Tesla: Strategic Audit
Overview
This paper provides a strategic audit of Tesla, examining both the company's internal and external environments. It analyzes Tesla's internal strengths such as innovation and brand positioning, while identifying weaknesses including production delays and significant debt obligations. The analysis considers external opportunities in emerging markets and threats related to market competition and pricing challenges.
What this case study covers
- Introduction: Overview of Tesla's product portfolio beyond electric vehicles, including solar energy systems, consumer electronics, and limited-edition merchandise
- Internal Environment: Analysis of weaknesses (slow production rates, debt obligations) and strengths (innovation, established brand, environmental positioning)
- External Environment: Assessment of market opportunities in Asia and Africa, and challenges related to vehicle pricing and market conditions
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Tesla: Strategic Audit
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Tesla: Strategic Audit
Introduction
On the onset, when a person says the word Tesla, the first thing most people is Tesla electric cars. While Tesla has specialized in the design, manufacturing, and distribution of electric-powered vehicles and solar energy systems, it also has an array of other products that are not as famous as the vehicles. Tesla has also ventured into the communication and entertainment industry through a range of smartphones, wireless chargers, and televisions. Tesla also produces and distributes ovens, washing machines and other household electronic products. In 2018, Tesla released 200 limited-edition surfboards, priced at $1,500, which sold out in just one day (Smith, 2019). Thus, a strategic audit of the company should not only focus on the production of vehicles alone.
Internal Environment
Internal environment involves internal factors that limit or enhance the organizational performance of Tesla. Such factors have the potential to weaken or strengthen Tesla's business growth and competitive advantage. The slow rate of production is among Tesla's internal problems. In the first quarter of 2019, the company delivered 63,000 vehicles, a 31% decrease from the 2018’s last quarter (Staff, 2019). This is partly dues to the complicated procedure involved in experimenting. Debt is another problem Tesla affecting Tesla. Regulatory findings indicate that at the beginning of 2019, Tesla had $920 million in senior convertible notes that were set to expire on the 1st of March (Kolodny, 2019). This debt obligation could wipe out 25% of Tesla’s cash.