Joel  A.  Rodino  B.  Ashley  C.  Brianna  E.  Camilla  L.  Trang  V.  Yanping  Z.  

Part  2:  Strat

egy  

Formulatio

n  and  

Implementa

tion    

Agenda  Final  Presentation  (Part  2)  

●  Strategy  Formulation  ○  IE  Matrix  ○  SWOT  Matrix  ○  Quantitative  Strategic  Planning  Matrix  ○  Final  Recommended  Strategy  

●  Strategy  Implementation  ○  Organizational  Structure  ○  Target  Market  ○  Product  Positioning  Map  ○  Balanced  Scorecard  

External  Factors  Evaluation  (EFE)  

Joel  A.  &  Ashley  C.  

Key  External  Factors   Weight     Rating   Score  

Opportunities  

Availability  of  service  and  charging  stations  for  electric  vehicles6,7,8   0.05   3   0.15  

Governments  around  the  world  establishing  greater  incentives  and  regulations  in  support  of  lowering  emissions  and  gasoline  dependencies2,4,5,9  

0.20   3   0.16  

High  gas  prices  that  are  likely  to  continue  rising   0.10   4   0.40  

Threats  

Hydrogen  fuel  cell  technology  (competition)10   0.30   3   0.90  

High  cost  of  delivery  overseas  (taxes/shipping/fees)   0.15   1   0.15  

Public  perceptions   0.20   3   0.60  

Total   1.00   2.80  

*See  sources  

Internal  Factors  Evaluation  (IFE)  

Rodino  B.  &  Camilla  L.  

Key  Internal  Factors   Weight     Rating   Score  

Strengths  

Diverse  product  lines1,2   0.25   3   0.75  

Emphasis  on  R&D  and  visionary  leadership3,4   0.25   4   1.00  

Control  over  supply  chain5   0.10   3   0.30  

Weaknesses  

Negative  public  image,  tarnished  brand6,7   0.15   1   0.15  

Lack  of  charging  infrastructure8,9   0.05   2   0.10  

High  costs10,11   0.20   2   0.40  

Total   1.00   2.70  

*See  sources  

IE  Matrix  Strong  

 (3-­‐4)  

Average    

(2.0-­‐2.99)  

Weak    

(1-­‐1.99)  

High    

(3-­‐4)   I   II   III  

Medium    

(2.0-­‐2.99)   IV   VI  

Low    

(1-­‐1.99)   VII   VIII   IX  

Grow  &  Build   Maintain  

Retrench  

Ashley  

SWOT  Matrix  Strengths  –  S    1.  Diverse  product  lines  2.  Emphasis  on  R&D  and  visionary  

leadership  3.  Control  over  supply  chain      

Weaknesses  –  W    1.  Negative  public  image,  tarnished  brand  2.  Lack  of  charging  infrastructure  3.  High  costs  

Opportunities  –  O    1.  Availability  of  service  and  charging  

stations  for  electric  vehicles  2.  Governments  around  the  world  

establishing  greater  incentives  and  regulations  in  support  of  lowering  emissions  and  gasoline  dependencies  

3.  High  gas  prices  that  are  likely  to  continue  rising  

SO    S2-­‐O1:  Increase    R&D  to  have  battery  charging  time  less  than  hydrogen  vehicles  S2-­‐O2:  Leverage  visionary  leadership  in  order  to  influence  government  regulations  

WO    W2-­‐O1:  Market  their  ability  to  provide  Superchargers  to  fulfill  the  high  demand  for  charging  stations    W3-­‐O2:  Leverage  governmental  tax  credits  to  absorb  some  of  the  high  costs  

Threats  –  T    1.  Hydrogen  fuel  cell  technology  

(competition)  2.  High  cost  of  delivery  overseas  (taxes/

shipping/fees)  3.  Public  perceptions  

ST    S3-­‐T2:  Strengthen  control  over  their  own  supply  chain  to  lower  cost  of  delivery  overseas  since  everything  is  done  domestically  S3-­‐T3:  Expand  control  of  the  supply  chain  with  a  focus  on  quality  in  order  to  improve  public  perception  

WT    W3-­‐T2:  Expand  MNE  (multinational  enterprise)  to  absorb  costs  by  cheaper  labor,  shipping,  taxes,  etc.      W1-­‐T3:  Increase  marketing  and  PR  efforts  to  increase  public  perception    

Camilla  &  Ashley  

Leverage  visionary  leadership  in  order  to  influence  government  

regulations  

Market  their  ability  to  provide  Superchargers  to  fulfill  the  high  demand  for  

charging  stations    

Expand  MNE  (multinational  enterprise)  to  absorb  costs  by  cheaper  labor,  shipping,  

taxes,  etc.      

Key Factor Weight AS TAS AS TAS AS TAS Strengths From IFE

Diverse product lines 0.25 0 0.00 0 0.00 4 1.0 Emphasis  on  R&D  and  visionary  leadership   0.25 4 1.00 3 0.75 2 0.50 Control over  supply  chain   0.10 3 0.30 3 0.30 4 0.40 Weaknesses From IFE Negative  public  image,  tarnished  brand   0.15 1 0.15 3 0.45 1 0.15 Lack  of  charging  infrastructure   0.05 2 0.10 4 0.20 2 0.10

High  costs   0.20 3 0.60 4 0.80 4 0.80

Sum of Weights 1.00 2.15 2.5 2.95

Opportunities From EFE Availability  of  service  and  charging  stations  for  electric  vehicles   0.05 2 0.10 4 0.20 3 0.15 Governments  around  the  world  establishing  greater  incentives  and  regulations  in  support  of  lowering  emissions  and  gasoline  dependencies  

0.20 4 0.80 2 0.40 4 0.80

High  gas  prices  that  are  likely  to  continue  rising   0.10 3 0.30 4 0.40 3 0.30

Threats From EFE

Hydrogen  fuel  cell  technology  (competition)   0.30 3 0.90 3 0.90 1 0.30

High  cost  of  delivery  overseas  (taxes/shipping/fees)   0.15 0 0.00 2 0.30 4 0.60

Public  perceptions   0.25 0 0.00 2 0.50 2 0.50 Sum of Weights 1.00 2.10 2.7

2.65 Sum of Total Attractiveness Score 4.25 5.2 5.6

Quantitative Strategic Planning Matrix

Rodino  &  Joel  

Final  Recommended  Strategy  ●  Expansion of manufacturing capabilities into Europe, Asia, and

South America by deploying resources and capabilities in the procurement, production, and distribution of Tesla vehicles.

●  Take advantage of economies of scale and lower costs ○  Decrease costs of shipping overseas ○  Increase local responsiveness ○  Take advantage of government incentives for electric vehicles ○  Gain larger target market ○  Low-cost input factors

Trang  

Current  Organizational  Structure  

Chairman Product Architect

and CEO

Chief Technical Officer

Chief Financial Officer

Chief Designer

Chief Information Officer

Vice President Business Development

Vice President Human Resources

Vice President Supply Chain

Board of Directors

Functional Structure

Trang  

Proposed  Organizational  Structure  Matrix Structure (geographic)

Trang  

Corporate HQ

North America

South America

Europe

Australia

Asia

CTO Chief Designer

VP Supply Chain

CFO CIO VP HR VP Bus. Dev.

Tesla’s  Leadership  Principles  

●  Commitment to quality

●  Commitment to customers

●  Creating the “electric car without compromises”

●  Achieve higher product quality at lower prices

Brianna  

What’s  it  like  to  work  for  Tesla?  

Pros7

●  Challenging, fast paced environment ●  Smart colleagues, great learning potential ●  Friendly/open working environment ●  Free soda, coffee and cereal ●  Employees have passion about what they do

Cons7

●  Pay and benefits aren’t as good compared with similar companies

●  Requires long hours (lack of work/life balance) ●  Location is isolated from restaurants, only food on

campus is cereal ●  New hires are not as qualified as before ●  Dynamic culture is fading, more politics

Brianna  

Tesla  Culture  Improvement  Proposal  

1. Improve work/life balance ●  Decrease employee workload/

hours requirement appropriately ●  Reinforce importance of breaks

through tone at the top

2. Improve benefit offerings to attract competent employees

●  Build on-site gym, or reimburse employees for gym memberships

●  Build a cafeteria on site ●  Offer more than just cereal and

juice for free ●  Sponsor family care programs

(child care, etc.)

Brianna  

Current  Target  Market  

●  Shoppers

○  Male in the upper economic class

○  Environmentally conscious group

○  Early new technology adopters

●  Sellers

○  Tesla

Yanping  

New  Target  Market  

●  Shoppers

○  Middle economic class

○  Male in the upper economic class

○  Environmentally conscious group

○  Early new technology adopters

●  Sellers

○  Independent dealers

○  Tesla

Yanping  

Product  Positioning  Map  (current)  

Hig

her

Qua

lity

Lower Price

Yanping  

Product  Positioning  Map  (proposed)  

Hig

her

Qua

lity

Lower Price

Yanping  

Balanced  Scorecard    Area  of  Objectives   Target   Target  Deadline   Primary  

Responsibility  

Customer  Perspective   Roll  out  Model  X  by  a  definite  date   2/2015   Business  Development  

Shareholder  Perspective   Increase  revenue  recognized  by  10%   02/2015  

Manufacturing  +  

Finance  

Process  and  Structure  Perspective  

Increase  Model  S  production  by  60%  so  that  company  can  recognize  revenue  more  quickly8  

03/2015   Manufacturing  

Learning  and  Growth    

Increase  employee  satisfaction  by  30%7  

01/2015   HR  

Brianna  

Conclusion  ●  Take  advantage  of  economies  of  scale  to  decrease  costs.    ●  Strategy:  Increase  MNE  (multinational  enterprise)  to  absorb  costs  by  

cheaper  labor,  shipping,  taxes,  etc.      ●  Make  the  EV  more  affordable  to  the  average  consumer,  while  pushing  

upward  towards  quality!  

References  1.  http://scienceofrevenue.com/tag/tesla-marketing-strategy/ 2.  http://ir.teslamotors.com/management.cfm 3.  http://en.wikipedia.org/wiki/Tesla_Motors 4.  http://www.fas.org/sgp/crs/misc/RS20811.pdf 5.  http://evworld.com/news.cfm?newsid=32914 6.  http://www.examiner.com/article/tesla-s-new-electric-car-is-eco-friendly-but-is-it-

affordable 7.  http://www.bloombergview.com/articles/2014-03-20/tesla-can-topple-the-car-dealer-

monopoly 8.  http://www.glassdoor.com/Reviews/Tesla-Motors-Company-Reviews-E43129_P3.htm 9.  http://www.bloomberg.com/news/2014-02-19/tesla-quarterly-results-beat-analyst-

estimates-on-model-s-growth.html 10.  http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/21/cbo-government-will-

spend-7-5-billion-on-electric-vehicles-what-are-we-getting-back/

References  cont.  10.  http://www.therichest.com/rich-list/poorest-list/countries-with-the-cheapest-labor/ 11.  http://www.econedlink.org/lessons/index.php?lid=342&type=student 12.  http://um.dk/en/tradecouncil/barriers/what-is/

Market  Position  Survey  1. How  would  you  rate  Tesla  on  Price?  2. How  would  you  rate  GM  on  Price?  3. How  would  you  rate  BMW  on  Price?  4. How  would  you  rate  Tesla  on  Quality?  5. How  would  you  rate  GM  on  Quality?  6. How  would  you  rate  BMW  on  Quality?