Tesla McKinsey 7S Model

By John Dudovskiy
April 29, 2021

Tesla McKinsey 7S model illustrates the ways in which seven elements of businesses can be aligned to increase effectiveness. According to the framework strategy, structure and systems are considered as hard elements, whereas shared values, skills, style and staff represent soft elements. McKinsey 7S model stresses the presence of strong links between elements.

Specifically, according to this framework, a change in one element causes changes in others. As it is illustrated in figure below, shared values are positioned at the core of Tesla McKinsey 7S model, since shared values guide employee behaviour with implications on their performance.

Tesla McKinsey 7S Model

Figure 11 McKinsey 7S model


Hard Elements


Tesla business strategy is based on the focus on electric cars driven by company’s mission to accelerate the world’s transition to sustainable energy. The alternative fuel vehicles manufacturer pursues product differentiation business strategy. Tesla cars and energy products are differentiated on the basis of performance, design and environmental sustainability. Moreover, ownership of distribution via company-operated stores and galleries in shopping centres and other places is placed at the core of Tesla business strategy. Moreover, the alternative fuel vehicles manufacturer positions low costs of Tesla electric vehicles ownership as one of the solid bases of competitive advantage.



It is difficult to classify Tesla organizational structure into a single category due to its unique nature. Inability or unwillingness of CEO Elon Musk to delegate key tasks has certain implications on organizational structure of the company. Specifically, Musk has more people directly reporting to him than any other auto company and turnover amongst Tesla senior executive team is high.

Moreover, there is no organizational chart or public list of senior leaders at Tesla.  Nevertheless, Tesla organizational structure is closer to divisional structure compared to other known structures.  The operations of the electric automaker are divided into a range of divisions such as energy, engineering and production, HR and communications, legal and finance, sales and software. Divisions are led by vice presidents directly reporting to CEO Elon Musk.



There is a wide range of systems that are important for Tesla’s long-term growth prospects. These include employee recruitment and selection system, team development and orientation system, transaction processing systems, customer relationship management system, business intelligence system and knowledge management system.

Moreover, taking into account company’s ongoing issues in manufacturing required amount of cars, it can be argued that manufacturing systems is a critically important system for Tesla. Tesla production system is renowned for its effectiveness and flexibility. There are cases where the electric automaker introduced certain improvements and modifications on cars in real-time during the manufacturing process on the basis of customer feedback from the social media.

Tesla Inc. Report contains a full analysis of Tesla McKinsey 7S Model. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Ansoff Matrix and Value Chain analysis on Tesla. Moreover, the report contains analyses of Tesla leadership, business strategy organizational structure and organizational culture. The report also comprises discussions of Tesla marketing strategy, ecosystem and addresses issues of corporate social responsibility.

Tesla Inc. Report 2021

Category: Strategy