Business Strategy of Tesla Assignment
Added on 2021-01-03
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BUSINESSSTRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1PESTLE analysis on TESLA..................................................................................................1Stakeholder Analysis on TESLA............................................................................................3SWOT analysis on TESLA ...................................................................................................3VRIO framework on TESLA.................................................................................................4TASK 2............................................................................................................................................6Porters five forces model on TESLA.....................................................................................6Strategic Management Plan....................................................................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONBusiness Strategy is defined as the course of action that which helps to any of theentrepreneur for the purpose of achieving it's target and goals. It is helpful because it determinesthat how any of the organisation is required to work on daily basis so that they can compete withthe competitors. This file is based on Tesla Inc. which is one of the automotive sector company.It was found in year 2003 by Elon Musk. The main motive of this company is to manufactureelectric vehicle where they wants to give unique design to their cars. This file will include aboutvarious internal and external factors that can affect the working policies of TESLA. In secondtask, recommendation will also be given with strategic directions which is available with theorganisation. TASK 1PESTLE analysis on TESLAPESTLE is the analytical framework which helps to tell about external factor that shouldbe considered while taking any of the business decision. In this, PESTLE stands for Political,Economical, Social, Technological, Legal and Environmental factors. In context of Tesla, thisanalytical tool will help them to enhance their business in a systematic manner. The detailstructure of PESTLE is mentioned below:Political Factor:The major area which is affected by political factor is related with taxpolicies, trade tariffs etc., and many more. In terms of TESLA, political factor mightdecrease the overall profit of the organisation because if tax rates are changed then theyhave to pay additional amount of tax which will affect of overall profit of theorganisation (Amran and et. al., 2016). This factor create problem in growth strategy. forexample: if tax rate on electric vehicle is increase where as fuel vehicle is not changedthen it will only affect electric Automotive organisation. Economical Factors: Here, economical factor mainly impact on purchasing power ofthe customer because it is directly connected with inflation rate, interest rate, foreignexchange rates etc. In context of the TESLA, this factor has provided lots of benefit tothe organisation because in recent period of time government wants to promote electricvehicle due to which it has been easy for the customers to purchase the cars of TESLA.Due to this factor, impact can be seen in cost differentiation because there is high1
chances that sometimes rate of vehicles might increase and even sometime it mightdecrease also. Social Factor: It is important for all the organisation that they must consider the trendwhile manufacturing any of the product. In context of TESLA, it is necessary for them toconsider current trend, norms and values of the society so that they can sustain in themarket. This factor can effect the product differentiation strategy. For example: TESLAshould try to target that market where people given more preference to electric vehicle tosave the environment so that their sale can be increased. Technological Factor: It is much and more important for any of the organisation tointroduce themselves with the new technology which can influenced the customer. Themarket of UK adopt only those vehicle where latest technologies are introduced so it isnecessary for TESLA to have the proper knowledge about the market and latesttechnology which is trending in the marketplace (Barberá and et. al., 2012). This factorcan affect the growth strategy. For example: For the purpose of tackling with theseissue, organisation is required to introduce new features in their car so that customers canbe attracted and if they will not be able to deal with this then huge problem can becreated for them. Legal Factors: This is one of the most important factor that need to be considered byevery organisation because simple changes in the law might create lots of problem in dayto day working policies. In context of TESLA, they are required to take their decision asper the guidelines of Companies Act, 2006 because that governs how business should beoperated. Equality Act should be considered where they are required to treat everyemployees equally.This factor will have the option to affect on cost differentiationstrategy because there is high probability that it will increase the overall cost of theorganisation.Environmental factors: As per the scenario of UK, various marketplace have number ofenvironmental standards that can have both positive and negative impact which directeffect on the profitability of TESLA. For the purpose of removing negative impactTESLA have shown their active participation in the area of CSR activity where they aretrying to provide various facilities to the people who are living within UK. This factorhave potential to impact on growth strategy. To understand, lets take a example: Here,2
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