A SWOT analysis is a procedure usually done by a business with the aim of developing a strong business strategy by putting together and analyzing all of the business’s strengths, weaknesses, as well as the opportunities and threats it faces in the market place where it exists. S.W.O.T is an acronym standing for Strengths, Weaknesses, Opportunities and Threats. From the definition above, we can observe that the SWOT analysis spans over the two business environments: The Internal Business Environment and The External Business Environment.

The Internal Business Environment constitutes of all those factors influencing a business of which the company has total control over these factors while The External Business Environment are uncontrollable factors that have direct impact on the business operation. An example of External Business Environment may be favorable or unfavorable weather. The SWOT analysis is therefore useful to an organization by providing a means by which both the Internal and the External Business Environment can be analyzed. The Strength and the Weaknesses parts focuses on the Internal Business Environment while the Opportunities and the Threats parts provide an analysis on the External Business Environment.

SWOT analysis is useful because it is a strategic tool that can be put to use by a business with the aim of carrying out an all-inclusive assessment to determine the strengths, weaknesses, opportunities and threats likely to be faced by a business.

2. SWOT Analysis of Tesla

Strengths

Innovation; Tesla is on the fore front of innovation in autonomous vehicles (AVs) by making marvelous vehicle software that can update over-the-Air (OTA) therefore keeping Tesla ahead of its Competitors in the production of autonomous vehicles.

Political and Government Backing; Through the Department of Energy, Tesla has received political support as seen with the Congressmen discussing Autonomous Vehicles (AV) and how to best innovate them.

Great Leadership; Tesla enjoys great leadership through their CEO Elon Musk who has passion for engineering in addition to being an astute salesman.

Brand Recognition; Tesla has that “cool factor” that other automakers do not have, this in turn creating hype about Tesla’s EVs that other brands are not privileged to have. This strength plays a vital role in sales and marketing of their products.

Weaknesses.

Limited supply chain. “Production bottlenecks” as put by Tesla’s CEO Elon Musk. It is becoming evident enough that Tesla is failing to maintain a supply chain by missing in its production goal.

Failure to meet market’s expectation by producing vehicles riddled with defects

Tesla’s inability to meet its production goal and production of defective vehicles has in turn had an effect on its profits.

The Tesla vehicles are very expensive, moreover, they only target consumers with specific taste.

The supply problem has created another problem as Tesla has to now produce and sell as many vehicles as possible in a bid to pay solve the supply chain problem but still production problems arise making it difficult to sell and deliver vehicles at an effective rate.

Opportunities

Choice of more efficient Technologies. Tesla ‘s preference for new technologies is seen as a huge opportunity in the market strategy. The Auto maker is brazened enough to pronounce ambitious goals and insist its vision for the future of the auto industry.

Tesla is seen as the driving conversation in auto making through pronouncing its vision as a definitive one and the leading role it has played in innovation in autonomous vehicles.

Threats.

Competition. As result of a sudden shift by auto makers in making of fully electric cars and hybrid cars, the established companies are now resulting to produce vehicles with artificial intelligence (AI). There is also increased global competition from other large companies for the same market share.

Funding problem has an influenced the investors’ perception about Tesla. Many investors are lack confidence in investing with Tesla citing lack of adequate funding as their main reason.

3. Based on the SWOT analysis, among the most important issues that Tesla needs to address is the supply chain. Tesla’s supply chain is described to be inefficient and ineffective. The production of vehicles crippled with effects is also an important issue that should be addressed. Another important issue to be considered from the SWOT analysis is the funding problem. Investors have been known to look away from investing with Tesla citing funding problems.
4. The supply chain is the Achilles’ heel. This is so because the supply chain has a direct link to not only the production goal but also to the profits to be realized at the end of a trading period. The only remedy to the supply chain problem would be to avert problems occurring at the production stage. This being solved would improve production and supply at an efficient rate. The suppliers would thereafter be paid and this would clearly suggest that Tesla would attract serious investors since the funding problem would also have been solved.

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