Follow the instruction to write 1.5 pages Single space case analysis

All the work must be 100% original and professional

Please do not use any used answers if you have done the same.

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Any kind of plagiarism will not be tolerated

Case Analyses (I need only a total of 1000 words.) Case Analysis Paper Format Each case analysis paper submitted should include five sections: (try to keep the word counts in each section the same!!!!!!)

1. What is the key problem or challenge facing the firm that you will try to resolve – identify the most important strategic issues facing the firm as a result of both internal and external analyses (short paragraph about 100 words)

2. Your external analysis (the industry and economic environment) check the sample if you’re not sure. (200 words) Do not copy and paste, or simply summarize up the whole information into paragraphs. I need personal thoughts, also critical thinking Making anaylsis by using one of the below models PESTLE analysis To check how it works – https://www.nibusinessinfo.co.uk/content/pestle-analysis-example Porter’s five forces analysis To check how it works – https://en.wikipedia.org/wiki/Porter%27s_five_forces_analysis Example:

3. Your internal analysis (the firm’s internal resources and capabilities using model) 200 words Do not copy and paste, or simply summarize up the whole information into paragraphs. I need personal thoughts, also critical thinking VRIO framework VRIO framework is a theoretical framework that explains and predicts firm-level competitive advantage. According to this model, a firm can gain and sustain a competitive advantage only when it has resources that satisfy all of the VRIO criteria. Keep in mind that resources in the VRIO framework are broadly defined to include any assets as well as any capabilities and competencies that a firm can draw upon when formulating and implementing strategy. So to some degree, this presentation of the VRIO model summarizes all of our discussion in the chapter so far.

4. Two mutually exclusive alternatives that solve the problem (300 words) A) list out the two mutually exclusive alternatives B) list out the pro and cons for each C) financial and operational implications considered example: 5. Your recommended chosen alternative course of action and justification for the alternative you have chosen (200 words) A) What you recommend B) The limitations of your recommend alternative C) How to overcome these limitation D) Implications considered Please check this before you write the essay. I will double check this after receiving your work, if one of them is missing there is the possibility I will need revision. So kindly make sure you do cover all sections in the initial work. Also, 1000 words is enough, there is no need to do extra work. A guideline for case analysis is provided separate to this syllabus will be available on the first day Blackboard is opened. Case analysis can be no longer than two- to two-and-a-half pages (single-sided, single spaced, 12-point Times New Roman, 1” margins throughout). Use the five headings above (those in bold!) for your case submissions. Up to two additional Appendix pages can be used for supporting information, references, tables or figures. Each case should be submitted to SafeAssign on Blackboard and should be submitted in WORD. Please note that I want you to only refer to the case when completing a case analysis and write-up. Do NOT use any other external references for ANY case analysis. For the exclusive use of H. HUANG, 2018. MH00 0 0 7 7645065 FRA NK T. ROT HAE RME L ERIN ZIMM E R Tesla Motors (in 2013): Will Sparks Fly in the Automobile Industry? AUGUST 8, 2013. It is 1:04 a.m. in Fremont, California, and Tesla Motors CEO, chairman, and product architect, Elon Musk, is wide-awake at his desk in the Tesla Motors manufacturing facility taking the last sip from a can of low-carb Monster Energy drink. He has barely slept in two days and has over 250 unread e-mails in his inbox, 40 some new messages on his voicemail, and a full day of meetings ahead of him that are unlikely to end before 10:30 p.m. In addition, he has a board of directors meeting that is fast approaching, at which he needs to present the latest manufacturing and financial information for Tesla Motors. The board will take even greater interest in these details now that the stock price has crested the $150 mark. Musk reaches for his smartphone to check the latest round of urgent text messages as he glances at the award for the Tesla Model S on his desk—2013 Motor Trend Car of the Year—and smiles. As a serial entrepreneur, he is chasing his dream: to leave a legacy. Musk has been described as “Henry Ford and Robert Oppenheimer in one person,”1 as well as “Tony Stark, the eccentric inventor better known as Iron Man.”2 Indeed, Musk made a cameo appearance in Iron Man 2. He believes Tesla just might be the company through which he can leave his mark in the history books. However, with several pressing issues and three companies to run, can he find a way to make it all work? As Musk attempts to prioritize all of the critical information that must be reviewed for the day ahead, he contemplates the many obstacles still in his path at Tesla Motors. Is Tesla the next great American car company? Can it disrupt the market with electric vehicles just as Japanese and Korean car companies did in the past with their high-quality, low-fuel-consumption combustion vehicles? What is the competition doing to compete with Tesla, and how will Tesla need to change or adjust its strategy accordingly? Can an electric car company really create a sustainable competitive advantage with a limited infrastructure? Is Tesla’s business model sustainable? Most importantly, can Tesla scale production to meet demand for the Model S and its upcoming Model X while maintaining the same high quality and yet drive down costs? Or, should Musk seek to either sell to an established car company, or partner even more closely with one that already has an equity stake in Tesla? As the time nears 2:18 a.m., Musk curls up on the sofa in his office and wonders, “What will the next few years bring for this company, and what should I do to ensure its success?” Elon Musk: Engineer Entrepreneur Extraordinaire In 1989, Elon Musk left his native South Africa at age 17 to avoid being conscripted into the army. Says Musk, “I don’t have an issue with serving in the military per se, but serving in the South African army suppressing black people just didn’t seem like a really good way to spend time.”3 He went to Canada and subsequently enrolled in Queen’s University in 1990. After receiving a scholarship, Musk transferred to the University of Pennsylvania. He graduated in 1995 with bachelor’s degrees in both economics and physics and then moved to California to pursue a PhD at Stanford University in applied physics and material sciences.4 Professors Frank T. Rothaermel and Erin Zimmer prepared this case from public sources. This case is developed for the purpose of class discussion. It is not intended to be used for any kind of endorsement, source of data, or depiction of efficient or inefficient management. All opinions expressed, and all errors and omissions, are entirely the authors’. © by Rothaermel and Zimmer, 2015. This document is authorized for use only by HAOYANG HUANG in MGT480-2018 fall taught by QI ZHU, Arizona State University from Jul 2018 to Dec 2018. For the exclusive use of H. HUANG, 2018. Tesla Motors (in 2013): Will Sparks Fly in the Automobile Industry? After only two days, Musk left graduate school to found Zip2, an online provider of content publishing software for news organizations, with his brother, Kimbal Musk. Four years later, in 1999, computer maker Compaq acquired Zip2 for $341 million (and was in turn acquired by HP in 2002). Not one to stand still, Elon Musk moved on to co-found PayPal, an online payment processor. In 2002, eBay acquired PayPal for $1.5 billion, netting Musk $175.5 million for his 11.7 percent share of the company. Although it was financially lucrative, Musk still harbors resentment about this deal. He feels that letting eBay acquire PayPal sold short the company’s potential, dooming it to a future as a niche tool rather than a launch pad for a full-fledged, online financial institution. Musk describes himself as an “engineer and entrepreneur who builds and operates companies to solve environmental, social and economic challenges.”5 He is now leading on three different fronts: electric cars, renewable energy, and space exploration. Two of his three ventures—SolarCity and SpaceX—seem to be doing well. SolarCity’s goal is to become the Walmart of solar-panel installations. With 2,510 employees spread out over 10 states, it is the number-one provider of residential solar power in California, and growing fast.6 SpaceX aims to send satellites into orbit at a quarter of the current cost. Since Musk took over engineering responsibilities, he has managed to launch rockets that reach outer space successfully. In May 2012, SpaceX’s Dragon spacecraft attached to the International Space Station, exchanged cargo payloads, and returned safely to Earth. Until then, only governments had accomplished this technically challenging feat. Since October 2012, when it completed its first official mission, SpaceX has begun regular resupply missions to the International Space Station.7 Although crowned “2007 Entrepreneur of the Year” by Inc. magazine, Musk feels that his personal ambitions have not yet been fulfilled. Many in California’s venture-capital and high-tech community view Elon Musk as someone who has good ideas and breathes life into risky ventures, but then fizzles out on them. He aims to prove them wrong. As a result, Musk’s dreams for Tesla Motors, the California-based designer and manufacturer of electric vehicles, are big; he wants to leave a legacy through this company. Thus, after firing three CEOs in the last few years, Musk is now leading the company himself. A Brief History of Tesla Motors Tesla Motors (TSLA) was founded in 2003 in San Carlos, California, as an automobile company dedicated to developing electric vehicles. Co-founder Elon Musk was also one of the first investors, putting up $7 million initially, and later an additional $30 million. Tesla Motors held a design contest for the styling of its first product: the Roadster, code-named “Dark Star.” Lotus Cars, a British manufacturer, won the contest and jointly engineered and manufactured the new vehicle. Lotus was a natural partner for this project because of its experience and expertise in building its own line of sports and racing cars. In fact, the Tesla Roadster was modeled using the Lotus Elise as a template. The partners designed the Roadster’s chassis using Lotus software tools and had it manufactured by the same Norwegian company that built the Elise. In December 2006, Time magazine hailed the Tesla Roadster as the best invention of the year in the transportation category. In 2007, however, it became clear that sales were not enough to sustain business; the company was bleeding money. After combing through Tesla’s financial situation, Musk found that Tesla was losing $50,000 on each car sold. As CEO, Martin Eberhard had led investors to believe that the manufacturing of the Roadster cost only $65,000 per car, which appeared to justify the $92,000 sticker price. In reality, Musk found that it cost Tesla $140,000 just for the parts, subassemblies, and supplies to make each vehicle, and that the Roadster could not even be built with Tesla’s current tools. He also discovered major safety issues with the existing design. Completely taken aback by the messy state of affairs, Musk commented, “We should have just sent a $50,000 check to each customer and not bothered making the car.”8 2 This document is authorized for use only by HAOYANG HUANG in MGT480-2018 fall taught by QI ZHU, Arizona State University from Jul 2018 to Dec 2018. For the exclusive use of H. HUANG, 2018. Tesla Motors (in 2013): Will Sparks Fly in the Automobile Industry? Consequently, Musk fired Martin Eberhard and took over the engineering himself. Almost every important system on the car, including the body, motor, power electronics, transmission, battery pack, and HVAC, had to be redesigned, retooled, or switched to a new supplier. Such dramatic changes were necessary to get the Roadster on the road at something close to the published performance and safety specifications, as well as to cut costs to make the Roadster profitable.9 Tesla Motors launched a completely redesigned Roadster in 2008 at a base price of $109,000.10 By December 31, 2009, Tesla had 514 employees and had sold 937 Roadster models in 18 countries around the world. More than 1,200 additional people had put in deposits to reserve a Roadster, giving the company $70 million in interest-free loans. Three years later, on December 31, 2012, Tesla had sold more than 2,450 Roadsters.11 The 2008 version of the Tesla Roadster had been discontinued and replaced with a new model, the Tesla Roadster 2, with an improved electric powertrain performance and lower production costs. The Roadster Sport, which accelerates from zero to 60 miles per hour in 3.7 seconds (faster than a Porsche 911 GT), was the next vehicle added to the pipeline. Now, however, Tesla Motors has decided to discontinue production of the Roadster altogether after announcing the introduction of the Model S. In March 2009, Tesla introduced to the public an early prototype of the Model S family sedan. By year-end, Tesla had received approximately 2,000 customer reservations for the car, with a minimum down payment of $5,000 each. The prototype had turned into a premium sedan and garnered approximately 12,000 reservations by June 2012.12 Tesla manufactures the Model S in the Fremont, California, factory that it purchased from Toyota for $42 million in May 2010.13 The car seats five adults, goes from zero to 60 in 4.4 seconds, and has a per-charge range of over 300 miles for the high-end version. As Musk described the electric car’s efficiency and range on Tesla’s blog, “With the 85 kWh Model S battery we set a goal of delivering a range greater than 300 miles using the 2-cycle EPA test procedure that we used with the Roadster. This is a goal that no electric vehicle (EV) in history had ever achieved. We are thrilled to say that we exceeded this goal.”14 One University of Central Florida senior researcher traveled more than 423 miles on a single charge in his Model S Signature model, which boasts the larger 85-kilowatt-hour battery.15 Deliveries of the Model S began on June 22, 2012, and positive feedback followed. As of December 2012, there were over 20,000 reservations for the vehicle, and Tesla was producing some 500 cars a week by the summer of 2013.16 The base price of the Model S has been $52,400 (after a $7,500 tax deduction) since January 1, 2013.17 The automobile magazine Motor Trend gave the Model S glowing endorsements, stating, “By any measure, the Tesla Model S is a truly remarkable automobile.”18 In an attempt to build on its success with the Model S, Tesla has begun work on a newly designed seven-seat electric vehicle, the Model X, which will combine the best features of an SUV with the benefits of a minivan. It plans to deliver the first Model X in 2014.19 Tesla’s growing popularity and big plans continued to face scrutiny through 2012 because of its financial uncertainty. Tesla completed its IPO on June 29, 2010, the first IPO by an American automaker since Ford in 1956. On the first day of trading, Tesla’s shares closed at $23.89 and generated $226.1 million for the company.20 Despite this, in its first annual report, Tesla reported an operating loss of $146.8 million.21 By the end of 2012, it reported total losses of more than $396 million (see Exhibit 1). However, in a letter to shareholders for the first quarter of 2013, Tesla announced its first profitable quarter in 10 years, with a GAAP profit of $11 million. Investors responded in kind to the black ink in Tesla’s ledger, causing a surge in the stock price, and pushing Tesla’s stock up over $150 per share on August 8, 2013 (see Exhibit 2). This rally continued despite a recall of 1,228 2013 Model S vehicles in June.22 In the first-quarter shareholder letter, Elon Musk stated that Tesla’s profit was attributable to operating more efficiently than ever before: As our manufacturing processes stabilized and our supply chain continued to mature, we turned our attention to improving execution. In the process, we reduced the hours required to build a car by almost 40% from December to March. 3 This document is authorized for use only by HAOYANG HUANG in MGT480-2018 fall taught by QI ZHU, Arizona State University from Jul 2018 to Dec 2018. For the exclusive use of H. HUANG, 2018. Tesla Motors (in 2013): Will Sparks Fly in the Automobile Industry? We also improved our inventory management. During Q1, raw materials declined by almost 26%, while unit production increased 80%. Better inventory management contributed over $30 million in cash and reduced our logistics costs during the quarter.23 The U.S. Automotive Industry The Big Three automakers—GM, Ford, and Chrysler—have dominated the U.S. automotive industry for decades (see Exhibit 3). GM was once the leading U.S. carmaker, with market share of over 50 percent in 1962. By 2009, GM’s market share had eroded to less than 20 percent, while the market share of the Big Three combined dropped below 50 percent for the first time ever.24 GM and Chrysler filed for bankruptcy, while Ford was fighting hard to become profitable again. What had caused their decline? In the 1990s, the Big Three shifted resources away from mid-size and compact cars to lead the “SUV craze.” They built their business models around the assumptions that gas prices would remain low for the foreseeable future, and that Americans would continue to prefer big trucks and SUVs. For as long as these assumptions held true, the strategy was quite profitable; pickup trucks and SUVs provided the highest margins of any vehicle class. In fact, the Ford F-150 pickup truck remains the most-sold vehicle in the United States of all time. For a while, the Hummer 1 (with gas mileage of 7 mpg) was one of GM’s most profitable vehicles. However, when SUV sales peaked in 2004 and started to decline, the Big Three were slow to detect and adapt to the shift in customer purchase patterns. Then, in the wake of the 2008 financial crisis, U.S. car sales hit a historic low of some 11 million vehicles, down from 18 million in 2000. Meanwhile, the price of a gallon of gas rose to over $4 in the summer of 2008, up from about $2 in 2005 (see Exhibit 4). While all car segments experienced a dramatic reduction in demand, trucks and SUVs were hit particularly hard. By summer 2013, gas prices had fallen to an average of $3.59.25 GM The Big Three found it particularly difficult to compete in this leaner financial environment due to their higher cost structure. Unlike their foreign counterparts, U.S. companies had to cover long-term legacy costs for employee health care and pensions. GM was particularly vulnerable in this regard. At one point, GM paid the full cost of health insurance premiums for all of its employees and their dependents, as well as GM retirees and survivors. When U.S. health care costs rose precipitously in the latter part of the 20th century, most of these legacy plans ended up chronically underfunded. Taking steps such as providing retirement packages to older workers and negotiating agreements with unions to transfer pension dues to an independent trust helped, but fell far short of solving GM’s financial woes. Compounding the company’s financial situation further, GM had also made large concessions to the United Auto Workers (UAW) union, driving up hourly wages and benefits. For example, laid-off autoworkers could await re-employment while enjoying almost full wages at so-called job banks. GM wa …