IB Business Management

The BBC's Theo Leggett looks at the current woes of Tesla - falling sales, job cuts, a product recall of the Cybertruck, and the sacking of the supercharger network - and wonders what it means for the organisation.

It's suggested that the perception of the brand has changed. Tesla is no longer seen as the disruptor it once was, it face increased competition, notably from China and it will be interesting see whether the renewed focus on driver autonomy really is the way forward. 

I 'scoop' this largely because I've been reviewing my notes on Sales Forecasting and one of the random variables that can impact this is the implications of product recall.

And I give you Exhibit A, Tesla having to recall 1.6 million cars in China because of issues with its steering software. Of course, in this market this doesn't mean a physical recall, but the need for an upgrade. However, any way you slice it, it will be likely to have adverse effects on  its sales forecasts and its brand image in a week when it's been overtaken by BYD in terms of global sales. 

Another article looking at Elon Musk's management style and its effect upon Twitter, arguing that what's currently happening could have been forecast, given his previous behaviours at Tesla and SpaceX.

However, the evident clash of cultures involved has meant that whereas his previous employees have generally learnt to tolerate his impulsive management style, that's not happening at Twitter. 

A nice application of the Ansoff Matrix for you: in response to falling profits, Tesla is reported to be accelerating the roll out of some new models from the end of 2025.

It's classic product development, and part of a response to falling profits by looking to boost revenues as well as by cutting jobs, with 6,000 jobs going in Texas and California. 

Does news like this damage the Tesla brand, or does it enhance the brand through clever contingency planning? It's an interesting question. Yes, the Autopilot system was faulty but for those car owners who haven't been adversely affected the recall is going to be installed 'at home' via internet technology and they won't lose access to their cars, unlike with a conventional motor car.