1. RUNNING HEAD: Tesla Audit
Christopher Lee Branyord
Dr. Friske, Mark
BUSN313
25 JUNE 16

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Tesla Motors is needing to have internal audit in order to identify awareness in the environment.
With understanding the current situation, strategic managers, external environment, internal
environment, analysis of strategic factors, strategic alternatives and recommended strategy, we
will be able to understand the situation with Tesla. With these diagnostics we will be able to
implement and evaluate the performance of Tesla having control.

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Tesla Audit
Tesla has a very particular situation that haunts all car-manufacturing plants. The new
direction of transportation to create less environmental use in oil has brought many concerns to
civilization. The manufacturer’s of motor vehicles is in a race to create a new world-class vehicle
being able to lead the market. This market is to change the direction of most manufacturers
following this answer to present environmental conditions (Sanderson 2015).
Tesla Performance
Tesla has consumers waiting for the answers that await the sustainment for production.
This present situation in using lithium ion and having no suppliers for Model 3 has many
questioning the ability of the manufacturer. Tesla needs a major supplier in order to continue the
development of these vehicles. These rare earth materials is not only difficult for Tesla however
many vehicle manufacturers. Most are pursuing and insisting on new strategies to make different
vehicles to run on different materials then Oil and lithium Ion batteries.
The potential of Tesla from the current report is astounding. Tesla is expanding
internationally of over 42 countries and selling over 107 thousand vehicles. Tesla has generated
over 179 million in cash flow for shareholders and research & development (R&D). Tesla is
trying to create its own cell production making a Gigafactory in order to produce their batteries.

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They have placed more then 1.5 billion in making this a priority in order to produce more vehicles
to the consumers. With only entering the market for 3 years ago has started growth of over 51
percent selling the Model S, seeing competitors drop on average of 10 percent (Tesla Report).
The posture of the Model S and the differentiation strategy of the company has surpassed
the market expectations. This helps them in creating the world-class vehicle being a new
manufacturer now the leader in automotive industry. Mission for Tesla is to make the most
premium vehicle at high cost. Then with each successful launch of vehicles lower prices to keep
beating the market down. This is being successful through the three years they have opened up the
doors. All R&D money is funded from free cash flow that was mentioned above to be 179
million. This will certainly happen if they continue to beat each year like the previous two.
Management Operations
Tesla has a clean mission in providing the world with best in class electric-cars. They have
achieved many stepping-stones in delivering the Model S having a very good foundation. One of
the key elements in Tesla is the board of directors. This is built of 7 individuals that have
extensive backgrounds in all areas. This helps them be successful in key points to help build the
mission of the business. The areas of their expertise is CEO having physics then 6 directors in
Global Supply Chain, Corporate Strategic Planning, Clean-tech Investment Practice, Operations,
R&D Engineer and Internet Engineer. They all have one particular skill combined in finance. This
is one skill you must have to help produce well thought strategies to be realistic. This happens to
be their strongest case in management is handling finances to produce longevity (Tesla Home).
The top management presents the board of directors with three particular skills. Elon
Musk is the CEO performing as Product Architect. With having history in design allows him to

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outline the products the way he wants. He wants to provide the world with clean cars and he has
the skills to do it. JB Staubel is the Chief Technical Officer in charge of energy systems
engineering. Jason Wheeler who is a Financial Officer coming from Google, VP in finance. This
is interesting case of events along with all these individuals being also on the board of directors.
Shows how they get involved every step of the way in creating and developing the products and
the strategies to accomplish the mission set by Elon CEO of Telsa.
Environment Today
As mentioned above the environment is not supporting automotive vehicles to continue to
be gas hogs. This allows Tesla to be the world-class leader in clean sustainable vehicles ahead of
the competition. Their strategy is differentiation and allowing them to make money off of it to
hurt the other motor industries later as Tesla becomes number one in the world. Oil is driving fuel
prices calling for a new method of automotive transportation. Tesla has created this vehicle
earning the Environmental Leadership Award. This was given to them from Global Green USA
for creating all electric automobile (Tesla Home).
The one resource that is difficult to come by in all vehicles providing electric cars is
Lithium Ion. Having this one source being hard to come by and high demand for Tesla is
complicating the system to attain a supplier. Tesla to counter this has created a strategy in order to
have a Gigafactory to help produce Lithium and make there own supply stretch further. Many
critics are asking how green is the motor really along with stretching this Lithium Ion that is hard
to produce using this limited resource. They have also insisted that the amount of CO2 emissions
is similar of a small SUV. This is slowly malingering and possibly getting revoked of allowing
admissions in certain countries that fine these types of vehicles (Oremus p.1).

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Tesla is looked up to from societal environment as economic answer to problems that
sustain the compass of our world. The technology that is brought through the years from Tesla has
allowed growth in battery capacity for longer sustainable energy and having self-driving cars.
This fundamental is backed up through government funding and allotting tax credit of 7500 US
dollars, to promote this transition. This is the transition that is needed to protect the environment
we live in (Euribe).
Motives Performing Desires
Strategy is built all around Tesla in this brand new market. This has been everyone’s
dream and now available in two different vehicles. These vehicles allow us to challenge the
market with two different classes. Roadster allows the challenge of performance and higher-class
targets. Model S is challenging most markets being the answer to many family cars. This assists
society to break the chain of oil demands.
The two markets above are targeted from the two desired outcomes of the owner. Tesla
mission is to present the world with a environmental clean vehicle. The second was being able to
give the world a high performance vehicle to challenge the competitors. These missions are being
challenged by the culture of Tesla. The culture is representing the idea of transparency in all
aspects. Elon announced that he is planning on releasing the patents of his electric cars in order to
have all the other manufacturers to climb on board. This allows open view of everything Tesla has
developed and promoted (Nicholson).
One resource we found that the business needs to hold onto is the employees. This has
been the key component to allow the business to develop and produce the all-electric car. They
have been able to produce a method to create a sustainable factory to be able to manufacture more

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lithium then the rest of the world combined. This is extremely important for them to have the lead
they plan to continue. Being able to build 500,000 orders that the consumers are demanding by
2020 will require them to sustain this resource (Debord).
Analyzing Tesla
Tesla has much strength allowing this business to be in favor of current economy. The
biggest asset to them is being the leader in this new market. Being a leader has its disadvantages
allowing others to reap the benefits of Tesla when they enter the market. They have a strong
approach into the industry following the mission they have. The weakness to their plan is the
supply. They are answering this weakness in order to be able to supply their own. This would
allow them to have more strength over their supply to continue leading this market. This would
also allow them to lower the price and accomplish the strategy to be cost differentiation. They
would then be able to enter the market into different key leaders like Audi and BMW.
Opportunities are many into this brand new market created by Tesla. The world wants someone to
create a price affordable commute car, able to sustain it for long periods. Threats are many that
will be entering the market and challenging them with new clean energy vehicles. They must
close off the market and make sure they are ahead of the electric car industry.
They have many benefits that put’s them above the competitors and pronounces the
differentiation making the mission accomplished. The have to emplace rules being no Tesla
dealers, no inventory along with no negotiation on price. This is great on behalf of the company
and the consumer until more individuals enter this market. There is no middleman to take away
the mission of Tesla. This allows them to keep their brand and not allow the market to change
them. Tesla will not be able to continue these demands if they allow the patents above released

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into the market. The demands that Tesla places onto the market will change dramatically when
others enter. This is important to create a timeline for when others enter the market.
Alternatives
The strategy at hand is differentiation to become cost differentiation later and lead the
market in electric car manufacturing. This is perfect strategy and will be the biggest benefit to
them if accomplished. They do need alternatives to have a contingent strategy. They best method
they need to do is global strategy. They have established a presence in the world so far however,
needs to place themselves into more markets to really place their brand above the competitors.
They need to jump into the next level of international vendors to global corporation.
The problem that needs to be evaluated is the timeline. This needs to be created in
evaluating when others enter the market. They must beat this timeline to be cost differentiation or
they will lose this market to the competitors. The demands they have specified will be agjusted if
they do not beat the timeline. This will make them not special to the market and just another car
brand. The timeline is laid out as competitors entering the market as 2018. This gives them a year
from being the only electric car manufacturer of clean sustainable energy into multiple.
From 2018 emplaced their brand into the current markets. They do need to establish a
stronger presence allowing the world to see what they are. Tesla are not an upper class vehicle
brand that is only for middle to higher class. They are creating vehicles to enter all classes into the
United States. If they place more emphasis on marketing then they would allow the established
brand to be placed harder in the industry.
The recommended strategy in order to keep the return of equity as high as 18 percent is
differentiation. They need to establish more products for consumers. They only have two markets

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right now and it will hurt them if they do not produce a method for more markets. They need to
establish a way to power a truck from lithium ion and sustain energy to keep power torque high
for towing capacity. This would require a lot more money in R&D. They need assistance from
recruiting at colleges and universities. They need to establish a new foundation to grow more
consumers.
Implementation
Tesla has already established 170 million in shareholder value and R&D. This is
completely the direction they need to establish and keep them the leader of this new market they
have created. Tesla has not been placing the money into the correct atmosphere. They have been
trying to develop this new method of self-driving vehicles. The economy is not ready and the
roads are in no way shape or form able to comply with drivers in this world. They must change
methods and have a new strategy developing this new truck.
Implementing this will be strait into the money and resources. They need to establish what
they have in other resources and place the current items on hold. The money into R&D needs to
be 170 million in creating a green truck. This would establish a team of engineers to make a
world-class truck to allow individuals to cut the oil industry down. This would boost the economy
and all potential business owners. Your new market would be business owners in all fields across
the globe. They have the money to purchase vehicles in full to get Tesla out of debt. This would
then boost the stock and the cash flow immensely. From this you are able to produce the items
needed to create more markets and boost the company’s revenue (Wheetan pg. 335).
Control

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The controls for the implementation will be difficult to implement and the ones to stop the
project is the board of directors. They would be the ones afraid of this new market and losing too
much money into R&D. They have the controls to be able to produce and develop the strategy
into this accomplishment. The managers are more then capable with all the other
accomplishments they have completed. You will need to control cash flow in order to place the
money where it needs to go. Many resources will be needed and financial advisors will need to
establish guidelines for controls.
The engineers will need new sets of ideas. This goes outside of the general method of
clean sustainable energy in longevity and focuses on power. The power would be best if grouped
with another firm. The best firm in assisting with this power is the leaders in combustion engines
being Ram. They would be able to assist in the new method to create power needed from
resources and personnel. This would be a powerful partner venture that could give the Tesla
Corporation what they need.
The necessary controls for keeping all systems secret is patents and trademarks. This is to
ensure that information doesn’t get into the wrong hands and allow for other competitors. They
would be able to create a contract for the partner venture to help enhance the industry they have
created. They must comply with these or it could lead to many influences in the market. They
must not release the patents they have already to help boost their timeline in this new strategy.
Conclusion
Tesla has started and led a new market helping the economy defeat many obstacles. The
environment restrictions will help boost the consumer’s needs of the product allowing them to
boost the economy. The government is assisting them in creating this new brand with tax credits

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in sustainable green energy. The strategy is perfect for what the mission is trying to achieve. Tesla
is the number one in electric all clean transportation. They are trying to lead the market by cost
differentiation.
Tesla is not capable of delivering the vehciels in the numbers needed, they are not able to
make their own lithium ion batteries and they are unable to lower their prices. They need a
different plan to be able to complete this mission. They need to establish a better delivery of a
new market that will pay for the product and not just lease. With this causes new implementation
into the ability to place money in correct fields and creating the Joint Venture.
Tesla is a leader in this market and will soon have competitors. They must not release the
patents they have and establish new ones. They should create and make contracts with other
business operations to have more engineers to create this new market. Once they have
successfully made this market they are able to complete and fulfill their mission in cost
differentiation.

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electric-carmakers-culture/#277be7fd37fe

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