BUSINESS CASE ANALYSIS
OLEH
RACHMAT HIDAYAT
135030207111082
FAKULTAS ILMU ADMINISTRASI
UNIVERSITAS BRAWIJAYA
Chapter I
STRATEGY
A. PESTLE
NO.
1.
PESTLE
Political
Analysis
Tesla motors use the strategy when there is a protection
law of production using environmental or green
technology cars. However, US government is limiting
(not easily entry) the new company.
2.
Economic
Economy anxiety due to the “great recession” of 20082009
3.
Social
There is a notion in people, which electric cars had to be
slow in acceleration and awkward in appearance.
However, this notion has crumbled down by attraction of
Lotus Elise Sports car.
4.
Technological
Tesla re-designed and built its own advanced battery
pack, power electronics module, high efficiency motor,
and extensive control software.
5.
Legal
Accepting the new product/new, company in certain
country passed the complicated procedure.
6.
Environment
Use of Gasoline is high (Gas emission).
B. MOST
NO.
1.
MOST
Mission
Analysis
To accelerate the advent of sustainable transport by
bringing compelling mass market electric cars to market
as soon as possible.
2.
Objectives
Big leaps in technology, such as :
Battery pack
Power electronics module
High efficiency motor, and
Extensive control software)
3.
Strategy
Leadership in electric power technology, ability to
combine electric power train expertise with electric
vehicle design and systems integration.
4.
Tactics
Brand leadership in high-performance, long range electric
vehicles, efficient research, and development process
C. Corporate Business Strategy

Leadership in electric power technology

Competencies in electrical engineering, software, and controls

Ability to combine electric powertrain expertise with electric vehicle
design and systems integration

Rapid customer by focusing on product development (Model S fourdoor, five passenger “offered exceptional performance, functionally
and attractive styling with zero tailpipe emissions”)

Ownership of its sales and service network

Brand leadership in high performance (Lotus Elise), long-range electric
vehicles

Long term financial support from a $465 million loan facility
agreement under the US Department of Energy’s advanced Technology
Vehicles Manufacturing Incentive Program

Efficient in Research & Development process.
Chapter II
INVESTIGATION
A. Prior Research
A.1 Interviews
1. The interviewees are

Co-Founder, CEO, and Product Architect, Elon Musk.

Vice president of Production

Vice president of Business development

Financial Department
2. The interview’s questions are

Co-Founder, CEO, and Product Architect, Elon Musk.
a) What is needed to improve the key factor that influencing the electric
vehicles in this case is power battery pack?
b) In General, why Tesla earned no profit even though its total revenues
had increased?
c) How can Tesla as the new company could entry the potential market in
US, which in US there is no new company has been able to
successfully enter the auto manufacturing industry since 1920s?

Vice president of Production
a) What is the strategic way to maintain or to create the longer power of
battery pack?
b) How much it costs to create long power battery and how significant
the impact to raise the price of product?

Vice president of Business development
a) What is needed to entry the barrier of competitors and the markets?
b) How can Tesla faces the competitors that had major advantages such
as in resources, brand identity, economies scale, and distribution?

Financial Department
a) What is the key factor that made Tesla earned no profit (Even though
its total revenues had increased from $3 million in 2007 to $14.7
billion in 2008 to $111.9 billion in 2009)?
b) What is the solution to minimize the loss or even to earn the profit?
A.2 Workshop
1. Whose should be invited to the workshop, they are Co-Founder, CEO, and Product
Architect, Chief Designer, vice president of Business development, Vice president of
Production, Chief Financial Officer.
2. The theme will be discussed is “Green technology or low emission vehicles
efficiency in the future”
3. Consensus will be achieved:
a. How could we make the low emission vehicles with high power
technology
b. How could we make the stylish design of the vehicles
c. How could we branding the image and quality
d. How could we give the low cost vehicles
Chapter III
STAKEHOLDER ANALYSIS
A. Chart of Stakeholder
COMPETITORS
SUPPLIERS
SHAREHOLDER
OWNER
MEDIA
CUSTOMERS
AGENCIES
EMPLOYEES
COMMUNITY
B. Stakeholder power map
Power/Influence
Shareholder
Supplier
Owner
Competitors
Customers
Agencies
Media
Community
Employees
Interest
B.1 Power-Interest
Quadrant 1 “Monitor only”
a) Agencies (Dealers) as the seller have no power and interest. They are just
waiting for the decisions coming from the company. They just have an
authority to sell as high as they can.
Quadrant 2 “Keep Informed”
a) Media, they have high interest on it, but they have no power to change or to
influence the company
b) Community, they are the groups who have the big interest. They also have big
care to the low emission or green technology or the low cost vehicles itself.
c) Employees, as the part of company, they must be had a big interest on the
company but they also have no power or low power to influence the company.
Because, their job is to fulfill the goals of the company.
Quadrant 3 “Keep Satisfied”
a) Shareholders, these people have big power to influence the company or even
to change the company goals, mission, and culture. Nevertheless, they have
no interest of the company as long as they get the profit.
b) Suppliers (Sotira Composite Group, Borgwarner, and Lotus), same as the
shareholders, they also have the power to influence company. Because they
are the first factor on how company can produce their goods. Their interest
also low toward the company.
Quadrant 4 “Manage Closely”
a) Owner (The CEO, Elon Musk) has both, high power and interest. Owner has
the authority to create the aim of the company. Owner also has the high
interest on how the company will get its goals and survive in business
challenges.
b) Competitors (GM, Toyota, Mitsubishi, Ford) , their power to influence
company is high. Because company should following the development of
another company in order to survive in business challenges. Competitor’s
interest also high because they always monitoring our company to control the
changes (price, branding, etc).
c) Customers, customer’s power to influence the company policy and others is
high. Because company should listen for the customer’s needs and wants.
Customers as the indicator of the company’s success also have big interest.
Everything of company’s good will be judged by the customers.
Chapter IV
MODELLING BUSINESS SYSTEMS
A.1 The significant stakeholder is the CEO (Owner) of Tesla Motors, Elon
Musk.
Why Elon Musk as the most significant stakeholders who influencing the
project or the business process?
We believe Elon Musk have been contributed so much toward the Tesla Corporation.
When he started as the CEO in early 2004, he took an amazing movement by
expanding the company’s strategic goals to include marketing mainstream vehicles.
He also the one who wanted to create or produce Tesla own battery pack, power
electronics module, high efficiency motor, and extensive control software.
As the creator, Elon Musk has created many changes. In 2009, the brand of
Tesla got the Hottest Brands in America. In 2010, Tesla had developed and
successfully sold over 1,200 electric-powered roadsters.
A.2 The significant stakeholder is the Production and Financial department of
Tesla Motors.
As the key factor of development product and profitability, these stakeholders
become the significant individuals to affect the company.
A.3 the customers
Customers have so many influences. Their needs and wants become indicators
to company in producing or developing the products.
B. Framework “CATWOE”
Framework
C
Agencies/Franchises dealers as the second seller, Direct
(Customer)
consumer/customer,
A
Designer
(Actor)
Mechanic
Product architect
Business development
T
How to keep people trust, how to create long sustainable battery to
(Transformation) satisfy the customer, How to be survive and challenging the
competitors
Electric Car as low emission car has a paradigm about “range
W
(World View)
O
(Owner)
E
anxiety”. People believed that they have to use sustainable battery
CEO Tesla Motors, Elon Musk.
Limited Gasoline (high gas emission), high level of unemployment
(Environment)
and economy anxiety,
C. Transformation
If we point out/ focus on the Transformation, we would have several things to
do:
a) Improvement of the battery pack
b) Charging Station system and placement. This is very important to
encourage the customer of safety issues.
c) Survive and challenging the competitors. Many companies launched
their own electric cars. General Motors was launching its electric Volt
for about $41,000 less federal tax rebates, Nissan was also introducing
its all electric leaf a $33,600 compact that would average 100 miles on
charge, Daimler was leasing an all electric versions of its Smart Car.
In addition, even BMW, Chrysler, Ford, Toyota and Mitsubishi were
also introducing their own electric cars.
Chapter V
THE REQUIREMENTS
No Requirement List
1
2
Sources
Comments
Tesla needs to earn profit by re- Financial
There
must
calculating. (Even though it’s total Department
mistakes
why Tesla
revenues
got
had
increased
from
$3
no profit
be
even
million in 2007 to $14.7 billion in 2008
though their revenues
to $111.9 billion in 2009).
had increased.
Improve the battery pack to make it Product architect,
How
longer
to
create
customer’s Mechanic Designer
encouragement.
much
the
sustainability
battery
pack
of
that
customer expected?
3
U.S manufacturing industry market Marketing Division, What
is
the
most
hard to accept new company. It proved R&D
effective way to entry
by index says no new company has
the US Market?
been able to successfully enter the U.S
Marketing and R&D
auto manufacturing industry since
division have to think
1920s. That is why Tesla has to
more about the market
strengthen its political strategy to entry
segmentation
the U.S Market
4
Tesla needs survive to challenging the R&D
Division, R&D and Marketing
competitors such as GM, Toyota, Ford, Marketing Division
should
find
the
etc that had major advantages over
weakness from each
Tesla in resources, brand identity,
competitors and then
economies of scale, and distribution.
overlapping them from
that weakness.
5
Tesla
has
to
improve
their Product Architect
Factor
Battery pack
technological advance in machine,
influenced the size and
size, weight which could completely
weight of the vehicles.
alter the competitive landscape.
It should be the way to
balance both.
Chapter VI
ANALYSIS
Tesla Motors actually has so many advantages to be the pilot company
of electric vehicles. For beginning, Tesla Motors had just completed an initial public
offering (IPO) of 11,880,600 shares of its common stock plus a private sale of an
additional 2,941,176 shares to Toyota Motor Corporation at the initial price of $17.00
per share. The company also had developed and successfully sold over 1,200 electricpowered Roadster, Advertising Age had named Tesla of America’s Hottest Brands in
2009. It means that trust from people become increased year by year, times by times.
A. Status Quo
SWOT Analysis, Strength of Tesla Motors are; image leadership in
electric power technology, Tesla has competencies in electrical engineering etc, brand
leadership in high-performance electric vehicles for example Lotus Elise, and Tesla
has efficiency in research and development process.
Weakness of Tesla Motors is; high improvement of total revenues level
but gets no profit, Tesla Motors
Opportunity of Tesla Motors is; development of internet and technology is
getting bigger. Selling via Online will be prospective selling strategy.
Threats of Tesla Motors are; the US auto manufacturing which hard to
entry on, demand from people or customers of the longer power battery pack and
decrease the weight and size of the vehicles caused by the battery pack itself,
Challenge from the competitors that have many major advantages.
B. Problem
There are several problems:
a) No profits after big total revenues
b) Power Battery Pack which need to be improved
c) US auto manufacturing industry
d) Tesla still loses in several major advantages such as resources, brand
identity, economic scale, and distribution.
e) Some products still have to be completed, balance in weight, size, etc.
C. Solution
Based on the problems, the solutions are:
a) Re-calculating of product price, production costs, and every factor that
influenced the revenues and profit.
b) Continue research of long power battery pack.
c) Use political strategy to entry the US auto manufacturing industry.
d) Improve several points; resources of Tesla Motors, Increase brand
identity, raise the economic scale, and expand the distribution. In other
side, Tesla Motors has to find the weakness of the competitors.
e) Re-design the style and layout of the vehicles in order to make it balance
between the battery pack, weight, and size of vehicles itself.
Based on that, Tesla Motors should fulfill the requirements and accomplish the
solutions to solve the problem. As the pilot company of electric vehicles, Tesla
Motors has big possibility to rule the market or to be major player in a very
competitive global industry.