Tesla Vertical Integration Strategy

Teslas marketing and sales depend on an unconventional model and rely on word of mouth from its satisfied customers. Teslas plan for an almost complete vertical integration from battery components to finished vehicle is unusual within the automotive industry and is perhaps only matched by BYD in China an OEM and a cell manufacturer Harrison said the move had major implications for battery supply chains and where the value exists.

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Teslas vertical integration can be universally applied and here are several takeaways for your building your business plan.

Tesla vertical integration strategy. Vertical integration grants Tesla more control over more details of its manufacturing process and allows Tesla to respond much faster to potential improvements and at a. Asked Sep 13 2019 in Business by AshleyWY. Recommendations for increasing profitability of Tesla. Task 4 Strategic Purpose Ethics and CSR. Tesla promotes vertical integration on sales which results in the non-negotiable price of vehicles. We have a massive amount of internal manufacturing technology that we built ourselves.

Case Study of Tesla 5 Current Supply Chain Configuration As stated by the companys CEO Elon Musk the goal for Tesla is to reach 500000 car deliveries by the year 2020 Monsellato 2016. A diversification strategy a vertical integration strategy and an international strategy. Fostering closer relationships between Tesla engineering. Based on this internal and external analysis there are three key growth strategies this author would recommend and Musk has already begun to pursue. Most notably Archambault writes in his report that they see Tesla as now being about 80 vertically integrated which is rare in the automotive industry where companies are focusing on the. This is also a strategy for reducing its reliance on suppliers by the vertical integration approach.

Other takeaways Tesla is standing by its 2020 delivery target of about 500k vehicles up 30-40 from 2019. Vertical integration interna SlideShare uses cookies to improve functionality and performance and to. At the Corporate stategy course me and the other 5 components of my team analyzed three main aspects of Tesla Corporate strategy. Teslas Gigafactory Supply Chain Vertical Integration Tesla is vertically integrating - or possibly taking an AppleFoxconn funded manufacturing and supply chain partnership approach. It has 1 superior technology 2 a supercharger network and 3 vertical integration. Task 3 Corporate Strategy.

Superior technology Figure 2. In the end it will be progressively more difficult for traditional auto to compete. Teslas vertical integration strategy makes sense because of the speed at which they are innovating and their complete solution approach to achieving their mission. Tesla mentioned an in-sourcing strategy in order to achieve rapid growth. In-house manufacturing of key components and new parts that require frequent updates resulting in a shorter learning curve and more rapid new Tesla vehicle development. For example vertical integration has given Tesla much more control over its manufacturing process faster response to changes needed and all at a lower cost by cutting out the middleman.

As a knowledgable businessman Elon Musk has worked incredibly hard to vertically integrate Teslas business structure but although it may have been costly. There are three reasons why Tesla has been successful thus far. CEO Elon Musk elaborated on the investor call Tesla is absurdly vertically integrated compared to other auto companies. Tesla motors value chain analysis shows that the company works on the Zero Dollar Marketing principle. Most importantly Teslas vertical integration flywheel will drive down costs lower vehicle prices and increase demand. Expansion strategy of Tesla.

Tesla a company run like no other avoided these chip shortages by using its vertical integration and preparation along with some other strategic moves. CSR strategy of Tesla. Start with low volume production and sell at higher price points. Tesla mentioned an in-sourcing strategy in order to achieve rapid growth. Tesla Plans Gigafactory to Make Batteries for 500000 Cars a Year April 9 2014 By Eric Wesoff. These three factors create a virtuous cycle that continues to extend the companys lead.

CEO Elon Musk elaborated on the investor call Tesla is absurdly vertically integrated compared to other auto companies or basically almost any company. The core of vertical integration is not to do everything yourself or even to integrate everything in order to profit from the margin you otherwise pay. Use of horizontal integration vertical integration outsourcing or strategic alliance. The hallmarks of Teslas vertical integration strategy do not include. Teslas vertical integration is a radical change in strategy Posted on November 26 2017 by Charles Morris One of the many ways in which Tesla does things differently than other automakers is its tendency towards vertical integration.

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