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Tesla Motors: External Analysis

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Tesla Motors: External Analysis
EXTERNAL ANALYSIS

TESLA MOTORS

_Prepared For:_

PEPPERDINE UNIVERSITY

STGY 659.65

STRATEGIC MANAGEMENT

Prepared By:

Daniel Aleksander

Andrew Beckman

Jeanette Gonzales

Jeremy Jay

September 26, 2014

INTRODUCTION

Tesla Motors, headquartered in Palo Alto, California, is a United States (US) based company that designs, manufactures, and sells electric vehicles globally. The company is traded publically on the NASDAQ with a market capitalization of $30.8 billion. Under the leadership of CEO, Elon Musk, the company seeks to provide a variety of high performance electric vehicles (EVs) to consumers in the near future. The following is an external analysis of Tesla Motors.

STRENGTHS

One of Tesla 's greatest strengths involves optimizing cost advantages associated with building economies of scale. Making batteries in massive volumes is a key part of Musk 's plan to drive down unit costs so that electric cars can become affordable to a much larger market. Tesla plans to cut battery pack costs by 30%, which will hit the target price of $35,000 for its third-generation vehicle. Musk is doing this by building a giant battery plant in Nevada, referred to as the "Gigafactory." In addition, Tesla is targeting to market large-scale electricity storage systems used by power companies, where low unit costs are also a key competitive factor.

Tesla has utilized its reputation in the industry as a strength and has struck deals with other strong companies to form agreeable partnerships. In June 2014, the company announced a partnership with Panasonic that involved the production of lithium ion cells inside the facility for inclusion in Tesla 's battery packs. In April 2014, China Unicom (Tesla 's first retail partner) agreed to install charging stations for Tesla 's EVs at hundreds of retail outlets nationwide. As a part of the agreement, Tesla will provide charging points for installation at 400 China Unicom retail outlets in 120 cities; China Unicom will provide


References: "Electric Cars: BMW versus Tesla." Financial Times. Pearson PLC, 18 July 2014. Web. 25 Sept. 2014. <http://www.ft.com/cms/s/3/980f3c54-0c1c-11e4-a096-00144feabdc0.html?siteedition=uk#axzz3DzmcXhDp>. Hirsh, Evan, Steve Headlund, and Mark Schweizer. "Reality Is Perception: The Truth about Car Brands." Strategy+business. N.p., Fall 2003. Web. 22 Sept. 2014. http://www.strategy-business.com/article/03302?pg=all Loveday, Eric Mitchell, Tom. "Tesla Strikes Deal with China Unicom to Build Charging Network." Financial Times. Pearson PLC, 29 Aug. 2014. Web. 25 Sept. 2014. <http://www.ft.com/cms/s/0/594063da-2f63-11e4-83e4-00144feabdc0.html#axzz3DzmcXhDp>. Musk, Elon. "The Secret Tesla Motors Master Plan (just between You and Me)." Tesla Motors, 2 Aug. 2006. Web. 22 Sept. 2014. http://www.teslamotors.com/fr_CH/blog/secret-tesla-motors-master-plan-just-between-you-and-me Platt, Eric Sanchez, Karla, and Jason Udy. "Top 20 Best-selling Vehicles of 2014, so Far."MSN Autos. Motor Trend, Spring 2014. Web. 22 Sept. 2014. http://editorial.autos.msn.com/top-20-best-selling-vehicles-of-2014-so-far#7 "Tesla: High times." Financial Times "Tesla: Room to Vroom?" Financial Times. Pearson PLC, 1 Aug. 2014. Web. 25 Sept. 2014. <http://www.ft.com/cms/s/3/c401947c-1911-11e4-80da-00144feabdc0.html#axzz3DzmcXhDp>. Waters, Richard. "Tesla Plans Massive China Expansion." Financial Times. Pearson PLC, 31 July 2014. Web. 25 Sept. 2014. <http://www.ft.com/cms/s/0/aec36734-18f3-11e4-80da-00144feabdc0.html#axzz3DzmcXhDp>. Waters, Richard. "Tesla to Gamble on Nevada Electric Car Plant." Financial Times. Pearson PLC, 3 Sept. 2014. Web. 25 Sept. 2014. <http://www.ft.com/cms/s/0/7236bd5c-33a6-11e4-ba62-00144feabdc0.html?siteedition=uk#axzz3DzmcXhDp>. Yahoo Finance. Industry Center - Auto Manufacturers - Major. Web accessed September 22, 2014. http://biz.yahoo.com/ic/330_cl_pub.html C:UsersJeanetteDocumentsPepperdineOTMT 670Team ProjectOTMT 670 Organizational Analysis Paper_V.2.docx 2ii
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