Management Information Systems Assignment
Analysis of Tesla Motors
Introduction
Management information system is designed to handle collection, processing, and retrieval of information or data that have significance to the organization (Quang, 2014). It is a system used by most organization for the purpose of support in decision making, provision of information to support operations, distribution of information or knowledge to key players of the organization and the systemic usage of technology for information sharing. In today's market competition, it is very important for organizations to maintain an MIS that will streamline and coordinate the complex processes related to the operations of the business.
This paper on the management information system will focus on Tesla Motors. Mainly, Value Chain and Porter's Five Forces will be employed to analyze the MIS of Tesla Motors. By reviewing the structure of Tesla Motors, it is easy to see how to build a network within for MIS to be achieved. To note, the structural complexity of the organization affects the flow of information. With this analysis, a plan will be prepared to help Tesla Motors become more effective and efficient in terms of operations and performance.
Company Overview
Since its inception, Tesla Motors has successfully positioned its products in the market. Currently, Tesla Motors' product in the market, the Model S, an all-electric large luxury sedan, like its predecessor, the Tesla Motor Roadster, is positioned as an all-electric premier sports vehicle in the market that meet the growing demand for e-electric green automobiles. In fact, Tesla Motors is also looking up to position its products with the concept of having the same strength with its future products such as the Model X. Although there are market rivals within the luxury vehicle market segment, the CUV segment or the all-electric vehicle segment has not been crowded with competitors, allowing Tesla Motors' products to maintain strength in the all-electric and luxury market combination segments. This means that Tesla Motors is trying to create a new market segment without the concentration of competitors.
While most automobile manufacturers are creating vehicles that are powered by gasoline; city cars, luxury cars, sports cars, and SUVs come in this system. However, with the growing demand for electric propulsion technology in the market, traditional car manufacturers are also looking up to enter the market. As a result of this market progress, there is a certain level of competition within the all-electric vehicle market segments. With this scenario, Tesla Motors looks up to a new segment of luxury all-electric vehicle market segment to take a different direction out of the cheap all-electric vehicles in the market.
Organizational Structure/Divisions
Shown below is the copy of the organizational structure/chart of the company.
Tesla Motors is divided into various main divisions that execute the plans and functions of the board. Mainly, these functional non-individual divisions include: Design, Supply Chain, Vehicle Engineering, Sales, Business Development, Communication, Human Resources, Manufacturing, Vehicle Programs and Worldwide Sales and Services. As the main divisions or department of the organization, they are actively engaged in the production, design, and marketing of the Tesla Motor products.
MIS In Building Competitive Advantage
For the purpose of understanding how Management Information System (MIS) can help Tesla Motors to gain competitive advantage and to build a plan that will strengthen its knowledge transfer for efficient and effective organizational performance, this section presents the different ways and approaches used by other organizations within the automobile industry using the MIS.
The emergence of information systems (IS) have created opportunities for organizations and solutions for issues faced by organization. With IS, companies are able to improve the processes of their operations, thus creating value to their products and customers with the establishment of new business models.
� Design and Manufacturing Improvement
As much as the designing process of a new automobile model is a long and complex process with multiple iterations and corrections, Collaborative CAD systems allowed the implementation of new designs such as noncurrent engineering. With the integration of knowledge from the manufacturing, marketing and the human resources department, there is a first-hand view of progress and problems thus allowing faster designing and correction of problems. According to McCafferty (2011), General Motors was able to save 7 months in the design of Electric Volt vehicle from 36 months to 29 months through the integration of MIS-based collaborated CAD.
� Improvement of the Supply Chain
In the manufacturing process, procurement plays a fundamental role, functioning within the checking and handling of suppliers to ensure on-time delivery of shipments and services. With the MIS, the organization is able to increase assessment of supplier performance for the management to make decisions regarding continuance of sourcing products or services from them. One of the example of this is BMW Procurement System which is focused on the management in purchasing supplies and services (Avery, 2008). Avery (2008) noted that with the aid of the Procurement System, management feedback is easier thus allowing better evaluation of suppliers who meet performance targets. This also allows coordination with suppliers to resolve issues that have significantly caused delays to the overall performance of the organization.
� Inventory Management
It is necessary to understand that inventory plays a role in the manufacturing process. The company needs to keep parts of the vehicle in the right location to avoid the interruption of production, but there are also risks of cost in storing materials. In this regard, Cami automobile made use of the Just-in-time inventory system. Inventory parts are injected to the production line through an automated system thus coordinating the flow of materials in the plan. According to the report made by Trebilcock (2007), there is a 400% improvement in the production of Cami automobiles with the use of JIT inventory system.
Value Chain and Porter's Five Forces Analysis of Tesla Motors
Generic Strategy. Tesla uses a differentiation strategy whereby it offers purely electric motor vehicles that are more efficient than other competing firms. Tesla�s batteries last longer and are charged much faster than other firms in the industry. Tesla also while being an electric motor car it also gives its driver all the performance privileges such as speed, acceleration, and comfort in addition to being environmentally friendly.
Competitive Advantages. The charging stations which Tesla uses are unique and different than other electric cars� charging stations. The superchargers that Tesla uses are approximately 16 times faster than the usual public charging stations. Their luxury car Model S can be charged up to 50% in approximately 20 minutes at supercharging stations. Tesla aims to expand its superchargers in an astonishing way that by 2015 it would cover 98% of the population in the U.S. by the year 2015. In Europe Tesla has just started opening superchargers and has already acquired 90% of the population in Norway.
Firm's Competitive Position. Tesla is an innovative high-tech automaker that produces and sells fully electric motor vehicles that compete in all markets. Tesla holds a relatively high market share. Over the past couple of years, Tesla already holds 10% of the luxury segment with the Model S acquiring 70% of the luxury sedan category, thus giving the company a boost in the industry scale. Tesla is market share leader as we can see it has sold more than its major competitors in the luxury sedan category during the first quarter of 2013 with 4,900 units compared to the following competitor brands or car companies.
Challenges of the Firm. One of the challenges Tesla will face is production up to scale. What I mean is that the big growth in sales figures of the Model S is putting Tesla�s body part suppliers under high pressure. Since the times of Henry Ford, one of the main components of the automaton industry is scale. Vehicles consist of many parts and each part needs an assembly line which means bigger factories are needed and logistics can get very complicated in order to match production demands.
Growth Options. Tesla Motors direction will be best fueled by its strategic intent. While the expectation of the US automobile industry is not that overwhelming compared to the past, traditional automobile giants such as Ford and General Motors (GM) are taking steps to acquire customers through their radical programs and campaigns. Meanwhile, what Tesla Motors is doing is leading the environmentally-aware sector regarding the existence of its car models. Tesla Motors noted that the company's Model S and Roadster have captured a great part of the market with tremendous sales growth, even outperforming large luxury vehicles of the market such as the Audi A8, Lexus LS, the Mercedes S-class or the BMW 7 series. Therefore, if we applied this information on BCG matrix we will find out that Tesla's products are stars products because it has large potential in market growth and large percentage on market share. So, the most sensible move Tesla can do is to focus their energy and resources in their core promising product and invest heavily to be leader in the market of electric car.
Recommendation
Looking at the current organizational structure of Tesla Motors, it is easy to find an important point to implement IS: coordination and integration. Taking into account the analysis of existing information systems used by other companies within the industry, it is easy to create the coordination and integration between departments to avoid the bottleneck on the performance caused by the thick and complex bureaucracy.
� Integrated Design System. The main purpose of designing and engineering a new vehicle is to meet the demand of the market. From standpoint alone, it is already easy to understand the need of getting the marketing people into the design process. By building the integrated design system, designing and engineering are tasks not just limited to technical people, but it becomes a question of marketing. How the new design appeals to the market? Through this integration, corrections and decisions are made fast enough to produce the new design within a shorter period of time, thus increasing Tesla Motors turnaround period.
� Inventory and Supply Chain Management Automated System. It is very important to note that Tesla Motors has a connection with other suppliers in the market for the manufacturing of its cars. The automobile industry is a specialized industry. This means that there are parts that are made by set of organizations or businesses. This specialization increases innovation and the strength of the car produced. But this also creates a problem of inventory and management of supply chain. To resolve this problem, automating the supply chain and the inventory process will help Tesla Motors to increase its products, avoid supply problems, and even make use of inventories the right way to avoid wastage of supplies.
References
Avery, S. (2008), �Automated rating system helps manage supplier performance�, Purchasing
p. 29. Vol. 137, Issue 3; Retrieved 22 February, 2011, from ABI/INFORMGlobal. (Document ID: 1448967171).
McCafferty, D. (2011), �Tech shapes manufacturing�s future�, Baseline 08, 30 � 32. Re-trieved February 17, 2011, from ABI/INFORM Trade & Industry. (Document ID:2254293521)
Tesla Motos . (2013). Tesla Motors Investors Presentation. Retrieved Dec. 31, 2013, from Tesla Motors: http://files.shareholder.com/downloads/ABEA- 4CW8X0/2772869373x0x701310/d5eee1f9-a7f2-45bc-b011-b94ebe543395/Autumn %202013%20Corporate%20Presentation.pdf
The Official Board. (2014). Tesla Motors. Retrieved from http://www.theofficialboard.com/org- chart/tesla-motors
Trebilcock, B. (2007), �Breaking the mold�, Modern Materials Handling 62 (1), 24 �29. Retrieved 11 March, 2011, from ABI/INFORM Global. (Document ID:1193146661).
