Tesla automotive company
Introduction
Tesla is an American based automotive company with its headquartering in Palo Alto, California. The company, Tesla, falls under the automotive industry, and it is specialized in the production of electric vehicles. Tesla is the American first automotive company to go public in 2010 when it displayed its shares within the security market (Vynakov, Savolova, and Skrynnyk, 2016). Based on its improved innovation that has been enhanced by the introduction of digital technology, the company has managed to come up with unique products, electric vehicles, thereby giving it some competitive advantages within the industry.
Market Analysis
Based on the nature of every business organization, Tesla organization general operation is also affected by various factors that tend to influence its general performance within the market. These factors can be classified as political, economic, social, technological, environmental, and legal factors.
Political Factors
The political environment of the United States, the origin country of the company, is much favorable for the business, given the fact that the country is politically stable. Political stability is a significant environmental factor that does impact various industries in many ways; for example, an unstable political environment with frequent demonstrations and corruption is always hindering the successful performance of the company. Apart from the US, Tesla Inc. operates in more than a dozen countries; hence it is exposed to different political environments. Other political factors that also affect the company within the origin country include the rate of tax on the products, electric vehicles, wage legislation, which emphasize higher pay for its employees regardless of the business performance. The federal government has encouraged consumption of the company product by offering a tax credit of up to $7,500 for people who buy electric cars (Krüger, 2017).
Economic Factor
The organization, Tesla, is also affected by certain economic factors that have an impact on its general performance. One of the significant economic factors that have a high impact on the general performance of the company is global economic growth. The overall economic growth, which currently stands at 3%, has enhanced a higher demand for electric vehicles; for example, in 2018, their market was at $39.8 billion. Based on the stable increase in demand of the product, that amount is expected to increase by up to $1.5 trillion by 2015 (Krüger, 2017). Additionally, another economic factor is the decrease in battery cost. The battery is one of the essential materials in the manufacture of the vehicles; based on this; a reduction in its price enhances a decrease in the cost of production hence leading to a general reduction in price of the vehicles. Foreign exchange rate is also another factor which majorly affects its foreign market. An increase in the exchange rate of the individual country’s currency to American dollar makes the vehicles more expensive hence affecting its general performance within the market.
Social Factors
General performance of Tesla within the market is also affected by certain social factors, for example, class structure or social status. People are always being judge by what they have or what they own, based on this, most people will probably be judged on the kind of car that they drive. Being a modern digital car, it will definitely attract many consumers who will prefer to be identified above other car users (Zhang, and Wang, 2019). Additionally, the electric cars are less expensive than other ordinary cars in terms of maintenance and running cost. They rarely experience breakdown and also, their spare parts are not that expensive, due to this, it becomes more favourable to the consumers.
Environmental factors
Environmental factors offer Tesla major competitive opportunity since it produces environment friendly vehicles which are in compliance to the general environmental regulations. The electronic vehicles are environment friendly in the sense that there is no carbon emission while they operate or move, this reduced environment pollution through air. They use electricity for their operation instead of burning various fuel products which makes the normal vehicles to pollute the environment.
Additionally, the company has well and strong brand image which is largely recognized by all leaders within the industry and the community. Based on this, the company has managed to build a good reputation within the society thereby making it to have an efficient supply chain (Zhang, and Wang, 2019).
Technology
The company, Tesla, enjoys the use technology that it has applied in enhancing its innovation towards its products. Technology can impact the company’s macro-environment or performance in appositive way or negative way. Tesla’s opportunity and threats can be determined by technological changes. For example, through technology, Tesla is able to effectively manage its competitive edge within the market. Additionally, it also applies technology in enhancing its product portfolio (Zhang, and Wang, 2019).
Analysis of the competitors of the selected car
Under automotive industry in which Tesla falls, there is high or stiff competative among various players or organizations within the country and even from other major companies outside the country. In United State, there are four major automovive compoanies with large market share and which are also the major cmpetitors of Tesla. They include, Ford Motors, Paccar Inc., and Fiat Chrysler Automobiles.
Ford Motors
It is one of the American multinational automaker with its headquater in Dearborn, Michigan.
In terms of strength, Ford has good a global recognition whereby its brand is well recognized in the global market. This has been enhanced by its effective m,arketing strategies. Additionally, the compoany’s research and development is also one of its main strength since through that, it do come up with new prodcuts that performs well within the market. The company produces variwety of products that meets the requirement and preference of differnt consumers.
In relation to its weaknesses, it always suffers a huge loss due to product recall. Additionally, due to its large diversity in terms of operations, it lack focus in performance and productivity. Lasty, the compoany,Ford has poor reputation compared to other companies within the country and abroad
Fiat Chrysler Automobiles
Fiat Chrysler Automobiles is an international company with its headquater in Auburn Hills, Michigan. In terms of strength, the comoany has got a strong brand and broad portfolio. Additionally, it has a strong fincnail base compared to other companies within the industry. It has an effective global sales and distribution network and lastly, the comoany has strongly invested in research and development.
The compoany also has some weaknesses, for example, it expereinces huge fiancail losses through prodcut recallsa and also, it has got no captive fiancial arm.
Paccar Inc
Paccar is an American company that deals in the manufacture of medium and heavy commercial vehicles. It has its headquater in Bellevue Washington. In relation to its strength, the company has a renowned brand name that has been achieved through extensive marketing activity. Addtiionally, it is highly skilled in IT innovation that assit it in meeting the changing market needs. In terms of weakness, the compoany has high debt level and is also affecdted with high rate of tax.
Build a SWOT analysis
Tesla is an automotive company which is largely known for its modern innovation based on the digital technology. It has managed to come up with environmentally friendly electric vehicles that have made it to gain much popularity within the market with less marketing activities. Its brand has gain a global reputation through its innovative model. However, apart from the numerous competitive advantages that the company is enjoying within the market, it also experiences specific weaknesses and threats, as analyzed in the SWOT below.
Strength
- The company, Tesla Inc. has got a strong well-recognized brand
- The company’s sustainable model is one of its min strength
- The company’s supercharger network is also another strength since it enhances widespread adoption of the organizational products
- Constant global growth of Tesla vehicles in terms of sales is also another strong
- The company has got a well-knowledgeable engineer in terms of technology
Weaknesses
- The cost of Tesla vehicles are high compared to other ordinary ones
- The company’s sales activities are limited to its supercharge network, so without the growth of the supercharge network, the sales can also not grow
- The company is within a highly competitive industry
- The company experiences high production and operational cost.
Opportunities
- The company is the advantage of the increasing demand for sustainable products
- The efficient supply chain and maintenance network within the Asian countries like China, and Indian markets
- The company’s favorable prices to the middle class are also an opportunity. In the 21st century, the rate of growth into the middle class has been experienced globally, thereby cleating convenient market opportunities for international brands like Tesla.
Threats
- Tesla is facing stiff competition from other reliable brands like Ram, Ford, Lincoln, Cadillac and even Dodge of which some are luxury or even environment-friendly brand
- Numerous legal and regulatory troubles can be costly, thereby might affect the company’s total return on investment.