Business Strategy Planning and Growth

This assignment provides a comprehensive analysis of business strategy planning, including external factors, SWOT analysis, Porter's five model, generic strategy, and Ansoff matrix. It also discusses the significance of solid planning in maintaining quality products, increasing customers, and beating competition. The report concludes by emphasizing the importance of business strategy for growth and success.

BUSINESS
STRATEGY

Contents
INTRODUCTION.........................................................................................................................................4
P1 Macro environment which impacts on business organization..................................................................4
P2 Internal environment and capabilities of an organization.....................................................................5
P3 Uses of porter’s fires force model........................................................................................................6
P4 Application of a range of theories, concepts and modals.....................................................................7
CONCLUSION..............................................................................................................................................8
REFERENCE.................................................................................................................................................9

INTRODUCTION
Business strategy is the long term planning which is used to run a business long time. Without
business strategy a business cannot sustain in competitive market place. So business strategy is important
which help to grow a business. To understand the value of business strategy Tesla has been taken. It was
founded in 2003 by group of engineer (Scholes, 2015). It is electric vehicle charging, home car charging
company. It is multinational company which helps to attract the customer through new products and
services. It has conducted so many business strategies which provide new model and automatic services.
This report will covered various topics such as PESTLE and SWOT analysis of enterprises, porter’s five
forces model that helps in competitive environment Moreover, report will discuss about models, theories
and concept of the organization.
P1 Macro environment which impacts on business organization.
Tesla is a multinational company which manufactures different types of car Model that help to
attract the customer. The manager of Tesla build number of business strategy in order to grow a business
and crack the competition. The PESTLE analysis of Tesla is given below:
Political: Tesla has opportunity to grow its financial performances through government support
which helps to run a business globally. As government has given freedom to expand the business by using
free trade agreement. It does not formulate any strict policies and regulation which impacts negatively.
The manager of Tesla prepares number of strategies that help to grow the business. This opportunity
impacts positively for enhancing business activities. Free trade will have a positive impact on a Business
such as Tesla this is because they can grow and expand without restrictions. This in turn will increase the
businesses profit allowing them to provide greater returns on investments keeping their shareholders
happy.
Economical: Tesla focuses on business performance which is useful to save the cost. As it uses
new business strategy and manufacture car at low battery cost. By producing low cost battery it attracts
customers and maintains the quality of products and services. this external factor translates the
affordability of industry’s electric automobile products. Moreover, it contains decreasing renewable
energy cost which make Tesla’s products more attractive. The manager of Tesla uses different pricing
strategies which are affordable and useful for customers. Hence, economically environment impacts
positively to business organization (Akter and et.al., 2016). It is one of the most important PESTEL

factors, more so because TESLA cars are not exactly affordable for a lot of people. Thus if the economy
is not performing well this would impact the businesses level of profit.
Social: Social environment affects the business organization such as Tesla’s growth is based on
rising opportunity to grow the international automotive business by using low carbon lifestyle that help to
attract the large number of customers. The marketing manager of Tesla analysis the market and get the
needs of people. After getting needs and lifestyle produce that kind of products at reasonable cost and
provides at large market. As population is growing continuously the demand of product are also
increasing. Theses external factor improve market demand and supply electric vehicles to customers as
they want. Hence, this factors impacts Tesla in order to grow the demand by satisfying the customers. The
manager of Tesla boosts the financial performance by giving preference to renewable energy.
Technological: This factor affects Tesla’s business greatly such as material engineering
technology which help to expand the business over the market. By using material engineering technology
and new technology it can increase the efficiency and productivity. As it produces cost effective batteries
which attract people and emphasis to purchase the products. The manager of Tesla uses new technology
to produce electric vehicle an maintain the customer loyalty in order to sale electric vehicles. For
example, Tesla is using eco friendly technology in which it will produce high performance
batteries and electric trucks that will influence customers. This will help to achieve objectives
which is decided by managers within organization.
Legal: Tesla has great opportunity to safely expand its business that focuses on electric vehicle to
attract the customer. It follows the patent protection law that help to save the products from copy by the
other industry. No other company has right to copy the electric vehicle that attracts customer. The
manager of Tesla produces the products and services and expand the business by following patent
protection law. For example, Tesla is following the health and safety act and provide security services to
its customers that help to retain the employees for long term. As result it can increase the productivity and
profitability with the efforts of employees. Additionally, it can analysis the stakeholders like investors,
employees etc who help to complete the targets.
Environmental: This analysis considers ecological elements which impact on Tesla,
environment. For example, the company has opportunities to promote its electric vehicles based
on climate change, expanding ecological drivers, and rising values on waste disposal. For
instance, Tesla is focusing on productivity of the organization by reducing the carbon and accepting
the climate change. This is going to have a positive impact on the business, there is a rise in concerns with

regards to global warming and the impact that we the human race are having on the planet. As such
governments in many countries are introducing regulations that are promoting electronic cars and cars
that have lower emissions. This is creating the ideal market conditions for Tesla products allowing for
them to increase their market share.
P2 Internal environment and capabilities of an organization.
SWOT analysis of Tesla that help to show the how a business organisation sustain in
competitive market. SWOT analysis refers strength, weakness, opportunity and threat that run a
business perfectly (Shuen,2018).
Strength: Tesla is a international company which provides number of electrical vehicle
who consume low battery and low cost. It attracts the customer by providing attractive products.
As it has wide area to sell the products and services which increases the customer loyalty. The
manager of Tesla has capacity to produce technological engineering products that make more
confidential to customer. Customer gets happy to purchase this kind of products and increases
the demand of products. Strong research and development team, advance technology. One of the
first businesses to introduce a sports model car that is in an electronic format.
Weakness: Tesla is facing the high debt load problem because of high competition and variety of
products are available in market. It invested a high amount of cash in order to crack the competition and
growing the business. New competitors have been created a problem for Tesla because it need to invest
the high amount which may be a weakness. Moreover, highly competition in market which can switch the
customer towards another industry's products. Technology can easily be imitated by competitors thus any
competitive advantage gain would be temporary. This puts pressure on the R&D department to produce
innovative features. Furthermore, any competitive advantage that arises from staff can be easily poached
by competitors.
Opportunity: Tesla has great opportunity to expand the business market such as it produce new
engineering vehicle car model that help to attract the customer. The manager of Tesla gets the information
of market and people interest, manufacturer products accordingly in order to grow the business market.
Additionally, it uses new technology and less cost batteries to manufacture products. By providing
attractive products customer influenced and maintain the customer continuously. In other words Tesa has
opportunity to expand the business by eliminating the competition and increasing demand of business.
The manager of Tesla creates new opportunities for organisation and growing business ( Razak and

et.al., 2016). They have the opportunity to develop a range of vehicles that cater to people that have a
lower disposable income to increase their market.
Threat: The major threat that Tesla would face is the risk of losing market share price point is
high for the vehicles, they also face the threat of other car manufacturers also introducing electronic
vehicles. Companies like Toyota, Volkswagen are going to launch their electric vehicles in next 2-3
years. These organizations has sound global presence and their financial condition is very strong. Tesla
does not have global presence and they do not have deep pocket like of other automobile giant
enterprises. The burden of debt is another major threat to Tesla, it can create problem in expansion of
their business in upcoming time.
To analysis the capabilities the VRIO analysis of Tesla has been stated as:
Resources Valuable Rare Inimitable Organized
Human resources Yes Yes Yes Yes
Market share Yes No Yes Yes
Technical skills Yes No No Yes
Brand image Yes No NO No
Valuable: Human resources, Market share, Technical skills and Brand image is valuable for
Tesla because they help to increase the productivity and profitability. The manager of Tesla focuses on
theses resources that help to increase the market share by capturing the share
Rare: Human resources are rare for Tesla because it has well skilled and experienced person who
can adopt the new technology in market place. Market share, technical skills and brand image is not rare
for other organization that means other company can get easily in market.
Inimitable: Human resources and market share are inimitable for which can not be imitate by
other organization. Where as technical skills and brand image is inimitable that can be imitate by
competitor of Tesla.

Organized: Human resources, market share and technical skills are organized in Tesla that help
to achieve the goals and objectives. On the other hand, brand image is not organized that creates low
productivity and profitability.
P3 Uses of porter’s fires force model.
Tesla uses porter’s five forces that help to analysis the competitive environment. It states that
how a company crack the competition and sustain in market by making number of attractive products. As
Tesla is vehicle engineering company who uses different strategy to be sustain at market place. The main
purpose of using this model is to know the competition and know the position of business. The five
elements are described below-
Competitive rivalry: This involves the number of competitors and who are the competitors. The
marketing manager of Tesla inquiry the market and get information about its competitors. If competitors
are high then it need to produce more attractive products that help to attract the visitors and customers.
Tesla built new products in order to face the competition and increase the strength of business.
Competitive rivalry is low in electric car segment as Tesla is the only well established firm but this rivalry
is going to touch new heights every years as other players of industry are planning to launch their electric
cars. This forthcoming threat can be addressed in better way by capitalizing early start which company
has got in past few years. It is very useful to determine about the level of competition in the market
segment.
Threat of new entrants: There is not entry and exit barrier which may be a challenge for
company. Tesla need to take patent or know how to sustain in marketplace that will help to face the
challenges. Moreover, government policies also help Tesla to be constant in competitive market. The
manager of Tesla gets patent of product and services in order to increase the sale of products. Threat of
new entrants is low as manufacturing electric cars require next generation technology and an investment
of billions of pound. Although, present table leaders of automobile industry is a threat to Tesla as they are
also going to sell electric cars in forthcoming time. This threat can be overcome by creating a good brand
image and expanding company's market at global level. Due to this factor, companies like Tesla can
evaluate about how many new entrants they have.
Bargaining power of buyer: There are large number of number of buyers because business
stand at global market and the products are differentiated that influenced customers. In this situation the
bargaining power of buyer is low because customer purchases products at high prices. As customers does

not have alternative option to purchase electric vehicle car at low cost. So they purchases products and
services at high cost. In this situation the switching cost is low, and Tesla can sell products and services
according to their strategy (Linder and Williander, 2017). Buyers have low bargaining power because
if they do not have much options. If they want to buy electric car then Tesla is leading firm in this
segment. From this factor of Porter's model, companies can analyses about the power of bargaining of
their customers and can make change in their policies.
Bargaining power of supplier: As Tesla is well known company who produce number of
products. At market palace there are number of suppliers who sells raw material at different cost. So Tesla
has opportunity to purchase raw material in less cost as it want. If limited sources are available in market
then Tesla has to pay according to suppliers. So it’s advantage for Tesla that no switching cost of supplier
who can charge price according to them. This model helps to increase the number of products and
services. Supplier of Tesla has low bargaining power because this organization does not have many rivals
so leaving them and selling raw material to their competitors is not an option for them. Contrary to this,
Tesla has many suppliers so they can easily overcome any challenge, which is raised by their supplier, by
switching vendor. Due to this factor, companies can inspect about the prices of material which is provided
by the suppliers.
Threat of substitute products: This means if substitute of products are available in market then
threat of substitute is high. It may be a challenge for Tesla that customer can purchase another
engineering model car from other company. So to be sustain and doing low threat of substitute Tesla need
to sell its products and services at low prices which customer can be afford easily. By doing such Tesla
can face the competition and increase the number of sale (Leonidou and et.al., 2015). Product
substitution threat is low as electric cars is already a new concept and it is considered as substitue of
petrol and diesel vehicles which are currently in mainstream. All the key players of automobile industry
are focusing on developing electric cars which proves that products of Tesla are in no position of getting
substitute by something else. Under this factor, companies can evaluate about the substitute products in
the market.
As per the above mentioned factors, the Tesla company has the competitive advantages because
they have better competitive marketing strategies.

P4 Application of a range of theories, concepts and modals.
Tesla uses different types of theories and models that help in growth of business and expand the
business strategy. It uses porter five generic model in order to beat the competition. This model is
described as below-
Cost leadership: This means companies focuses on prices and demand of products. In this
strategy organization has to create the large market share and low prices of products in order to influenced
the customers. If Tesla uses this strategy it has keep the less cost of products as possible as can or need to
increase the market share that will help to create the large demand of products and services. If the
manager do so they can increase the productivity and profitability.
Differentiation: In this strategy organization target a wider market by producing the unique or
differentiated products. This strategy help to influenced the customer to buy new and unique products. If
Tesla uses this strategy then it need to produce unique and differentiated products. If the products will be
unique customer will purchase more products and will reference to others also (Torrent-Sellens, 2015).
Cost focus: In this strategy organization focuses on cost and reduces the cost of business
activities. such as it considers low cost of raw material, labor etc. The main object of this strategy is to
focus on cost. If Tesla uses this strategy it has to select the niche market, it means low competition
marketplace where number of customer purchases products at low prices. Moreover, it will need to
understand the dynamics of market and needs of customers.
Differentiation focus: This strategy mostly involves strong brand loyalty and trust among
customers. Its main target is niche market where competition and uniqueness of products are available.
Tesla can use this strategy by establishing low competitive market and unique products. The manager of
Tesla has to produce new and attractive engineering products in order to face the challenges.
From the above strategy Tesla should adopt differentiation strategy that will help to beat the
competition. This strategy will be suitable and acceptable such as by providing new engineering model
car it will attract customer and make available at low cost it can increase the number of customer. This
will suitable because Tesla has unlimited financial and skilled human resources that help to increase the
productivity and profitability. The manager of Tesla needs to manufacture electric as customers wants and
focuses on number of products.
Tesla also uses Ansoff matrix that is a strategic planning tool which provides a future growth and
expanding business activities. It involves different phases to growing the business at market place. The
Ansoff matrix is described as below-

Market penetration: This strategy is adopted when industry has existing product and existing
market. It is used in growth of business in existing market. Tesla can use this strategy by producing
existing products. It does not need to incur extra cost that may be a challenge for Tesla.
Market development: This strategy considers new market and existing product. Tesla can use
this strategy by expanding the business at new market and providing existing products. In this strategy
company have to treat the products as new entrants in new market. If the product have already high brand
then it may be easy for companies to sale the products and services. In other side, if the product is new
and not established in market first it needs to cater the existing products. Hence, Tesla can use this
business strategy that will help in growth of business (Martinez-Simarro, Devece and Llopis-Albert,
2015).
Product development: This is used in new product and new market that help to growth of
business activities. It mainly focuses on customer base and new product development strategy that help to
growing the business activities. Tesla is fast growing company is planning to bring new product such as
electric vehicle that help to attract the customers. By introducing new products it can expand the market
place.
Diversification: This strategy is used in case of completely new product and new market place
which influence the new as well as existing customers. If Tesla use this strategy need to make solid
business planning that help to beat the competition and growth the business industry. The manager of
Tesla company is bringing new electric vehicle, for this it should make strategy where it should launch
first and how it can expand its market (Yuliansyah, Rammal and Rose, 2016).
From the abovementioned strategy it has been recommended that Tesla should use product
development strategy that will help to growth of business industry and expand the business by selling the
attractive products at new market.
For example they are launching the electrical vehicle which are electrical car and truck. It can be
very cost effective if they will apply market penetration strategy. By this strategy, they can be able to
sustain in the market.
CONCLUSION
From the above report it has been concluded that business strategy are very important that helps
to run a business effectively. A business can grow by formulating number of strategy. Business strategy
help to maintain the quality of products and increases the number of customers. Every business concern

should make solid planning to expand the business and beat the competition. This report has covered
various topics such as external factors like political, economic, social, technological, legal and
environmental which impacts on business. Additionally, report has covered SWOT analysis of Tesla
organization that states strength and weakness of business industry. Apart from this report contained
porter five model, porter generic strategy and Ansoff matrix in order to growth of business.

REFERENCE
Books and Journal
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Akter, S., and et.al., 2016. How to improve firm performance using big data analytics capability
and business strategy alignment? International Journal of Production Economics .113-131.
Shuen, A., 2018. Web 2.0: A Strategy Guide: Business thinking and strategies behind successful
Web 2.0 implementations. O'Reilly Media.
Razak, N. A., and et.al., 2016. Theories of knowledge sharing behavior in business
strategy. Procedia Economics and Finance, 37, pp.545-553.
Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business strategy and the environment, 26(2), pp.182-196.
Leonidou, L.C.,and et.al., 2015. Environmentally friendly export business str
Torrent-Sellens, J., 2015. Knowledge products and network externalities: Implications for the
business strategy. Journal of the Knowledge Economy. 6(1). pp.138-156.
Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
strategy moderates the relationship between business strategy and performance. Journal of
business research. 68(7). pp.1592-1594.
Yuliansyah, Y., Rammal, H. G. and Rose, E., 2016. Business strategy and performance in
Indonesia’s service sector. Journal of Asia Business Studies. 10(2). pp.164-182.