Differentiation and Positioning Strategy, SWOT Analysis Example

Tesla SWOT analysis

Tesla Motors is a renowned company that deals exclusively with the sale of electric cars since its inception in 2003.

Tesla Motors strengths

• Tesla Motors is the developer of “The Roadster” which is the first ever sport car that is fully electrical.
• Tesla Motors is a sturdy supplier of vehicles to manufacturers such as Toyota.
• The technology expertise at Tesla Motors is unchallenged with regard to drive drain as well as electric transmission (Witcher & Chau, 56-112).
• Tesla Motors is also competent in absolute in-house vehicle manufacturing and any other necessary sub-assemblies.
• Tesla Motors has also developed a modern platform for Model S with potentials for future crossover models as well as any model that the company may envision

Tesla Motors weaknesses

• Tesla Motors deals with complete development of their cars together with the sub-assemblies. This situation results to escalated production costs because they can hardly enjoy the economies of scale.
• The products coming from Tesla Motors are extremely high as compared to other companies dealing with the sale of vehicles powered by combustion engines, thus they are less competitive in the market.
• Tesla Motors deals exclusively with the sale of electric vehicles and customers have reservation of suspicion on this model of vehicles. Addressing such a problem requires that the company build some Tesla Stores whereby they can educate their clients about sustainability of electric cars in the future (Akpoyomare, Adeosun & Ganiyu, 53-65).
• Infrastructure supporting electric cars is nonexistent, thus forcing Tesla Motors to spend more on manufacturing of Superchargers.

Tesla Motors opportunities

• Most governments on international front are supporting any initiatives that promote environmentally friendly technologies and the production of vehicles by Tesla Motors along this line attracts support from the government including duties exemption.
• Tesla Motors also supports the Smart car from Mercedes that is likely to promote sufficient learning concerning the passenger vehicles that they intend to introduce in the market in the future (Baliga, 112-116).
• Tesla Motors has initiatives of enhancing the processes of quality control which is associated with a drastic reduction in the cost of operation.
• With global oil deposits nearing depletion, the price of fuels is anticipated to increase due to supply shortage. This will attract more customers to electric car market.
• Most manufacturers including Toyota and Daimler are purchasing electric model of cars from Tesla Motors.
• Majority of people are concerned with environment problems caused by internal combustion engine and therefore they are likely to support electric cars.

Tesla Motors threats

• The aspirations of Tesla Motors entails manufacture, distribution as well as sales of their vehicles, a situation that is associated with great challenges on account of the business model applicable at Tesla Motors (Wit & Meyer, 211-267).
• The pricing strategy involving skimming that has been applied at Tesla Motors has never been applicable in motor vehicle industry.
• Tesla Motors is conventionally competing against combustion engines which is a type on technological innovation that has been in place for hundreds of years in the past while their new innovation might take substantial time to be embraced by the optimal masses that they desire.
• There are other vehicle manufacturers who have introduced in the market other forms of environmentaly friendly vehicles. The companies are well endowed with resources and they can embrace economies of scale thus compete effectively against Tesla Motors
• Accidents that are associated with electric cars are likely to scare away the clients, such as fire coming from batteries.

Works cited

Akpoyomare, O., Adeosun, L. & Ganiyu, R. Differentiation and Positioning Strategy: A Toss of the Same Coin. International Journal of Management and Sustainability, 1(2), pp.53-65, 2012.

Baliga, B. Advanced power rectifier concepts . 2^nd Ed. New York: Springer, 2009.

Wit, B. & Meyer, R. Strategy synthesis . 3^rd Ed London: Thomson Learning, 2005.

Witcher, B. & Chau, V. Strategic management. 1st ed. Andover: Cengage, 2010.