Analyzing the Impact of Macro Environment on Tesla's Business Strategies

BUSINESS
STRATEGIES
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Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK 1............................................................................................................................................3
P1. Applying appropriate framework analyse the impact and influence of macro environment
on given organisation and its strategies..................................................................................3
TASK 2............................................................................................................................................9
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................9
TASK 3.........................................................................................................................................12
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.
..............................................................................................................................................12
TASK 4.........................................................................................................................................14
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................14
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
INTRODUCTION
Business strategy is a concept which is a bundle of various schemes and selections for
action performed that helps business firm in achieving organizational objectives and targets. It is
a plan which allows firm to have competitive advantage over rivalries in industry. Business
strategy comprises of several components such as factors of external and internal environment,
various theories and models for strategic planning, etc. which presents a picture of company's
potential and brand image in market (Anderson, 2019). The present report discusses elements of
business strategy such comprising of PESTLE analysis (Political, Economical, Social,
Technological, Legal and Environmental factors), Stakeholders analysis (investors, management
board, suppliers, wholesalers, customers, etc.) and Ansoff matrix under the category of external
environment, resources based view strategy, McKinsey's 7s model and VRIO framework in
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internal environment. Further in the report Porter's five force model and Porter's generic strategy
is being applied with Bowman's strategic clock. Tesla Inc. is a global electric vehicle
manufacturing company which is being taken into analysis for understanding its business
strategies and performance in market.
TASK 1
P1. Applying appropriate framework analyse the impact and influence of macro environment on
given organisation and its strategies.
Company's Overview:
Tesla is a multinational electric vehicle manufacturing and clean energy organisation
based on Palp Alto, California having its headquarter there. The famous global company was
established in year 2003 and being owned by Elon Musk who is its CEO. Tesla deals in
manufacturing and selling of electric vehicles which are pollution free and is made with latest
techniques emerging in market. It operates across the globe comprising regions of United States
of America, China, Germany, United Kingdom, and recently entered into Indian market. At
present company is having more than 438 stores under his own name and also more than 100
service centres across globe. The company has a wide range of products in various different
product line such as electric vehicles, storage products, clean energy generation items, etc.
producing with less or no carbon emission technology.
Mission:
Tesla Motors has a mission of accelerating the advancement of sustainable transportation
by launching compelling mass market through its electric cars as soon as possible into trade.
Vision:
Tesla Motors posses a vision of creating the lion's share compelling electric car
manufacturing company of current time that if in 21st century by bringing global transitions into
their electric cars.
Strategic Planning Techniques:
Strategic Planning refers to designing a framework which company makes with a aim to
attain its objectives and goals in set time (Arbatani and et.al.., 2019). This is done because to
have huge profit and big brand image of firm in industry as well as in market.
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The various techniques for strategic planning that are applied in every organisation to
have better performance is discussed below:
 Business Analysis: It refers to an analysis of a business firm about its activities and
performance. This assists businesses in having better strategics and finest decisions for
company's growth (Bayo-Moriones, Galdon-Sanchez and Martinez-de-Morentin, 2020).
This helps Tesla Motors to know and analyse their strengths and weaknesses in order to
have adequate decisions in organisation for its development and growth. Business
Analsyis also assists Tesla Motors to communicate the necessary requirement in bringing
changes in respect of company's work culture and structure. Tesla Motors is able to find
various solutions in order to maximising their values added in its cars which is being
delivered to potential buyers.
 Benchmarking: It refers to making a comparison of a firm with similar in industry or
with rival firm to know its standing (Chen and Keung, 2019). Tesla Motors by using this
will gets to know their position in market with the help of comparison between its
organisation and other big giants of market. This takes Tesla Motors to have better
strategies in its firm so that can enjoy high power in the market. Through benchmarking
Tesla Motors finds a way to discover better performance with greater efficiency in their
products.
Macro Environment:
Macro environment refers to a domain which prevails outside the business organisation
but creates an hindrance on the internal performance of businesses. Such factors are not in hands
of management who can control their forces, in fact management has to modify their plans and
directions according to the effect of such environment (Chereau and Meschi, 2018). It is also
called as external environment which not only but also effects industry as a whole. The factors
sometimes supports positively or sometimes creates a negative impact on businesses. These
includes PESTLE and Stakeholders analysis, in its shed.
PESTLE Analysis:
PESTLE is an acronym stands for Political, Economical, Social, Technological, Legal
and Environmental factors which creates a large impact on business firms and also disturbs
internal management of organisation. The analysis in respect of Tesla Motors is done below:
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 Political Factor: This factor relates to various issues related to government of a nation
which comprises of taxation policy, various regulations, trade and commerce restrictions,
etc. frequent changing government impacts negatively on business as mostly when
government changes policies or guidelines also gets change which forces companies to
modify their policies according to them (Desai, 2019).
Tesla Motors being a multinational electric vehicle manufacturing brand posses an
opportunity to boost up its performance via availing governmental incentives. Zero carbon
emission cars by Tesla assists company in enjoying free trade agreements while going globally.
Other than this, stability of political party in major countries proves favourable for Tesla motors
in order to experience smooth operations and growth. This political factor opens lots of doors for
Tesla knocking opportunities in auto mobile business.
 Economical factor: This factor of external environment relates with country's condition.
This talks about capital availability, rate of inflation, purchasing power of consumers,
demand and supply, balance of payment, etc.
Tesla Motors has received a positive revert from the forces of economic factor. Company
enjoys benefit by manufacturing low battery cost cars. Less renewable energy cost vehicles
attracts external factors to favour Tesla Motors. There is a presence of economic instability threat
for Tesla but then also this factor brings scope of great opportunities for company. Countries
experiencing less development opens a door for Tesla to start its operation in their nation. The
manufacturing of electric vehicles are affordable and meets high sales in global economy which
acts as a favourable force to company.
PESTLE Analysis
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 Social Factor: The factor discuses forces related to society in which both consumers and
organisation survives. This includes various demographics of customers, their preference
and acceptance, ethics and morals, sentiments, etc.
Tesla Motors received a positive force from society as it offers its cars by indulging zero
carbon emission technique in it which is more preferable by people in society along with having
preference in renewable energy. Under this factor society creates high demand for company's
electric cars and other associated products which increases supply ultimately leads to high profits
for the company. Company has an option for experiencing growth according to its socio-cultural
freedom. Tesla has gained competitive advantage over other auto-mobile firms in market by
offering renewable energy products and electric cars which has won hearts of society people.
 Technological factor: This factor of external environment relates to technological
changes in environment such as improvement in existing technology or emergence of
new innovation in market (Dina and Cahyandito, 2018).
Tesla Motors enjoys technological enhancement as well as faces threat for the same inn
his business operations. This is an favourable condition as adoption of updated technology
allows Tesla to manufacture better car with latest technology which is preferred by customers.
On the other hand it is a threat in a sense that frequent technological change takes old technology
into its obsolescence which has involved huge cost at the time of installing it. Obsolete
technology are not accepted by buyers hence wastes company's money and resource after some
time which is very short term. Another adoption of technology by Tesla in respect of reducing
carbon impression into its cars proves favourable for the company and acts as an opportunity for
it.
 Legal factor: The force of macro environment which deals with legally comprises of
rules and regulations prescribed by court of law. Such rules and regulations are forced
mandatory to apply in business and to comply with (Ibrahim and Harrison, 2020). It
includes laws such as minimum wage law,employee protection, safety and security, etc.
Tesla Motors has an option to diversify its operations by following adequate legal rules
by keeping global patent regulation in concern. Many countries has modified certain regulations
in relation to auto-mobile standards which is mandatory required by Tesla to follow.
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