Automotive Industry overview
Automotive Industry overview
  1. Introduction

The automotive industry is a major economic and industrial force in the world. It produces 60 million cars and trucks per year, accounting for nearly half of global oil consumption. The industry has been around for over a century. It began in Germany and France and matured in the United States during the mass-production era. Designing, building, and selling automobiles are just a few of the jobs available in the auto industry.

Around 11 million people are employed directly by the industry, with many more employed indirectly. Throughout the history of the industry, vehicle volumes, efficiency, safety, features, and choice have steadily increased. It has been dubbed the “industry of industries” because it is closely associated with 21st-century industrial development and its twin marvels, mass production, and mass consumption.

  1. Industry Automotive Industry Trend Report

The current trend in the automotive industry is evident. Many automakers are focusing on electric vehicles as a result of Tesla’s success. Not only that, but the commercialization of autonomous vehicles is also underway.

Aside from the well-known automakers, there is a slew of new electric vehicle manufacturers. SUVs’ meteoric rise in popularity, as well as recent trends like connected, autonomous, shared, and electric vehicles, are reshaping the automotive industry as we know it. SUVs continue to be the fastest-growing segment globally as automakers abandon sedans and MPVs in favor of crossovers. Despite the dangers of a Trump-led trade war and oversaturated auto lending markets, Euromonitor forecasts that SUV sales will grow at a 6.8% annual rate between 2017 and 2022.

2.1 Analysis of Tesla’s external environment (250)

Automotive Industry Market Size 

Numerous companies, such as BMW and Lexus, already compete in the premium electric car market. Tesla is one of the few firms that offer a mid-range car, even though they have also inhabited this sector.

Though the $35,000 Model 3 is a step in the right direction, Tesla should devote even more resources to building more cheaper vehicles – the Model 3 is already outselling Tesla’s premium models, demonstrating widespread demand for inexpensive electric cars. In areas like Asia and Europe, where Tesla already has a competitive edge in the premium electric vehicle market, extending manufacturing to cater to customers who buy less expensive cars might be beneficial.

Automotive Industry Business Cycle Analysis

Introduction

Tesla has dipped its toe in the water with its Autopilot features, but there is still a lot of space for improvement. All other automakers are still in the early stages of product development.

Automotive Industry Growth

The Tesla Model S is in its early stages of development. Electric vehicles must still persuade people that they will function and be practical. As more electric charging stations are installed, and more people embrace electric cars, it becomes simpler to convince individuals skeptical of new technology such as electric vehicles.

Automotive Industry Maturity

Tesla Motors, Inc. is noted for its rapid innovation, particularly introducing the world’s first completely electronic sports automobile. This internal strategic component is a source of strength for the organization, allowing it to create competitive and lucrative goods.

Decline – Diesel cars.

Governments have voiced worry about the degree of pollution caused by diesel vehicles. Within a few years, some cities have vowed to outlaw diesel vehicles. Diesel car sales have plummeted, and the market for these vehicles may be nearing its end.

Market or Automotive Industry Opportunities

Tesla Motors, Inc. has several significant changes to enhance its financial position and overall competitiveness in the global automobile industry, including the following:

1. Increased global sales

2. Expansion of global supply chains

3. Diversification of the business

Tesla needs to think about expanding its global sales. This possibility is predicated on considerable economic development in nations where the firm has a minor presence. In this regard, Tesla has the option to extend its supply chain in order to enable worldwide production and sales expansion. Diversification can also help the organization boost its performance. This external strategy component entails creating new businesses to limit Tesla’s exposure to market hazards.

2.2 Internal Environment Competency Analysis of Tesla

Tesla Motors, Inc. builds its brand popularity and market penetration by utilizing its marketing mix, or 4Ps. Tesla’s marketing mix is unique in the automobile sector because of the place and promotion elements.

1. Products 

The outputs or items sold to target clients are identified in this component of the marketing mix. Customers pay for the value that profitable items deliver. Tesla has the following goods as an automobile company:

  • Automobiles
  • Components of the electric vehicle’s powertrain
  • Rechargeable batteries

2. Place/Distribution

The following locations are utilized in the case of Tesla:

  • The Company’s Official Website
  • Stores and Galleries owned by the company
  •  Service Centers that the company owns

3. Automotive Industry Promotion

The following elements make up Tesla Motors, Inc.’s promotional mix, in order of importance in the automobile industry:

  • Social media marketing (most significant)
  • Selling to individuals
  • Marketing and public relations
  • Promotional sales
  • Use of direct mail

4. Automotive Industry Pricing 

This part of the marketing mix deals with price levels and associated initiatives. Tesla Motors, Inc. operates on a premium pricing model. This approach entails setting high price points based on the uniqueness or perceived worth of the company’s products.

2.3 Automotive Industry Stakeholder analysis

Tesla’s stakeholders are listed below, in order of priority for the company’s CSR:

a group of people 

Communities

Tesla Motors, Inc. is a car company that directly addresses community concerns as essential stakeholders in brand image. The natural environment is one of the interests of this stakeholder group. Tesla’s electric vehicles cater to this demand. Communities, for example, are pleased that these products are environmentally friendly because they emit no pollutants. Tesla also meets the needs of communities in terms of advanced technology benefits.

Automotive Industry Customers

Customers have an impact on Tesla’s revenue, and they care about product quality and fair pricing. Given their importance, the company prioritizes these stakeholders in its corporate social responsibility initiatives. To address such concerns, the company continues to look for new ways to reduce battery costs. Tesla, for example, intends to manufacture its own batteries rather than continue to purchase batteries from Panasonic in order to make its electric vehicles more affordable. Tesla is also continuing to expand its charging station network.

Employees

Here employees are a major success element for Tesla Motors, Inc. in the automobile industry, according to the company when developing its corporate social responsibility strategy. Employees have an impact on business productivity and performance as stakeholders. High pay and a wide range of career options are among their priorities.

Shareholders/Investors

Tesla’s early years were reliant on a series of investments. These stakeholders have a significant impact on the company’s capitalization. Investors and shareholders are interested in the company’s profitability and growth. Tesla’s corporate social responsibility strategy addresses these concerns by pursuing long-term goals to transform the automotive industry.

Automotive Industry & Governments.

Government action has an impact on Tesla Motors, Inc. Governments are stakeholders who provide businesses with requirements, constraints, and opportunities. Legal compliance and business contribution to economic growth are among the interests of this stakeholder group. Tesla’s corporate social responsibility strategy meets these needs, with plans for global strategic expansion and an excellent sustainability track record.

2.4 Managing change, Organisation culture and Operational management of Tesla 

Based on the ten strategic decision areas, Tesla Motors, Inc. employs operations management (OM) best practices to increase productivity while lowering costs. 

1. Goods and Service Design

Operations managers focus on how the organization’s products influence costs, quality objectives, and resources in this strategic decision area. Tesla addresses this issue by innovating at the same time.

2. Quality Management

The main goal of this strategic decision area of operations management is to meet customers’ quality expectations. Tesla achieves this goal by conducting market research regularly.

3. Process and Capacity Design

This decision area in operations management is concerned with business processes and related investments, standards, and resources. Tesla Motors, Inc. uses automation to address this issue.

4. Location Strategy

This strategic decision area of operations management considers logistics and proximity to markets, resources, and suppliers. Tesla’s operations managers take advantage of the company’s global reach when it comes to resources.

5. Layout Strategy and Design

Operations management is concerned with achieving the best possible flow of resources and information in this strategic decision area. Layouts at Tesla are designed to maximize the capacity utilization of facilities, particularly those used to manufacture electric vehicles.

6. Human Resources and Job Design 

In this strategic decision making area of operations management, the goal is to have adequate and effective human resources. Tesla Motors, Inc. achieves this goal by employing a competitive compensation strategy to attract capable and effective employees.

7. Supply Chain Management 

Operations managers focus on adequate supply and an effective and efficient supply chain in this strategic decision area. A global supply chain supports tesla’s manufacturing processes.

8. Inventory Control

This strategic decision area considers inventory decisions, costs, and production support. At Tesla, inventory decisions are made using quality-oriented operations management principles.

9. Scheduling

This strategic decision area focuses on resource utilization schedules for the short and intermediate-term. Tesla Motors, Inc. operations managers address these concerns by combining market-based scheduling with automated processes for maximum efficiency.

10. Maintenance

In this strategic decision-making area of operations management, adequacy of resources and production capacity are the goals. Tesla ensures resource adequacy by monitoring inventory on a regular basis and responding quickly to changes in market demand.

2.5 Tesla’s Organizational Culture and Impact and Influence on Tesla 

Tesla Inc. highlights six key characteristics of its organizational culture:

1. Move Fast. Tesla Inc.’s competitive advantage is influenced by speed. This corporate culture trait emphasizes the importance of workers’ capacity to adapt quickly to trends and changes in the worldwide market.

2. Do the Impossible. Tesla must guarantee that its corporate culture encourages staff to think beyond the box while producing cutting-edge goods. This cultural trait highlights the value of fresh ideas and solutions while also emphasizing the advantages of thinking in unexpected ways.

3. Always be lookout for new ideas. Tesla, Inc. is a company that thrives on innovation. This aspect of the company’s culture focuses on the company’s ongoing commitment to innovation.

4. Use “First Principles” reasoning. Elon Musk, the company’s CEO, advocates for reasoning based on basic principles. These ideas are based on discovering fundamental causes in order to comprehend and solve real-world situations.

5. Think Like Owners. Tesla uses its corporate culture as a tool to sustain a mentality that encourages corporate growth.

6. We are ALL IN. Tesla, Inc.’s organizational culture brings people together as a team to enhance the company.

This cultural feature has the benefit of allowing the company to manufacture high-tech items that appeal to its target market. Tesla autos, for example, have a growing percentage of the automotive industry because of the company’s strong branding. This advantage is in line with Tesla’s overall competitive strategy as well as its aggressive expansion plans.

In terms of support for speedy reaction and issue solutions, the company culture is also favorable. This cultural attribute keeps the organization up to date on new technology while also ensuring that its goods are effective and relevant to the demands and preferences of its consumers. Tesla’s corporate culture has a disadvantage in that it puts continual pressure on staff to innovate. The corporation gains from innovation, but it places pressure on human resources. Nonetheless, when this cultural trait is appropriately adopted, it assures long-term commercial competitiveness.

  1. Client Report

3.1 Strategic planning 

Tesla should stick to the plans it has in place for its future expansion and development.

Because the firm is new in terms of the things it sells, it has many strengths and potential to expand and become bigger and better as it draws more consumers. Various investors have also expressed an interest in this firm, all of whom are motivated to see it succeed since they all profit from the operations that Tesla does. 

One important strategy that Tesla Company might pursue is to cease the manufacture of their vehicles completely. Alternatively, the corporation might elect to sell some of its technological components employed in the production of these automobiles. Selling these technologies, particularly to competitors or rival businesses, will lessen the pace of competition to which this company will be exposed in the coming years.

Because this company has the resources necessary to create electric vehicles, it might choose to create the technology and then sell it to other companies to create the finished automobiles. The corporation will still make more money as a result of this, and they will also be able to avoid competing with auto-manufacturing businesses.

Another important strategic approach for this corporation is to develop hybrid vehicles. Rather than producing all-electric cars, the corporation may produce hybrid vehicles that utilize both gasoline and electricity. The firm will be able to attract a wider consumer base as a result of this, resulting in increased profit. Purely electric cars have a number of drawbacks that make them less appealing to users. In addition to being environmentally beneficial, these automobiles need extended periods of charging and are connected with high gas prices. As a result, adding a fuel system will increase this company’s client base as other firms have done.

3.2 Automotive Industry Recommendation 

The organization will employ the three easy methods below to implement the strategic plan. One is to generate awareness about the plan; this provides stakeholders time to learn about and comprehend the plan’s components. This variety of methods can be used to raise awareness. Information may be disseminated via materials such as posters and pamphlets,

for example. Events can also be planned, giving stakeholders adequate time to learn everything about the proposal. The next phase is training, which will ensure that all stakeholders understand their responsibilities in the strategy. As a result, they will have an easy time putting the strategy into action. Last but not least, there’s monitoring and reporting.

Once the implementation process has commenced, this will commence. It might include things like making frequent updates, identifying remedial measures, and conducting periodic evaluations. All of this will ensure that the strategy is carried out successfully. The organization will employ an initiative that reveals the strategies that are near to the performance gaps to come up with strategy prioritizing. The strategy that should be prioritized is those that complement the company’s performance gaps. As a result, depending on this proposal, the organization will pick the most acceptable methods.

  1. Conclusion (100)

In conclusion, the Tesla Company has the potential to develop and become a major automobile manufacturer. With contemporary automobile technology on their side, they stand the best chance of expanding and flourishing. As a result, the firm should implement some of the following recommendations in order to mitigate the risks and losses associated with its operations.

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