Business Strategy: Evaluation of Macro Environment and Internal Capabilities of Tesla

Business
Strategy

INTRODUCTION
A business strategy is a set of decisions or course of actions which guide and assist an
organization in achieving and fulfilling its particular business goals and objectives. Business
strategies is treated as a master plan that is adopted by management of a company to implement
its plans and polices for securing a competitive position in market and for conducting its
operations in a better way to achieve its desired ends of business (Pereira, and et. al., 2019). For
this assignment Tesla organisation is selected which is an American automotive and energy
based company having specialisation in electronic car manufacturing. This project includes
internal and external analysis of business environment through proper evaluation of PESTLE and
SWOT. This assignment also contain analysis of competitive environment of an organisation
trough using Porter's Five Force Model. At last, a strategic plan based on environmental analysis
is also included which comprises different strategies, objectives and tactics.
TASK 1
P1) Evaluation of macro environment
Macro environment represents the conditions of economy as whole and includes external
factors of an business environment which directly or indirectly affects operations and growth of
an organisation (Luo, 2019). Tesla is a American company having its branches across different
parts of world which includes Asia, Europe, middle east, Australia,UK, etc. Tesla motors make
use of PESTEL analysis to evaluate its external or macro factors of business environment.
PESTEL analysis

It is a strategic management tool that is used by an organisation to effects of macro
environment on performance of an organisation (Tesla, PESTEL/PESTLE Analysis &
Recommendations, 2019). The differ aspects included in PESTEL analysis are explained below :
Political – It includes political factors that are related with government policy and other
administrative authorities that have a significant effect of business operations of an organisation.
Tesla is a multinational organisation and majority of its share markets( UK,USA, Asia, etc.)
have political stability thus, provides an opportunity for its electronic vehicles and is favourable
for Tesla's generic competitive strategy and intensive growth strategies which include market
penetration. Different government incentives are also provided for promotion of Electronic
automotive thus, it has strengthen the financial performance of Tesla. An expansion in free trade
agreements has created better opportunity for company for Tesla to expand its operations at
wider level. But some political stability is faced by Tesla due to Brexit which lead to withdrawal
of UK from European union thus, creating some trade barrier on international trade of Tesla.
Economical- These factors are a indicator of economic conditions of an business
environment which includes market growth, inflations or deflation rate, price level, trade level,
etc. economic conditions of USA and UK and other markets of Tesla are highly devolved and
stable. A decrease in price of battery costs and renewable energy costs creates huge benefits for
Tesla as it has reduced the cost of Tesla electric automobile products which makes product more
affordable thus, increase sales and profits of Tesla. Increase in the popularity of renewable
energy has created bright future for Tesla but economic instability in some parts of Asia and
Europe is threatening the financial performance of Tesla (Zin, and et. al., 2019). The GDP of UK
is good which create better environment for Tesla but the unemployment rate of UK is 3.9%
which have negative impact on its strategy as it dose not get cheap labour in UK.
Social- It includes different factors related with habits and culture of society. Social
conditions effect an organisation as employees, customers and investors of company are also a
part of society. An increase in popularity of low carbon lifestyles and more preference of society
towards renewable energy is providing better opportunity for Tesla for its electric vehicles.
Stable economic conditions of large market of Tesla has improved market demand for its
vehicle. An increase in wealth distribution of developing markets has boost Tesla financial
performance through increasing potential customers for its expensive cars. Based on
sociocultural opportunities Tesla inc. is having huge growth opportunity to expand its