Bcg matrix volkswagen group

Liberty University

BCG Matrix (Appendix )
The two strategic business units (SBUs) of Tesla evaluated via the BCG Matrix were the automotive operations and the energy generation storage organizational segments. The automotive services are the cash cow of Tesla because it is generating the most profit and revenue between the two SBUs, and consumes most the share earning within the company. The energy generation and storage segment of Tesla are the problem child because it makes up a small share of earnings and will require more resources and strategic initiatives to help grow this SBU. Therefore, the automotive operations are the more profitable business unit when compared to it lesser performing SBU energy generation and storage. Tesla's can utilize some of the cash generated from the automotive operations and invest it in energy production and storage to help maximize growth.

Product Life Cycle

Tesla life cycle is between the initial and growth stage since the development of electric cars is becoming more mainstream. Tesla currently manufactures three models which are the X, S and 3 type that vary in size from compact to medium sized vehicles. In the future, as growth for the company continues larger cars like SUV and minivans will be developed. Also, as the demand for electric vehicles increases to help mitigate air pollution and waste, more automobile companies will pursue the technology advancements of producing electrically operated vehicles. Therefore, to help prevent adverse effects from the mature development of electric motor vehicle in the automobile industry, Tesla will have to employ techniques like mass production of a various model to fit the needs of all consumers and find a way to expand their customer base by offering a reasonably priced vehicle. The overall objective is to adapt to the market and keep profits high as possible.

Competitive Forces Analysis

The automotive industry is a very competitive market which requires multiple strategic initiatives to help entice consumers and maximize profits. The automobile industry in the United States is saturated with both dominant domestic and import companies such as Ford, Chevy, Toyota, Honda, BMW and Volkswagen to name a few. Tesla is the smaller company that specializes in making high-end electric motor vehicles by providing an alternative to standard gasoline fuel. With the rise of cars being environmentally healthy and minimizing pollution, Tesla will be a competitive force to be reckoned with in a competitive automobile industry consumed by gasoline operated vehicles.

Porter’s Five Forces

· The Threat of New Entrants: The threat of new entrants in the auto industry is always high. Automobile companies are always going to challenge each other for sustaining success by holding a majority of the market, high profits, and maintaining a huge consumers base by offering what people desire (McMullen, 2016). In the case of Tesla, the company offers a high quality, sporty, cutting edge, electric propelled a motor vehicle, and depending on the demand by consumers this niche automaker could become a force in a large automobile industry that has both Honda and Toyota to compete against for electrical car dominance.

· Bargaining Power of Buyers: Barging power for consumers is moderate for Tesla. Tesla does participate in a niche market, by offering an electric vehicle that is high priced aimed at targeting high-end users. Therefore, Tesla is providing a specific high-quality vehicle, to a particular demographic, which directly impacts bargaining power for buyers. Also, federal and local governments are providing incentives for cleaner technologies (DeShazo, Sheldon, & Larson, 2017), which directly impacts the demand for electric cars keeping the power of bargaining power low.

· Bargaining Power of Suppliers: Bargaining power of suppliers is high because Tesla is very dependent on suppliers delivering raw materials and components that could impact production timelines directly affecting cost. Tesla vehicles are made up of very savvy technology, which is driven by research and development of significant technological parts, which too can impact bargaining power of suppliers.

· The Threat of Substitutes: The threat of substitute that could affect Tesla's low. Although other automobile companies such as Honda and Toyota offer electric hybrid vehicles, a majority of Tesla car are customized and made to order. Therefore, Tesla affords its consumers the opportunity to get the vehicle they went at the point of purchase vice having to search for the electric car they want.