Tesla was established in 2003 and is based in California. Tesla company is engaged in the manufacture of electric vehicles, scalable clean energy generation, and storage products. The key activities at Tesla include the electronic manufacturing services model of production. Tesla is involved in the manufacturing of the electric sports cars, the operation of a distribution chain all over the world, and investment in charging station (Petri, 2015). Tesla is also engaged in the production of car batteries, which is an essential element in the performance of electric cars.
Critical Activities Performed by Tesla
Tesla has been noted to have adopted a model, “We’ll do it ourselves, we’ll change the mold.” This philosophy has seen the company engaged in the production of most parts of the vehicle including seats. Among the activities that are handled internally by Tesla include design and building bulks of its vehicles. Tesla also handles components of software development for the car’s systems. Tesla is also known to manage its chain of car dealerships all over the world.
It is indicated that Tesla has more than 150 suppliers distributed throughout the world. These suppliers are engaged in the supply of more than 2000 different parts. Among the key partners include Chei Mei OptoElectronic that supplies the displays in the car, Garmin supplies the navigation systems, NVIDIA TEGRA 3 processor is used to run the electronics in the vehicle, and modems are supplied by Sierra Wireless and used to run broadband on the AT & T network. Panasonic is the strategic partner for developing battery packs.
It is noted that Tesla rarely uses traditional metrics such as market penetration and market share. While market share was widely used, Tesla is noted to rely on a share of profits. This was evident in 2017 when Forbes reported that Renault-Nissan was the global electric market leader in 2017 having sold 1.5X more units than Tesla for the first quarter. Tesla recently reported that it expected its gross margins for Model to hit 25% in 2018 and noted to be twice as high as gross margins as Ford and GM (Yoon, 2017).
Eusk, M. (2017). Tesla Versus the World: Can Insourcing Beat Outsourcing. Harvard Business School, Technology and Operations Management. Retrieved from https://rctom.hbs.org/submission/tesla-versus-the-world-can-insourcing-beat-outsourcing/
Lehtinen, P. (2015). The advancement of electric vehicles-case: Tesla Motors. Disruptive technology requiring systemic innovating (Master’s thesis).Yoon, E. (2017). Tesla Shows How Traditional Business Metrics are Outdated. Harvard Business Review.
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