Structure of the Business Model of Tesla Motors Incorporation - Assignment Example

Identification Current business Tesla Company Motors Commercial Electric modifier Other s; yes Current address; United State, 425242-53737- California Branches; Three Telephone number; +1242 007298719 fax; 12342334 Financial Information Balance sheet latest sales (2014): 800 million dollars Result: 1540893 dollars Total Assets: 1 billion dollars Share capital: 93400 dollars Employees: 153000 Listed on a Stock Exchange: YES Commercial Information Incorporation date: 12/04/1980 Activity: selling of electric motors NACE 2009 CODE: 4244 International Operations: Imports and Exports Introduction The Tesla motors incorporation is an American enterprise that designs, manufactures, and sells electric motors plus electric vehicle power train. The Tesla motor is a public firm and operates with the symbol TSLA. During the first quarter of the year 2013, the firm posted abnormal profits that absolutely took it to higher financial levels. The tesla was famous following the production of the perfect tesla roadster that was the first full electric sports car. The firm’s second model was the model S that is a fully electric luxury sedan then the next two vehicles are the models known as X and 3 (Cheney, Margaret, Robert, & Jim, 45). The firm also markets electric power train components that include lithium ion battery packs to the firms making autos such as Toyota and Daimler. The chief executive officer focuses on making the tesla firm to be an independent automaker that aims at eventual offers thus making the cars affordable to the average consumer. This facilitates the selling of the products to a greater percentage of people due to the high demand from its affordability. Structure of the business model Activity The tesla motors core business is designing, manufacturing, and selling of electric automobiles. This is facilitated by the concept of embracing the modern technology that also promotes innovative ideas and activities. Yes, the company is diversified in developing complementary activities such as provision of charging points for the electric motors. They also deal will the designing and manufacturing of batteries that are for replacement when the initial ones are wasted. The scope of the activities from the tesla motors is felt both locally and internationally (Cheney, Margaret, Robert, & Jim, 76). It focuses on the concept of limiting pollution of the environment and air by lack of pollution from the engines of motors that use either petrol or diesel. The idea is ideal for hindering the effects that cause global warming. Prevention of global warming is appropriate for boosting agricultural production that is the main backbone of gross domestic product. The main characteristics of the industry are ideas from the perspective of electricity. They include the activities such as structuring engines that are computerized, the use of chargeable batteries, and promoting emission free automobiles. These characteristics are due to the appropriate embrace of the modern technological activities in the production sector. The life cycle The tesla motors incorporation is an organization that has not yet fully establish in the competitive market. This is due to the various experimental processes of making sure that the product that is being brought into the market is of the appropriate standards. This therefore means that the tesla motors company is at the startup phase. The organization has not yet developed this stage due to the experience of growing pains that usually result from rapid growth. The tesla motors company should make sure that it serves its customers with quality products in order to acquire a portion of the consumers that are loyal. Constant production of quality products and providing customers with the appropriate services will facilitate the movement into the next stage or phase (Doeden, 56). For customers to be more loyal, the organization should carry out practical operations that will full satisfy clients. Outputs The tesla motors corporation majorly sells electric motors such as tesla roadster, model S, model X, and model 3. Tesla motors also markets components of electric power train including lithium ion battery packs for the automakers such as Audi and Toyota. The products from the tesla motors are very new since they are designed and manufactured within the firm. Unfortunately, these products are not having substitutes because they are specifically distinct in methods of operation. The patent rights appropriately protect the products. This is because the products are positively constructive to the economic structure. This patent protects the tesla products from being copied by other entrepreneurs. The products are extremely complicated to produce because the kind of modern technological concepts essential for the operation are extremely complex. This makes the operation possible for specialized personnel. Customers The customers to the products of tesla motors incorporation are majorly racers who use the cars for racing sports. Other citizens also prefer the electric cars because they are cheap in the long run. The customers buy the products from the tesla organization more often because that is the main point that, they will get the appropriate products. This therefore makes the company to make abnormal profits making it because that is the center of purchase. Demographic trends will positively affect the future sales of the electric motor sales because the will be a high population thus a great demand for fast and affordable mode of transport (Doeden, 73). The population will therefore prefer the electric motors due to their convenience and the rising preference of modern technology. Competition The major competitors for the firm are generally the organizations that make motors that use petroleum or diesel. The other competitors are firms that are making racing vehicles that tend to use modern technologies in their designs and manufacturing. The position of the tesla motors company is at a risky point because most of the car owners are loyal customers to the petroleum and diesel motors. It is not easy for new competitors to enter the market for its products because the tesla motors company has already having a great share of the market since they provide its consumers with quality products and services. The tesla motors company differentiates its products by increasing some elements that will favor the attributes that please the customers. This makes its products to sell than the products of the new competitors (Marcovici, 68). The products from tesla Motors Company have a cost advantage from its new competitors due to their affordability and reliability. Inputs The main suppliers of the tesla motors company are firms that are closely related to the technological concepts from electricity. Some examples include the following Gentex Corporation, Harada Industry Company, Hitachi cable America, Modine manufacturing, Hope global, AGC automotive, and Methode electronics incorporation. These are just some of the few organizations that supply the tesla motors company with products that help in the assembling of their automobiles. There are multiple supply sources since there are some products that should be provided in bundles because they are used as a set. The company does not really depend on one source for supply that may create a base for high costs of inputs. This is because there are many suppliers that produce quality products and at affordable prices. The telsa company will maintain loyalty to suppliers whose services are appropriate. This creates a potential for cheap input costs. Labor The company managers are individuals with high knowledge in the engineering and electric sector. The managers are always adequately effective because they head operation that they are well conversant with thus promoting high production in the firm. The dependence rate on skillful or educated workforce is high because the operations in the firm strictly favor individuals with the appropriate knowledge to handle the complex operations. Technology The company greatly depends on the modern technology in relation to electricity, software engineering, and mechanical engineering. The knowledge from this field will facilitate expansion and success of the firm. The company outsources production from countries such as japan that are well conversant with the technology behind electric cars. The methods of delivering products depend on the destination. The company depends on water for global transits and electric trains for local supply. Capital The company may rely on public markets in order to raise some urgent capital through transportation of public products that need fast and safe transportation using electric trains. It has not gone public so far. Yeah there are appropriate plans for expansion to access larger markets that will improve the volume of sales thus adequate returns (Marcovici, 138). The company is planning to acquire a telecommunication firm. This will help in the tracking and communication to the operators from the headquarters in case of any form of problem. Communication is a vital entity in production thus; the signals from the motors should not be lost in order to facilitate efficiency and safety. The tesla motors is not in any danger of defaulting its debts because its performance in the market is perfect. Eventually it will reach the favorable standards. Political aspects The tesla motors company is very friendly to the environment where it operates and it relates to the occupants and the administration effectively. This gives the company ample environment to carry out its operations to the best levels. The government regulation that affects the company’s operations negatively is the high tax imposition. The tax greatly creates a loophole that could otherwise boost some essential activities in the company such as acquiring more inputs and creation of more employment opportunities. There are apparently proposed regulations that will cause a positive or significant influence to the tesla motors. The main regulation in this case is elimination of motors that pollute the environment. The motors that pollute the environment mostly operate on diesel or petrol. Tesla motors produce motors that are emission free giving it an ideal deal for preventing global warming caused by the pollutants from emissions. Vertical and horizontal analysis of accounts The vertical accounting reports each amount on a financial statement as a percentage of another item. A restated amount from the vertical analysis of the balance sheet will be illustrated as a common size balance sheet that always allows one to compare balance sheets of two different companies. Another concept that can be analyzed in this case is the average production of an industry. The vertical analysis in the income statement results in every income statement amount being presented as percentage for sales. Horizontal accounting examines at amounts on the financial statements over the previous years. The same analysis will be done to items on both a balance sheet and the income statement. This gives an accountant the idea to understand how each item changes in the relationship to changes to other items or factors. The horizontal analysis can also be referred to the trend analysis. From the above concepts, the vertical accounting and the horizontal accounting are part of a relevant financial statement analysis. The financial statement analysis 2010 2011 2012 2013 Total revenues 100% 100% 100% 100% Automotive sales 83% 73% 93% 99% Vehicle sales 62% 48% 76% 87% Emission credits 2% 1% 10% 10% Sale of powertrain components 19% 23% 8% 2% Development services 17% 27% 7% 1% Depreciation -14% -13% -8% -7% Gross profit adjusted 35% 38% 14% 28% Research and development -80% -102% -66% -12% Sales and administration -72% -51% -36% -14% EBITDA -117% -115% -88% 2% Depreciation -9% -8% -7% -5% EBIT -126% -123% -95% -3% Evolution of the company This refers to the progress of the tesla motors company whether it is growing or declining over the years of operation. Fortunately, the company is growing over the years of operation since their products are conversant with the modern technology and the products are readily affordable. The information below shows the growth of the firm in terms of sales: Year Sales in terms of million dollars 2010 23 2011 28 2012 38 2013 45 Comments on the structure of income statement and the balance sheet in the latest year The structure of the income statement and the balance sheet in this business organizatation is perfect. This is because the business is operating on profits, as customers are loyal to their quality products. The tesla motor company therefore has an opportunity of bringing more capital into the firm in order to maximize the profits. This is due to the proper management department and a straightforward panel of keeping financial records. Analysis of the company’s profit The company operates in profits because the inputs costs are not very high. The basis of this point is due to the confined use of the inputs that is greatly attached to the tesla motor company. Its comparison to the industry’s profitability is because the tesla firm emerged to win the greatest share of the market. The efficiency of the company is majorly due to its aspect of being economic friendly and pollution free. This promotes factors such as agricultural production due the reduction of global warming levels. Agricultural production is a key economic booster thus very important in an economy. The company’s liquidity A company’s liquidity characterized by a high rate of trading activities. A firm can easily use the available cash or exchanges an asset for a particular transaction. The telsa motor company is in a safe condition in that it cannot face such a deficit. Sufficient amount of cash is allocated to handle issues of emergency in order to create a condition that is suitable for business operations. The basis of this concept is actually, because the management of the firm is perfect. The tesla motor company therefore operates in the safe quarter. A company’s liquidity characterized by a high rate of trading activities. A firm can easily use the available cash or exchanges an asset for a particular transaction. The telsa motor company is in a safe condition in that it cannot face such a deficit. Sufficient amount of cash is allocated to handle issues of emergency in order to create a condition that is suitable for business operations. The basis of this concept is actually, because the management of the firm is perfect. Company’s solvency The company is a solvent enterprise. This is because it operates on its accredited rules and regulations. Another factor that promotes this is because the administration is supporting the activities from the firm. The firm focuses on improving the living standards of individuals in a state at it not based on self-interests only. The solvency of a firm gives it a free mandate to carry it business activities both locally and internationally because there will be an approval that the products or services it provides are of the required standards (Martin, Thomas and Nikola, 102). Buying shares from the company Yes, it is advisable to buy shares from the telsa motor company. This is due to the relevant operations with a focus to create a sustainable environment. Currently economic development greatly concentrates because of operating in a safe environment in that the returns will be high on factors that promote environmental sustainability. The shares in this company will positively grow in a faster rate since the demand of the products from tesla Motors Company is growing accordingly. This is due to the issue of adequately embracing modern technology for the purpose of convenience, accuracy, and speed. In the next few years, individuals with shares at the tesla company will enjoy great benefits because the world is focusing on moving towards the point using products such as electric cars for economic empowerment. The bank work and type of credit to offer Opening a credit line for this company is appropriate for its development. This credit will give the company a chance to acquire inputs that are appropriate in creating electric motors that are more effective. This creates a platform for the development of the firm to levels that it can easily cater for its goals and objectives. The credit would be long term because it is clear from the analysis in the article that the company will make great profits in the near future (Martin, Thomas and Nikola, 132). This creates a situation that will make the company to pay the credit with all the interest according to the terms and condition of lending. Works cited Cheney, Margaret, Robert Uth, and Jim Glenn. Tesla, Master of Lightning. New York: Barnes & Noble Books, 2009. Print. Doeden, Matt. Spacex and Tesla Motors Engineer Elon Musk. Print. Marcovici, Michael. The Tesla Motors Way. Norderstedt: Books on Demand, 2013. Print. Martin, Thomas Commerford, and Nikola Tesla. The Inventions, Researches, and Writings of Nikola Tesla. New York: Barnes & Noble, 1992. Print. Tesla, Nikola. A New System of Alternating Current Motors and Transformers and Other Essays. Lanham: Start Publishing LLC, 2013. Print. Tesla, Nikola. The Nikola Tesla Treasury. Lanham: Start Publishing LLC, 2013. Print. Read More