Page 82 - MS Year in Review 2020

 Tesla’s business concept makes Tesla a very complex but high potential

business.
 Neither Tesla’s explicit strategic mission nor its core strategy are explicitly
defined or fully clear.

 Our overall assessment is that Tesla’s business foundation is underdeveloped
for a company of its size, scope and complexity.
 This, in turn, comprises a risk factor as Tesla increase further in scale and

complexity.
 It is possible that Elon Musk has a concept of Tesla’s business foundation, but

does not want to reveal it for competitive reasons. Nevertheless, the lack of
clarity of its business foundation remains a risk factor. Lack of clarity can
create structural and execution problems, especially as the company grows

rapidly in size.
 Giving Tesla the benefit of the doubt and recognizing its potential, I would

assign a score of “3” to its business foundation. The firm’s huge potential is
offset (at least to some extent) by the risks posed by lack of clarity if its
business foundation. This is a trade-off of potential versus complexity and

lack of clarity.

ASSESSMENT OF DEVELOPMENT OF STRATEGIC

BUILDING BLOCKS BY TESLA

We will now examine the extent to which Tesla seems to be developing each of
these key strategic building blocks:

 Identification and Definition of a Viable Market Segment;
 Development of products or services for the chosen
 Acquisition and development of resources required to operate the firm

 Development of day-to-day operational systems
 Development of the management systems necessary for the long-term

functioning of the organization

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