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Running head: STRATEGY PLAN: SWOT ANALYSIS PAPER
STRATEGY PLAN: SWOT ANALYSIS PAPER
Henry Vascones
BUS/475
April 06,2017
Prof. Faiella
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Running head: STRATEGY PLAN: SWOT ANALYSIS PAPER
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STRATEGY PLAN: SWOT ANALYSIS PAPER ON TESLA
Abstract
This paper shall provide a SWOT analysis for Tesla
STRATEGY PLAN: SWOT ANALYSIS PAPER
3
Tesla’s SWOT
External forces and trends
Legal & Regulatory
Strength
Weakness
Opportunity
Threat
Trend
Push for reducing
Regulations might
Government
Trump administration
Increasing number of
carbon emissions
push for more
subsidies
uncertainty
electric vehicles
typical, affordable
options
Global
Economic
Adaptable to many
Price point could be
Expanding
Vehicles from other
Need for vehicles is
locations
too high
transportation needs
companies with wider
high, technologies
around the world
range (Toyota)
make it possible
Tesla is respected
Skepticism about
Be the key company
Other non-electric
Investment in
brand
value of vehicles
in this market
alternatives that are
alternative energy
more affordable
solutions
STRATEGY PLAN: SWOT ANALYSIS PAPER
Technological
Innovation
4
Tesla’s technology is
Skepticism about
Leverage Tesla
Other alternative
Alternative, remote
excellent
effectiveness of
technology to expand
vehicle technologies
vehicles and
electric vehicles
sales
Tesla is about
Might miss hot
Leverage Tesla R&D
Other non-electric
Cutting edge
innovation
opportunity
to corner this market
options
technology always
technologies
gains attention/sells
Social
Alternative energy is
hot
Backlash from fossil
fuel industry
Become social leader
in this area
Fossil fuel industry
Environmental
Tesla is leader in
environmental
solutions
Tesla is premier name
in this market
Fossil fuel backlash
Corner this market
Climate change
deniers pushing back
Other, cheaper
alternatives
Expand influence into
this mobile market
Other companies
stealing Tesla
technology
Competitive analysis
Push for more
alternative, green
energy
World looking for
climate change
solutions
Tesla continues to
dominate market
Internal forces and trends
Strength
Weakness
Opportunity
Threat
Trend
Strategy
Frontrunner in market
Corner this market
Structures
Has structure for
developing and
selling these cars
Tesla already has
Need could not
materialize
International reach is
limited
Geared towards
domestic market
Shore up international
reach
Other competing
technologies
Other international
companies have
existing structures
Other companies
Geared towards
domestic market
Look for resources
internationally
Broader distribution
of electric vehicles
Working with local
structures to
distribute
Work with local
entities to broaden
reach
Coordinating with
other international
partners
Processes & Systems
Resources
Has existing market,
R&D, infrastructure,
funding
Can innovate to
respond to this need
Other competing
companies
STRATEGY PLAN: SWOT ANALYSIS PAPER
Goals
Have been met before
Strategic capabilities
Leader in this market
Culture
Tesla has culture of
innovation
Technologies
5
Aggressive and
dependent upon
shifting international
factors
More focused on
domestic market
Too hip to notice
shortcomings?
Meet them and
become leader in this
market
Fall flat and fail
internationally
Companies expanding
internationally
Increase company’s
reach
Expand to include
international focus
Shoring up
international presence
Make larger, more
inclusive company
Tesla is innovator in
this market
Could be too complex
Innovations
Tesla lives on
innovation
Fall behind other
competitors
Companies lead by
continuous innovation
Intellectual property
Tesla has strong
intellectual property
capabilities
Other companies
innovate, other
companies steal tech
Technology being
created around the
world
Leadership
Tesla has strong,
capable leadership
Innovation could not
translate and exist
without a market
Betting on one
technology over the
other, making wrong
choice
Strong leadership
could fail to
recognize outside
ideas
Further solidify
position as leader on
technology
Continue to be
innovator in electric
vehicles
Build on existing
technologies, gain
new markets
Multiple competing
international factors
Expansion could fail,
integration could be
difficult
Other innovative
companies
Leadership does not
integrate well
Global leadership for
companies
Chance to bring
international leaders
into company
Technologies define
the company
Running head: STRATEGY PLAN: SWOT ANALYSIS PAPER
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Analysis
Tesla SWOT
Tesla is a company that has experienced economic growth and increasing sales. The Q1
sales for 2017 were 69% higher than they were for Q1 2016 (Tesla). Economically, there is a
push on a global stage for alternatives to fossil fuel powered transportation. There is demand in
the marketplace and there are both regulations that favor the increased introduction of electric
vehicles and laws that make fossil fuel powered vehicles more expensive and less attractive,
especially over the long term. This positions Tesla in an excellent space, as its vehicles and
technologies take advantage of the economic, legal and regulatory conditions at this time.
At the same time, Tesla is a company that innovates and adapts to change, as it has
needed to in order to survive. This adaptability and flexibility also favor it. One of the arenas
where this is apparent is in how it is able to innovate and release not only new products but new
technologies as well. Tesla thrives on innovation and delivering on successful new technologies,
and this positions them well for being able to deliver on the long range, solar powered electric
vehicle division that is being proposed.
The supply chain for this new division will rely heavily on the supply chain of the
existing division. They will both rely on similar technologies and similar core products and
components. Being able to increase the reliance on the existing supply chains means that the
division will be easier to launch and the economies of scale will benefit both the existing division
and this new one with lower costs.
The major strengths that Tesla has are related to its position as a technology leader and an
innovator and the amazing R&D resources that it can pull from. This is an asset that will serve it
well and gives it an advantage over competitors who have not delivered on promises or have
STRATEGY PLAN: SWOT ANALYSIS PAPER
delivered in less spectacular ways. One way of considering whether or not this is a strength is to
evaluate the perception of the company that existing customers and potential customers have.
This basic market research could consider the hypothesis that Tesla is seen as a technology
leader and an innovator. Research has indicated that these individuals with an interest in
purchasing electric cars have different purchasing habits than those who purchase gas powered
vehicles, so it will be important to correctly screen for the right survey participants (Nayum,
Klöckner, & Mehmetoglu, 2016, p. 9).
The major weaknesses that it must confront are in the marketplace where it is strong but
is also high end and not seen as the most affordable option. This new division will need to be
affordable and accessible if it is going to succeed, so it not only needs to succeed in this area, it
also needs to communicate this fact and convince customers that it is affordable. This has to be
considered within the framework of the industry and the electric car marketplace that exists. In
this marketplace, which is still very young, it will be important to confirm the position of Tesla
and build off of its reputation in order to convince potential customers that it can deliver a more
affordable vehicle with the Tesla quality that has been delivered in the past. Since research has
shown that this marketplace is still relatively small, this is even more important that would be for
other markets (Dijk, Wells, & Kemp, 2016, p. 77).
The opportunities for this division are significant. It allows Tesla to expand to a global
market with customers outside major metropolitan areas. It makes it a truly global company with
customers from all walks of life, not just the affluent few. It provides Tesla with the opportunity
to deliver a vehicle that is in a lower price point, but one that is not ridiculously low because the
technology and the value it delivers warrant a price point that is still relatively high. The value
that this vehicle can deliver allows Tesla to still maintain a level of high end respectability while
STRATEGY PLAN: SWOT ANALYSIS PAPER
entering a new market and expanding its ability to deliver on the promises that fuel free vehicles
represent. Research does need to be done to better assess the size of this market and its ability to
purchase these vehicles.
Threats to Tesla in this endeavor are in large part coming from the fossil fuel industry and
other corporate interests with a desire for this division to fail. Tesla will have to deliver on the
technology and in making these vehicles accessible in order to avert these threats. It is important
to position this vehicle as a viable option that can function as well as a vehicle fueled by fossil
fuels but with the benefits of being carbon free and also being able to exist without being
tethered to a fueling station or a charging station. In order to test whether or not these vehicles
will be accepted or not and whether or not fossil fuel interests could disparage it, additional
market research should be done that gauges the opinions of the larger market and more
importantly the target market for these vehicles that would purchase them in the initial roll out.
CONCLUSION
This new division of Tesla has many strengths and opportunities that it can leverage to
make this division successful. Many of the challenges that it will face are from the existing
market for vehicles and pressures from fossil fuel interests.
STRATEGY PLAN: SWOT ANALYSIS PAPER
REFERENCES
Dijk, M., Wells, P., & Kemp, R. (2016). Will the momentum of the electric car last?
Testing a hypothesis on disruptive innovation. Technological Forecasting and Social Change,
105.
Nayum, A., Klöckner, C. A., & Mehmetoglu, M. (2016). Comparison of sociopsychological characteristics of conventional and battery electric car buyers. Travel Behavior
and Society, 3, 8-20.
Tesla. (2017). Tesla web site. Retrieved from http://www.tesla.com.
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