Business Strategy

Business Strategies

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Suitable framework to analyse the impact and influence of macro environment on Tesla
and its Strategies.........................................................................................................................3
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................6
TASK 2............................................................................................................................................7
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks..................................................................................................................................7
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set..........................................................9
TASK 3............................................................................................................................................9
P3 Porter’s Five Forces model measure the competitive forces of a given market sector..........9
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes.............................................................................................................................11
TASK 4..........................................................................................................................................11
P4 Apply theories, concepts and models, interpret and devise strategic planning for Tesla....11
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives..................................................................................................................................12
D1 Interpret information and data applying environmental and competitive analysis to
produce a set of valid strategic directions, objectives and tactical actions...............................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

Introduction
A strategy means an integrated concept that allow company and its higher authority make
not only plans but also proven techniques to achieve the organisational objectives. A strategy is
systematically proven plans that allows management to follow them in order to eliminate
pandemonium. In organisational context strategy is a full-proof master plan which divide several
tasks into segments in order to fulfil them logically. Business strategy specifically refers to ways
in which an organisation make plans to win the particular objective. These strategies focus on
several aspects of business like what are the competitors how to stay ahead of them, different
environment where business operate; identify them, use them, target marketplace where product
are deliver how to reach and catch as much as possible, what are the threat company may face in
new market, ways to overcome them, pricing strategies and so on (Gast, J., Gundolf, K., &
Cesinger, B. 2017). In the current report the researcher have chosen TESLA company in order to
understand its business strategies are researcher will try to address several components related
with strategies, different theories and models and their influence on an organisation and its
decisions. TESLA is an American electronic vehicle making company founded by Elon Musk in
2003.
Main Body
TASK 1
P1 Suitable framework to analyse the impact and influence of macro environment on Tesla and
its Strategies.
Vision and Mission: The vision statement of company can be drawn as there aim is to
bring transition into the world by developing electric vehicles making company, as the most
powerful car manufacturing company of 21st century (About Tesla, 2021). The mission of Tesla
is by using sustainable source of energy to speed up the transition of the world in motor vehicle
manufacturing.
Objectives:The major objectives behind this mission and vision is to Accelerate the
planetary transition which means, company aim to use more cleaner and sustainable energy
source instead of traditional sources of energy. The company have another objective, that is
Tesla have emphasize on future by bringing positive changes in vehicle sector and making solar

panels to reduce carbon emission and thus well-being for the society at large. This shows
company's Commitment towards society. Also Tesla have another significant objective through
its plan to build electric vehicles by adopting sustainable methods is they try to Exceed
expectations of the people from the company. The company always try to remain ahead with its
strategies from other brand who plan to offer same values. Company have significantly identified
the futuristic problem like Fuel and scarce energy sources potential, Technology etc. that our
planet may face in coming period due to continuous degradation of nature.
Below the competitive external environment analysis is represented through PESTLE analysis of
Tesla:
Political The company have taken initiative towards making e-car making where the
role of government play important as the local authority as well as
internationally have gain attention. The governmental bodies now encourage
Tesla company for such innovation keeping the environment safe and
identifying the demand and need for future generations.
Economical The company with production of electronic motor vehicles brought a
revolution in the mind of people who have sympathy and consciousness
towards environment. Also rise in prices in fuel, uncontrollable traffic in
every regions and fuel scarcity have force people to understand the urgency of
changes that need to be address. The model offered by company Tesla is
affordable and strength to bring significant change the world's economy.
Social Since the ultimate goal of the company is to reduce carbon footprints to save
planet earth from pollution and exhausting fuel. Company encouraging people
towards such positive approach for the betterment of the society at large. The
concept of e-vehicles have power to change that by influencing people to buy
them nothing in terms of profit but importantly for future of the earth and for
its coming generations.
Technological For Tesla technological aspect have leading meaning to the company. Since
ultimately it is the techniques who enable such thinking power to any one
who wish to see change. Moreover the growing use of technologies and its
strength have been an inseparable part of the company for the success of such

invention. With positive use technology have Tesla have come so far with its
offering to the people. Thus rapid development in technological factor can
have more contribution in Tesla.
Legal In different parts of the world, the governmental laws and regulations have its
own set up which either can be favourable or not. Since the Tesla company is
dedicated its idea for novel cause have made remarkable impression in people
at all level. However they have restriction regarding set up of the company's
manufacturing units. Another concerning technology used in Tesla that its
autopilot system have involve it self with legal formalities since the system
have no human control at emergency stop and on of the cars. As the company
is promoting eco- friendly methods therefore company needs to comply with
International Environmental Regulation and their laws.
Environmental With increase in global health concern now people are aware about these
problems now then ever. People have understand the current situations of
global which need attention of the people to them. Tesla with its innovative
idea and strategical steps towards it, have somewhat degree low down the
burden. But still a lot more is need to be done for future of the earth.
Therefore company's responsibility have increased and rise in global concern
among people.
Stakeholders Analysis for Tesla is discussed below:
 Communities: One of the stakeholder of the company is community who determine the
Tesla's brand image by significantly influence activities and consequence to the business.
Major interest of the community as stakeholders is make sure that environment stay
protected and conserve. In this report, since company known for its specially designed e-
vehicles using batteries or any solar power systems, the company try to address such
community interests.
 Customers: The second main stakeholder of the company is customers. As the customers
are the buyer of Tesla's offering thus they have significant impact on the revenue
generations of the company. Customers expect reasonable pricing of the cars and quality

products. Therefore company must have prioritize such demands from its major
stakeholder. The company always look forward to newer method to develop e-vehicles
with minimal cost thus pricing can't be the barrier to company's objective.
 Employees: Another major stakeholder of the company is, its own workforce. Since the
employees who work with Tesla have given wing to such an innovative idea for the
dreamer of the company that is, Elon Musk. He have realised the potential power of its
employees who are the ultimate part of success. The employees have interested in
company's growth opportunity for them, good package of compensation and better career
options. Through CSR the company aims to satisfy these interests of its employees. For
that company use competitive salary strategy and various human resource programs in
order to develop skill matching with current demand of the environment.
 Investors: Company with its investors who have invested capital expect higher
profitability and great returns from their invested capital (Tanwar, 2013). They are vital
for the company since they provide the very important thing that is, finance. In order to
company survive and face competitions successfully, it is important for company to
sufficiently funded to do so. The interest of investors as stakeholders of the company is
continuous growth and steady earning from the company.
 Government: Finally the Government as stakeholder of the company, posses interest in
the company is lower as compared to other stakeholders of the company but full power to
control over the company's operations.
M1 Critically analyse the macro environment to determine and inform strategic management
decisions.
From above PESTLE analysis it is noted that it have identified possible competitiveness
in different environment of the company (Kolk, A. 2016). As the Tesla is aiming towards less
carbon experience the natural environment of the world. According to that company can adopt
strategies in its management of the overall company's operating system. As macro environmental
factors cant be change or modify by the company as theses have no control. By analysing
stakeholders of the company help in understand the interests and power in decision making and
their impact on business operation of the company. Keeping all the factors in mind company can
develop logically prove strategy to maintain them and change the if needed due to any changes
are observe in them.

TASK 2
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
The model of VIRO help management authorities to analyse the company's resources and
its capabilities. Full form of VIRO is the; valuable, Rare, Imitable and organised. The four
components of the framework represent its features and capability that help in analysing
company to determine its either competitive advantage or temporary advantage (Weiss, 2014).
When the all four factors of the framework of are fulfilled it considered as competitive
advantage. Whereas when these elements meet only some standards then it will lead to
company's temporary advantage. However, competitive advantage for company arise only out of
company's core competency.
Core
competency
valuable Rare Imitable Organise Advantage
Innovation     Competitive
Product
extent
   Temporary
Distribution
channel
  Temporary
Brand
image
    Competitive
Innovation: Since Tesla have started its company with innovative ides that define the future
demand for e-vehicles plus the emergence to reduce CO2 in the nature environment. With such
innovation company have offered its customer different models of battery and electronic or
natural source of energy in cars. Thus it is the ultimate competitive advantage for the company
from its competitors. With increase in technological innovation company can do a lot more what
company have achieve till now. It is also important for company to increase its market share by
continuous development with the help of technology and provide better customer experience

with it (Crane & Matten, 2016). Innovation in Tesla have been a inseparable part as this have
made company stand excellent from rest of the other companies who are offering same.
Product Extent: The company have introduce different product with different price also known
as product extension. The company keeping in mind the future demand for the cars and their
importance have made company offer variety in the offerings. Currently Tesla is offering e-cars
like; Model S, Model 3, Model X, Model Y and Cyber truck etc. Company through its product
offering primary concentrated on high end user with excellent quality but quite unaffordable
price for anyone (Knott, 2015). Since company in terms of product extent is now consider as in
temporary advantage as many car manufacturing companies are now offering such variety in the
offerings as against design, price and performance however these features are comparatively low
from Tesla but still they are trying to match with Tesla's performance at some degree.
Distribution Channel: The distribution channel of Tesla is quite deliberate positioning at
different stores and gallery locations in high foot commercial area as company believe that they
want to reach people even before they make decision to buy a new car (Dupire and M’Zali,
2018). This have allowed company to reach potential areas and this have provided customers
learn about Tesla's offerings (Musk, 2012). The company's product specialists are well trained to
answer the customers queries regarding electric vehicles. Company use traditionally franchisee
model as the US automotive industry is selling cars in the same way more than a hundred years.
Automotive franchise laws were introduced decades ago to forbid a manufacturer from unfairly
opening stores which create direct competition with an existing franchise in the industry that had
already invested their time, investments and effort to keep up their business. Though company
through its distribution channel gaining temporary advantage which means they have space to
make this aspect as Tesla's competitive advantage with coming period of time.
Brand Image: It is the one of the most important competitive advantage for Tesla. The brand
name itself distinguish the company from other automotive vehicle making company. Through
the years and innovation company have gained so much reputation through its b rand. Which
promise to provide best in class electric vehicle experience to generations after generations. Thus
brand image of Tesla have powerful control over its revenue performance and the industry of
automotive as whole (Prajogo, 2016). The company's brand image have helped Tesla to generate
sustainable competitive advantage. Though with all benefits company can be also observe one of

the weakness currently facing that Tesla, with high production costs, huge investments in
research, high debt etc. have low down the production capacity of the brand.
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.
After applying the framework of VRIO which provide a reflection about the company's
competitive advantage and temporary advantages by using all its principle like; valuable, rare,
imitable and organisation (Öneren, Arar and Yurdakul, 2017). Since Tesla is valuable as it is the
only car manufacturer which provide superior experience with e-vehicle. The technology of the
car design in away that it focus on developing rapid charging by reducing battery producing cost
considerably as Tesla before they make their own battery company were depended on Panasonic
for batteries (Panasonic Enters into Supply Agreement with Tesla Motors to Supply Automotive-
Grade Battery Cells. 2011). So it have helped company to reduce its costs respectively. Tesla
with its remarkable design and quality as electrical vehicle have gained so much popularity
among people and so company now enjoying its brand power in the automotive industry.
Company within few years have win customer loyalty that have scale up the business worldwide.
With constant innovation at Tesla have created a monopoly power in competitive market. The
product of Tesla have power to beat even the still born brands as the company is known for its
up-roaring motor engine which go faster as compare to other brand's engine in same category.
TASK 3
P3 Porter’s Five Forces model measure the competitive forces of a given market sector.
The model of Five Forces was introduced by Michael Porter, who observe few significant
forces that affect firm's profitability in an industry. Hence the model can help in understand how
theses five forces can brought competitive advantage for the company and develop strategic
position in the industry (Henshall. A., 2019). The model in context to Tesla will be discussed in
the following sections:
Threats of New Entrants: With growing technical advantages, many new companies
have adopted the concept as Tesla is driving in the market. These new company also ensuring
low carbon emission in the environment, sustainable approach to the environment, Ozone-
friendly cars to the customers keeping the future safe for upcoming generations (Krumwiede,
and Charles, 2014). These car manufacturing companies have put pressure on the company's

brand and try to give direct competition to Tesla. Companies like Volkswagen' e-golf, Chevrolet
Volt EV and Hyundai Ioniq EV etc. are in tough competition. These companies with low price
offering, new values with their model of electrical car and low cost have pose threat to Tesla in
the industry. Also with competitions effecting its competitive edge in the market.
Bargaining Power of Suppliers: In automotive industry specially in car manufacturing
sector company have to heavily rely on different suppliers who provide quality material for the
product (Mahnken, 2012). The supplier thus said to be in dominant position which can effect the
margin of profitability of Tesla. They use their negotiation power in order to attract high prices
from the manufacturers. Thus it can be said that high bargaining power of suppliers of Tesla,can
low down the overall gainfulness of it.
Bargaining Power of Buyers: The buyer are the ultimate motivating factor for company
to keep their innovation at optimum pace. Buyer consider as demanding as these drive company
to introduce different offers and discounts in the product to stay up in the competition (Mangram,
2012). At Tesla too, their buyers put pressure on the company to do so. Thus it results in
company's profitability in the long run.
Threats of substitute Product: Any new product in to the existing industry pose a threat
to existing players of the industry. Thus it affects probability. Sometimes the threat of substitute
product can be dangerous to company and can shake the market position which they may have
evolve with time and experiences.
Rivalry Among Existing Competitors: Any intense rivalry among existing players of
an industry can seriously affect the profitability of industry (Carlson, 2015). Since, Tesla
operates in a very competitive Automotive sector, one of the major industry. This competition
does take value on the general long term profitability of the company.
Illustration 1: Five Force Model

M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes.
In above, by applying the Five Force model on Tesla, the strategy maker can have broad
view of different factors and their impact on profitability of the company. Such as; in one the
factor of the model i.e. Threats of New Entrants how Tesla can face this by innovation of new
technology in their products, that will not only attract new or prospect customers but also
existing customers a good reason to buy their new offering. Similarly, in Bargaining Power of
Buyer, Tesla by creating huge customer base by not only concentrating on one segment of the
society who can afford such great price of the electric car will reduce the bargaining power of the
customers. Thus this will also help in opportunity to company to streamline its production
process. So, with this model the company can identify the game changing points which can bring
opportunity and provide competitive advantages by utilizing right opportunities. The model of
Porter' Five Force, can play a significant role for Tesla and its managerial bodies who can shape
theses identified forces in the company's favour.
TASK 4
P4 Apply theories, concepts and models, interpret and devise strategic planning for Tesla.
Porter's Generic Strategy: The Generic strategy of Porter is a useful framework that
provide ability to company to identify the potential place in which they can profit through
competitive advantage in industry.
For Tesla the competitive strategy is broad differentiation. Such generic strategy help in
building competitive gain based upon the development of products that make differentiate Tesla
from other company in the industry. Suppose, Tesla's products are in competitive because
company have integrated technologies which are environment friendly or we can say Friendly.
Today many companies now use combustion engines in their model too. Using Generic strategy
company increasingly attract all type of potential customers who are now then ever conscious
about environment and want to something for it at their level. At beginning, Tesla used to use
Differentiation Focus as their Generic strategy for having competitive advantage. In that
company emphasized on the uniqueness of their products but mainly focused on early adopters
which have high end market for electric cars (Cheong, Song and Hu, 2016). Those customers
were the wealthy people and they have increase tendency to purchase such high priced models.

But now since company is well known among all people and clear bout its intension behind the
company the and now demand company for their products . This allow company to low down the
costs at some extent and gaining continuous popularity among people day by day. This is how
Tesla's Generic competitive strategy was shifted from Differentiation Focus to Broad
Differentiation. Thus, by lowering the cost of production and increase in popularity of Tesla
enable them to broadly target customers in this industry.
Bowman's Strategy Clock: The strategy was introduced by Cliff Bowman, the strategy
represented different positions of the market where customer both potential and existing have
different requirements in terms of the value for the money the spent. Since the company use
Differentiation strategy more where Tesla concentrate on small group of people only. Who have
capacity to buy such models and most importantly they claim to be environmental friendly thus
encourage company in their business. The models not only offer them great cause to buy but also
offer superior design, quality that value their money spent on the product (Tesla Motors, (2014).
As it will be tough for company to reach and compete with other automotive brands because any
common person will not go and buy a luxury electric car for his regular short distance travelling
and also low charging network priced more than $60000 or more. Company also can not choose
the low cost or any hybrid strategies as this will not going to provide any capital, scale and
majorly production capacity in order to compete on cost. It is the company's one of the USP for
company that provide best in class quality, unique design also equipped with leading
technologies that not only give class but also these features are user friendly and environment
friendly. Which allow to attract select people to buy them. Thus it can be said that it is oddly
suitable position for company keeping the current environmental situations which gives Tesla
core competency.
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.
From above Bowman's strategy Clock it can be say that company needs to shift its
strategy from Focus Differentiation which will be benefit to the company. As it may provide
advantages from its rivals and can be widely valued by the people with same price (Hossain and
et. al., 2019). In return it will increase the gainfulness of the company in the industry and can
positively affect the long term profitability of Tesla. For that Tesla can widen up its product

range from premium to affordable models which allow them to compete with other brands
effectively.
D1 Interpret information and data applying environmental and competitive analysis to produce a
set of valid strategic directions, objectives and tactical actions.
From above the company with the help of models and theories helped in understand the
Tesla's current position in the differer environment. The various macro environmental factors
with company's internal process have been a good condition for the company to grow. Since
Tesla being futuristic company where they introduce product keeping the mind the future
changes in natural environment the world may going to face in coming years. Thus in some
points company lack to identify its competitive advantages by ignoring the common group of
people who are the most inseparable part of this whole society rather just a handful group of high
society. Thus Tesla need to observe them as fast as possible by adopting suitable strategies in it.
Tesla also need to gain sight of other valuable models and framework that may help company to
identify it weak points effectively. In order to sustain in such dynamic environment company
needs keep close eye on all the strategical aspects related with human and their affordability with
strong economic power is the main point (Bhardwaj and et. al., 2020).
Conclusion
From this report it can be sum up that company with its current business strategy made
company into competitive advantages but however they are not fixed hence any changes in
macro environment can be game changer for the company. Thus it will may not be favourable as
it is today. With successful start-up spirit to now a leading electric vehicle making company
Tesla have come so far. Thus it become important for company to stay alert and try to keep the
edge with its competitors in automotive industry.

References
Books and Journals
Gast, J., Gundolf, K., & Cesinger, B. (2017). Doing business in a green way: A systematic
review of the ecological sustainability entrepreneurship literature and future research
directions. Journal of Cleaner Production, 147, 44-56.
Kolk, A. (2016). The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), 23-
34.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Dupire, M. and M’Zali, B., (2018). CSR strategies in response to competitive pressures. Journal
of Business Ethics, 148(3). pp. 603-623.
Prajogo, D.I., (2016). The strategic fit between innovation strategies and business environment
in delivering business performance. International journal of production Economics, 171,
pp.241-249.
Öneren, M., Arar, T. and Yurdakul, G., (2017). Developing competitive strategies based on
SWOT analysis in Porter’s five forces model by DANP. Journal Of Business Research-
Turk, 9(2). pp. 511-528.
Krumwiede, K. R. and Charles, S. L., (2014). The use of activity-based costing with competitive
strategies: impact on firm performance. In Advances in management accounting.
Emerald Group Publishing Limited.
Mahnken, T. G. ed., (2012). Competitive strategies for the 21st Century: Theory, history, and
practice. Stanford University Press.
Mangram, M. E., (2012). The globalization of Tesla Motors: a strategic marketing plan
analysis. Journal of Strategic Marketing, 20(4), pp.289-312.
Carlson, W. B., (2015). Tesla: Inventor of the electrical age. Princeton University Press.
Cheong, T., Song, S. H. and Hu, C., (2016). Strategic alliance with competitors in the electric
vehicle market: tesla motor’s case. Mathematical Problems in Engineering, 2016.

Hossain, E., and et. al., (2019). A comprehensive review on second-life batteries: Current state,
manufacturing considerations, applications, impacts, barriers & potential solutions,
business strategies, and policies. Ieee Access, 7. pp. 73215-73252.
Bhardwaj, S.,and et. al., (2020). Problems Faced by Automobile Industries: Case Study on
Tesla. International journal of Tourism and hospitality in Asia Pasific, 3(2), pp.78-88.
Knott, P.J., 2015). Does VRIO help managers evaluate a firm’s resources?. Management
Decision.
Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of Business and
Management, 15(1), pp.11-17.
Online
About Tesla.2021. [Online] Available through:< https://www.tesla.com/about >
Tesla. Inc. Annual report form 10-K. 2017. [Online] Available through:<
https://www.sec.gov/Archives/edgar/data/1318605/000156459018002956/
tsla10k_20171231.htm >
Musk.E., 2012. The Tesla Approach to Distributing and Servicing Cars. [Online] Available
through:< https://www.tesla.com/blog/tesla-approach-distributing-and-servicing-cars >
Panasonic Enters into Supply Agreement with Tesla Motors to Supply Automotive-Grade Battery
Cells. 2011. [Online] Available through:< https://www.tesla.com/blog/panasonic-enters-
supply-agreement-tesla-motors-supply-automotivegrade-battery-c >
Henshall. A., 2019. What is Porter’s Five Forces Model? Competitive Position Analysis
Explained. [Online] Available through:< https://www.process.st/porters-five-forces/ >
Tesla Motors, Inc., (2014). Form 10-K Annual Report . Palo Alto, California. [Online]Available
through:<http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-14
69681&CIK=1318605 >