Question

What are Tesla's competitive environment, key strategic challenges, and advantages and system for performance improvement?

Answer 1

ANS.Tesla is probably best known for its charismatic CEO Elon Musk and his vision to produce affordable and high-quality electric vehicles.Tesla vehicles have been hugely popular, but the company has been hard a tough nut to crack for investors and analysts.This could be because Tesla's unique business model integrates aspects of being an auto-maker, a hardware supplier, and a tech company.

Once Tesla established its brand and had produced and delivered its concept car to the marketplace, it reinforced its business model. Tesla's business model is based on a three-pronged approach to selling, servicing, and charging its electric vehicles.

1. Direct sales: Unlike other car manufacturers who sell through franchised dealerships, Tesla uses direct sales. It has created an international network of company-owned showrooms and galleries, mostly in prominent urban centers around the world. By owning the sales channel, Tesla believes it can gain an advantage in the speed of its product development. But more importantly, it also creates a better customer buying experience. Unlike car dealerships, Tesla showrooms have no conflict of interest. Also, customers only deal with Tesla-employed sales and service staff. Including the showrooms, Service Plus centers (a combination of retail and service center), and service facilities, Tesla has 429 locations around the world as of the end of Q4 2019.3 Tesla has also made use of Internet sales—consumers can customize and purchase a Tesla online.
2. Service: Tesla has combined many sales centers with service centers. They believe that opening a service center in a new area corresponds with increased customer demand. Customers can charge or service their vehicles at the service centers or the Service Plus locations. Also, in certain areas, Tesla employs what it calls Tesla Rangers – mobile technicians who can service vehicles from your house. Sometimes, no onsite technician is required at all. The Model S can wirelessly upload data so technicians can view and fix some problems online without ever needing to physically touch the car.
3. Supercharger network: Tesla has created its own network of Supercharger stations, places where drivers can fully charge their Tesla vehicles in about 30 minutes for free. The premise behind building and owning these stations is to speed up the rate of adoption for electric cars. Without the ability to charge on the go (similar to the concept of getting gasoline while driving), electric cars face a huge obstacle to mass adoption. Tesla will continue adding to the network of Supercharger stations in the United States, Europe, and Asia.

Tesla has two advantages that make it the industry leader in EV battery costs: More advanced engineering and the massive Gigafactory where it manufactures battery packs. Tesla’s engineering advantage, according to Jaffe, is the automaker’s use of more advanced cylindrical battery cells and its battery management system, the software that controls a vehicle battery pack.Tesla has really revolutionized that part of the battery pack and made it much more sophisticated, and it gives them the competitive advantage.