MIS Strategic plan for Tesla Motors

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15th August, 2018

Introduction
MIS is a type of information system, which is usd for decision making, analysis, control and

coordination, visualization of information in a company or an organization[1]. It is very

important, for organizations to to maintain an MIS, which thus streamlines and coordinates

various complex processes which are related to business operations of the organization,

especially in today’s competitive market.

In this paper, we shall be focusing on the management information systems of the Tesla motors.

In order to fully understand the MIS strategic plans to implement, we look into the Value Chain,

and Porter’s Five Forces, which will help analyse the MIS of Tesla Motors. By studying these

factors, we can visualize how to build a structure within, so that the MIS can be achieved. One

thing to be noted is that the complexity of any organization affects the flow of information within

the organization. The strategic plan, thus will be drawn after this detailed analysis, with the aim

that it can help Tesla Motors become more productive and efficient in terms of performance and

operations.

Overview of the Company

Tesla Motors was initiated amidst much public hype, and has have a strong and successful

position since it took off in the market. Just like its predecessors, the newer Tesla models, mostly

being fully electric luxury sedan, are well positioned in the market, and have been meeting the

growing demand over the market. Tesla now has positioned itself for much larger population

base, and with cheaper cars which are as good as their luxury ones, enabled by the reducing

Lithium-Ion battery price, and the inception of Gigafactories, which has made Tesla more

independent for the vendor companies. Though it cannot be argues that the competition is high,
especially with big Motor companies moving into building state of the art electric vehicles, Tesla

Motors still maintains and holds great strength over its market, especially due to its relentless

R&D department, and customer fidelity. We can thus imply that Tesla can, and has been trying

to create new market segments without much concern about rival companies.

Even now, most automobile companies are investing on gas powered vehicles; be it for SUVs,

luxury cars, sports cars and others. However, there is a huge demand of electric propulsion

technology, and these big companies have started their slow shift towards it. Due to this, these is

a growing competition within electric vehicle market. Because of this, Tesla is weighing its

options to take a new direction out of the cheap electric vehicles in the market.

Structures/Divisions within the Organization

As a large and complex company, Tesla Motors is divided into various divisions, who maintain

and execute the plans decided by the company board. Few of these divisions include Sales,

Business, Motor Engineering, Research, Design, Supply Chain, Communications, HR,

Manufacturing and many more. These major departments within Tesla are mostly involved in

production, design and marketing of the Tesla products.

Building a competitive edge using MIS

Here, we look into the methodologies and approaches used by other organization within the

sphere of automobile industries using managerial information systems, so that we can understand

how MIS can be implemented by Tesla to gain a competitive edge, and build a plan which will
help the company realise its aims, and strengthen its knowledge transfer for efficient and

effective organizational performance.

We have to realise how with the emergence of information systems, there has been a huge rise in

opportunities for companies to solve pertinent issues. Information systems help enhance the

processes involved in variety of operations, which thus create value to their products and

improve customer satisfaction along with the establishment of new business models.

1. Improvement of Design and Manufacturing

The designing process of a new automobile model is a complex and lang process, which

involves huge number of corrections and iterations. Now, we have the Collaborative

CAD systems, which allowed the implementation of new designs with much ease. The

knowledge for different divisions like manufacturing, marketing and HR department can

now be integrated to get a better view of the progresses being made, and the problems

faced. This thus allows faster designing and helps solving corrective problems much

easily.

Looking into an example, General Motors was able to save seven months in the design of

Electric Volts ( the projected time was 36 months, but got completed within 29 months

because of the integration of MIS-based collaborated CAD.

2. Supply Chain improvement

Procurement plays one of the most important/fundamental role in a manufacturing

process. It mostly functions within the checking and handling of suppliers, so that the on-

time delivery of shipments and services of products is always ensured.

 With the help of managerial information systems, the company can make their

assessment of supplier performance much easily. This helps management to make better

decisions regarding whether or not to continue sourcing products or services from them.

To better understand this, let us look into an example. The BMW Procurement System,

which is focused on the management in purchasing supplies and services was analysed by

Avery in 2008. Avery noted that the Procurement System helped management to get

feedbacks easily, which in turn helped them to properly access/evaluate suppliers who

meet performance targets. This also helps bettering the coordination so as to resolve any

issues which may cause significant delays to the overall performance of the company.

3. Warehouse management

It is very necessary for us to understand the role that inventory plays during the

manufacturing process. Inventory keeping/warehousing helps the company to keeps parts

of the vehicle in right location so as to avoid any sort of interruption of production.

However, there are risks involved in the cost of storing the materials. To see the

methodology applied to solve this, we look into Cami automobile, which uses the Just-In-

Time inventory system. In this, the inventory parts are supplied to the production line

through an automated system, thus coordinating the flow of materials in the plan. This

research, done in 2007 by Trebilcock in 2007 showed that there is an improvement of

400% in the production of Cami automobiles due to applying this process.

Analysing the Value chain and Porter’s Five Forces for Tesla Motors

Generic Strategy

Tesla offers its customers purely electric vehicles, and promises and delivers greater

efficiency than its competition. This is a differentiation strategy.Tesla, with the help of its

Gigafactories, has better lasting batteries, more suitable for its cars, and can charge much

faster than what its competitors have to offer. In spite of being an all-electric motor

company, Tesla cars hsa all the better end of facilities including speed, acceleration,

comfort, addon facilities and much more, while promoting itself to be environment

friendly company.

Competitive Advantage

Tesla uses unique charging stations, which are very different than the charge stations

used by other electric cars. Tesla boasts supercharges, which charges its batteries 16

times more faster than usual public charging stations. For example, the Tesla Model S car

can be charged up to 50% usually within 20 minutes at a supercharging station. Tesla

aims to expand its superchargers to cover 100% of the US population within a few years.
In Norway, Tesla has covered more than 90% population, and is fast expanding in other

countries too.

Firm’s Competitive Position

The high end electric cars that Tesla sells and produces competes in all markets. As a

new company, Tesla has a strong relative hold over the market. By 2014, Tesla already

had more than 10% of the luxury segment due to the Model S, acquiring 70% of the

luxury sedan category. This gave a huge boost to the company’s sales. Tesla is growing

to be a market share leader, as it is quite evident that it has sold more than many of its

major competitors in the luxury sedan category. Even as early as 2013, Tesla had sold

over 4900 more units than its major competitors.

Major Challenges that the company Faces

The biggest challenge for Tesla in current scenario is the production of this units up to

scale. The growth rate of the company is high, and it is looking to aggressively expand its

market in Asian countries. The demand has risen to all time high, and it is a growing

concern that whether Tesla can maintain sales on par with the demands. Since the

beginning of assembly lining by Ford Motors, one of the key aspect of any automobile

company is scale. The need of variety of parts, and the need of large assembly lines for it
means the need of precise logistics, and way of understanding of complex mechanisms

that the company needs.

Growth Options

The strategic plans that the company implements shall be very deterministic on the

directions the company shall take in the future. All the old automobile giants are taking

large and radical steps to garner more customers, and are pushing campaigns backed by

cutting edge technology vehicles.

Tesla Motors, on the other hand, has the hold over environmentally-aware sector, with

regards to its car models. The newer models of the company has captured a large chunk

of customers from generic luxury sedan makers like Audi, Lexus and others.

Thus, if we apply the BCG matrix into this, we can see that the products Tesla sells is its

star, and has a huge potential to rapidly grow over the market.

It is therefore recommended that Tesla Motors focus their energy and resources in the

core of their promising product, and invest heavily on its research, design and

development to lead the market of electric cars.

Recommendations

If we look into the structure of the organizational goal of Tesla Motors, we can easily

find a very important aspect to implement in IS, which is coordination and integration. If

we take into account the analysis of IS done by other automobile company (as presented

above as examples), we can infer that the coordination and integration between
departments is very necessary so as to avoid the bottleneck of performance which can be

caused by the Kafkaesque bureaucracy within the company.

to avoid the bottleneck on the performance caused by the thick and complex bureaucracy.

The Integrated Design System

A company engineers, designs and deliver a new product as per the demand of the

market. Thinking about it, we can see that it is already easy to understand the benefit of

getting the company product marketed to large audience and implementing the feedbacks

obtained for design process. We can thus see that designing and engineering are tasks

which are not just limited to technical verse people, as all the departments have their

relative importance over the matter.

Therefore, we can also look into it as a question of marketing by asking questions like

how the new design appeals to the customers. With these integrations, and repeated

corrections can we make assertive and quick decisions to produce a new and better design

within a shorter period of time, which thus will increase the total revenue of Tesla

Motors.

Chain management automated system, and inventory and supply system

 A very important factor we must know is that the Tesla is still heavily reliant on many

suppliers so as to manufacture their cars. As the automobile industry is very specialized

one, there are many car parts which are manufactured by a limited number of company.

This sort of specialization is required so as to decentralize the work needed to be done to

manufacture the car, and relieving the company from the nightmare of building

everything from scratch.

However, this creates a problem in the inventory and management of supply chain.

Therefore, it is necessary to automate the supply chain t this also creates a problem of

inventory and management of supply chain. To resolve increase the sales of its product,

automating the supply chain and its problems, and increase the inventory process will

need Tesla to make a valid MIS strategy.

References

1. Bourgeois, David T. (2014). Information Systems for Business and Beyond. The Saylor

Academy. p. 5.

2. "What is Management Information Systems?". Mays Business School. Archived from

the original on May 9, 2015.

3. Avery, S. (2008), ‘Automated rating system helps manage supplier performance’,

Purchasing
4. Tesla Motors . (2013). Tesla Motors Investors Presentation. Retrieved Dec. 31, 2013,

from Tesla

5. The Official Board. (2014). Tesla Motors. Retrieved from Trebilcock, B. (2007),

‘Breaking the mold’, Modern Materials Handling 62 (1), 24 –29. Retrieved 11 March,

2011,

6. Costa, A; Ferreira, C.; Bento, E.; Aparicio, F. (2016). "Enterprise resource planning

adoption and satisfaction determinants". Computers in Human Behavior.