International Management Consultancy Report The City And State Where It Is Located

International Management Consultancy Report
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Table of Contents TOC \o "1-3" \h \z \u 1.0 An Overview of the Company PAGEREF _Toc16473673 \h 12.0 Internal Environment of the Company PAGEREF _Toc16473674 \h 22.1 SWOT Analysis PAGEREF _Toc16473675 \h 22.1.1 Strengths PAGEREF _Toc16473676 \h 22.1.2 Weaknesses PAGEREF _Toc16473677 \h 32.1.3 Opportunities PAGEREF _Toc16473678 \h 32.1.4 Threats PAGEREF _Toc16473679 \h 33.0 External Environment Analysis PAGEREF _Toc16473680 \h 43.1 VRIN Framework PAGEREF _Toc16473681 \h 44.0 Recommendations to the Organization PAGEREF _Toc16473682 \h 45.0 Implementation of Recommendations PAGEREF _Toc16473683 \h 55.1 Communication Team PAGEREF _Toc16473684 \h 55.2 Employee Retention Programs PAGEREF _Toc16473685 \h 65.3 Strategic Financial Team PAGEREF _Toc16473686 \h 66.0 Critical Reflection PAGEREF _Toc16473687 \h 6References PAGEREF _Toc16473688 \h 7
International Management Consultancy Report: An Analysis of the Tesla’s Strategic Position
1.0 An Overview of the Company
Human civilization has gone to unimaginable extent since the turn of the 21st Century. The advancement in technology has been central to the progress of humanity. Innovations in technology have improved exponentially considering the level of implementation of machine learning and artificial intelligence in solving human challenges. Furthermore, relevant innovations are apparent in almost every other sector of the economy including but not limited to healthcare, finance, agricultural, beauty and wellness, food industry, and automobile. The automobile industry in particular has been subject to a reissuance with the implementation of various innovations to enhance safety and efficiency. Related technological innovations in this industry include electric-driven vehicles, self-driving, backup cameras, and biometric seat technology. Tesla is positioned as a leader in the electric vehicle (EV) segment, which is a part of the broader automobile industry.
Tesla is a Silicon Valley startup that focuses primarily in the production of EVs. Elon Musk is the Chief Executive Officer and among the pioneer of the company. Tesla was formed as a long-term strategy of Musk’s thoughts on what humanity would need in the future. Such claims were mainly hinged upon the cause for deteriorating. Governments and other concerned stakeholders such as non-governmental organizations (NGOs), action groups, business community, politicians, and scientists were highly concerned with significant pollution levels emanating from the transportation sector. Exhaust fumes have long been considered as causes of the increasing carbon dioxide in the atmosphere. Industrial output in China has also caused a spectacular increase in both temperatures and concentration of hazardous gases.
Renewable and non-renewable sources of energy provides a new aspect that is prevalent in this discussion. This factor has contributed to the rise in popularity of Tesla firm because there has been a rapid depletion of oil reserves in recent years. Oil is a non-renewable source of energy and the mere fact that it can be exhaustible raises concerns among consumers. Moreover, information age has facilitated the spread on knowledge that sustainability in the automobile industry is a possibility. EVs not only save customers related gasoline expenses but also maintenance cost. An average annual mileage of 15,000 miles would cost an internal combustion engine (ICE) approximately $6,957 on gasoline while an EV would cost $540. On the other hand, the latter’s maintenance cost is less is by about 35% (Bilbeisi & Kesse, 2017). Tesla has made this a reality and besides the popularity, the firms share value has risen since $17 at its initial public offering to $235 as at 9th August, 2019 (TESLA, 2019). On the other hand, the leadership at the firm can be credited for the success of the firm.
2.0 Internal Environment of the Company
2.1 SWOT Analysis
SWOT analysis is an acronym for Strength, Weaknesses, Opportunities, and Threats analysis in relevance to the problems that a company is facing internally. A SWOT analysis is central to the productivity levels of the company. It is a strategic planning tool that provides the firm with an appropriate aspect in the allocation of resources. In economics, resources, which can be perceived as technological, financial, or human are limited while relative needs are unlimited. The great thing about SWOT analysis is that it integrates both the internal and external environments of the business.
On the other hand, the strategic framework has its drawbacks. The main limitation with SWOT analysis is that it fails to offer comparison with its competitors (Gurel & Tat, 2017). It fails to provide a quantitative index from where the respective firm can offer a benchmark for competitive analysis. Strengths stipulated are not necessarily commendable sources of competitive advantage.
2.1.1 Strengths
Tesla’s position in the market makes it an attractive place in having a flexible working force. In this regard, the firm can outsource less relevant activities and concentrate on the primary ones. Focus on the activities that matter implies that optimal value creation is attained. Also, it is great to acknowledge that the firm operates the entire value chain from the production, distribution, to consumption. This process is a vertical integration of management and is central to guaranteeing that are less disruptions in the production process. Besides, Tesla can easily achieve high quality standards for its products.
Musk has reiterated the need for high performing personnel as part of his workforce with notable ones being from tech giant, Apple (Price, 2017). Apart from this procedure, the organization allows for the various departments and employees to interact often. It is a procedure that facilitates quick decision making and consequently, employees can respond to external factors much faster.
Tesla is keen to assume responsibility in demanding situations. Musk, in particular, never coy when the public image of the firm is at stake. A stellar example of this situation is when the company’s self-autonomous vehicle was involved in an accident in San Francisco. He was quick to comment on the incidence even before the authorities had their conclusion on the matter. Musk admitted of the possible failure of the autopilot mode but was still concerned over the double standards the media set on Tesla (Yadron & Tynan, 2016). This is a great virtue in showing concern for the injured, taking responsibility, and promising to improve the state of security on the subsequent productions.
2.1.2 Weaknesses
Tesla lacks the experience that comes with operating in a relatively complex industry such as this one. Disappointments among customers who place pre-orders have become often as the company has been unable to meet its production projections. Unexpected production delays have become rampant and it is an issue that has resulted in lost revenue over time. At times, unreliability among suppliers is a cause for concern.
Tesla is a start-up and as with every other company of this type, initial capital is directed towards research and development of the company’s products. Taking into account that the company needs to control the entire value chain, much capital has been directed towards the construction of Gigafactories. These factories are meant to produce battery packs for the firm and other EV automakers. The factories and continuous production channels for the firm have resulted in significant capital outlays that the firm has reported consistent losses over time. Besides the losses, Tesla is cash-stricken and has a high debt level of about $9.79 billion compared to its shareholders’ equity of about $5.47 billion.
2.1.3 Opportunities
Current projections indicate immense growth for this industry in the future. At the moment, the EV segment is in its early stages and it is an opportunity that the firm can seize. In this process, Tesla can attract highly skilled personnel who are exceptional in technological innovations. Countries such as China are making significant steps in the technology phase and could be a great source of related intellect.
2.1.4 Threats
Financial resources are the major threat the firm faces at the moment. Trade wars and debts advance the nature of predicament at hand. Since Tesla is an international firm, the present trade war between China and the U.S. is a great cause for concern. China is the largest market for EVs and trade war would cause a significant decrease in sales revenue for the firm. Moreover, financial incentives from the government are bound to come to an end as Tesla has already hit 200,000 sales cap set by the federal government (Energy.gov, 2019). Lack of financial resources will inhibit the firm from hiring the best personnel there are in the market.
3.0 External Environment Analysis
3.1 VRIN Framework
Jay Barnes developed the VRIN framework to offer a precise approach in the utilization of a company’s resources (Cardeal & Antonio, 2012, p.10159). VRIN is an acronym for value, rareness, imitability, and non-substitutable. Tesla can only achieve competitive advantage when its resources provide tremendous value and are rare.
In contrast, the VRIN framework faces valid criticism from its users still. First, the VRIN focuses on the internal conditions of the firm and disregards the external ones and some which are very important such as the demand size of the market. Therefore, the possession of rare and valuable resources does not imply a competitive advantage if there is no demand.
As discussed earlier, Tesla employs vertical integration or in-house production in its operations. This system provides temporal competitive advantage over others. Designs from its software developers and engineers are then passed to the production team in the factory. It’s a competitive advantage f...