Tesla Case Study Case

And, as the American and European populations continue to age older consumers are buying more traditional models such as the Sabre and the Taurus. But because the company’s product mix is both broad and deep, the company can capture sales lost in one segment by increasing marketing and sales efforts in another. The flexibility of modern production lines also allows the company to rapidly switch from one model to another in order to quickly meet changing consumer demand patterns. 3) Impact of Innovation and Technical Change A November 2001 article in Bus... ... middle of paper ... ..., such advantages are reversed – demand for both cars and financing drops, and Ford Motor Credit is not able to generate increased profits off of its loan portfolio. When exchange rates increase, and more dollars are necessary to purchase foreign currency, the relative price of foreign goods drops and people will tend to purchase more imports.

Tesla Motors change the global energy structure and provide a paradigm shift to the automobile industry. Other than that it contributes a lot to solving dependency of global transportation on oil which is one of the most important culprits for global climate change. However Tesla also suffers from some flaws that hinder the development of electric vehicles. For example the expensive production costs make the market price of the Tesla is difficult to achieve expected standard. Consequently the electric vehicle is difficult as popular as a normal car.

So far the prior four times the Federal Reserve has raised rates not much has happened. I am predicting that if the current rate hike does not effect the market, Federal Reserve Chairman Alan Greenspan will raise rates again in March and May to slow our prosperous economy. The reason why a rate hike will slow down the economy is by raising the overnight rate to 5.75, the highest since 1995, it has made borrowing less attractive. In turn, corporation will have less money to invest then productivity will go down, hence supply will go down and demand will soon follow. Right now though productivity numbers released in January showed that it is on the rise, which has keep inflation in check.

What does that tell us, Tesla may be having great challenges when it comes to resources and key capabilities? These include; The focus of Tesla Company is on a niche in the automotive industry, which is building and selling electric cars. To a company like General Motors, the electric cars line of business is considered a side business, hence it only needs to study the patterns of Tesla’s cars then build on of its kind that will take Tesla out of business (Debord, 2015). In addition, the economy is also working against Tesla as the gas and oil prices are dropping at a steady but positive way. This would render Tesla’s business unattractive, as people will be able to afford other types of cars other than the electric cars.

By preceding our marketing plan, the expected outcome will be an increase in net sales, typically from our recent model S, as well as model X and up-coming third generation EVs; and a decrease in the cost of sales, which is the result of the infrastructure completion and reducing cost of R&D. These combine factors will result in an ultimate increase in net income. In fact, during the year ended December 31, 2012, Tesla recognized total revenues of $413.3 million, an increase of 102% over total revenues of $204.2 million for the year ended December 31, 2011. Automotive sales revenue of $385.7 million increased 160% from the year ended December 31, 2011, driven mainly by commencement of Model S deliveries in North America. (Tesla Annual Repor, Exhibit) As a matter of fact, new products had been proved to have a direct relationship with increases in net sales.

The economy will have to grow at a negative rate over the next two quarters in order for the US to be in a recession. But is there cause for concern that a recession may occur? Yes there is, but the government’s interventions should keep the US from falling victim to recession. I believe that the economy will eventually pick itself back up and avoid a recession. The GDP will once again grow at a quick pace.

GM’s strategy currently is used to bolster short-term, quarterly, profits. Popular vehicles like GM’s trucks are being priced very high relative to competitors Ford and Ra. In doing so, GM is showing profits in the short-term. However, this strategy is also leading to disloyalty of GM truck owners and a loss in the market share for GM which can seriously hurt GM in the long-run. If costs are to remain constant and GM continues to utilize this pricing strategy, the company could run into some major issues.

Tesla’s strategy is to conduct direct sales, from the manufacturer to the consumer. U.S. States require automakers like Ford and General Motors to sell their vehicles through networks of independent dealers. Tesla has fought and one against dealer franchise laws in several states, but some states still refuse to allow direct sales. In the states that refuse to budge on the direct sales issue, Tesla opened galleries where consumers can view the vehicles, but they cannot test-drive, or discuss price with Tesla employees (Hull, 2015, p. 21). Restrictive state laws are proving to be a significant threat to Tesla’s direct sales approach and may lead to a change in strategy in the

Article summary The article written by Bertel Schmitt concerns the topic of Tesla's success on the market, in particular, the lack of it, considering the active work of the competitors to boost their products and to promote them. While the statistics collected by the EV Volumes database provide a predict a positive development of the car industry in terms of use of the electric vehicles, for Tesla this news is not a positive one. The problem for Tesla lies in the fact that the majority of the vehicles that would be sold on the market would belong to the places where Tesla does not have success in contrast to its competitors. Tesla's concentration on the idea that the American market is the one that requires electric vehicles is a mistake

The cost of electric cars, currently on the market, makes them an impractical purchase for the average consumer. If cost is not the growing concern in today’s economy which prevents the consumer from considering this option; they may deny the technological advance due to battery storage capabilities and the inadequate infrastructure in place to refuel and provide for them. A revolutionary environmental impact to pollution is provided by electric cars which produce zero emissions and provide a replenishable fuel resource. Toxic emissions into our earth’s environment would be reduced immediately as gas powered, pollution emitting vehicles are replaced with non-polluting, battery powered vehicles. Not only will pollution be reduced, but the means that power these vehicles are a renewable resource.