Unit 1 - Exploring Business - Compare and contrast the success of 2 businesses (601/7155/8)
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PEARSON (PEARSON)
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BTEC Level 3 National Business Student Book 2
A distinction level answer to Unit 1 - Exploring business - Compare and contrast the success of 2 businesses. The 2 companies compared in this document were Tesla and Coca-Cola 2 very different companies with lots to contrast between the two! Sure to impress your lecturer!
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Unit 1 - Exploring Business - Compare and contrast the success of 2 businesses (601/7155/8)
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Unit 1 – Compare and contrast the success of 2 businesses.
Compare and contrast the success of 2 businesses
I have chosen Tesla & Coca-Cola
An overview of what this assignment will contain and the case study.
Within this assignment I will be highlighting the key features of each of my chosen businesses and I
will be looking into what makes them each successful and strategies that contributed to their
successes.
Tesla
Tesla is a public limited company, this gives them an advantage over private companies as they are
able to offer shares to public investors, government agencies and employees. Tesla shareholders
tend to be in for the long run and tend not to react to random news events compared to the average
stock market investor. This shows us that Tesla’s shareholders clearly hold a vision in the company
and the company’s future and their visions and missions. This is particularly true for Tesla as during
COVID-19 and the first 3 quarters of the year Tesla’s share price skyrocket very briefly but has since
returned to a stable level. This shows us that despite Tesla’s annual sales and revenues being way
below expected levels they are still valued very highly as a company as shareholders have not sold
their shares despite the company’s negative return showing to us that the shareholders see clear
value and worth within the company long term. Tesla’s Price to earnings ratio is current 793 with
their share price sitting at $400. On August 11 th Tesla announced a 5-for-1 stock split causing their
stock price to skyrocket by more than 70%.
As Tesla is a public limited company it is set up as a separate legal entity, which means that the
owners are not financially or legally liable for losses made by the business. Being a public limited
company also allows for capital to be raised at from new or existing investors. Company liquidity;
Shareholders are able to buy and sell their shares (if the company is quoted on the stock exchange
market) Having your company on the stock exchange market allows for the share price to be easily
identified and for the value of the company to be defined.
Tesla as a company has a very clear purpose and reason for existing as a company according to
Tesla’s official mission statement their purpose is to ‘accelerate the world’s transition to sustainable
energy’ This states and gives of a very clean and precise message to all of Tesla’s stakeholders and
investors. Tesla as a company wants to be more than just a successful profitable business they want
to work towards a sustainable and renewable future, they want to lead this with their innovation
and sustainable energy storage solutions.
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, Tesla sits within the automotive and energy storage sectors. While these sectors may at first seem
very different Tesla has been able to market and capitalise on this. Tesla’s have achieved this by
offering a viable and affordable option to electric vehicles that do not compromise on comfort and
efficiency. Furthermore, on Tesla’s battery day they announced all cars will soon come with a 1-
million-mile guaranteed durability and soon their cars will be able to do 1000+ miles on one charge.
Tesla is most well known for their 100% electric vehicles however they also make sola panel roof
tiles and energy stores. Tesla are within the secondary (processing the raw materials), tertiary and
quaternary sectors for product manufacturing as they build all their vehicles, and they do all the
research and design in house. Tesla also don’t franchise any dealerships and, in fact, Tesla don’t own
any specific dealerships they just have customer cars delivered straight from the factory to customer
pickup points allowing Tesla to cut out a large chunk of their cost by not having a ‘middle man’. This
is one of the ways Tesla can compete with the bigger car companies. They can cut prices down by up
to 20% by not having franchised dealerships taking a cut of the profit also allowing them to sell more
cars.
Tesla focuses on providing a sustainable and viable option in terms of sustainable driving and power
usage. They are working towards a goal to accelerate the world’s transition to renewable energy and
a sustainable future. They want to lead the way and set out an example for the quality and efficiency
of work that all manufacturers should be following. They pride themselves on their ability to make
400,000+ cars per year from their one giga factory and providing a high-quality finish.
In 2016 Tesla employed 17,782 people, this more than doubled to 37,543 in 2017. They currently
employ 48,016 as of the end of 2019. Tesla only currently have 3 giga factory. A giga factory is a very
large manufacturing facility. Within Tesla’s giga factory they are producing cars and they are
investing into building more factories. (1)
Tesla also sell their cars with very few options from factory; this allows the manufacturing process to
be very efficient and reduces manufacturing cost as Tesla will not have to spend huge sums of
money on more manufacturing lines. For example, the Tesla model 3 comes with, 5 paid options, 2-
wheel options, 2 interior options and some software options. This simplified manufacturing process
maximises efficiency and minimises cost allowing Tesla to be able to charge a lower price for their
cars and stay competitive within the market. Lastly you can order a new Tesla and receive it in a little
as 3 months this is roughly 3 times faster than conventional car manufacturers.
Tesla has a functional or U-form organizational structure. The unitary-form (U-
form) structure uses organizational function as the main defining factor. For example,
the company has a structural group of employees for engineering, and another for sales and service.
This form of structure creates capabilities that enable strong managerial control of the business
despite Tesla being an ever growing and expanding international business. A U-form structure is very
similar to a matrix structure. Teams are comprised of people working to achieve a common task with
joint knowledge and expertise. This working structure allows for increased specialization, higher
efficiency of work and easily scalable monitoring. (2)
Tesla’s mission as stated by them on their website is ‘Tesla's mission is to accelerate the world's
transition to sustainable energy. Tesla was founded in 2003 by a group of engineers who wanted to
Page 2 of 8
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