Case Problem 'Tesla Inc, 2023'

Case Problem: Tesla, Inc., 2023 Student Name University Course Professor Name Date Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc158240610 \h 3Introduction PAGEREF _Toc158240611 \h 4Entering Mass Market PAGEREF _Toc158240612 \h 4Industry Life Cycle PAGEREF _Toc158240613 \h 6Elon Musk’s Master Plan 2 and Plan 3 PAGEREF _Toc158240614 \h 7Tesla’s Corporate Strategy PAGEREF _Toc158240615 \h 8Conclusion and Recommendation PAGEREF _Toc158240616 \h 9References PAGEREF _Toc158240617 \h 10 Executive Summary Today’s proliferation of electric vehicles (EVs) can be attributed to Tesla and the main co-founder, Elon Musk, who made EVs a reality. The company’s growth since its inception in 2003 provides a great managerial case study. This managerial report offers an overview of Tesla and the EV industry. The report highlights how Tesla entered the mass market, helped by its direct sales business model. The report also illustrates why the EV industry is at the growth stage of the industry lifecycle. Tesla’s Master Plans and a brief overview of the company’s corporate strategy are also reviewed. Case Problem: Tesla Inc., 2023 Introduction Tesla Motors, Inc. is a leading manufacturer of electric vehicles (EVs). Founded by Elon Musk in 2003, Tesla was intended to accelerate the global transition to sustainable transportation comprising EVs. The company was named after Nikola Tesla, an engineer and physicist renowned for inventing the induction motor and alternating current (AC) power transmission. Elon Musk provided most of the initial funding for the company because external funding was deemed impossible for an automotive start-up during the global financial crisis. As such, Musk remained in control of the firm and its destiny. Today, Tesla has grown into a global brand spearheading the electrification of road transportation globally. The success of the firm can be examined from a strategic perspective. This report discussed various critical aspects of the business, including how it entered mass production, its business model, life cycle stages, the corporate strategy, and Musk’s Plans 1, 2, and 3. Entering Mass Market Tesla was able to enter the mass-market American automotive sector by raising capital and capability with its first car. The Roadster was introduced in 2008, with a faster acceleration than a Ferrari or Porsche. The car was an Elise model by Lotus, retrofitted with an electric drivetrain and motor. Tesla produced and sold 2500 Roadsters at an average price of $110000. With this capital, Tesla discontinued the Roadster and designed the Model S from scratch. This model was scalable, cheaper, and appealing to the market (Rothaermel, 2023). Later, products were made with great customer enthusiasm and massive preorders, which allowed Tesla to access the funds necessary to scale up its production. Tesla’s genuine pursuit of sustainability has attracted many consumers with the same environmental concerns. As a leading brand and a pioneer in EV manufacturing, Tesla has transformed the sector and amassed a massive market share. Tesla’s business model is based on direct sales and service instead of franchised dealerships used by other automotive manufacturers. It means Tesla rolls out EVs and charging stations instead of outsourcing to third parties. Direct sales means that Tesla sells EVs and other products directly to customers. The model can be justified because Tesla started as a small start-up firm without a massive production capacity. Producing fewer units makes it possible to sell directly to consumers. Tesla’s key plan was to produce cheaper products to attract more consumers. Therefore, direct sales eliminate a costly value chain and allows customers to access products cheaply. Traditional automotive manufacturers follow a different model. Often, such firms are large multinationals producing millions of units annually. Such scale of operations forces the manufacturers to delegate some core operations to third parties, including outsourcing parts and using franchised and other global dealerships to reach out to the consumers. Bigger product...