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The company that I have chosen to look at is Tesla, Inc., which has experienced significant financial risks due to the volatility of the automotive market and the changing needs of customers. Among the main risk factors that the company has reported experiencing are delays in manufacturing and other challenges associated with the design, production, and launching of its products. These challenges occur as a result of both controllable and uncontrollable risks that affect organizational processes at different stages. In terms of uncontrollable risks, the supply chain of the company is reasonably limited, which means that it encounters delivery failure or component shortages that are vital to manufacturing (Tesla, 2021). Another uncontrollable risk is that the growth of Tesla depends on consumers’ willingness to choose electric vehicles, and the COVID-19 pandemic has significantly affected purchasing potential.
A controllable risk is Tesla’s lack of experience manufacturing high volumes of cars due to production restrictions. Another risk is that the company may be unable to meet some of the demand for its vehicles and meet delivery plans, which can hinder the business and prospects. To address these controllable risks in its decision-making process, the company has to work on developing efficient, low-cost, and highly automated supply chains to support increased volumes of production. To address the uncontrollable risks, Tesla may have to do more work when it comes to developing long-term agreements with its suppliers to reduce delivery failures and other shortages that affect production. While some suppliers may have lower costs and be more flexible, it is important that the company only works with reliable and consistent suppliers, thus not negatively affecting the production process.
Reference
Tesla. (2021). Form 10-Q. Quarterly report pursuant to section 13 or 15(d) of the securities exchange act of 1934. Web.
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