Introduction of Tesla

Introduction of TESLA Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tiles, as well as other related products and services. In 2020, Tesla had the highest sales in the plug-in and battery electric passenger car segments, capturing 16% of the plug-in market (which includes plug-in hybrids) and 23% of the battery-electric (purely electric) market. Through its subsidiary Tesla Energy, the company develops and is a major installer of solar photovoltaic energy generation systems in the United States. Tesla Energy is also one of the largest global suppliers of battery energy storage systems, with 3 GWh of battery storage supplied in 2020. Founded in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors, the company's name is a tribute to inventor and electrical engineer Nikola Tesla. Elon Musk, who contributed most of the funding in the early days, has served as CEO since 2008. According to Musk, the purpose of Tesla is to help expedite the move to sustainable transport and energy, obtained through electric vehicles and solar power. Tesla began production of their first car model, the Roadster, in 2009. This was followed by the Model S sedan in 2012, the Model X SUV in 2015, the higher volume Model 3 sedan in 2017, and the Model Y crossover in 2020. The Model 3 is the world's all-time best-selling plug-in electric car, with more than 800,000 delivered through December 2020. Tesla's global vehicle sales were 499,550 units in 2020, a 35.8% increase over the previous year. In 2020, the company surpassed the 1 million mark of electric cars produced. Tesla has been the subject of numerous lawsuits and controversies arising from statements and acts of CEO Elon Musk, allegations of creative accounting, allegations of whistleblower retaliation, alleged worker rights violations, and allegedly unresolved and dangerous technical problems with their products. Hierarchy Of TESLA Tesla Tagline To accelerate the advent of sustainable transport and electric technology Tesla Logo Slogan Of TESLA “RIDE FREE” Human Resource Management Of TESLA Tesla Motors Inc. is a Silicon Valley-based company that designs, manufactures and sells electric vehicles (EVs) and electric vehicle powertrain components. It is currently the only automaker building and selling a zero-emission sports car in serial production (as opposed to prototype or evaluation series production). Tesla is also deep into the engineering and production development of a zero-emission premium sedan, the Model S, which will be built in Fremont, California. Tesla also sells its electric powertrain components to other automakers, including Daimler and Toyota These two models are the most commonly use HRM models in businesses today aside from other models that has been theorized and formulated by some academics. Based on the definitions and explanation of each model, it can be concluded that the soft model is more advisable to be practiced by industries within the service sector while the manufacturing sector would be better to use the Michigan Model of HRM for increased production. Importance and Purpose of Tesla Tesla's mission is to accelerate the world's transition to sustainable energy. Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn't need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. Performance Management At Tesla Like most organizations of Tesla's size and influence, its performance management system is somewhat of a mystery. But if you know how to read between the lines, there are some interesting strands to follow. For starters, it seems that the performance management culture has changed quite dramatically over the last few years as the company has grown. From employee development to stack ranking Back in 2016, when Juliana Bednarski was HR Business Partner and Louis Efron was Head of Global Employee Engagement, the picture looked quite different. In a presentation for Talent Week, Bednarski and Efron outlined Tesla’s dynamic approach to leveraging the best talent. They recognized the importance of engaged employees and their impact on customer engagement. In response, they created the Tesla360 Summary. This was essentially a staff survey that used the Maslow Hierarchy of Needs to guide performance management. The survey was a massive success and achieved an impressive 91% participation rate. So it's strange that during the tenure of Gaby Toledano, the Chief People Officer who left late last year, Tesla appears to have embraced an entirely different approach. Details are thin, but it seems that they've gone back to using a traditional annual review to determine promotions, demotions and firings. That's a stark switch up from their previous engagement-focused approach aimed at helping employees reach the top of the self-actualization pyramid. Changing priorities, changing process In an email statement submitted to Fortune, a Tesla spokesperson confirmed that performance reviews happen annually and employees meet with managers to discuss their achievements over the past 12 months. As a result, top performers are rewarded with compensation, equity awards or promotions. And we saw what happens to the low performers. Not much to go on there. But it's clear that Tesla is driving hard to deliver what former employee, Spencer Gore (now CEO of Impossible Aerospace) describes as “industry-defining product on a limited budget." And, to deliver on such a promise, Tesla needs to run a manufacturing operation that is lean and mean. With Tesla’s formidable production goals, it might make good business sense to remedy the bottlenecks as firmly and swiftly as possible. And if that's the goal, what could be more effective than the good old rank and yank approach? But to be fair, even the grandfather of rank and yank performance management, Jack Welch would say that this is approach is as much about employee growth as it is about assessment. And it is possible that Tesla's current performance management framework somehow marries the two. But with the layoffs still hot off the press, it may be awhile before they start opening up about their latest performance strategy. Motivation Tactics Of TESLA Employers are working hard to keep you happy. More content employees are less likely to quit, which saves companies money and helps businesses hold on to top talent, according to a recent study. Tesla and SpaceX CEO Elon Musk does his best to inspire his employees (and keep them from leaving) by motivating them to succeed and by helping them feel like they’re part of a larger team. His tactics make sense financially: Research compiled by company review website Glassdoor shows that businesses invest a lot of money when hiring new employees. On average, it takes HR recruiters 52 days to fill an open position, which is up from 48 days in 2011. How does Musk do it at his companies? He pushes his senior executives to find ways to motivate and inspire their employees through selflessness. Musk suggests that leaders do this by “reducing the noise in their work.” The CEO says if leaders understand the fundamental principles of what they’re trying to do they can avoid “building on faulty ground.” ″We want our leaders to find ways of motivating and inspiring their teams, reduce the noise in their work and help remove blockers,” says Musk to Glassdoor. “If you are a manager or leading at any level at SpaceX, we stress that your team is not there to serve you. You are there to serve your team and help them do the best possible job for the company.” “This applies to me most of all,” he tells Glassdoor. “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours, thus leading by example.” SWOT and Recommendations of TESLA Tesla’s Strengths (Internal Strategic Factors) This aspect of the SWOT Analysis of Tesla Inc. deals with the business strengths that contribute to organizational growth and improvement. Business strengths are internal factors that empower the company to compete against other firms, and to ensure profitability, especially in the long term. For example, the company’s strong brand can support strategic expansion in the global market. In this company analysis case of Tesla, the following strengths shape the capabilities of the business as a competitive player in the automotive industry: 1. Highly innovative processes 2. Strong brand 3. Strong control on production processes Tesla, Inc. is known for its high rate of innovation, especially in introducing the world’s first fully electric sports car. This internal strategic factor is a strength that empowers the company to develop competitive and profitable products. Also considered in this SWOT analysis, the Tesla brand is a strong symbol of innovation and renewable energy solutions, in line with CEO Elon Musk’s business goals. Such a strong brand optimizes the company’s ability to attract and retain new customers. The internal factor of strong control on production processes is based on vertical integration, as well as the centralization and hierarchy in Tesla’s organizational structure. For example, the company manufactures automobiles and many of their components. This factor is a strength that minimizes issues linked to the involvement of third parties. Overall, this aspect of the SWOT analysis of Tesla points to innovation and brand image as major strengths of the company. Tesla’s Weaknesses (Internal Strategic Factors) The internal factors that limit organizational performance are identified in this aspect of the SWOT Analysis. These internal factors are weaknesses that can reduce Tesla’s competitiveness and business growth. In the context of this business analysis, weaknesses are issues that the company must overcome through strategies, reforms, and initiatives. Despite its strong brand as a manufacturer of electric vehicles, Tesla, Inc.’s performance and potential future growth suffer from the following major weaknesses: 1. Limited market presence 2. Limited supply chain 3. High prices Tesla suffers from limited market presence. For example, the company generates most of its revenues in the United States and has a small presence in China and the developing world. This internal strategic factor is a weakness that limits business growth based on the rapid economic development of overseas markets. This SWOT analysis also determines that the company’s limited supply chain is a related weakness that prevents the company from rapidly expanding in such markets. Moreover, Tesla’s products are relatively more expensive than competing cars, especially those that have internal combustion engines. Such high prices prevent the company from rapidly growing its customer base and market share. The weaknesses identified in this SWOT analysis reflect Tesla’s need to reform its strategies related to global expansion and growth. Opportunities for Tesla, Inc. (External Strategic Factors) This aspect of the SWOT Analysis focuses on the external factors that present potential growth and development for the organization. These external factors are opportunities that Tesla can use to improve its business performance, management effectiveness, and strategic growth, among other aspects. For example, the company can expand in the global automobile market to support further business growth. Tesla, Inc. has major opportunities to improve its financial standing and competitiveness in the global automotive and energy markets, as follows: 1. Global sales expansion 2. Global supply chain expansion 3. Business diversification In relation to its weaknesses, Tesla must consider the opportunity for global sales expansion. This opportunity is based on the significant economic growth of countries where the company has insignificant market presence. For example, the company can increase its revenues through expansion in Asian automotive and renewable energy markets. In this SWOT analysis, another opportunity is to expand Tesla’s supply chain to support the global expansion of production and sales operations. This external factor puts emphasis on the relatively small extent of the company’s operations, compared to larger firms like General Motors. Also, the company can improve its performance through diversification. This external strategic factor involves establishing or acquiring new businesses to reduce business exposure to risks in the automotive market. This aspect of Tesla’s SWOT analysis points to the benefits of international expansion. Threats Facing Tesla, Inc. (External Strategic Factors) The external factors that limit or reduce Tesla’s organizational performance are covered in this aspect of the SWOT Analysis. These external factors are threats that prevent the company from maximizing the benefits of its strengths and opportunities. For example, competitive forces limit the company’s potential revenues from the global market for electric vehicles, batteries, and solar panels. Even though its business has shown considerable profitability, Tesla needs to address the following threats to maintain resilience despite the changing conditions of the automotive industry: 1. Aggressive competition 2. Fluctuations in material prices 3. Dealership regulations Automotive companies aggressively compete against each other. This external strategic factor threatens Tesla, considering current efforts of other firms in producing electric vehicles. The fluctuations in material prices are another threat determined in this SWOT analysis. This external factor especially highlights the fluctuating and generally increasing cost of lithium, a material used in the company’s energy storage products. The company also faces the threat of dealership regulations. At present, Tesla directly sells its products to customers without dealership involvement that increases selling prices. However, some states like Virginia and Texas prohibits direct sales of the company’s products, requiring that such sales must go through dealerships. Based on this aspect of the SWOT analysis, Tesla must maintain competitive advantage to remain profitable despite aggressive competition from large automotive firms. SWOT Analysis of Tesla Inc. – Recommendations Tesla, Inc. has the strengths to remain successful in the business in the years to come. However, as identified in this SWOT analysis, there are various issues that the company must address to maintain its competitiveness and improve its profitability. Tesla must improve its multinational presence. For example, new facilities and sales operations in high-potential developing countries can enhance business growth, satisfying Tesla’s corporate mission and vision statements. Also, the company must continue its significant investments in research and development (R&D) to produce technologically advanced products that are competitive. This SWOT analysis shows that Tesla has the potential to grow in the global automotive market despite aggressive competition. In considering the results of this SWOT analysis, with the goal of improving business competitiveness, growth, and development, it is recommended that Tesla Inc.: 1. Expand operations in foreign markets to exploit the global growth of the renewable energy industry. 2. Continue or increase investments for product innovation. 3. Diversify the supply chain to reduce supply-side risks. References  Bernroider, E. (2002). Factors in SWOT analysis applied to micro, smallto-medium, and large software enterprises: An Austrian study. , (5), 562-573.  Chen, W. M., Kim, H., & Yamaguchi, H. (2014). Renewable energy in eastern Asia: Renewable energy policy review and comparative SWOT analysis for promoting renewable energy in Japan, South Korea, and Taiwan. , , 319-329.  Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. , (6), 801-830.  Leigh, D., & Pershing, A. J. (2006). SWOT analysis. , 1089-1108.  Tesla, Inc. – Form 10-K.  United States Department of Commerce – International Trade Administration – Automotive Products: Expanding a Key Industry to TPP Countries.  United States Department of Commerce – International Trade Administration – The Automotive Industry in the United States.  United States Department of Commerce – International Trade Administration – Top Markets Series: Renewable Energy.