Business Strategy: Analysis and Evaluation

Business Strategy

Table of Contents
Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
PESTEL ANALYSIS .................................................................................................................3
TASK 2............................................................................................................................................5
P2. Analyse the internal environment and capabilities by using SWOT analysis.......................5
TASK 3 ...........................................................................................................................................7
P3. Porter’s 5 forces model along with evaluation......................................................................7
TASK 4 ...........................................................................................................................................9
P4. Range of theories, conception models together with interpretation and development of
strategic plan................................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Business strategy is a blueprint of activities that the companies uses in order to gain
competitive edge in the market. It is a strategy that organisation uses to strengthen the
performance of the company with an aim to achieve and attain organisational goals (Aubry and
et. al., 2012). Business strategy is essential to make effective planning, to control and monitor the
activities and to properly allocate the resources of the organization. This report is based on Tesla,
an American company deals in manufacturing of cars. The company was established in 2003,
headquartered in California. U.S. The founders of the company are Elon Musk, Martin Eberhard
and Marc Tarpenning. The report examines the internal and external factors that impacts the
organisation. In addition to this, Porters five forces model will be used to analyse the market.
Later, it covers the concepts and theories that will help in making an effective strategic
management plan.
TASK 1
PESTEL ANALYSIS
Pestle analysis is a technique used by the company to identify and analyse the external
factors that effects the performance of the organisation. It includes political, economic, social,
technological, environmental and legal factors that is used to examine the threats and weaknesses
of the organisation (Burgess and Radnor, 2013). With reference to TESLA, the manager of the
company uses PESTEL framework in order to know the impact of external factors in growth of
the organisation and its strategies. The factors are discussed below:
Political factors
Political factors ascertain the degree of government interferences that impact the
economy or the industry. It includes Political stability, government policies, tax policies, trade
tariffs, Fiscal policy and so on. In context to Tesla, manufacturing of electric vehicles reduces the
use of fuel and gas. The U.S government took initiative towards the adoption and development
of electric cars and hybrid engines in the country that allows Tesla to easily receive loans,
backed grants and tax breaks. The company financial stability improves which further leads to
more manufacturing of cars and earn high profits.
Economical factors:
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Economic factors are those factors that directly affect an organisations demand and
supply, consumer willingness and performance in long term. The factors include inflation rate,
disposable income, interest rate, exchange rate etc. with reference to TESLA, sales of the electric
cars increased by 35% between 2017 to 2019 due to increase in the global economy. The price
of batteries is low, which benefit the company by reducing in production cost. This leads to the
creation of cost-effective cars for the citizens and increase in sales and profit of the company. In
other countries, people make investment in luxury cars such as BMW, SUVs and so on which is
good for the company as it is viewed as lavish and luxury with advance technology by the public
(Cacciolatti and Lee, 2016).
Social factors:
It is also known as socio cultural factors that affect beliefs, value and attitude of the
people. Social factors consider demographics, career, attitude, population growth and so on. In
context to Tesla, manufacturing of eco-friendly cars like by the population of society and they
prefer to buy it. Tesla sustainable electric cars is good for the environment and builds a positive
image in the mind of consumers. It is focused on implementing strategies which are inconsistent
with the demands of people living in the society. It is using renewable energy in order to become
acceptable in the areas in which it is operating. Furthermore, it makes investments in making the
lifestyle better together with making expenditure in infrastructure, employment and many more.
Technological factors:
These factors relate to growth and marketing of business at global level. These are used
in every operation of the entity for better management of the work. With the use of advanced
technologies, companies can bring innovation resulting in higher profit and revenue (Cserháti
and Szabó, 2014). In the context of Tesla, it is one of the organisations which make sure that
latest technologies are used which can increase customer satisfaction. It has used Autopilot 2.0
which is the technology for self-driven cars. Furthermore, it has installed mega charger stations
for charging the electric cars. These are available in almost all major fuel stations. Similarly,
some other technologies have also been used in order to sustain in the market and retain the
position.
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