Tesla bcg matrix

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Tesla bcg matrix

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It was developed by the Boston Consulting Group in Dogsfound in the lower right quadrant of the grid, don't generate much cash for the company since they have low market share and little to no growth. Because of this, dogs can turn out to be cash traps, tying up company funds for long periods of time. For this reason, they are prime candidates for divestiture. Cash cows, seen in the lower left quadrant, are typically leading products in markets that are mature.

Generally, these products generate returns that are higher than the market's growth rate and sustain itself from a cash flow perspective. These products should be taken advantage of for as long as possible. The value of cash cows can be easily calculated since their cash flow patterns are highly predictable. The matrix is not a predictive tool; it takes into account neither new, disruptive products entering the market nor rapid shifts in consumer demand.

In the upper left quadrant are stars, which generate high income but also consume large amounts of company cash. If a star can remain a market leader, it eventually becomes a cash cow when the market's overall growth rate declines. Questionable opportunities are those in high growth rate markets but in which the company does not maintain a large market share.

Question marks are in the upper right portion of the grid. They typically grow fast but consume large amounts of company resources. Products in this quadrant should be analyzed frequently and closely to see if they are worth maintaining. The matrix is a decision-making tool, and it does not necessarily take into account all the factors that a business ultimately must face. For example, increasing market share may be more expensive than the additional revenue gain from new sales.

Because product development may take years, businesses must plan for contingencies carefully. Mutual Funds. Portfolio Management. Corporate Finance. Alternative Investments. Your Money. Personal Finance. Your Practice.Tesla Inc. Tesla was named after Nikola Teslawho was a very successful inventor and scientist of his time. He had remarkable achievements in Radio technology and electrical engineering of Serbian descent.

Tesla, Inc. It is famous for its innovative approach in the market because of its dominant position worldwide. Tesla has emerged as one of the most discussed and analyzed companies among business enthusiasts. This SWOT analysis of the very organization will reveal all the significant insights regarding every factor of Tesla business model.

Moreover, the overall results of this analysis also include strategic reforms in light of all the SWOT factors, i. Any organization is as good as it employs. In the case of Tesla Inc. Wall Street Journal reports that Tesla has emerged as an ideal company for employees due to its diversity and innovation-encouraging culture.

It has recently been listed as one of the ideal places to work, attracting young jobseekers with fresh talents and energy. It has become a leading automotive brand fordeliveringvehicles. Thanks to its unparalleled advancement in innovation and luxury simultaneously, the company has left behind some very exclusive automobile brands like Mercedes and BMW.

Tesla has left behind every other brand in the race of the finest electric cars. The recent comparison shows that Tesla occupies the top three places in terms of range. The Tesla Model S will get you the furthest — traveling up to kilometers on a single battery charge. The nearest another brand has got is the Opel Ampera, with a range of kilometers. According to Statista, Tesla model 3 is the most sold electric vehicle of with a sales number ofOn the second position, Chevrolet Volt stands, withcars sold.

Where Tesla model S is again on the third position with a close call, havingcars sold. In short, Tesla is topping the electric car sales chart. Tesla has launched a comprehensive insurance program for its vehicles in association with Liberty Mutual insurance company called as InsureMyTesla. Therefore, the market trust and expects the company to develop competitive and profitable products which of course leads to substantial financial gains.

All the internal factors in a company which causes any damage or bounds performance evaluation are identified weaknesses in the SWOT Analysis. The higher standard of innovationthe greater will be mechanical complications and production risk factor.

Tesla faces continuous launch, manufacturing and production ramp delays while launching their new vehicles and other products.

For example, Tesla faced endless manufacturing challenges when they were about to launch Model X, which lead to constant delays for distribution. In fact, their delivery rate in the first quarter of is quite alarming. There is no doubt that Tesla is the pioneer of actual energy-saving cars.

But it has failed to produce high volumes of automobiles for any of its models. Even now, as the company plans to manufacture Model 3 vehicles at high volume, it faces issues in terms of production cost and management resources and space expansion in Gigafactory 1.

In the annual shareholder meetings, CEO Elon Musk accepted that their production rate has decreased due to the limited supply of batteries. The shortage directly affected the sales of electric vehicles and energy storage systems.

Musk is also deeply involved in other projects like space launch vehicles at Space Exploration Technologies Corporation and The Boring Company. The opportunity section of this SWOT Analysis emphasizes the emerging chances of growth for the company. It is an external factor which, when identified, can help Tesla to improve its business performance, management structure, and strategic growth and other aspects.

The most significant opportunity for the company right now is the Asian market, which is still unsaturated in the field of automotive and renewable energy markets.High product differentiation — electric power train technology: Tesla Inc. The powertrain consists of battery pack, power electronics, software, motor, gearbox and control software. Related diversification in product portfolio — powerpack applications: Tesla harnessed its competence in electric power systems and has started to develop powerpack application products meant for domestic homes incommercial purposes and utilities since in blocks of Kwh to offer up to 10Mwh.

These applications are used for electric market services, power-backup, load shifting etc. Coupled with improved sales, Tesla has integrated and diversified marketing policies aimed at increasing consumer satisfaction. Integrated battery manufacturing at Gigafactory: Tesla is building up a new facility — Gigafactory at Nevada which will integrate the battery manufacturing process which is currently dispersed across various regions.

Initiatives taken by national and state governments to encourage manufacturing and sale of electric vehicles: There have been a lot of initiatives taken by the government to support innovation in developing hybrid engines and electric driven powertrain.

Improvement in global economy coupled with rise in sales of electric vehicles: Due to improving factors of production, growth of world economy is expected 3. US economy is expected to rise by 2. This backed by political stability in major economies has led to increased investment into electric powertrain development. Development of countries has also seen better wealth distribution among its countrymen and improving inclusion of people in the mainstream sources of income which has led to affordability of technologically advanced green technologies.

You can use the following in your reference section in order to give credit to the source. For different referencing styles and detailed guidelines, please click here. Tesla Inc. Copyright of Tesla Inc. Please refer to the Terms and Conditions and Disclaimer for usage guidelines. View All. Need Strategic Analysis for this company?

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BCG Matrix and VRIO Framework for Tesla Motors

We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals.The automotive services are the cash cow of Tesla because it is generating the most profit and revenue between the two SBUs, and consumes most the share earning within the company. The energy generation and storage segment of Tesla are the problem child because it makes up a small share of earnings and will require more resources and strategic initiatives to help grow this SBU.

Therefore, the automotive operations are the more profitable business unit when compared to it lesser performing SBU energy generation and storage. Tesla life cycle is between the initial and growth stage since the development of electric cars is becoming more mainstream. Tesla currently manufactures three models which are the X, S and 3 type that vary in size from compact to medium sized vehicles. In the future, as growth for the company continues larger cars like SUV and minivans will be developed.

Also, as the demand for electric vehicles increases to help mitigate air pollution and waste, more automobile companies will pursue the technology advancements of producing electrically operated vehicles. Therefore, to help prevent adverse effects from the mature development of electric motor vehicle in the automobile industry, Tesla will have to employ techniques like mass production of a various model to fit the needs of all consumers and find a way to expand their customer base by offering a reasonably priced vehicle.

The overall objective is to adapt to the market and keep profits high as possible. The automotive industry is a very competitive market which requires multiple strategic initiatives to help entice consumers and maximize profits. Tesla is the smaller company that specializes in making high-end electric motor vehicles by providing an alternative to standard gasoline fuel. With the rise of cars being environmentally healthy and minimizing pollution, Tesla will be a competitive force to be reckoned with in a competitive automobile industry consumed by gasoline operated vehicles.

Automobile companies are always going to challenge each other for sustaining success by holding a majority of the market, high profits, and maintaining a huge consumers base by offering what people desire McMullen, In the case of Tesla, the company offers a high quality, sporty, cutting edge, electric propelled a motor vehicle, and depending on the demand by consumers this niche automaker could become a force in a large automobile industry that has both Honda and Toyota to compete against for electrical car dominance.

Tesla does participate in a niche market, by offering an electric vehicle that is high priced aimed at targeting high-end users. Therefore, Tesla is providing a specific high-quality vehicle, to a particular demographic, which directly impacts bargaining power for buyers.

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Tesla vehicles are made up of very savvy technology, which is driven by research and development of significant technological parts, which too can impact bargaining power of suppliers. Although other automobile companies such as Honda and Toyota offer electric hybrid vehicles, a majority of Tesla car are customized and made to order.

Therefore, Tesla affords its consumers the opportunity to get the vehicle they went at the point of purchase vice having to search for the electric car they want. Tesla is a smaller company that specializes in making high-end electric motor vehicles by providing an alternative power source rather than the standard gasoline fuel. With the rise of cars being environmentally healthy and minimizing pollution, Tesla is a competitive force to be reckoned with in a competitive automobile industry consumed by gasoline operated vehicles, and the completion being Honda and Toyota which offer hybrid vehicle ran off both electricity and gas.

The competitive profile matrix was based on evaluating critical success factors of Tesla, the Ford Motor Company, and Toyota. The most critical factors for success for all three automobile companies are advertisement, customer service, brand value, economic profit, customer loyalty, and quality.

Tesla is a young car company in the United States, but it lagged in competitive profiling with a total score of Then customer loyalty is high as well since most of the consumers come from a particular economic demographic that shows continued support for the Tesla brand.

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Tesla rating for price competitiveness is low since the vehicle is marketed with a high price tag not competing against the standard models of both Ford and Toyota. Both Ford and Toyota earned modest profits per shareholder equity with both ratios being greater than 1 in The net gain for all competitors was very similar because all competitors were below the ratio, which an indication that a trend is happening within the automobile industry for all three competitors at.

There are multiple strategies that Tesla can utilize to help stimulate and sustain growth. A strategic concept can either hinge on previous initiatives or look for alternate innovative ways to increase growth.

Below are the follow strategic alternatives that can be used. Stability strategy is employed for companies that are not looking to expand or introduce new items into a separate market.

The is strategic alternative could be perfect for Tesla because sustainable and continued growth is important for a new company.

Stability strategy will help Tesla focus on improving technology and quality of existing vehicles in the market not necessarily hindering growth by not expanding. Some disadvantages could be.

The expansion strategy can be employed by Tesla to help determine other ways to break into other markets and raise their strategic competitive advantage. Tesla can utilize expansion to help increase growth and mitigate a rapid decline by not expanding and adapting to the market demand and growing market share and using resources.

Some advantages of expansion:. DeShazo, J.Related Expertise: Automotive. Moreover, it could well mark the day that electric vehicles went from being niche to mainstream products.

If Tesla can ramp up production to meet this demand, which has far exceeded industry expectations, it could emerge as the leader in EVs. It could have around 1 million cars on the road by Indeed, Tesla could be on its way to disrupting the entire automotive industry. But even if some Model 3 customers have to wait longer than they want for their cars, the intense excitement generated by the new vehicle has already shaken up the industry.

Tesla also exercises a high degree of control over key components. The Driver Experience. Is the paint job flawless? Is the upholstery perfectly trimmed? For example, the navigation system and all controls are displayed on a inch digital touchscreen that resembles the user interface of a smartphone. By tapping the screen, the driver controls the state-of the-art entertainment system, adjusts heating and air conditioning, modulates energy use, raises and lowers the suspension system, opens the garage door, and browses the internet.

The Model S also offers one of the best ultra-high-fidelity sound systems on the market. In short, Tesla created a vehicle that is loved by its owners, as evidenced by its high ratings in customer surveys. Success at the High End First. It has wowed owners with its remarkable acceleration and impressive handling, given the added weight of its batteries.

Software Expertise. In part because of its Silicon Valley upbringing, Tesla was, from day one, built as a company with a core strength in software design.

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Software developers account for a much larger share of the workforce at Tesla than at other OEMs. Tesla develops not only most of the on-board software itself but also such key electronic components as circuit boards—tasks that other OEMs typically outsource.

It has also allowed Tesla to remain at the forefront of some of the most disruptive technologies being introduced. One advanced Tesla feature, for example, is the over-the-air software update. In OctoberTesla took this capability further than any other automaker by becoming the first to launch a large-scale, online update; the new autopilot feature steers cars on the highway and assists with lane changes. So far, other car makers have shied away from attempting remote updates of critical driving functions.

Direct Marketing. They sell their vehicles through licensed dealerships that also offer financing and after-sales services. In fact, around half the states in the US prohibit direct sales by manufacturers. In the states where it is allowed, Tesla sells directly to consumers through its showrooms—generally in downtown locations—and online.

Control over Critical Components. Tesla is the only major automaker that has invested heavily in production capacity for lithium-ion cells and batteries—the most important components of an electric vehicle. Investments in Charging Infrastructure. Tesla has invested heavily to build a network of more than charging stations along key routes in the US and Western Europe to supplement public charging stations—a move that most other automakers have avoided.

At the very least, other OEMs should acknowledge that their industry might be on the brink of disruptive change. If Tesla establishes itself as the Apple of EVs, catching up will be difficult.

BCG Matrix and VRIO Framework for Tesla Motors

Nevertheless, incumbent OEMs still have many strengths that will take Tesla time to master. They have long experience in mass production, the capability to ramp up quickly, a core strength in precision engineering, and sound records of safety and reliability. Their extensive dealership and service networks also give incumbents a far greater geographical reach in distribution, after-sales service, and long-held customer relationships.

So what should incumbent OEMs do now that Tesla is riding up against their bumpers? How well positioned are our EV programs against those of Tesla?We are all in quarantine: but our services are available! Keep yourself safe by staying at your home and let us work on your assignment. Do not have a account? Sign Up here. Tesla Motors should develop unique product design, name and features to stand out in the competitive market.

tesla bcg matrix

Following factors should be considered to develop the product strategy- quality, variety, features, packaging, brand name and augmented services. This Marketing Strategy element requires an evaluation of the value of products for targeted customers. The pricing strategy of the Tesla Motors will focus on setting the list price, credit terms, payment period and discounts.

This Marketing Strategy element requires Tesla Motors to make some important decisions when developing its distribution plan. It should decide:.

tesla bcg matrix

This is one of the most important elements of Tesla Motors Marketing Strategy. Tesla Motors can blend above and below the line promotional strategies to achieve its marketing objectives. The above the line promotion options for Tesla Motors are- television, radio and print advertising.

Below the line promotion options are- catalogues, tradeshows and direct mail campaigns.

Case Study On Apple - BCG Matrix - Dr Vivek Bindra

The promotional plan of Tesla Motors Marketing Strategy requires the company to consider the following factors:. The strategies will be more effective if the company understands the needs, expectations and attitude of its customers. The detailed analysis leads towards the identification of different customer profiles or segments as explained in detail in the next section.

The customer analysis and development of segmentation strategies run in parallel.

tesla bcg matrix

Tesla Motors can use the information obtained from the customer analysis to develop the segmentation, targeting and positioning strategies as discussed below:. The development of Tesla Motors Marketing Strategy requires identifying segmentation basis to understand the specific buying behaviour of customers. The needs, expectations and buying behaviour of customers are heterogeneous and depend on multifaceted factors- like:.

By using the segmentation technique, Tesla Motors can narrow down the large, diversified target audience into specific and narrowly defined groups. Market segmentation surveys are common methods of obtaining the customer-specific information that could be used to create groups sharing common characteristics. After understanding the unique buying behaviour of customers and getting the required information through surveys, Tesla Motors can divide the market into small homogeneous groups.In this pandemic: We are here to serve you!

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Sign Up here. The BCG matrix is a strategic management tool that was created by the Boston Consulting Group, which helps in analysing the position of a strategic business unit and the potential it has to offer. The matrix consists of 4 classifications that are based on two dimensions. These first of these dimensions is the industry or market growth.

The other of these dimensions is the relative market share of the strategic business unit. Strategic business units are placed in one of these 4 classifications.

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The BCG matrix for Tesla Motors will help decide on the strategies that can be implemented for its strategic business units. Strategic business units with high market growth rate and high relative market share are called stars. Businesses should invest in their stars and can implement vertical integration, market penetration, product development, market development, and horizontal integration strategies. Strategic business units with high market growth rate and low relative market share are called question marks.

tesla bcg matrix

These strategic business units require close considerations whether the business should continue with them or divest. Strategic business units with low market growth rate but with high relative market share are called cash cows. The business should invest in these to maintain their relative market share. Lastly, the strategic business units with low market growth rate and low relative market share are called dogs.

The business should divest these strategic business units. Some of the strategic business units identified in the BCG matrix for Tesla Motors have the potential of changing from their current classification.

For example, a dog changing to a cash cow. These have been identified in the BCG matrix of Tesla Motors and recommended strategies to ensure such change have also been made.

It helps identify which one of its internal strengths and resources can be a source of sustained competitive advantage. The VRIO analysis requires looking at a firm's resources based on these 4 factors. Based on the analysis, each resource can either provide a sustained competitive advantage, has a good competitive advantage, temporary competitive advantage, competitive parity or competitive disadvantage.

A sustained competitive advantage exists when a resource is valuable, rare, non-imitable and organised. A good competitive advantage occurs if it is valuable, rare, and non-imitable.

A temporary competitive advantage exists if it is valuable and rare. A competitive parity occurs if it is only valuable.

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Lastly, the resource is a competitive disadvantage if it is neither of the 4. The analysis takes place in this order by first assessing whether a resource is valuable, rare, imitable and organised.

Barney, J. Firm resources and sustained competitive advantage. Journal of management, 17 1


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