ENG 202, Assignment-2

Read the grading rubric carefully, before you start writing your analysis.

Content	30 Points	Final Score
Relevant introduction, which consists of summary of case study, including companys background information, growth, and development Start, 1 or 2 sentences Very brief description of how it expanded its business. 2 to 3 sentences. (Major Dates) Products, 1 or 2 sentences,	5	5
Identify and discuss companys strengths and weaknesses as discussed in the case study, if any area is not fully discussed, students may use their own knowledge to come up with additional strengths and weaknesses Two short paragraphs, The major Weaknesses and Strengths mentioned in the case study Then go to outside sources, a website, another case-study etc. please dont to forget to mention the source name.	5	5
Identify and discuss companys opportunity and threats as discussed in the case study, if any area is not fully discussed, students may use their own knowledge to come up with additional opportunities and threats	5	5
Analysis and evaluation of the companys strengths, weaknesses, opportunities, and/or threats and how they affect the companys current and continued success in the future. Your assessment Current market analysis Current competition Deep inter-work between strengths, weaknesses, and opportunities and threats How these four elements depend, or effect each other. How these factors have an impact on the overall business and customers.	10	10
Relevant recommendations to help the company deal with any strategic or structural weaknesses or threats and that will help them to maintain strengths and take advantage of future opportunities. (Inference) Realistic recommendations Future business environment What changes are expected Check out all possible connections and points when you suggest a line of action.	5	5
Sentence structure (professional, using collocations/business phrases)	5	5
Vocabulary (subject relevant vocabulary, word order, transitions, complexity)	5	5
Total	50 Points

Case study:

How Tesla changed the auto industry but did not change its working.

Moving parts: How the automotive industry is transforming

Tesla is experiencing growing pains, but has willingly invited more criticism than other young companies because the automaker is bold enough to say that its vision of the future of the automotive industry is the definitive one. Tesla is forcing the auto industry to rapidly change. Large, established automakers now are making fully electric and hybrid electric cars. Automakers are starting to explore and include artificial intelligence (AI) in their cars, and now major automakers and governments are autonomous discussing vehicles (AVs) and how best to innovate and regulate them.

Here is what Tesla does best:

• Brand Promise: The leading electric car, backed by simple software, drives high-performance and stylish designs.
• Brand Story: Tesla has built a movement that stands alone with an intense desire from brand fans
• Innovation: Tesla engines are designed like technology, and we are always investing in getting better.
• Purchase moment: Simple. Order online, no dealers, sales reps, or negotiations.
• Consumer Experience: Tesla promises a total automotive vehicle experience which creates desire and envy among customers.

Not only that, but Tesla's software design is state-of-the-art: the fact that Tesla can update vehicle software over-the-air (OTA) simply makes it incomparable. As cars become more tech-savvy, Tesla is in the lead. However, Tesla struggles to meet deadlines and frequently delivers flawed vehicles, and profitability remains elusive. Many experts use Tesla's failings to argue that the company shouldn't be followed as an innovator or even as a true automaker.

It turns out Tesla's story is far more complicated and the roots of its challenges come down to the company's finances and supply chain.

Tesla is forcing the auto industry to change rapidly

Tesla didn't invent the electric car (Scottish inventor Robert Anderson did, in 1832), but it was Tesla who popularized, pioneered and promoted the electric car ever since the company's founding in 2003. None of the major automotive manufacturers were making electric cars until Tesla made it cool in 2008 with its bombastic announcement of the first luxury electric car: the Tesla Roadster.

Since then, big automakers with lots of capital, solid supplier bases and seasoned supply chains went to work in rapidly developing and churning out their own electric cars, as consumers and governments pursue eco-friendly, low-emissions transit options. The next electric car, released in 2010, was made by Mitsubishi Motors.

According to the available data, the number of hybrid EVs sold in the USA until 2011, was 9,750. Since then, the EV market has exploded. By 2015, 71,044 EVs were sold in the U.S., and 384,404 hybrid EVs. Between January and September 2017, Tesla led by selling 73,227 EVs, followed by Chinese automaker BYD, selling 69,094.

The auto industry was not resistant to innovation and change, but it adapted slowly. Lately however, that's changed dramatically, and largely because of Tesla's disruption in the market. Tesla has that "cool factor," something established automakers do not have, and has created hype around Tesla's EVs that other brands like the Nissan Leaf, do not get.

Then there's the AV discussion. Tesla's Autopilot, which uses AI to drive a Tesla vehicle for you with some minor assistance, has been the subject of hot debate, with some consumers misusing the technology and crashing the cars while using Autopilot. Other automakers are following Tesla's lead and looking to create semi-autonomous or fully AVs, and that has sparked controversies as lawmakers are trying to discuss safety concerns with automakers.

Tesla is one of the key drivers of innovation as the auto industry is forced to evolve, but Tesla also shows how difficult it is to succeed in the auto industry at all, and how there is still room for improvement within the hotly competitive, tight margin business. In fact, Tesla is a good example of how critical stable supply chains are to the success of an automotive company.

Tesla's supply chain is it's biggest problem

Tesla doesn't meet deadlines. Tesla doesn't meet market expectations. Tesla delivers cars riddled with defects.

September 2018, Tesla missed Model 3 production goals in due to supplier issues, and ended up having to redesign a key part of the Model 3. The CEO Elon Musk called it, "production bottlenecks". The problem continued through 2019.

These problems are due to lack of funding. It is a fact that Tesla is still a small company, compared to the rest of the auto industry, and so ramping up production for a new car is much harder for Tesla than it is for landed companies like Ford or General Motors.

Tesla's supply chain is still in the development phase, and right now Tesla doesn't have the capital and supplier relationships that other big automakers have. Tesla makes its own batteries, so it's heavily dependent on its own sources," said Michelle Anderson, a partner with Boston Consulting Group.

"While we obtain components from multiple sources like other automobile manufacturers, many of the components used in our vehicles come from a single source," Tesla said in its official statement. "To date, we do not have alternative sources for most of the components used in our vehicles and we generally do not maintain long-term agreements with our suppliers. We do not buy the parts from others because their prices or costs are not favorable to us." That's essentially the story of the company's struggle: Tesla tries to scale high and fast, but gets bogged down by a faulty supply chain. Supply chains are critical to an automaker's success, but the most critical part of the automaker's supply chain is its relationship with suppliers and that might be where Tesla is weakest.

Then there's the funding problem. Tesla is technically still in the red the company isn't profitable yet, and many critics use that fact as their main reason for arguing that Tesla isn't worth investment or even worth paying attention to.

But when it comes to suppliers, Tesla's lack of funding is a huge issue. For example, Tesla is trying to ramp up production of the Model 3, necessitating a high volume of parts and components from its suppliers. Because of that capital outlay, Tesla might hold off on paying upfront costs for the parts and wait until the car starts selling before paying suppliers. That compounds the problem; now Tesla has to produce and sell as many cars as possible in order to pay suppliers and maintain strong supplier relationships. But because Tesla is still learning how to mass produce electric cars, it is increasingly difficult to sell and deliver quality cars at an efficient rate.

Tesla delivers on its promises, just not always on time

What Tesla has proved is that it takes a tremendous amount of funding, grit and hard work, star power and a strong vision in order to succeed in the auto industry and launch a radical new product especially if you're trying to do both those things at the same time. The fact that Tesla is still around 15 years after its commencement is impressive all by itself.

While Tesla can be seen as an inspiration to the industry, it also serves as an example of what happens when you lack capital, sufficient cash flow and an unstable supply chain. But if Tesla can keep investors hooked on its vision of a future filled with electric cars, it may just be a matter of time before it becomes an industry foundation.

1. How can Tesla maintain the power player position while competitors are investing in battery technology?

We see Toyota and Nissan investing in solid-state batteries that will force Tesla to keep investing in new technologies. It is hard to get a sense of who will win the battery war. The Japanese government has invested billions in making the functional solid-state batteries. While the solid-state might be more efficient or longer-lasting, there is no evidence a solid-state battery will make for a faster car than Tesla. Those solid-state batteries will be coming in the 2025-2028 period. The next decade will be interesting to watch the shakeout in the electrical vehicle market.

2. How can Tesla capture a bigger audience within this decade?

Despite Teslas lead, they remain a niche disruptor for the elite. The current Tesla consumer is 54 years old, 70% male, with an income of $154,000 USD. Tesla will have to decide if they will continue to own the luxury market and let Toyota and Nissan own the mass market. At the current price points, Tesla will remain the electric vehicle for the elite. Also, if Tesla chooses a broader target option, Tesla may need to fill out its lineup with more practical car choices, especially in the SUV product line.

3. Should Tesla do a better job in getting its message out?

Many believe Tesla should be advertising, even if in big moments (e.g., Super Bowl), to ensure they own the story that delivers their vision. Elon Musk has become a polarizing figure, with an inconsistent voice on Twitter. There is a belief Elon Musks voice maybe be pushing away female consumers, who only make up 30% of Tesla sales. Yet, the Lexus ownership is evenly split between male and female. It seems Tesla is avoiding advertising, almost for principle, not whether or not it is smart. In terms of marketing, Tesla needs to look at how Google has done their ads, with big huge stories that connect emotionally with the consumer.

4. How can Tesla keep its focus on winning the EV market?

As a leader, Elon Musk sends many conflicting signals that can scare investors. Internally, Elon Musks approval ratings have fallen from mid-90% to mid-60% over the past few years. Will Elon Musks side projects distract from the Tesla battles? Is self-driving a reality or a distraction?