1. Tesla, Inc.

it is an American company based in Austin, Texas, led by its Elon Musk, which designs,
manufactures and sells electric cars, components for the propulsion of electric vehicles, solar roofs,
photovoltaic solar installations and household batteries.

The electric vehicle and clean energy company, was founded in 2003 by American entrepreneurs Martin
Eberhard and Marc Tarpenning and was named after Serbian American inventor Nikola Tesla. Elon Musk
serves as the CEO of the company and has had an active role in its growth and widespread popularity.

The electric cars that Tesla currently has on the market include the Model S, Model 3, Model X, and
Model Y.The company is organized in a functional or U-formed structure with global functional centers
covering all business activities.

Production management

Tesla CEO Elon Musk has a clear vision of accelerating the world towards sustainable sources of energy.
This vision is clearly reflected in all the work he does, whether at Tesla Motors or the other companies
he leads—like SolarCity (recently merged with Tesla; Stewart, 2016) and SpaceX. To evolve and
contribute towards the mainstream usage of sustainable energy, Musk has been the central force
developing cutting-edge technologies by employing the best minds in the field.

organizational structure

The company is organized in a functional or U-formed structure with global functional centers covering
all business activities. These functional centers include design, technology, engineering, finance, sales,
and marketing, and of course the offices of the chief executive officer (Musk) and the chairman (Larry
Ellison). All use a hierarchical structure with reporting lines stemming from Managers through to
assistants. The functional centers support the divisions of the company, the two key ones being
Automotive and Energy Generation with a subset of geographical divisions in the likes of the U.S., China,
and other key jurisdictions.

All areas of the business ultimately report to and are directed from the centralized US-based
headquarters in Palo Alto, California. Using this corporate business structure managerial control is
maintained across the business globally. This also allows processes to be streamlined and strategic
direction provided by the top tier of management and filtered down through the organizational
structure.

. The development of factory system of production

It has often been said that for Musk, and therefore for Tesla, the manufacturing process is equally
important as what is being manufactured. In this view of things, revolutionizing the manufacturing
process isn’t just a means for creating better products, but a crucial priority in itself.

The first vision of manufacturing innovation in Tesla was Musk’s “Alien Dreadnought” concept first
appearing in 2016. This was an almost completely automated factory setting. But the concept in practice
failed initially when tried with the production of Model S, and a human-assisted production line had to
be set up to clean up the mess.
But with the rise of success in recent times, the Alien dreadnought is apparently rekindled. Musk
recently described Tesla’s current factories as “Version 0.5 of the Alien Dreadnought.”

So. To Musk, the factory is the “machines that make machines,” an idea he talked about in a 2016
shareholders meeting. This vision originates from Musk’s desire for improving the density of products as
well as the exit velocity of products from factories, and to focus more on the efficiency gains that can be
obtained by improving the production process. In other words, shifting the focus from improving the
machine, to improving the machine that makes the machines

“The competitive strength of Tesla long-term is not going to be the car; it's going to be the factory.”

- Elon Musk

Strategic partnerships
While building up its production capacities und processes, Tesla has always been strongly dependent
on strategic partnerships not for economic reasons only, but also in terms of knowledge and know-
how sharing. Since 2008, they cooperate with Daimler where Tesla developed a battery and
powertrain system for their electric fleet that is produced and delivered by Tesla as well. The same
type of cooperation exists with Toyota since 2010. Another cooperation agreement was concluded
with Panasonic. The Japanese cooperation is not only the long-term main supplier of the battery
packs, but also a project partner in the jointly planned Gigafactory project (a huge battery research and
production site in Nevada, USA).

Key Executive Team

 Vaibhav Taneja. Chief Financial Officer.

Operations management

Tesla, Inc. applies operations management (OM) practices that address the objectives in the 10 strategic
decision areas for optimal productivity in the automotive and energy solutions business. These 10
strategic decision areas require operations managers to maintain best practices to ensure streamlining,
operational effectiveness, and high productivity in the organization. In this business analysis case, Tesla’s
global expansion plans depend on the success of these practices in optimizing productivity and overall
performance.

1. Design of Goods and Services.

2. Quality Management

3. Process and Capacity Design

4. Location Strategy.

5. Layout Design and Strategy.

6. Job Design and Human Resources.

8. Inventory Management.

9. Scheduling

10. Maintenance.

Operations strategy and competitiveness

Market

Tesla is currently navigating the electric car market. The increase in concern for the environment
has generated a period of change and expansion in the automotive market where alternative
mobility solutions are making their way.

Competitive Strategy

Tesla follows a competitive strategy based on differentiation. The vehicles offered by this
organization, although being comparable with those offered by its competitors, have certain
elements that provide the customer with a differential value. These factors, especially the
autonomy, the quality of the components and the high-end attributes that the brand itself
possesses, generate that Tesla's products are perceived as unique and different within the
automotive sector market. On the other hand, the organization does not focus its competitive
strategy solely on differentiation, but it is combined with segmentation or focus.

Tesla Integrates Mission, Goal, And Workplace.

Unlike other firms, Tesla has seamlessly integrated its mission, business goals, and workplace.
Tesla's mission of saving the planet through the mass adoption of electric cars is central to its
operations. This integration allows Tesla to transcend the limitations of current management
practices.

11 Operations strategy

Tesla performs vertical integration of the activities of its company. On the one hand, it carries
out vertical backward integration or supply assurance in terms of the development of its own
components and technology, as well as fully automated production chains created by them,
thanks to its innovation and development policies and quality plans. On the other hand, it
performs forward or output vertical integration with the after-sales service and the own
distribution and sales channels.

Tesla established a product market development strategy, introducing improvements to

Core principles that drive Tesla’s strategy

The company measures its manufacturing performance based on the number of cars produced a
day; for the customer service division, it considers the number of inquiries resolved, emails
answered, and complaints handled. In addition, Tesla also establishes Key Performance
Indicators (KPIs) to monitor its production and inventory and to generally assess the success of
achieving the goals within the predetermined duration

The product design process and development

Musk’s 5 Step Design Process consists of making the requirements less dumb; delete the part
or process; simplify and optimise the design; accelerate cycle time; and automate.

It develops cars as it would a software product.

Tesla builds cars by developing software on unique hardware, this enables the company to
improve its cars’ software functionality every few weeks.

It simplifies the buying process, putting the consumer in control.

Buying a Tesla is relatively simple: You go online, pick a model, add your features, place your
deposit, and schedule pickup. Done. They understand the buyers’ journey very well. They know
consumers are smart and will find them.