Write a Culture of Continuous Learning Plan
Based on the SWOT analysis completed in Assignment 1 this week, create a plan to move forward and to strengthen the organization’s Culture of Continuous Learning. Provide at least five different SMART goals for the organization in this plan, and then explain the following:
- How does the goal relate to the SWOT analysis you conducted?
- Why was the goal selected as a priority?
- How will this goal improve the overall culture of the organization?
- How will this goal help the company to achieve its strategies?
- What challenges could occur while trying to implement this goal?
- What is the best way to overcome those challenges?
Length: 3 – 5 pages
References: Include a minimum of five scholarly resources.
SWOT Analysis of Tesla’s Culture of Continuous Learning
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SWOT Analysis of Tesla’s Culture of Continuous Learning
Carl Harris
Northcentral University
Dr. J. Klein
Due January 24, 2021
Introduction
Tesla Inc., formerly knowns as Tesla Motors Inc, is an automotive and energy solutions corporation. Tesla is the leading electric vehicle (EV) manufacturer in the world and is based in the United States. The company is a highly innovative and successful company. Due to the nature of its innovative products and ideals, the company must foster a climate of continuous learning. A SWOT analysis of the organization reveals the current culture of learning and areas of opportunity for the company to continue to learn. The following SWOT chart outlines the current state of Tesla.
SWOT Analysis of Tesla
Strengths
High Market Valuation
Innovative Technology
Fast Sales Growth
Leading EV Producer
Charging Network
Weaknesses
Higher Overhead
Limited Customers
Low Market Presence
Low Manufacturing Capacity
Battery Shortages
Opportunities
Growing Markets
Rising Demand of EV
Technological Innovation
Growing Supercharger Network
Threats
Pandemic Impact
Competition
Regulation
Strengths
One to the strengths of Tesla organization is a high market valuation. Tesla’s market valuation has grown expeditiously in recent years. For example, in January 2016, Tesla had a market cap of $31.5 billion (Duggan,2020). In January 2018, Tesla had a market cap of $52.3 billion (Duggan, 2020). In January of 2020, Tesla’s market cap grew to $75.7 billion (Duggan, 2020). In November of 2020, Tesla had an unprecedented market cap growth of $458.9 billion (Duggan,2020)! As of January 2021, Reuters has reported that Tesla currently has a market capitalization value of over $800.00 billion (Reuters,2021).
Technological innovation is another strength of Tesla Inc. The automobile industry is inundated with heavy competition. However, Tesla holds a unique position in the industry. The company only makes electrical vehicles for the higher end of the market (Pratap, 2020). These vehicles have lower maintenance costs due to the technology that goes into the vehicles. Technology features such as auto-drive, provide drivers with a safer, and higher performing vehicle compared to other vehicles on the road (Pratap, 2020). In 2019, the Model 3 earned the top safety award in its class from the Insurance Institute of Highway Safety (Pratap,2020). This award supports the company’s commitment to providing the safest vehicle on the road. Tesla’s vehicles also offer superior battery range when compared to other electric vehicles and hybrids (Pratap,2020).
The fast growth is another strength of Tesla Inc. Since the release of the Model 3 in 2017, Tesla has had astronomical sales increases worldwide. In 2018, Tesla delivered 245,000 vehicles and in 2019, Tesla delivered 367,000 units (Pratap, 2020). In 2020, the world experienced a devastating pandemic and as a result the automobile industry experienced a sharp decline in sales. However, compared to other auto makers, Tesla proved to be resilient. According to Statista, Tesla delivered over 90,000 units between April and June in 2020. This was over 2200 more than the previous quarter (Pratap, 2020). Although, the company sold more than 95,000 units in the same quarter of the previous year, considering that the world was in the middle of a pandemic, Tesla’s sales growth-maintained momentum. Furthermore, in the third quarter of 2020 Tesla’s car sales were 40% higher than in the same period of the previous year. When considering how the automobile industry has crashed since the pandemic, Tesla’s sales growth is nothing short of superior.
Tesla’s sale growth is tied to its supercharger network. Tesla cars depend on superchargers for charging their vehicles. Therefore, the company has focused on growing its network of superchargers. Tesla has established supercharger stations along well-traveled routes in areas where its products sell. In addition, Tesla has partnered with companies such as Hilton Hotels to establish destination charging stations (Pratap, 2020). The destination charger networks complement the supercharger station networks which provide Tesla customers with an easy option to charge their vehicles.
Weaknesses
Weaknesses include higher cost of operating expenses, low customer base, low manufacturing capacity and shortage of batteries. These factors contribute to low profitability. Despite Tesla’s high market capitalization value, the company has been running the business at a loss for the past several years. The higher standard of innovation increases cost because of mechanical complications and production risk factors. In addition, Tesla is constantly dealing with manufacturing and production delays. Whether it is due to increasing customer demand, the pandemic or supplier shortages delays cost the company more overhead costs. These delays not only cost the company but delay sale of its vehicles.
Another weakness is the low customer base. Due to the cost of Tesla vehicles most people cannot afford the most affordable Model 3. Tesla primarily deals with the higher end market and therefore their customer base is limited. The limited customer base can potentially affect growth especially in emerging markets like India due to the higher taxes in that market.
Battery shortages are a weakness that directly affect the sales of electric vehicles. The batteries used in electric vehicles are made from lithium, nickel and cobalt. These materials are expensive and contribute to the high cost of making Tesla vehicles. For example, Lithium is plentiful in the United States, however, extracting it from the earth is expensive and difficult.
Opportunities
Growing markets are an opportunity for Tesla. Markets with a large base of upper middle-class consumers present a growth opportunity for Tesla. For example, India and Brazil are countries with a large base of upper middle-class consumers with an interest in electric vehicles. For the past several years, these countries have experienced outstanding growth. Strengthening its presence in markets such as these can help Tesla attract more sales and grow faster.
Another opportunity is the growing demand for electric vehicles worldwide. As the world continues to evolve being more environmentally friendly the appeal of electric vehicles will grow. In addition, Tesla already has a 60% percent market share of the EV industry, so the company is in perfect position to see higher success (Pratap, 2020).
Tesla’s innovation and charging network are also opportunities for the company. Since its supercharger network and destination network coincide with its growth, it is critical that Tesla continues to expand its network. In addition, Tesla currently has an edge in technological innovation, and it is critical that the company maintain this edge. If Tesla can continue to grow its charging network in other regions and maintain its innovative edge it can increase its sales growth.
Threats
The threat factors of Tesla are factors that can prevent the company from maximizing the benefits of its strengths. One of the most common threats of any company is competition. Tesla faces aggressive competition from alternative fuel vehicles and self-driving technology. Many luxury brands have launched and are launching alternative fuel vehicles to compete with Tesla in the EV market. In addition, many other brands in the economy section such as Toyota and Ford are launching and planning to launch environmentally friendly and self-driving technology at comparably lower prices. This is a definite threat to Tesla, which thrives on its unique position of value for innovative vehicles, which are typically sold to upper middle class and wealthier consumers (bsstrategyhub,2020).
References
https://notesmatic.com/2020/11/tesla-motors-in-2020-a-swot-analysis/
https://www.benzinga.com/news/20/11/18433902/teslas-valuation-is-greater-than-nearly-the-entire-established-auto-industry
https://www.reuters.com/article/tesla-stocks-int/tesla-market-value-crosses-800-billion-for-the-first-time-idUSKBN29D20B
https://www.axios.com/battery-shortage-risk-electric-car-era-fa699bfb-9d57-4bdc-b907-993903cc7620.html
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