1.1 Task 1: Strategic Planning at Tesla Motors, Inc.
Case description:
In 2003, a group of engineers in Silicon Valley launched Tesla Motors with the vision to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles (EV). Driven by the chairman and CEO of Tesla, Elon Musk, this vision became reality in 2008 by introducing the Roadster, a car capable of traveling 245 miles on a single battery charge, along with a 0-60 time of 3.7 seconds. The next milestone in Tesla’s history was the development of the Model S, an electric luxury sedan car which was released in 2012 and became the best-selling plug-in electric car in 2015 and 2016. While the Model S and the Model X, which were introduced in 2015, cover the upper price segment, Tesla launched the Model 3 in 2017 at a base price of US$ 35,000 with the value proposition to release the most-affordable wide-range EV ever into the market.
According to Statista, Tesla Motors has become the most valuable car company by 2020 with a market capitalization of US$ 185 bn., followed by Toyota with US$ 176 bn. and Volkswagen with US$ 77 bn. Tesla is also market lead-er in sales of electric vehicles with 367,820 units sold in 2019, followed by the two Chinese car manufactures BYD with 229,606 EV units sold and SAIC with 160,251 EV units sold.
It is indeed remarkable for a company which has started business just a bit more than a decade ago to have achieved this market position. Led by its vision to be the most compelling car company of the 21st century, Tesla’s success is due to careful and long-term strategic planning. As for every successful enterprise, the strategy of a company aims at creating a unique and valuable position in the market place. The strategic challenge for Tesla lies in sustaining its competitive advantage on the electric vehicle market and confirming its position as a trans- formational leader in the usage of sustainable energy.
Your Task:
In order to successfully manage this strategic challenge, Elon Musk assigns you as a member of his “Going For- ward Future“ team. It is your task to develop the strategic plan for Tesla for the next five years. First, Elon Musk wants you to apply the Strategic Planning Process which needs to include an external analysis of Tesla ́s business environment (PESTEL Analysis and Five-Forces Analysis) as well as an internal analysis of Tesla ́s capabilities and resources (Value Chain Analysis). Second, based on a SWOT Analysis, you need to conduct the strategy formulation with strategic options. Third, Elon Musk expects you to suggest – backed by sound arguments – the most convincing strategy for Tesla to maintain and strengthen its position as the most compelling car company of the 21st century.
