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CAPARAL. HAMAWY. MAGALIAO. NACILLA. PARAISO. REYES.BA 190 - STRATEGIC MANAGEMENT
UNIVERSITY OF THE PHILIPPINESPROF. MITA ANGELA M. DIMALANTA
2013
• 4500-PERSO COMPANY• CREATED 2 REMARKABLE CARS• POSTED ITS 1ST QUARTERLY PROFIT• REPAID ITS GOVERNMENT LOANS• LOOKED LIKE IT MIGHT SURVIVE• BENEFITED FROM ENTHUSIASM OF “ECO-WEALTHY”
HISTORY
HISTORY
• MARTIN ERBERHERD• ENGINEER LOOKING FOR HIS NEXT BIG PROJECT• SERIAL ENTREPRENEUR WHO LAUNCHED A NUMBER OF START-UPS• HAD CONCERNS FOR GLOBAL WARMING & USA’S DEPENDENCE ON THE
MIDDLE EAST FOR OIL• LOOKED FOR A SPORTS CAR THAT WAS ENVIRONMENTALLY FRIENDLY
“IT WAS CLEAR THAT PEOPLE WEREN’T BUYING A PRIUS TO SAVE MONEY ON GAS – GAS WAS SELLING CLOSE TO INFLATION – ADJUSTED ALL TIME LOWS. THEY WERE
BUYING THEM TO MAKE A STATEMENT ABOUT THE ENVIRONMENT.”
HISTORY
• ALTERNATIVE FUEL OPTIONS:• HYDROGEN FUEL CELLS• NATURAL GAS• DIESEL• ELECTRICITY
HISTORY
• AL COCCONI, FOUNDER OF AC PROPULSION & PRODUCER OF TZERO• TZERO
• COULD GO FROM 0-60 MILES/HOUR IN 4.1 SECONDS• POWERED WITH EXTREMELY HEAVY LEAD-ACID BATTERIES
• EBERHARD APPROACHED COCCONI WITH IDEA OF USING LIGHTER LITHIUM ION BATTERIES
• HE LICENSED ELECTRIC-DRIVE-TRAIN TECHNOLOGY FROM AC PROPULSION & ESTABLISHED HIS COMPANY, TESLA MOTORS
HISTORY
ELON MUSK• FOUNDED PAYPAL BUT SOLD IT TO EBAY FOR $1.5 BILLION• STARTED SPACEX• ONE OF THE INSPIRATIONS FOR TONY STARK IN IRON MAN SERIES OF
MOVIES• APPROACHED EBERHARD ABOUT BUYING TZERO BUT LATER ON
AGREED TO JUST FINANCE PLAN WITH $6.3 MILLION
HISTORY
ROADSTER• FIRST TESLA PROTOTYPE• FEATURES: 400 VOLTS OF ELECTRIC POTENTIAL, LIQUID-
COOLED LITHIUM ION BATTERIES, AND A SERIES OF SILICON TRANSISTORS• GIVE CAR ACCELERATION SO POWERFUL, DRIVER WOULD BE
PRESSED BACK AGAINST THEIR SEAT
PERSONALITY CLASHES: EBERHARD VS. MUSK
BOTH WERE TECHNICALLY SAVVY & VIGOROUSLY ADDRESSING PROBLEMS WITHIN TESLAEBERHARD: “JUST BRILLIANT, AND HE HAS THIS TENACITY THAT IS UNBELIEVABLE. . . HE IS THE GUY YOU WANT AROUND IN THOSE EARLY DAYS WHEN YOU HAVE NAYSAYERS ALL AROUND.” BUT ABRASIVE & CRITICAL
PERSONALITY CLASHES: EBERHARD VS. MUSK
AT ODDS OVER DECISIONS OF:BODY PANELS
MARKETING
Use lighter, stronger – and more expensive – carbon fiber
PERSONALITY CLASHES: EBERHARD VS. MUSK
CHASSIS
PERSONALITY CLASHES: EBERHARD VS. MUSKMUSK’S PREFERENCE PREVAILED EVERY TIMEMUSK’S INSISTENCE ON BEST MATERIALS&PARTS +EBERHARD’S INEXPERIENCE AS MANAGER OF A MAJOR FIRM = DELAYS AND RUNAWAY COSTSEBERHARD: CEO TO PRESIDENT OF TECHNOLOGY TO NOTHINGMICHAEL MARKS, TEMPORARY CEO FOCUSED ON ROADSTERALL-TIME LOW TO ALL-STAR CELEBRITY STATUSTESLA ANNOUNCED MODEL S - A HIGH PERFORMANCEALL-ELECTRIC SEDAN
OBSTACLES TO ADOPTION OF ELECTRIC
VEHICLES
PRICE
E-VEHICLES ARE MORE EXPENSIVE
TESLA’S RESPONSEA. SUPER CHARGER NETWORK
- FREE- 6 STATIONS IN THE WORLD AS OF 2013
B. GUARANTEES- FREE REPAIRS & FREE CAR REPLACEMENT WHILE
CAR IS UNDER REPAIR
LIMITED RANGE & ASSOCIATED “RANGE ANXIETY”
PEOPLE ARE CONCERNED ABOUT DRIVING TO PLACES WHERE CHARGING STATIONS ARE UNAVAILABLE
TESLA’S RESPONSEA. NOT A BIG ISSUE FOR TESLA’S CARS DUE TO ITS LONG RANGE CAPACITY
COMPETITION IN THE ELECTRIC VEHICLE
HYBRID ELECTRIC VEHICLESTOYOTA PRIUS, 2000
REQUIRE NO CHANGE IN TYPICAL CONSUMER USAGE HABITSHAVE EXTREMELY LIMITED ELECTRIC RANGE
ALL-ELECTRIC VEHICLES/PLUG-IN ELECTRIC VEHICLES
Nissan Leaf Chevy Volt
TESLA’S STRATEGY
STRATEGIES
LOOKING TO THE FUTURE
NOT OUT OF THE WOODS YET
TESLA’S SUCCESS• REVENUE OF $562 MILLION & PROFIT OF $11.2 MILLION• MODEL S EARNED CONSUMER REPORT’S HIGHEST RATING• MAY 2013: COMPANY RAISED $1 BILLION BY ISSUING NEW SHARES• PAID BACK GOVERNMENT LOAN WITH $679 MILLION CASH STILL AVAILABLE• SURVIVED INFANCY, APPEARED TO BE SOLVENT, & WAS MEETING SALES
OBJECTIVES
NOT OUT OF THE WOODS YET
INVESTMENT ANALYSTS SAY• 2013 PROFITS INCLUDE STOCK WARRANT PROFITS & ZEV CREDIT SALES
• WARRANT REVENUES WOULD NOT BE REPEATED• NO FORECAST FOR YEARLY DEMAND OF ZEV CREDITS• NO ONE KNOWS WHETHER REVENUES WERE SUSTAINABLE
• INCREASING COMPETITION • WHAT’S MARKET SIZE FOR ELECTRIC VEHICLES & WHAT PORTION OF MARKET WOULD
PAY HIGHER PRICE OF A TESLA?• POSSIBILITY OF TESLA’S STOCK PRICE TO BE AN OVERINFLATED BUBBLE
REFERENCE : HILL, C. & JONES, G. (2013). STRATEGIC MANAGEMENT: AN INTEGRATED APPROACH (11TH ED., PP. C-201-C-210). STAMFORD, CT: CENGAGE LEARNING.