Page 81 - MS Year in Review 2020

ASSESSMENT OF TESLA’S BUSINESS FOUNDATION

As explained above, the business foundation consists of three related dimensions or
constructs: 1) the “business concept” or definition, 2) the “strategic mission,” and

3) the “core strategy.” We will now examine the extent to which Tesla seems to be
developing a strong business foundation.

Tesla’s Business Concept. What is Tesla? This is not a simple question to

answer. Although most people envision Tesla as an electric vehicle company,
it is actually much more than that. Tesla manufactures and sells cars, but it
also has a solar-panel business, and an energy storage business. It is possible

that Tesla might once day also sell its batteries to other automotive
companies. Tesla also have plans for a “Robo-taxi” business based upon its
software for autonomous, self-driving vehicles. Tesla could potentially create

other adjunct businesses from its technologies.

Tesla’s “Strategic Mission.” Although Tesla has not stated an explicit

strategic mission, one can be imputed from comments made by Elon Musk.
Specifically, Musk has stated that he targets an annual volume of 20 million
cars. Implicitly that would make Tesla the de facto leader in the automotive

space. According, that implies a key aspect of strategic mission: to become
the leader in the automotive space. Nevertheless, given that Tesla’s business
concept is broader that automobiles, a strategic mission for the enterprise as

a whole is required.

Tesla’s “Core Strategy.” Tesla has not defined an explicit core strategy; but

it is clear that “synergy” is an aspect of its strategy.

Evaluation:

This section will treat the assessment and evaluation differently than the later
assessment of the strategic building blocks, because of a paucity of information. In

brief:

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