Strategic Management: A Competitive Advantage Approach Concepts and Cases 17th Edition Instructor ma
With the economy experiencing upward and optimistic trends in recent years, Tesla can leverage on this upward trend and increase its presence in emerging markets as well as developed countries by installing additional Supercharger stations and stores worldwide, in order to allow better and quicker customer assistance. Tesla’s business is also highly dependent on government policies and incentives. To counter these unfavorable government policies, the company should employ highly competent communication strategists or lobbyists to remove the no-sale policy in restricted states. Even though the automobile market has reached some level of maturity, the sales of electric vehicles is expected to increase in the coming years. Therefore, it is crucial for Tesla to step up the game and develop innovative models that the average population can afford.
Internal Factor Evaluation (IFE) Matrix
| Weaknesses | |
| 1 | Tesla’s total long-term debt amount has increased from $364,976 to $1,891,449, up 418% during the year ended December 31, 2016 compared to the year ended December 31, 2015. |
| 2 | Tesla experiences significant delays or other complications in the design, manufacture, launch, and production ramp of new vehicles and other products, which could harm financial condition and operating results. |
| 3 | R&D expenses increased $116.5 million, or 16%, to $834.4 million during the year ended December 31, 2016 compared to the year ended December 31, 2015. |
| 4 | Cost of automotive revenues increased $1.63 billion, or 62%, to $4.27 billion during the year ended December 31, 2016 compared to the year ended December 31, 2015. |
| 5 | Limited amount of charging stations; 790 Supercharger stations and 4140 locations worldwide have Tesla wall connectors as of December 31, 2016. |
| 6 | Tesla’s operations are subject to foreign currency and interest rate fluctuations since total revenue consists of 60% U.S., 15% China, 8% Norway, and 20% other countries. |
| 7 | Compared to other car manufacturers, such as BMW, Audi, and Ford, Tesla has considerably less experience in the industry with its first electric vehicle production starting in 2008. |
| 8 | Employees at Tesla complain about work conditions, safety instructions, and racial harassment. |
| 9 | Future growth and success is dependent upon consumers’ willingness to adopt electric vehicles, especially in the mass market demographic which Tesla is targeting with Model 3. |
| 10 | Tesla is highly dependent on the services of CEO Elon Musk, who is also responsible for two other companies. |
| Total IFE Score |