Fortune 500 Final Project Tesla I.Company Overview Originally founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla was created with the mindset to make electric cars to be quicker and more entertaining to drive compared to it's gasoline counterpart. In addition to usability, they also wanted to help drive the world closer to a zero emission society in order to reduce the effects of climate change. In 2006 cofounder and CEO Martin Eberhard left the company, leaving another cofounder, Elon Musk, to eventually become the new CEO. Currently, Elon is the top stock holder of the cooperation, holding around 21% of it's shares. It wasn't until 2008, nearly 5 years after the founding of the company, when finally Tesla launched their Roadstar car, which had results no other electric car had from it's time period. From this huge success they began the process of creating a new electric sedan called the model S. First prototyped then produced in 2012, the model s featured the top of the line safety features, along with a very fast and efficient electric motor. To expand its product line, Tesla created the model X, a sport utility vehicle that holds a 5 star safety rating, and is the fastest SUV in history. One of the biggest reasons Tesla was able to become more widespread to the general public was the creation of the Model 3. Beginning production in 2017, the Model 3 cost a mere 35,000 for it's base model, over half the cost of both the Model X and Model S. This made it possible for the average person to be able to afford a tesla car and led to the increase of tesla purchases. Since then Tesla has also released the Model Y, a medium size SUV, but it's numbers do not compare to the Model 3’s. Currently the Model 3 is the highest selling electric vehicle in the world, and has arguably been the best thing to happen to Tesla. But what competition does Tesla have to deal with? While not known for their electric vehicles, big name companies like Ford Motor’s and General Motors have begun production on new electric cars that could easily compete with what Tesla has to offer. People will often see the well known brand names on cars and immediately assume them to be better than newer brands, even if they aren't as reliable or energy efficient. This could lead to problems in the future, especially once gasoline cars are unavailable because people might choose a brand they feel more comfortable with, rather than what the best option really is. Obviously being in the automotive industry is harsh as only Tesla and Ford have not gone bankrupt out of the thousands of other car startups, so Tesla must be doing something right. As we move into the age of electric vehicles, Tesla continues to bring new innovations that propel the industry towards a brighter, more clean future of transportation. II Marketing To further theorize the possibility of Tesla continuing it's control on the market for electric vehicles, we must discover their strengths, weaknesses, opportunities, and threats. Tesla has a considerable amount of strengths that can outcompete it's competitors. These include being the most valuable automotive company, having the best in class electric cars, and having one of the highest innovation rates compared to other vehicle manufacturers. Tesla being the highest valued automotive company shows its ability to outperform others, even though they are a somewhat new company that only produces electric vehicles. The fact that they can outcompete big names like Ford illustrates how by producing better technology, newer companies can succeed over those who have been in the market longer. Tesla's innovative crew will continue to bring new additions to their cars that will drive more people into purchasing them. Although Tesla has many strengths that can help them grow, there are also many weaknesses that might stop them in their tracks. Manufacturing complications, lack of high volume production, and being unable to meet their demands may stop Tesla from being able to sell as many cars as other companies. Because of the high innovation rate on the Tesla vehicles there are more things that could experience production complications, leading to lower production rate. Since Tesla is unable to meet their demands for their vehicles, people may begin to buy from other sources that can provide them with vehicles in a short amount of time. This can lead to Teslas becoming a secondary option to other companies that can produce cars in a short time span. Tesla does have some opportunities that could help increase profitability. By expanding their production into the Asian market, they can bring their products into a place where renewable energy is just beginning to be used, and set a standard for other companies in the area. Along with this, they could produce a cheaper car that is able to give many of the same benefits of the more expensive versions, without the high price tag. Because around 17.6% of the US automotive market consists of pickup trucks, Tesla could also begin production of some form of truck to attract these buyers. Tesla of course also has some threats that might hurt the future sustainability of the company. Constant product defects, liability claims, and shortage of materials can all harm Tesla. Defects on vehicles cause the company a lot of money, along with liability claims from things like self driving accidents. A shortage of lithium and other precious materials required to construct Tesla cars might also prove harmful, but would likely be harmful to every other automotive company as well. To move forwards with the marketing side of Tesla, we will take a look at their product, placement, promotion, and price. While Tesla is known for the vehicles they produce, they are also sellers of electric vehicle powertrain components, energy storage, and solar panels. These contribute a very little amount of money compared to the cars, but are helpful for completing Tesla's mission goal of removing the usage of fossil fuels. Tesla also has several places where you can purchase their products from. These include company owned stores and galleries, service centers, charging stations, and the official company website. This allows for a wide range of ways to purchase goods and services from Tesla. Next we move onto Tesla's promotion strategies, which include viral marketing, personal selling, public reactions, sale promotions, and direct marketing. Of these viral marketing is the most significant in relation to the amount of consumers being added to their company. Finally we have price, in which Tesla has two main forms of deciding; premium pricing strategy and market-oriented strategy. Premium pricing strategy puts a high value on the product because of its uniqueness and ability to outperform other options, and thus allows Tesla to gain more money. Market-oriented pricing is mainly used for products besides cars, like their solar panels, in order to compete with other brands on the market. On top of the four P’s, Tesla also uses social media as a platform to distribute their products to the masses. Videos showing their cars reaching high speeds in a short amount of time rack in millions of views, and in process thousands of new customers. Platforms like Youtube, Instagram, and Twitter help Tesla promote their products, and are one of the main reasons they are such a successful company. III Human Resource Practices Tesla being an innovative company requires intelligent individuals that possess the skills required to work at one of their facilities. To first secure an interview with a human resource manager, the individual can apply through the company website or other job listing websites like indeed. Certain jobs require certain characteristics such as a certain level of education, which means people need to refine their job search based on their criteria. Advanced questions are asked in order to further understand the intelligence of the possible candidates. Background checks and drug tests are also performed to make sure the individual is a worthy applicant. If the interview goes well and Tesla decides to hire the person, they must go through a training process called Tesla START. Tesla START is an educational program run by Tesla and in partnership with several colleges and universities that prepares its students for their future careers at Tesla. It's a 8 hour daily course that takes around 14-16 weeks to complete, and gives the person advanced skills and certifications that help them perform their jobs at Tesla. There is also a grace period after the training that has supervisors and managers looking over the workers back to make sure they are performing their job correctly. In the post hiring phase, the employee is sent to the location they were intended to work at and begin settling in. The human resources department introduces the person to the current staff at the building and shows the location they will be working at. Again the exact location and part of the building the employee will work at is dependent on the line of work they are going into. A question people might ask, especially new employees, is how does Tesla motivate its employees? Tesla’s main form of motivation is through McClelland’s theory of needs, which states that the main three motivators are achievement, affiliation, and power. To form the feeling of achievement for its employees, Tesla has groups of workers brainstorming and producing new ideas to add to the vehicles that may be added for future versions. Whether that be software for the computers or new safety features, the workers there can have a feeling of achievement if their idea is added to the Tesla’s. Secondly Tesla uses affiliation through the recognition it's workers obtain from their hard work. Elon Musk continuously attributes Tesla’s success to it's intelligent and hardworking employees, which gives the workers a feeling of belonging. Finally, Tesla also uses the power motivator for those who like to control their own works or the work of others. People are set to take control of projects or to work on their own ideas at a given time, motivating them and giving them a sense of power. While Tesla’s main theory of motivation comes from McClelland’s theory of needs, there are many other motivations they use in order to continue the innovation process. IV Financials Tesla’s annual report from 2020 is a 449 page document which of course is nearly impossible to read fully. After a little bit of sifting I was able to find the quote “We ended 2020 with $19.38 billion in cash and cash equivalents, representing an increase of $13.12 billion from the end of 2019”(Tesla, Inc. 31). This is just a representation of how much money went back to the business, not the actual profits the company made overall. Doing a little bit more research, I was able to find a slide show that narrowed down the information found on the most recent report in 2021. Below are some images providing financial information: As seen from above, Tesla has been able to produce a great profit margin, equaling around 5.5 billion dollars in total profit. Compared to previous years, Tesla has had the highest revenue rate ever recorded in their history. This was caused by the dramatic increase in vehicle deliveries. According to the Q4 2021 Update report, “With our deliveries up 87% in 2021, we achieved the highest quarterly operating margin among all volume OEMs, based on the latest available data(2), demonstrating that EVs can be more profitable than combustion engine vehicles”(Tesla). With an increase of deliveries up 87% from the previous year, there is no doubt the amount of income Tesla has generated wiped the previous number of past years. Along with this, the report said “Additionally, we generated $5.5B of GAAP net income and $5.0B of free cash flow in 2021 – after spending $6.5B to build out new factories and on other capital expenditures”(Tesla). Expanding its production lines will allow more cars to be produced on a yearly basis. As stated in the SWOT analysis, one of their main weaknesses is lack of production rate. By building new factories, they will be able to combat this shortcoming and continue to sell Teslas at a higher rate. Reading through both the annual report and financial statements made it clear that Tesla had an outstanding year for company growth. As the demand for Tesla automobiles continues to rise, the amount of money Tesla earns also continues to increase. The excess money made this year has been used to invest back into Tesla, creating new sources of income for the upcoming years. This yearly report proved that electric vehicles are becoming a profitable business, and that Tesla is improving its total income from year to year. V. Sustainability and Corporate Social Responsibility Tesla's code of conduct consists of 5 main points; labor, health and safety, environment, ethics, and management systems. For labor it consists of seven different parts. To briefly describe the parts you are allowed to chose employment type, not have any workers under 15, no more than 60 hour work weeks, appliance to local wage laws and benefits, humane treatment of it's employees, commited to a non discrimination/non harassment workplace, and the ability to join unions of thier own choosing. Next we will move onto health and safety. Tesla is required to be prepared for emergency situations, have a system to prevent illness and injuries, provide industrial level hygiene, control the amount of demanding work, ensure the safety of machinery, and inform the employees with workplace health and safety information. Moving on to the environmental part of the code of conduct, they have 8 rules to follow. These include acquiring all environmental permits/approvals, prevention of pollution and recourse reduction, standard on handling and using hazardous substances, implementation of proper waste disposal, compliance with emission control systems, restrictions of materials, proper water management system, and providing energy consumption and greenhouse gas emissions.Following health and safety, we find the ethics policy. They must follow the highest standards of integrity, allow no improper advantages, disclosure of all business information, respect intellectual property rights, follow all fair business,advertising, and competitions laws, have programs that protect identity of whistleblowers, follow the Organization for Economic Co-operation and Development’s rules of sourcing minerals, and protect the personal information about the workers. Finally we move on to management systems in which they must create a company commitment policy, provide identities of people responsible for implementation of management programs, learn the legal and customer requirements, complete an assessment for risk management at suppliers operations, produce improvement objectives to the suppliers, make sure adequate training is being provided, have a proper form of communication, and to create and maintain documents to ensure regulatory compliance. The code of conduct Tesla has created indicates a well designed management system that makes sure to follow regulatory rules and to keep the privacy of its employees and suppliers. Not only do they care about their workers, but they also put great emphasis on making sure that the environment is impacted as minimally as possible. Proper disposal of waste and prevention of greenhouse gasses being emitted into the atmosphere helps prevent the catastrophic events that could occur if we continue polluting our environment. It also goes into preventing the spread of disease and preventing injuries, making sure that Tesla's employees are safe. As far as I can tell, the code of conduct at Tesla appears to be very ethical and sustainable for the future and thus seems to be ideal. VI. Conclusion Personally I believe that Tesla is a great company to invest money into as it's working towards the future. As our generation moves closer and closer to renewable energy sources, electric car companies like Tesla will thrive in the automobile industry. Companies that have very little experience with electric cars will have a lot of catching up to do in order to even compete with Tesla, and thus might become bankrupt. Not only will it be an amazing long term investment, but it might also be a good short term investment as well. In the last year Tesla has almost doubled the amount of profits and increased sales dramatically, and it looks as if the rates will continue to rise. Tesla also has an amazing innovation process that allows bright minds to improve and create new ideas for the vehicles. These ideas are what make Tesla’s stand out to other electric car models and will continue to make sure they are a top named brand. Another reason Tesla is something I would invest in is due to their marketing strategies. Tesla’s has become a well known brand without a single advertisement on television as they use platforms on social media to display their products. This allows them to focus further on their progress of production, rather than wasting money on ads. The final reason I believe Tesla is a good company to invest in is it's other options in renewable energy accessories. In a short amount of time the demand for electric batteries and solar panels are going to skyrocket, and Tesla will be able to help fill the needs. This will lead to an increase in overall stock price and value of the company. With all of these ideas combined, I am confident that Tesla should be a stock everyone should invest in. Work Cited Anasagasti, Alden. “Tesla Swot Analysis (2022).” Business Strategy Hub, 20 Jan. 2022, https://bstrategyhub.com/tesla-swot-analysis/. Kissinger, Daniel. “Tesla, Inc.'s Marketing Mix (4PS) Analysis.” Panmore Institute, 25 June 2018, http://panmore.com/tesla-motors-inc-marketing-mix-4ps-analysis. “About Tesla.” Tesla, https://www.tesla.com/about. 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