Strategic Audit
Using the guides and resource suggestions listed in Chapter 12, perform a strategic audit of Tesla Motors,
Inc. A good starting point is the company’s investor relations.
The audit should include the following:
I. Current Situation
II. Strategic Managers
III. External Environment
IV. Internal Environment
V. Analysis of Strategic Factors
VI. Strategic Alternatives and Recommended Strategy
VIII. Evaluation and Control
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Introduction
The concept of strategic audit has attracted a global debate. Experts in the business
sectors outline that it is always easy to venture into the same but on the contrary, to make it
successfully grow is a real task thereby fostering the need for audit and evaluation. Nonetheless,
both business specialists and intellectuals agree on the importance of the same. Hence, a strategic
review is viewed by writers as the assessment of a firm’s tactics as well as business policies with
the aim of scrutinizing the flaws and faults so as to spur the excellent growth of the enterprise.
Nevertheless, the paper shall endeavor to do a strategic audit for Tesla Motors Inc. on the
current situation of the firm both on performance and strategic posture as well as strategic
managers including the board of executives and topmost management. Furthermore, it shall
cover external environment entailing essential, task and societal; internal environment
comprising of corporate structure, culture, and resources; SWOT analysis of strategic factors,
review of mission and objectives. Finally, it examines strategic substitutes and optional strategy,
implementation; evaluation and control.
Current Situation: Current Performance and Strategic Posture
According to the firm’s website, it has so far released four models and its whole stock
quote of about two hundred and nineteen. Wholly the boards of directors and top administration
have so far highly performed to sell the products as well as make them cheaper to the purchasers
as outlined in the organizations goal. Furthermore, Tesla sells their automobiles from their silos
as opposed to others that do the same through dealers and distributors (Hirsh, 2014).
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On current strategies, it has opened several Tesla have begun their stores on malls
whereby even buyers of cloths can see their products. The potential buyers can thus select and
order their preferred car model and color thereby reducing time wasted in negotiations as well as
having an unsatisfied customer. Based on the scholars’ emphasis, that is bestowing to the world’s
controls (Hoffman & Zimbelman, 2009).
Strategic Managers: Board of Directors and Top Management
The strategic role of the board of governors and chief executive officers, according to the
firm’s website is to aid in the success of transformation by articulating its importance, arousing
the potential interests of the buyers, motivating the staff as well as getting personally involved.
Board of Governors has set very tough standards for the company’s directors, officers as well as
employees. The Tesla websites alert that there is a prudent liaise control. Furthermore, the board
of governors is also entrusted to serve as the link between the firm and shareholders as well as
supervising the daily running of the stocks trades (August 2013).
According to the web released by the company, the board of governors has set aside
measures to help them fulfill their mandate including together with obedience to the already
stipulated methods rules. Furthermore, empowering workers to open dialogue; cooperate
opportunities, reduced inside trading; protection of safety and health, fighting against prejudice
and embarrassments; promoting confidentiality; elimination of corrupt dealings; safeguarding the
company’s assets. Additionally, following compliance protocols; the set ethics that they govern
include conflicts of interests, adhere. All that team is gender balanced, have well-stipulated roles
as well as professional training as required by international requirements. Finally, top supervisors
and managers are mandated to take charge of various departments (Hirsh, 2014).
STRATEGIC AUDIT 4
III. External Environment: Natural Environment, Societal Environment, Task
Environment
Tesla’s aim is to produce an automobile that doesn’t use diesel that pollutes the Mother
Nature; that’s according to the corporation’s Chief executive officer. Also, the societal
expectations are catered for through periodic engagement with their representatives, and finally,
the task environment is met by the stationed engineers at the enterprise’s malls (Buchanan &
Gibb, 2008).
Inside Setting including all business beliefs, assets, and arrangement
According to researchers, internal environment is very crucial to a strategic audit of any
firm. However, Tesla has a well-outlined structure with the top most being the board of directors
and junior most being the sales representatives. The entire group is well coordinated, inculcated
with a culture of valuing feedback from clients, excellent communication skills, as well as
recommended methods of delivery. To add to the list, the firm has resources including updated
information technology gadgets, tools as well as sound engineering models (Buchanan & Gibb,
2008).
Strategic analysis, SWOT
The strength of Tesla Motors stem from its diverse innovation in the automobile industry. The
electric vehicle manufacturing expertise has resulted in production of very high quality vehicles
that have earned the highest rating in safety provisions. The model S boasts of excellent features
STRATEGIC AUDIT 5
that include autopilot, all wheel double drive and free elaborate over-the-air electronic software
updates.
The opportunities available for Tesla Motors include widespread adoption of electric vehicles
that have created a ready market for Tesla Motors globally.
The strength of the company includes: it only produces electric automobiles as opposed
to other firms, it is the first business to build up a whole microelectronic carriage, balanced cord
of ethics both for the board of governors and top executive (Tesla Motors, 2014). However, the
demerits comprise higher manufacturing expenditure, limited renewing locations and reduced
sell-ability due to underdevelopment in many continents (Robins, 2014).
Nevertheless, the firm has prime opportunities to capitalize on for the better good
including more demands on electric motors due to fluctuation in oil prices; the globe is moving
towards safeguarding the environment from pollutions from smoke thus the need to have
electronic machines, the firm can consider using solar panels to replace batteries. Despite all the
openings, the company has quite some threats in the ever-changing business world. For instance,
stiff competition from larger firms dealing with the same, electric engine is more expensive than
combustion engines (Robins, 2014).The threats include intense competition from lean and
efficient multinational companies. The global economic crisis also poses a constant threat to the
existence of medium manufacturers that survive on relatively small margin.
The weaknesses of Tesla Motors include its inability to be repaired in most market while
its durability and longevity are still to be proved. Limited supply chain creates a big problem
whenever interruptions in supply chains are registered (Tesla Motors, 2014).
STRATEGIC AUDIT 6
Review of Current Mission and Objectives
According to the enterprise’s website, Tesla’s mission is to move to a sustainable
electronic and solar economy from ancient hydrocarbons economy. However, to achieve the
mission, vision is also of fundamental significance; to grow the most attractive automobile
enterprise in the 21st Century through switching the global to electric vehicles. Moreover, to
realize the stated mission, Tesla must do regular strategic audits so as to compete effectively with
other giant diesel and petrol firms. The investigation ought to include external, internal,
industrial as well as competitive. Therefore, the vigorous evaluation would be able to determine
any change in the market demands and policies plus inventions from other surrounding
syndicates (Hirsh, 2014).
Deliver self-independent evaluation of financial, supervisory plus job perils and regulate
the firms’ board and top management effectiveness. The company shall aid in control
professionals so as to minimize hazards, better quality of the whole course so as to enhance
better performance in spreading its aims (Buchanan & Gibb, 2008).
Professionals in the same field outline that Tesla additionally has to do the right order of
the raw materials, assemble them in the right proportions and dimensions, do vigorous drive
tests, invest in advertisements and seek support from the environment agencies. Hence,
displaying the merchandise in easily accessible stores, offer after sales services, sell policies to
the potential buyers on a serious note are all important assignments. Finally, training company
models and Tesla ambassadors, do a collaboration with other developing nations that are
promising to be future clients as well as packaging and exposing on billboards (Hirsh, 2014).
Objectives
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To come up with a sustainable and inclusive procedure that would determine both inside and
outside risks that could slow down the successes of the firm’s strategy and goals. (Hirsh, 2014).
To team up together with additional risk management roles to minimize incurring of threats
To systematize findings for regular communications
Legalize internal review booklet with all staff (Hirsh, 2014).
Strategic Alternatives and Recommended
The corporation could consider investing and strategizing in areas where they are most
likely to face challenges before they occur like refilling stopovers, spare parts fall outs and
breakdowns. Having strategically placed mechanics dealing with wiring and general repairs
could also help actualize the strategic plan. Alternatively, do a low-cost electronic vehicle that
would give it an upper hand in the flooded and competitive market. Tesla’s is to get into the
furthest periphery of the market whereby buyers are ready to cater for premium for their products
as well as insurance policies. That would indemnify customers on behalf of the organization so
as to save massive expenses of replacements when technicalities arise thereby saving on raw
material and manpower (Hirsh, 2014).
After obtaining the aim of making the profit from most admired Roadster model, the
demand shot up for its products; thus, the sales were reinvested to create a more pocket-friendly
S models that earned the company several international awards according to the corporation’s
website. According to the company’s Chief, from the sales prototypical X was introduced with
even reasonable charges. Moreover, the institution plans a launch of a new model in 2017 that
shall even attract more customers (Hirsh, 2014).
STRATEGIC AUDIT 8
According to the report, the firm is selling vans directly to the buyers through their
showrooms located within the business malls where several people and general public go for
daily routine commodities such As watches, clothes, large monthly shopping as well as quick
beverages. The strategy is to ensure the potential purchasers freely view newest models, and their
prices are hence influencing their decision. Extra so, they get to see the first gadgets and get
advice from the well proficient vendors. Also, by making direct sales, the firm eliminate
middlemen such as dealers and brokers who may not in all cases give the accurate information
on model quality and prices. Hence, customers shall be preserved from hecklers that stand to
defraud them or charge higher prices than the usual prices (Hirsh, 2014).
According to the professionals, investing in employees’ welfare can considerably raise
theirs. Hence, Tesla has to have well regularly revised policies of the staffs ethical, health and
financial status so as to achieve the strategic plans and objectives. Compensations when injured
in the line of duty, methods and criteria of promotion should be well stipulated so as to meet
international standards (Hirsh, 2014).
Moreover, having well-structured training guideline will be essential in the realization of
the set aims. Board of management should offer routinely upgrading that cover on the role of
manufacturers and people in environmental health, globe ethical standards, and federal laws
safeguarding her tax contributors in their respective countries. When done, general know how
shall exponentially grow on customer relations thereby substantively skyrocketing demand
(Buchanan & Gibb, 2008).
Implementation
STRATEGIC AUDIT 9
According to the firm CEO, the important factors that could affect actualization of the
strategic plan are an outline of the business, clients, leadership, and organization systems plus
procedure. Just to start up the discussion, the firm structure should constantly always be
accurately revised and examined whether it is helping achieve the outlined objective; necessary
measures like reducing the number must be taken when necessary. The procedure should
smoothen communication modalities from seniors to juniors since any interference with the flow
shall adversely affect operations and service delivery. On the other hand, customers shall also
have sound and accessible mechanisms of relaying their issues such as placement of order,
selection of model, compliments and complaints thereby give them a sense of satisfaction (Hirsh,
2014).
Writers stress that Tesla to achieve these, organization goals must be all translated into
action objectives. Without which all the strategic plan shall be tendered into are to little
paperwork; all managers, stake holders, as well as a technical team, must channel their efforts
towards the general good of the firm by all means needed to remain relevant in the market
(Robins, 2014).
Evaluation and Control
The managers of Tesla Motors must make sure that the enterprises implementation
strategic plan are occasionally reevaluated by comparing with the previous years or other
competing companies like Honda, Nissan, and Toyota so as make current decisions such as the
type of model to be released, prices as well as the date. Always make necessary amends to the
structure together roles so as to be at par with the current market trends. To borrow from the
corporation’s history, in by 2013, the firm planned to make and sell SUV-X model and sell it by
STRATEGIC AUDIT 10
2014, however, when the strategic evaluation was done; the launch was postponed to the last half
of 2015 ( White, 2013).
Conclusion
To sum it up, from the above details, discussions, and scrutiny, it is evidenced that sound
strategic audit is of practical importance to every organization that would wish to grow to
international level. Tesla Motors hence has well formulated achievable flowing business plan
and based on the audits it is doing well. To prove that, the organization developed a very
attractive and expensive model which the author retaliates caught the attention of national
government and buyers. After which, the company began to grow even more expensive makes
which gave them divers kinds of awards from that came along with money acknowledgments
thus, according to Tesla’s website, the ministry provided the substantial incentives which helped
make the debts. The firm had a comprehensive tactic to excel. Nevertheless, there is the need to
control periodically and evaluate all the processes about the new models despite previous
successes so as to consistently minimize the chances of incurring unnecessarily loses.
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References
August, N., (2013). Tesla 4th model-Affordable EV-To come in 2017.
Buchanan, S., & Gibb, F. (2008). The information audit: Methodology selection. International
journal of information management, 28(1), 3-11.
Chatterjee, K., Morton, S., & Mukherji, A. Strategic Audit Policies Without Commitment.
PARETO OPTIMALITY, GAME THEORY AND, 407.
Hirsh, J., (2014). Elon Musk Opens up Tesla patents to everyone.
