Tesla analysis by THE VALUE CHAIN analysis Management Research Paper

TESLA ANALYSIS BY THE VALUE CHAIN
Name
Course
Institution
Date
Tesla Analysis by Value Chain
Tesla Inc. remains an innovative entity whose success in a highly competitive industry keeps attracting debates and analyses. Tesla is a fairly young company that has experienced unprecedented success through its development. Part of the success has been pegged on Tesla’s unique ability to create a new product in an existing market. However, it should be noted that much is happening in Tesla’s value chain that could warrant its global presence. Primary among the factors contributing to Tesla’s prominence is its successful diversification into the Chinese market recently. China presents one of the largest markets for electric vehicles currently, something that Tesla is strategizing to utilize effectively. An advanced understanding of Tesla’s operations in China is anchored on the company’s value chain activities. This paper explores the analysis of Tesla in the Chinese market through value chain analysis. The analysis is valuable in exploring Tesla’s strengths and weaknesses through the elements of its value chain, including both the primary and supportive activities to mark the company’s strategic intent in China.
Value Chain Analysis
The value chain model has been an efficient tool for organizations that intend to have a better understanding of their operations. Developed by Michael Porter in 1985, the value chain model features nine technologically and economically interdependent activities. Each activity in the chain bears significant importance to the success of an organization individually. The nine elements are subdivided into primary activities and support activities. Besides giving an organization an operational footprint, the value chain tool also creates an advanced understanding of operational costs, thereby enhancing efficiency. The tool has, however, been criticized for its limited consideration of the broader organizational goals. With more emphasis on micro-activities, little emphasis is put on long-term organizational goals.
Tesla’s successful entry into China is primarily attributable to its unique internalization strategy. At the entry point, Tesla collaborated with the Chinese government to execute independent operations. As opposed to other competitors such as Toyota and BMW, Tesla was allowed to operate in China without restrictions on innovation and value chain inputs. The company has since employed the opportunity to develop one of the most stable electric vehicle markets in the world. A better understanding is anchored on the company’s value chain as follows:
Primary Activities
The primary activities are those that bear direct relationships with the creation of products or services in Porter’s value chain analysis. Each primary activity defines the scope of the product in terms of the value it creates at the end of the chain. Tesla’s primary activities are as follows:
Inbound Logistics
Inbound logistics refers to the inward flow of goods or materials into a business. The strategy that an organization employs in transferring its materials from suppliers to company facilities marks the inbound logistics. Some of the acti...