(BUSI 1271) - Global Strategy: Analysis and practice

Name - Harsh Kumar
Student id- 001303878
 Introduction
2023
Individual reflection report

This report will provide a high-level summary of Tesla's strategy for dealing with the market.
The factors that influence the development of the business will be examined. In this process,
PESTEL, Porter's five forces, and SWOT analysis will be used. In addition, a value chain
analysis and Tesla's available resources will be presented. After gathering this information, the
viability of the strategy chosen will be assessed. Finally, I will employ the Gibbs model to reflect
on my experience and share what I have learned.
 Tesla strategy
Based on Porter’s generic strategy, cost leadership, cost focus, differentiation focus, and
differentiation leadership (Tanwar, 2013). Tesla's business strategy may be categorized as a
differentiation focus caused by its emphasis in solving environmental problems by developing
electric vehicle technology that does not produce greenhouse gases. Since 2003, they have been
investing heavily in R&D to bring their vision of an electrified, eco-friendly future to life
(Grimpe et al., 2017). Customers were given the impression that vehicular pollution is inevitable
and would kill everyone. As a result, buyers' perceptions were skewed in favor of the Tesla way
of thinking. They were a breakthrough invention that altered people's perspectives on
sustainability throughout the globe. Sustainability is a forward-looking, never-ending notion that
should be prioritized (Wesseling et al., 2015).
 Macro-environmental Analysis
The demographic, social, economic, technical, legal, and political aspects that are outside the
control of any one firm are what make up the macro-environment. These are not beyond our
control; therefore, we must learn to live with them.
PESTLE
Table 1: Tesla's PESTLE Analysis
Political Regulation on Emission and Safety
Standards, Energy Policy and Conservation Acts.
Economic In the next years, electric automobiles will be the primary source of
income for car manufacturers (Patyal et al., 2021).
Funding for eco-friendly vehicle advances has increased thanks to EV.
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Social The widespread use of electric cars signified a new standard of life and
set a trend among young people.
Comparison of a High-End and Low-Cost Car
Technological Tesla employs the cutting edge of power train technology, namely the
level 4 CAV (Connected Anthony vehicles) system. Automotive uses of
ethanol and biodiesel as alternative fuels (Costa et al., 2021)
Legal The right to a patent on an international scale is retained.
Limits placed on daily energy use.
Rules governing the selling of supplies must be upheld.
Environmenta
l
Environmental concerns are a typical basis for regulating the sale of
products by dealers (Patil, 2020).
 Industrial environmental Analysis
According to Porter (1979), the level of competition may be measured using five forces. Those
forces are shown in Fig. 1:
Figure 1: Porter's Five Forces
Table 2: Tesla's Porter's five forces
Bargaining power of buyers: The pricing has already been determined after careful evaluation
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Low of all relevant aspects.
Bargaining power of
suppliers: Low
Vital components like Engine, Transmission produced inhouse
Multiple suppliers
The majority are produced by Tesla, while the remainder are
purchased in bulk at affordable costs (Hutchinson et al., 2019).
Threat of new entry: High The rising popularity of electric cars may be attributed to the
scarcity of fossil fuels and the introduction of zero emission
regulations at the state and municipal levels.
Threat of substitute: Low When compared to other electric cars, the battery range is
superior (Naor et al., 2021).
Intense rivalry: Moderate Numerous well-known brands such as Volkswagen, BMW,
Mercedes-Benz, Audi, etc.
 Micro Environmental Analysis
Internal resources and competencies
Tesla spent much on innovation-related research and planning to ensure that their products would
be available in sufficient quantities. Table 3 shows Tesla's unique and necessary resources.
Threshold resources Distinctive resources
Around 100,000 people are employed here
(Mangram, 2012). There are 655 art galleries
and specialty shops in the retail industry.
Their patented battery technology is
employed in their own line of automobiles.
Six large factories are now in use, while a
further eight are currently under construction.
The firm has never had more positive
publicity.
62.1 billion in assets and $1 trillion in revenue
(Putranti, 2022)
Excellent recent R&D efforts by the firm.
Tesla’s Competencies
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