Page 83 - MS Year in Review 2020

 Development of the organizational culture that management feels necessary

to guide the firm and a related culture management system.

Identification and Definition of a Viable Market Segment

Positives:

 There is clearly demand for Tesla cars. The company sold approximately

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368,000 vehicles globally in 2019.
 The company has a chance (the potential) to become the dominant

provider of electric vehicles.
 Tesla also has an opportunity to become an integrated energy company.

Negatives and Risk Factors:

 Although Tesla is the leader in the electric vehicle space, global mass
adoption of electric vehicles is still a long way off. It has been estimated

that it will not happen in the current decade.
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Questions:

 Although demand for Tesla cars has been established, what is less clear is
the role that government subsides play in purchases. Since price always
matters to consumers, Tesla’s overall market strength currently has been

bolstered to an unknown degree by governmental subsidies, and, at some
point these subsidies might stop. Accordingly, we must “discount” (reduce)
its apparent market strength for this factor.

Evaluation:

 For a quantitative evaluation, we assign a score of “4” to Tesla for
its market position and strength, where “5” is the highest score and “1”

63 Analyst Note David Whiston, CFA, CPA, CFE, Analyst, 22 July 2020. Morningstar Equity Analyst
Report, as of 25 Aug 2020.
64 Ibid.

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