A regular evaluation of a company’s product portfolio is crucial in developing effective sales and marketing strategies to keep the brand relevant in its target market. While there are plenty of ways that this assessment can be conducted, most businesses like to use the BCG matrix because of its simplicity and accuracy.
The BCG matrix is a business planning tool created more than 50 years ago by the Boston Consulting Group, hence its name. In this article, we present a brief analysis of the BCG matrix of Tesla, which explains the business strategies used by this immensely successful company in a nutshell.
Background of Tesla
Presently, Tesla, an American company, holds the distinction of being the foremost global producer of electric cars and solar panels. Its inception dates back to 2003, initiated by Marc Tarpenning and Martin Eberhard. The company draws its name from the renowned inventor, Nikola Tesla. From its early stages, Elon Musk, co-founder of PayPal, assumed an influential investment role, eventually assuming the CEO position in 2008, propelling Tesla towards its current prominence.
With dsitinctive brand image, Tesla became a household name in 2012 after the release of the Model S, which was hailed by experts as the best car ever tested. It sold 2,500 units within a month and the company rose to success. Today, it has a market capitalization of $720.82 billion and a current revenue (TTM) of $94.02 billion.
Tesla BCG Matrix Analysis
A Tesla BCG matrix analysis is one of the ways of how we can understand the strategic decisions made by the company in order to turn it into the massively successful corporation that it is today.
Tesla BCG Matrix Analysis Created in Boardmix
Although the name is most frequently associated with electric vehicles, in this BCG matrix Tesla shows that they do have other notable products and services.
Stars
One of the stars of the BCG matrix Tesla is definitely the electric cars and the consistent innovations that the company produces on them. The other star, which is shining more brightly than ever, is sustainable energy service, where Tesla has proven to be a very strong leader.
Question Mark
Tesla has attempted to penetrate the solar power market but is having a hard time due to the tough competition. Hence, these products can be considered question marks, which can really take off, given bigger investments.
Cash Cows
The cash cows are the most reliable income earners even in a market with slow growth. For Tesla, the cash cow would be the Powerwall battery, which shows continuous profits despite external factors.
Dogs
There really are no obvious dogs in the Tesla product portfolio as all of them are performing really well in general. However, there could be certain models that are facing complications in manufacturing that can be considered for phase-out.
Mastering BCG Matrix Creation on Boardmix
The Boston Consulting Group (BCG) Matrix is a vital tool for strategic management, allowing you to visualize a company's product portfolio and identify growth opportunities. Here's how you can create a BCG Matrix on Boardmix.
1. Login and Create a New Board
First, log into your Boardmix account. Once logged in, click on ‘New Board'. This gives you a fresh canvas to work on.
2. Draw the BCG Matrix Grid or Use a Template
The BCG Matrix consists of a 2x2 grid. Use the ‘shape' tool in the toolbar to create this grid. You will need two perpendicular lines intersecting in the middle to form four quadrants. You can also search for the BCG Matrix template in the template library and use it for free.
3. Label the Axes
Next, label your axes. The y-axis usually represents the market growth rate, while the x-axis represents the relative market share. You can add these labels using the 'text' tool from the toolbar.
4. Add Quadrant Labels
Each quadrant in the BCG Matrix represents a different product category: Cash Cows (high market share, low market growth), Dogs (low for both), Stars (high for both), and Question Marks (low market share, high market growth). Use the text tool again to add these labels.
5. Plot Products
Start plotting your products or business units in the appropriate quadrants based on their market share and growth rate. You can use different shapes or colors for each product to make them distinguishable.
6. Customize Your Diagram
Boardmix offers various customization options. Feel free to change colors, add patterns, or adjust sizes as needed to create a visually engaging BCG Matrix
.
7. Add Notes or Annotations
If needed, add any notes or annotations for clarification using the text tool. This can be especially helpful when sharing your BCG Matrix with others who might not be familiar with all the products or units plotted.
8. Save and Share Your BCG Matrix
Once you're happy with your BCG Matrix, save it on Boardmix's secure cloud storage for future reference. You can also share your diagram with colleagues or stakeholders via email or direct link.
Creating a BCG Matrix on Boardmix can significantly enhance your strategic planning process by providing a clear visualization of your product portfolio's current state and highlighting potential areas of growth or investment.
Key Takeaways
Tesla is widely recognized as one of the world’s most valuable companies today. It was initially built to manufacture electric vehicles but has since expanded to other products and services, like solar panels, storage systems, clean energy generation, and so on.
In the BCG matrix of Tesla that we have created with the help of the Boardmix BCG matrix analysis template, we were able to sort the products and services of this brand based on their market growth and market share. We did achieve a clear and concise graphical representation of the market performance of the brand’s main products but since this matrix is based only on two factors, we have to note that the results obtained might be somewhat limited.
You can also create your own BCG matrix of Tesla or any other company by using the pre-built BCG matrix template available at Boardmix It’s simple to use, letting you do your own BCG matrix analysis with no difficulty.
References
https://www.oboolo.com/blog/our-tips/tesla-bcg-matrix-02-03-2022.html
https://www.investopedia.com/articles/personal-finance/061915/story-behind-teslas-success.asp
https://www.britannica.com/topic/Tesla-Motors
https://www.businessinsider.com/tesla-ceo-elon-musk
