). Tesla Motors showrooms and galleries “are highly visible, premium outlets in major metropolitan markets some of which combine retail sales and services”. Tesla Motors sales strategy has been likened to Apple Inc.’s sales strategy as stores for both organizations are present a rich aesthetic appeal and allow for the organizations to create unique and memorable buying experiences. Tesla Motors’ showrooms have essentially served to redefine the entire conventional car buying experience. It has essentially eliminated the economic incentive for buyer and seller to allow market forces to determine on how to compete for a price that is accepted by both parties. Furthermore, Tesla Motors’ showrooms have gone the extra mile allowing for the organization to achieve commendable operating efficiencies, realize high sales targets and enhanced after sales service revenues that the conventional fossil fuel based automobile manufacturers have no access to due to state law limitations.
Organizational objectives, accomplishments and SBU’s
Tesla motors plans to grow organically in the near future by expanding its product range making products more affordable by introducing mass market oriented cars as well as introducing more innovative products and expanding worldwide. Tesla has ideally only produced two products over its short lifetime, the Tesla Roadster and the Model S. Tesla intends to start production of the new Model X, an electric cross-over vehicle this year with the intent to introduce it into the market in 2015 (Ohnsman, 2013). Research and development is a large and critical part of Tesla Motors core business operations and thus, it is expected to consistently stay a step ahead of new and emerging green energy technologies from its competitors. It has to incorporate new technologies or stay well ahead of the competitors introducing such innovations in non fossil fuel based vehicle technologies (Bullis, 2012). Tesla Motors is expected to stay well ahead of its competition as its current CEO, Elon Musk, is considered as an extremely successful entrepreneur with the necessary skills, talent and experience to able to keep Tesla Motors profitable and competitive.
Tesla Motors as a cash cow
Tesla management has provided that they plan to introduce into the market a low priced version of the Model S. This can only happen after it has began selling units for it proposed cross over electric car. Tesla Motors intends to use revenues from the previous models to design and manufacture lower prices versions of the Model S for the mass markets and can thus be considered as a cash cow (Graham, 2013). This will enable the organization gain a bigger market share globally. The company harvested in 2013 following continues sales growth from both its core business operations.
Organizational growth strategy
Going forward, the firm will need to continue to bring innovative products to the market. Tesla is a leader in bringing innovative products to the car market. Outside of the fact that they have created an all-electric car which accelerates from 0-60 in 4.2 seconds, the technology inside the car is spectacular. In the future, the company plans to continue to improve product offerings by creating innovative cars that will definitely alter the nature of the conventional automobile industry (Bullis, 2012). One such change will be to increase the range that their cars can go in a single charge (Graham, 2013). In 2013 Tesla opened stores in Europe and Asia/Pacific. Expanding the business overseas increased business significantly. Currently the firm has Model S cars displayed in stores overseas, with nearly 25% of reservations for Model S being from outside of North America (Bullis, 2012). The company intends to increase it’s improve its market objectives by increasing both the sales volumes and market share in the US and globally.
Elements of the Market plan
Tesla’s Motors long term goals are not clear. However it is understood that the company’s short term strategies are to ensure that it open up more show rooms in North America, Europe and Asia (Graham, 2013). The company is well positioned to reap the advantages of adhering to innovative strategies aimed at combating climate change. Its power-train division is bound to ensure that the company will reap high profits this year. These profits will most probably be invested towards research and development of battery packs that will offer more range as well as mass production which will enable it to manufacture low priced cars for the mass market (Graham, 2013). The consumer market for automobiles is wide but many people are aware that green technologies are the future. Tesla motors have positioned it perfectly to hold a sizable market share. Its ability to ensure that their products are reliable and aesthetically as well as practically appealing will enable the company to position itself in line with its organizational purpose which is to ensure
Tesla Motors has taken over the all electric segment of the auto motives industry by storm. It has overtaken many of the industry’s leaders who have been investing heavily in the research and development towards producing cars with zero carbon dioxide or green house emissions. The company has been in operations for just over ten years but its growth has been phenomenal. The company’s marketing strategies as well as growth initiatives have been both revolutionary and a prime example on the way forward in the digital age. The company will reap huge returns on its investments if it targets the mass market and global reach.
Berdichevsky, G., Kelty, K., Straubel, J. B., & Toomre, E. (2006). The tesla roadster battery system. Tesla Motors Inc.
Bullis, K. (2012). Can Tesla Survive? Accessed from http://www.technologyreview.com/news/4269Kevin Bullis09/can-tesla-survive/page/2/
files.shareholder.com (2011). Tesla Motors Company Overview Summer 2011. Accessed from http://files.shareholder.com/downloads/ABEA-4CW8X0/0x0x494001/dd297293-ec2d-4dc5-8db4-63d491fb6bd0/Company_Overview_Q3_2011.pdf
Graham, K. (2013). MGX5181 Presentation – Tesla Motors. Accessed from
Ohnsman, A. (2013). Tesla’s Straubel Keeps Motors Rolling as Stock Surges 57%. Accessed from http://www.bloomberg.com/news/2013-05-14/tesla-s-straubel-keeps-motors-rolling-as-stock-surges-57-.html
teslamotors.com (2014). Executives. Accessed from http://www.teslamotors.com/executives
University of Oregon. (2013 ). Tesla Motors, Inc. Accessed from http://uoinvestmentgroup.org/wp-content/uploads/2013/04/TSLA.pdf
US manufacturing competitiveness initiative. (2012).Make an American Manufacturing Movement. Accessed from http://files.shareholder.com/downloads/ABEA-4CW8X0/1859801418x0xS1193125-12-81990/1318605/filing.pdf
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