Innovation and Competitive Analysis
Tesla Motors is an automobile company that deals with the production of different types of cars as well as their products. This industry is flocked with other companies which provide stiff competition for Tesla Motors. As a result of this issue, there is a need to undertake a competitive analysis of the company’s industry. The framework that will be selected to perform the company analysis is the Porters Five Forces of Competition. The first element in the Porters Five Forces of Competition is completion (Rothaermel 2015). Tesla Inc. operates within a competitive industry because there are large automobile companies that are aggressive especially when undertaking their marketing campaigns. Therefore, Tesla has to put in strategies that will enable it to meet this level of aggressiveness. The second factor in the Porters Five Forces of Competition is the Bargaining Power of the Consumers (Rothaermel 2015). The bargaining power of Tesla customers is high because other companies produce motor vehicles. When their needs are not met, they can easily switch to other companies. Therefore, Tesla has to make sure that these customer’s needs are met. The bargaining power of Tesla Suppliers is the third element under Porter’s five forces of competition (Rothaermel 2015). Tesla has different suppliers who provide the raw materials that are used for developing their products. Therefore, in the event one of the suppliers fail to deliver the raw materials, there are others who will be used. This approach ensures that the company continues operating and is not affected when one supplier fails. The other element is the threat of substitutes. The threat of substitutes means that other companies provide the same product which may attract the customers. The last issue the Porters Five Forces is the threat of new entrant. The automobile industry is continuing to grow (Rothaermel 2015). This growth means that there is a possibility of new companies to be developed in the future. Therefore, Tesla Motors has to develop the strategies that will ensure it maintains its competitive advantage even when there are new entrants in the market.
There are various innovations and technological trends that have been introduced into the company. One of these trends is back up cameras which helps the driver to reverse without turning back (Rajashekara 2013). This trend is likely to be adopted by various motor vehicle industry because most of them want to enhance comfort for the driver. One way that comfort can be enhanced is through these cameras so that the driver does not strain while looking back. The other innovative and technological trend is the development of autonomous vehicles (Akakpo et al. 2019). The autonomous vehicles are self-driven, and they operate based on the sensors, cameras, laser scanners, and EPS Motor and brake actuators. This trend has excited many customers, and various companies which are the competitors of Tesla are considering to implement it. Therefore, the expected market trend is that there will be an increase in the production of self-driven cars.
Over recent years, Tesla Inc. has managed to show an improvement in its development. The current company situation has enhanced the development of Tesla motors. An example of the existing company situation is the resources (Stringham, & Miller 2015). The company is well equipped with different resources that it receives from various suppliers. The steady supply of these resources has enabled the continuous production of quality products that have managed to meet the needs of the consumer in the market. The other current situation that has helped in the recent development of the company is its capabilities. The capability of Tesla motors is that it mainly majors on the production of electric cars which is unique from its competitors (Kessler 2015). This factor has given the company an advantage because it has managed to gain a large market. The large market has helped the company to gain a high revenue which has been a significant factor in its development. The other current situation that has been significant for Tesla motors is the workforce. Tesla Company has employed qualified and skillful employees who can undertake various duties well to help in improving the productivity of the company.
The organization structure that is being used by Tesla motors is divisional. In this case, the organization structure of Tesla Company has been classified into various parts such as the HR, Legal, and Finance, energy, production, engineering, software and sales (Moritz, Redlich, & Krenz 2015). A vice president heads each of these departments. This organizational structure has been significant to the company because it has supported the ability to be innovative and become a successful company in various ways. One way that this issue has been made possible is that every department focuses on the different roles and has its leader. This aspect has given these departments the ability to focus on their task and come up with ways on how they can improve their services. As a result, most departments have come up with innovations that have been used to develop quality products which have led to the success of the company.
References
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming barriers to entry in an industry: Tesla Motors. California Management Review, 57(4), 85-103. Retrieved from: https://journals.sagepub.com/doi/abs/10.1525/cmr.2015.57.4.85
Rajashekara, K. (2013). Current status and future trends in electric vehicle propulsion technologies. IEEE Journal of Emerging and Selected Topics in Power Electronics, 1(1), 3-10. Retrieved from: https://ieeexplore.ieee.org/abstract/document/6507304/
Akakpo, A., Gyasi, E. A., Oduro, B., & Akpabot, S. (2019). Foresight, policies and management strategies in electric vehicle technology advance at Tesla. In Futures Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham. Retrieved from: https://link.springer.com/chapter/10.1007/978-3-319-94923-9_3
Kessler, A. M. (2015). Elon Musk says self-driving Tesla cars will be in the US by summer. The New York Times, B1. Retrieved from: http://www.oharas.com/ET/elonmusk.pdf
Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S., & Wulfsberg, J. P. (2015, August). Tesla Motors, Inc.: Pioneer towards an approach in the automobile industry along with the open source movement? In 2015 Portland International Conference on Management of Engineering and Technology (pigment) (pp. 85-92). IEEE. Retrieved from: https://ieeexplore.ieee.org/abstract/document/7273032/