To: Deepak Ahuja, CFO, Tesla Motors, Inc.
From: Harmony Piazza
Date: December 1, 2014
Subject: Tesla’s strengths and weaknesses
Tesla’s key strengths and weaknesses are identified below. See Exhibit 1 and 2 for detailed VRI analysis results.
Strengths:
Innovative and Strong Research and Development Tesla’s strong technological advancement offers the corporation the potential for competitive advantage and differentiation of product. It is the technology of the industry that sets the companies apart. The company’s current research will potentially reduce costs of manufacturing and selling expenses to decrease. Highly productive batteries, transmission, electronic powertrain, and various components provide opportunities for growth between Tesla and its customers, both the individuals buying the car and the corporations buying the components. Tesla has also managed to produce its batteries and other components at a much cheaper cost than its competitors, giving it a distinct sustainable advantage over those hoping to compete in the industry.
Highly motivated and experienced management Elon Musk, Tesla’s CEO and chief product architect, has provided Tesla with strong leadership that has already benefited the company. Musk is also the CEO of SpaceX and cofounder of Paypal, two solid and successful companies. Musk has lent his entrepreneurial abilities to Tesla to help shape has used his leadership skills to set Tesla ahead of the market.
Valuable and effective product Tesla motors sought to create an efficient, high class, fully electric vehicle, and has so far succeeded. Customers are exceedingly pleased with the vehicle’s superior design that has bested competitors, despite having only a few different models on the market. Having already received high reviews and awards for vehicle design, brand recognition
Weaknesses:
Lack of Supporting Infrastructure The infrastructure that needed to support fully electronic vehicles does not currently exist throughout the entire United States. As such, consumers have been apprehensive to approach the EV market, causing the market to be small and growth to be slow. Although Tesla has plans on growing the supercharger network, the current plans for such a project are expensive and seem far too large for such a new company.
Limited experience, funds, and brand recognition Tesla Motors is a young company trying to enter an old market. The cost of entering such an industry is costly, and having only produced a limited amount of vehicles, Tesla is experiencing the heavy costs of starting business while competing against larger companies like BMW and Toyota. By increasing production and decreasing costs through increased operational efficiency, Tesla is slowly managing to even the odds.

Core Competency Analysis
Tesla Motors is an electronic vehicle producer with a view of accelerating the market of sustainable transportation. This dream is being realized through the creation of an extended supercharger network and the addition of future models of EV to Tesla’s production line. For a description inclusive of Tesla’s core competencies, please see the statement below.
Core Competency Statement - Tesla Motors has devoted much of its time and resources to the production of innovative intellectual property that allows for the delivery of high-class, electric vehicles that provide the forward thinking user a luxurious experience while remaining environmentally conscientious.
Tesla Motors’ core competency passes the three part core competency test. First, Tesla produces high quality vehicles that have surpassed competitors in both speed and efficiency. It is due mainly to the unique powertrain and battery components that have allowed Tesla to compete successfully against large companies and grow as fast as it has in the past several years. Through the in house production of its own core components, Tesla has been able to sell these components to various companies, capturing a share of