Impact of External Environmental Factors on Tesla: A Business Strategy Analysis

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1. ..........................................................................................................................................1
M1...........................................................................................................................................2
LO2..................................................................................................................................................3
P2. ..........................................................................................................................................3
M2. .........................................................................................................................................6
LO3..................................................................................................................................................6
P3. ..........................................................................................................................................6
M3. .........................................................................................................................................8
LO4..................................................................................................................................................8
P4, M4. ..................................................................................................................................8
D1.........................................................................................................................................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is certain actions which are competitive and initiatives that is adopted
by an organisation for attracting consumers, face competition and strengths the overall
performance of an enterprise for the purpose to achieve business objectives and goals. It
determine way in which an enterprise carry out its business activities in order to achieve its goals
to achieve certain desirable results (Johnson, 2016). This report talks about Tesla, that is an US
based auto mobile business entity and is famous for specialisation of electrical cars. It includes
impact and influence external environmental factors upon the overall functioning of Tesla.
Further, it includes identification of strengths, weaknesses and capabilities of an organisation by
using SWOT analysis and VRIO framework. It also includes determination of competitive forces
that affect Tesla by applying five forces of Porter framework. At the end, a strategic marketing
plan is developed for this auto mobile organisation by using Ansoff Matrix for facilitating
business activities appropriately.
LO1
P1.
Macro environment refers to all the external factors and forces that has influence upon
operations and strategies of an organisation. Tesla is determined as a leading organisation which
deals with auto mobile in America. It uses different strategies and plans for staying competitive
in a market (Akter and et. al., 2016). There are different macro environmental factors which
affects operations and functioning of Tesla and these factors is identified by using Pestle
analysation as follows-
PESTLE Analysation- It is determined as a tool, approach or a technique which is used to
monitor and analyse external factors of a business that has impact upon functioning of an
organisation as a whole. This framework can be used by Tesla for identifying the impact of
macro environment which are economical, political, social, technological, environmental and
legal factors which is affecting its business operations. It is elaborated as follows-
Political- This factor identifies affects of government upon overall operations, strategies
and functioning of an enterprise as a whole. Tesla has this opportunity which it can grab to
strengthen its overall business performance by taking into use certain government incentives.
UK's political environment is stable which is proved to be favourable for this auto mobile
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business for global expansion. This has proved to be favourable for market development and
penetration strategy of this enterprise.
Economical- Due to growth in overall economy at global level, electric car sales had
enhanced up to a large extent (Rothaermel, 2017). Economies of Europe, Asia, and US had risen
which results in development of more electric car and it has positively affected profitability and
sales of an organisation appropriately. Decrement in battery cost had results in increased
business performance which is proved to be its weakness for this business entity.
Social- Because of fast changes in tastes and preferences of consumers, they prefer
modern cars with unique features over the traditional cars. Such innovative cars helps the
customers in satisfying self recognition in their surroundings and enhance their living standard.
In addition, improved distribution of wealth in developed markets like Asia, Europe, and USA
has boosted up company's financial position.
Technological- As innovation and technology has increased, enterprises such as auto
mobile has largely benefited with it. This developed technology helped Tesla to maintain its
competitive edge and strength. It also helps this organisation to become more fuel efficient and
also in becoming even more adaptable for latest innovative ideas than the traditional choices
which are existing in an auto mobile organisation.
Legal- Various legal regulations and laws are there which are required to followed by
Tesla for running its business smoothly and appropriately. In United Kingdom, all the vehicles
are required to be approved by EC type, that is considered as nationally approved for auto mobile
industries. Tesla follows legal regulations and rules of the government of all the nations (Peng,
2017).
Environmental- As now a days environment awareness has been increased among the
people which has enhanced people's love for electric vehicles as these vehicles limits fuel usage
and it very rarely affect carbon emissions. Because of high focus upon a business environment,
Tesla had developed its brand name which becomes difficult for other businesses to match.
Brief Analysis: From the above discussion, it is analysed that PESTLE analysis is useful to
examine the external environment which impacts the company in its expansion or launching of
new product. As in political, the government policies of UK impacts the company in their
product launch. In addition to this, technological factors improve the worth of company in terms
of its innovation such as fuel efficient or innovating the electronic cars.
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