Business Strategy on Tesla Assignment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
P1. Framework for macro-environment analysis...................................................................1
P2. Framework for internal analysis.......................................................................................4
P3. Industrial analysis.............................................................................................................5
P4. Selection of a strategic option along with rationale.........................................................7
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1
.........................................................................................................................................................3

INTRODUCTION
Business strategy is the term which involves a series of tactics which is required in the
organisation in order to accomplish its long term vision and goals. It is also a core component for
the association as through the implementation of the proper business strategy within the business
a firm can easily gain a competitive benefits over other rivals within the industry. This project is
documented on the company Tesla which is one of the largest company in automotive industry.
The brands deals in rendering their customers with the best electronic cars which have been
manufactured keeping the customers preferences and required state of quality in the mind. The
study will focus on the covering of the certain important topics such as factors which have
significant impact on the working of the concern with PESTLE analysis(Johnson, 2016). Apart
from this the study will also cover SWOT and porter's five forces model so that business
attractiveness within the market place can be identified. At, last the use of Ans off matrix has
been done so that the different opportunities can be identified and preparation of strategic
management plan can be done.
P1. Framework for macro-environment analysis.
In order to understand the factors which are rapidly impacting the business it is necessary
for the business to implement different models and techniques. Identification of these influencing
factor will enable the association in designing, formulating and developing of the tactics so that
the association can easily overcome different challenges from their competitors and sustain their
enterprise within the competitive market for a longer duration of time(Jeston, 2014).This will
also support the business of TESLA in performing the activities in the best possible manner. The
macro environment factor which influences the business are written under as follow:
PESTLE ANALYSIS
PESTLE analysis is the tool which is important and useful to the business in different
different situation when entering into the newer market or starting up of the new venture. This
tool is used by the business in order to determine all those factor of the macro environment
which are impacting the associations performance. PESTLE denotes different different factors
such as Political, economical, social,technological, legal and environmental. All these factors are
as mentioned beneath:
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Political: political factors are those which comprises of all government interventions
such as diverse rules and regulations related to taxation, trade, political stability etc. as the
economy of UK is fostering a stable economic so this is an advantage for the business of TESLA
to develop and enhance their business in this nation. Other than this the business can also
undergo some threat regarding its property as there are some factor which affect the business
such as the effect of BREXIT,imbalance of the political conditions etc. In this case the business
of TESLA is required to focus on holding of the stock in advance so that whenever the situation
in front of the business occurs is unfavourable, they can easily full fill their customer expectation
with the stock available to them(Akter and et. al., 2016).
Economic: These factors of those which directly affect the performance of the economy
such as inflation rate, growth rate, GDP rate etc. In regard to the context of TESLA the business
have the opportunity to sell their electronic car in the market and grow their business in an
effective manner due to the increment of the fuel-engine prices for the other businesses. Along
with this, it can also be affected through the recession, Brexit which may be a danger for the
business of TESLA as due to this the requirement of the car in the market of UK will be
decreased. In order to deal within this situation the enterprise of TESLA is needed to undergo the
development of strategies of economic pricing so that business can grow in the market
place(Reim, Parida and Örtqvist, 2015).
Social: These factors are those which involves customers belief, ethics, values, attitude
and lifestyle etc. in current scenario, the customers in present time have become more conscious
regarding the benefits of the environment and society. So in regard to this this is an opportunity
for the business of TESLA motors to launch their new electronic cars as this will not hinder the
society and its customers. Apart from this the business can also face the problem from the
competitors in the market who works towards the production of the product which are of eco-
friendly. So to cope up with this the business of TESLA motors is required to Built up strategies
of manufacturing of the cars which are of advanced technology, structure so that large number of
customers can be attracted and retain them towards the business for a longer duration.
Technological: This factors is the one which gives its more emphasis on the
technological interventions and innovation. So it is an opportunity for the business to launch
their car which is electronic cars with some unique features and high tech technology. The
business has also launched its car with latest hydrogen fuel technology which have made it
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important for the public to purchase the car from the company like TESLA(Olson and et. al.,
2018). Moreover the business has also faced diverse ranges of the challenges from another
automotive companies like Audi, BMW etc. has they are to launch the car which comprises of
advance technology and automation so that they can cover the larger market section . So in order
to overcome this issue the business manager of TESLA is required to focus more on the factor of
Innovation so that the increase customer base can be maintained.
Legal: These involves all the rules and regulation , diverse range of policies and
procedure which the government have commenced for businesses to follow in a systematic
manner. All the laws regarding the business must be followed by the business of TESLA such as
employment laws, automotive laws, go green act etc. which does not harm the environment and
can help the business to retain their customers within the business for longer time(Morris, 2016).
However if the business does not focus on all these legislation in the market place such as the go
green environment the firm has to face challenges. So in order to reduce this the manager of the
TESLA is required to focus on the adoption of all go green act and policies related to the taxation
so that business can sustain in the competitive market.
Environmental : These includes all those factors of the environment which impact the
business such as climate,changes, locations, weather etc. In context of the TESLA the manager
of the business is required to produce the car which are of eco friendly nature and are not
impacting the environment so that the customers become loyal to the buying of electronic car
and remain sustain to the business. In order to this the business also has to undergo a threat of
rapidly changing environment and requirement so the business need to focus on the development
of the strategies which enable them to understand the fluctuation and operate the business in a
systematic way(Higgins, Omer and Phillips, 2015).
In regard to this external factors the business has number of opportunities prevailing in
the market such as the firm can introduce their new car in the market with unique and innovative
features so that business can grow in the market place. Further more the business also have to
grow some challenges from the increases in the rate of taxes. Imbalance of the economic
condition, customers more consciousness towards the other brand rather than the TESLA must
be handled in a significant manner so that the business can easily operate their operation in the
competitive market.
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P2. Framework for internal analysis
Due to the extreme fluctuation in the market place and business environment it is
essential for the business to scan their internal environment too so that effective strategies for the
success of the business can be formulated. In order to identify this SWOT analysis of TESLA
must be done where the business can easily determine where they are good at and at what point
of time they are lacking so that by working on all these they can survive in the market beating
their rivals in an effective manner(Amran and et. al., 2016).
SWOT ANALYSIS:
SWOT analysis is the tools which the businesses used in regard to identify their
competitive position in the market by determining all their strength and weakness along with all
the opportunity and threat which are prevailing for the firm in the market place.
STRENGTHS WEAKNESSES
 TESLA foster an strength that is
extreme amount of assistance from the
governing body such as $476 billion
that is granted by authorities for their
operating of all the projects which are
related to the energy.
 Business also have the strength to be
the first hand firm producing the car
which is electronic car in the
competitive market.
 TESLA is the firm known world wide
for their car with higher technology and
innovations which no other firm is
operating till the date. As the business
have focused on installing newer form
of battery in their cars.
 Cost of the cars is extremely higher
which each and every customer can not
afford.
 The company has its production
capability to the limited area only as
this manufactures their car in the single
unit which is situated in the location
that is California.
 Due to the hike in the prices of
manufacturing and operating , the cost
of production within the business is
also high(González-Rodríguez and et.
al., 2018).
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OPPORTUNITIES THREATS
 The business has the opportunity to
grab market in an effective manner as
now the customer within the market are
in need of the product which can
sustain in the market for a longer
duration of time which automatically
raises the demand of this electronic
cars.
 Through the manufacturing of cars with
the highly innovative technique which
is automated driving car, eco friendly
which does not cause harm to the
environment , the business have the
opportunity to gain market share in a
increasing rate.
 Huge competition to the firm by the
other automotive industry such as Ford,
Audi etc. in the market place.
P3. Industrial analysis
It is essential for the business to do their industry analysis as this assist them in
understanding about the various market factors or component which they can use in order to gain
a competitive advantage over the other rivalry firms. In order to do so the firm will undergo
porter's five forces model where the business of TESLA will try to identify how competitive they
are in compare to their competitors and how attractive the business of TESLA motors is their in
the market place(Chen and et. al., 2016). Below mentioned are the core five forces of the porter's
five forces model:
Threat of New Entrants
In general the threat of new entrant within the automotive industry is generally low as
starting new venture requires lots of efforts and finance at the initial level which is not possible
so the business of TESLA in this aspects can easily sustain their business in the market without
concerning about the threat from the new entrant as this is moderately low in this case. Here the
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business is required to focus more on enhancing their business performance and services which
are already in existence so that their durability can be maintained in the market and customer
mind.
Level of rivalry within sector
The level of the competition from the rival firm is comparatively high as there are
number of automotive industry which is operating in the industry such as Ford, Audi,
BMW,Volkswagen etc. which are offering the same products that is car in the market due to
which the companies manufacturing electronic car also have to undergo a huge range of
competition. So in order to compete with this the business of TESLA is required to look onto the
factor of uniqueness so that large number of customer base can be built and strong relation with
the customer can be maintained which will indirectly leads the business into the stage of
profitability and development(Martinez-Simarro, Devece and Llopis-Albert, 2015).
Threat of Substitutes
Threat of the substitute is generally high as there are number of businesses operating in
the field of manufacturing of the car with some new technique and unique features on a regular
basis by considering the changes which occurs in the environment. While considering the
business of TESLA the business have less threat from the substituent as there is no other firm
manufacturing the electronic cars in the market place due to which the business as the power to
control the market and the prices so that the growth of the firm can be done with the increasing
rate and profitability.
Bargaining Power of Suppliers
Bargaining power of supplier for the industry like automotive is generally low as there
are infinite number of supplier available in the market . Moreover if the business of TESLA ask
their supplier to provide them the material with the particular quality which they want and the
supplier denied to do so the business of TESLA has the opportunity to switch to another
suppliers who will render them the quality resources as per their requirement. In context of the
supplier, supplier within the industry will work hard to maintain their relationship with the firm
so that the customers base can be built and maximum range of profit can be earned.
Bargaining Power of Buyers
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Bargaining power of buyers within the association like TESLA is termed to be low as the
customer do not have the option to switch to other firm for buying or purchasing the electronic
cars as this car is only manufactured by the TESLA in the market place(McCahery, Sautner and
Starks, 2016). So the business have the benefit to set their prices of the car according to their
wants so that maximum amount of the profit can be earned and better customers loyalty can be
experienced by rendering them this innovative cars( Balon and et. al., 2019).
Thus all these five force will enable the business in determining their market position and
the competition so that they can easily come up with the range of strategies which will lead the
business to a superior position in the market place.
P4. Selection of a strategic option along with rationale
Every business within the market place execute their operation so that higher amount
revenue along with the growth and development can be attained. In relation to grow the business
there are infinite number of the tactics which the business can implement within their firm. The
growth strategy which the business will seek to adopt is Ansoff's matrix where they will focus
mainly on the different different quadrants such as market penetration, product development,
market development and diversification. All these strategies will enable the firm of TESLA to
identify what major strategies must be taken into consideration so that the business performance
and productivity can be enhanced in a best possible manner.
Below mentioned are the 4 quadrants of Ansoff's matrix:
Market Penetration: This factor is the one where the firm try to sell their product
which is already in the existence to the same market where they are operating the business. In
this aspects the business of TESLA will sell their products which is electronic car by innovating
it in a different way considering its design, services and performance to the same market as the
customer base within that market is already built so that higher level of loyalty by the customers
towards the brand can be maintained in a effective manner(Soltanizadeh and et. al., 2016).
Market development: This growth strategy Is the core for the business in regard to
increase their market share and position within the competitive market. As this strategy of
growth comprises of the factor where the TESLA will try to introduce their new electronic car to
the newer market segment which have been not touched till the date such as Chicago, Bellevue.
This will enable the firm to cover market in a larger section by maximizing the amount of the
profit earned.
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Product development: This strategy is the prime in the growth of the business as this
involves the development of the new product within the existing market place where the business
is operating their operation in a effective manner. In this strategy the may focus is on providing
the customer with wide range of the products so that their ultimate needs gets satisfied. In the
context of the company TESLA the manager of the business can easily cope up with this strategy
as in this case they can render their customer with so innovative products with unique features
and technology which they have never thought of in the same market segment. This will allow
the business to earn much higher profit and a higher position in the market by enhancing the
firms overall productivity. This will also render the business with increase customers loyalty and
base as the product which the TESLA is providing or offering to their customers are according to
their expectations(Fontana, Sastre-Merin and Bace, 2017).
Diversification: Diversification is the term concerned with the providing of the
diversified range of the products to the potential customers so that their ultimate needs get
satisfied within the tenure. This strategy is the most dangerous strategy as it involve high amount
of the risk and uncertainty as here the new products are launched to the newer market segment.
In term of the Tesla motors, the business is already fostering a reputed market position with the
increased customers base so this diversification strategy of growth will give a business a
advantage to operate internationally by establishing new products in the new market so that
global market share can be covered and higher revenue within the business can be generated.
Therefore, from above mention 4 quadrants it can be concluded that business will be
beneficial only if these adopts the strategy of product development as this will allow the business
of Tesla to earn high amount of profit by launching the products in the existing line only without
involving much cost and time. Along with this this will also enhance the business customer base
and goodwill in the market place in front of the other rival firms such as Ford,Volkswagen, Audi
etc(Moseley, 2017).
Strategic Management Plan
The business of Tesla have prepared a strategic management plan for their business in
regard to operate the operation in systematic manner in the competitive market place:
Vision: To become one of the most renounced automotive industry domestically and
internationally .
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Mission: To render the products to the customers as per their demands and expectation
regarding the quality and services so that higher amount of recognition in the mind of customers
can be established.
Objective: To raise the market share percentage from its existing share which is 8.0% to
the next percentage level which is 9.0% within the tenure of the 6 months(Fontana, Sastre-
Merino and Baca, 2017).
Strategy: The major focus of the Tesla will be to cover the percentage share of the
market by providing the customers with higher innovation and new technology products.
Tactic: The business of Tesla will focus more on the offering of the value added products
so that the goal of the firm can be accomplished and brand image of the firm can be increased.
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CONCLUSION
As per the documented report it can be summarised that forming a strategy within the
business for the success and growth of the business is very essential. As this will enable the
business manager to use diverse ranges of analysis and techniques so that all about the factor
influencing the business performance can be identified. Apart from this the inner strength and
weakness of the business has also been identifies so that those can be overcome and operations
and be executed in a smooth manner. Lastly the areas of growth and success is covered with the
strategic pan preparation which has lead the business to the higher market position .
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