Business Strategy Assignment PDF | Tesla

Business Strategy

Table of Contents
INTRODUCTION................................................................................................................................3
P1 Impacts and influence of macro environment on Tesla..............................................................3
P2 Analysation of internal environment and capabilities of Tesla using SWOT.............................5
P3 porter's five forces model for evaluating competitive forces of a given market sector..............6
P4 applying a models , theories and concept to understand interpretation of strategic directions
To Tesla............................................................................................................................................7
M1 Critically analyse the macro environment to determine and inform strategic management
decisions...........................................................................................................................................9
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.............................................................10
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes. ......................................................................................................................................10
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.......................................................................................................................................10
CONCLUSION .................................................................................................................................10
REFERENCES...................................................................................................................................10

INTRODUCTION
Business strategy is the action that business uses to attract the large no of customers. it is the master
plan which management uses to secure a position in the market there are the three level of the
business strategy such as corporate, business, functional level. Under this report Tesla taken as the
company , it is an American auto mobile company which makes electric cars ,its headquarters is
based in the Palo alto, California . It was founded in july 1,2003. Martin Eberhard, Elon Musk, J.B
straubel, Ian Wright are the founders of the Tesla. This report will cover the internal environment
and capabilities of a Tesla using appropriate frameworks, porters five forces model evaluate the
competitive forces of a market sector for an organisation, range of theories , concept and models
interpret and devise strategic planning for a given organisation and the analysis the impact and
influence of the macro environment on a Tesla and its strategies.
P1 Impacts and influence of macro environment on Tesla
The impacts and influence of macro environment on Tesla & its strategies can be analysed by
PESTEL analysis.
Impact of political factors on Tesla
It is very essential for Tesla motors to undergo various political analysation before entering a new
market. As different countries has difference in their political system and environment, thus to get
successful in dynamic environment, Tesla undergo following assumptions of market which are
major sector in any countries' economy i.e. Labelling of products & other required things ,
regulating week work, laws related to anti-trust, interference & bureaucracy, political stability &
importance of auto manufacturers (Buckley and Ghauri, 2015). Those influence the minor sectors of
political factors in countries economy are industry safety regulation, wage legislations, flavoured
trading partners, trade regulations & tariffs, level of consumptions & risk of military invasions.
Impact of economic factors on Tesla
Average demand & average investment in a countries' economy can be determined by macro
environmental factors such as foreign exchange rates, interest rates, saving rate & inflation rate.
Thus, Tesla uses countries economic factor for forecasting the growth trajectory of the organization.
Through PESTEL analysis Tesla considers following economic factors : interest rates, inflation
rates, unemployment rates, discretionary income, economic growth rate, business cycle stage, cost
of labour & their productivity, level of education, skill level of workforce, infrastructure quality,
financial market efficiencies, exchange rates, government interventions & type of economic system
within the organization.
Impact of social factors on Tesla

Impact of culture on organization is dependent on the societies culture & the way of practising those
cultures. Social factors that Tesla must consider while conducting Pestle are: leisure interests,
attitudes, entrepreneurial spirit & broader nature of society (Razak and et.al, 2016). While,
entrepreneurial is encouraged by some societies while some societies doesn't encourage, culture
which includes social conventions, gender roles etc., level of education along with standards of
education in Tesla industry, power structure, hierarchy & class structure & skill level &
demographics of the countries' population. For understanding the customers by Tesla marketers
carried out by attitudes & shared beliefs.
Impact of technological factors on Tesla
Rate of technological diffusion, consumer goods sector impacted the value of chain structure, in
auto manufacturers the impact of cost structure, impact of technology on product offerings,
development by Tesla competitors in technical sector are all the technological factor that Tesla has
to analyse by PESTEL analysis. Technology is the fast changing sector all across the world. The
innovations in the transportation industry has given various chances to the players of the auto
manufacturing industries to cope up with the changes. Thus, for Tesla to be profitable organization ,
slow speed of innovations will give more time to cope up with the technological disruptions
(Yuliansyah and et.al, 2016).
Impact of environmental factors on Tesla
Before expanding to new country, organization closely observes the various environmental issues
related to the country in which it tends to expand. These environmental factors greatly affects the
profitability of the organization. Different countries has different standards and norms of
environmental factors. Thus, for Tesla, entering the new market will undergo following assumptions
i.e. support of renewable energy, endangered species, attitude towards ecological product, waste
management, recycling, pollution regulation towards air & water, environment pollution laws,
climate & weather changes. Perhaps for Tesla to be a profitable industry of auto manufacturing will
consider all these environmental factors before entering the new market.
Impact of legal factors on Tesla
The firm entering to new market must carefully observes the all the legal factors associated with the
new market. In most of the countries, laws are not strong enough to protect the overseas company.
Tesla considers following factors that can that could have legal impact on the smooth running of the
organization are: data protections, laws related to health & safety, employment laws, e-commerce &
consumer protection, copyrights, intellectual / patents property laws, discrimination laws & anti-
trust laws in the auto manufacturing. Thus, for the protection intellectual property rights of an
organization, the company must properly observe the legal frameworks of the new markets.

P2 Analysation of internal environment and capabilities of Tesla using SWOT
Strengths of Tesla
Every organization wants its growth and development to cope up with its competitors in the present
market. Thus, organization uses the aspects of SWOT to analyse the strength associated with the,
that will be having contribution in its growth & improvements. Organizational strengths are factors
that influence the organization to compete with the competitors, and to make them secure for long
run in the market along with their profitability. Strategic expansion in global market is facilitated by
strong company brands. The various strengths of Tesla in automotive industries are: high
innovations, strong brand-name & highly controllable production process.
Tesla has recently introduced first electric sport car, Moreover, Tesla in always known for its
innovative approaches in the automotive sector. The company has strong brand name & innovative
image in the market of auto industry, thus due to strong brand name it is easy for Tesla to attract and
retain customers very easily. Tesla has a strong centralized administrative system and its vertical
integration proved that it has a very highly controllable production process (Amran and et.al, 2016).
Thus, strength of Tesla motors derived from SWOT analysation is Tesla's brand & innovative image
in the market.
Weaknesses of Tesla
Weaknesses of an organization is the incapabilities to the of organization that reduces the businesses
growth and its competitiveness. For analysation of organizational weaknesses the companies
undergo SWOT analysis to identify what is limiting its organizational performance. thus, companies
undergo SWOT analysis to identify their weaknesses and their these weaknesses can be overcomed
by applying initiatives, reforming the structures & by applying strategies. Although, Tesla is a
strong brand but than too it has some major weaknesses such as high prises of automobiles, supply
chain is very limited & limited market presence.
Due to rapid economic development in the overseas market Tesla has suffered due to its high price
whereas its competitors are delivering the same service at a low price. As Tesla has its most of the
presence in the markets of US and a very less in some developing countries. Moreover, due to very
low presence in the overseas market, the company has faced various issues of limited supply chain.
Thus, Tesla undergoes SWOT analysis regularly just to check where it lags behind from its various
competitors of the market and develop the strategies accordingly to overcome those weaknesses.
Opportunities for Tesla
Opportunities of SWOT analysis are the external factors that mainly focuses on the overall growth
& development of the company. These factors help organization in their various aspects of
development. Strategic growth, management effectiveness, business performance can all be
enhanced or improved by finding the various opportunities associated with the particular

organization, thus the various opportunities associated with Tesla that enhance its competitiveness
and financial standing in the market are business diversification, expansion of global supply chain
& expansion of its global sales.
The above opportunities of Tesla show that the overall growth of company has been enhanced by its
expansion of global sales and its supply chain in the entire market. Global supply chain of
automobiles proved to be its significant image in the industry. Moreover, the company has
improved its performance & market through business diversification, thus Tesla regularly check it
opportunities that could benefit its performance and to earn huge profit from its business.
Threats facing Tesla.
Threats are the external factors that limit the organization's performance. Threats are the various
factors faced by the organization that reduces there overall growth, so the organization would not
been able to make as much profit as much they are capable of. Thus, to understand the factors that
tend to reduce the organization growth can be analysed by SWOT analysis. Though Tesla has a
significant image in the global market but then too it faces threats. Threats faced by Tesla are
dealership regulations, fluctuations in the material prices & very aggressive competition in the
market (Akter and et.al, 2016).
There if aggressively great competition in the automotive industry in the today's world. At present
Tesla is focusing on its electric vehicles which is having comparatively low competition than that of
general petroleum cars. Thus, some times Tesla faces the threat of aggressive competition of the
market. Fluctuation in the prices of the material required in the production is also the biggest threat
faced by the company. As Tesla directly sold out its cars to the consumer rather than delivering from
any dealer, which increase its automobile costs. Thus, analysation through SWOT helped Tesla to
remain sustainable in this aggressive market of high competition & survive in the market for long
run.
P3 porter's five forces model for evaluating competitive forces of a given market sector
Porters five force model is the model that analysis the business. This model explains why various
organization are able to sustain different level of profitability. This model identifies 5 in-ignored
forces that plays a part in shaping every market & organization in the world. These five forces
frequently used to measure profitability of the organization, attractiveness of the product among the
consumers & intensity of competition .
The porter five forces are:
Competition in the industry
These aspects show that larger the number of competitors, lesser will be the power of the
organization which are serving the same products. If the company has its monopoly of the product

or service than it will definitely prove to be in power in the market. Thus, Tesla faces so many
problem due to its large number of its competitors. Although Tesla brings innovation in its
automobile industry regularly to stand on the top of the competition. It is always wished of the
organization that it would have the least competition.
Potential of new entries into the industry
An organization power is influenced by the entry of new entries in the market. The competitor
always tends to take less time & money in comparison to previously surviving companies. New
entrants has not to face the various obstacles as they get guidelines easily by the existing
companies. Ones the new entrants enters the market the monopoly of existing organization get
broke done and thus they can't charge higher price & they have to negotiate in various terms
(Johnson, 2016).
Power of suppliers
The more will be the supplier the lesser will be the power of the organization, similarly lesser will
be the supplier higher will be the power of the company, Moreover, it is benefit for the organization
when there are large number of raw material supplier for them are present, such that they could
keep the prices of their products low. Thus, the power of supply of Tesla is very low, so Tesla has to
face the problem of high cost due to its weak supply chain across the globe.
Power of customers
A smaller & more powerful consumer means that the consumer has the power to negotiate for a
commodity such that they will tend to get the commodity at the best price or at the best deal.
Organization which has many, smaller, independent consumers will always tends to charge high
prices in order to gain more profits. Tesla does not provide its power to consumers as Tesla always
tends to bring the new product in the market which enable it to keep higher prices of its automobiles
and decreasing its market of competitors.
Threat of substitute products
Threat of the substitute product is the problem faced by ever organization. When the companies sell
the product, which has the least close similar product than the company get the benefit of keeping
the higher price of the commodity and thus, easily could gain larger profits. Both company selling
products with more similar product already existing in the market than the company faces the
problem and perhaps has to work on very less profit margin. Threat of organization are always
needed to overcome by bringing innovations. Tesla uses the innovation techniques to always stand
above its competitors. But due to its high prices it sometimes faces threats.
P4 applying a models , theories and concept to understand interpretation of strategic
directions To Tesla
Tesla ansoff Matrix

Tesla ansoff model is an proper marketing planning that that can be used by different
fuel manufacturer vehicle to make a strategic decision for the company (Gurcaylilar-Yenidogan and
Aksoy., 2018) . Tesla is using the four strategies for growth in the market.
Market predictions
Tesla is having a good market predictions and they are m focusing to selling the electric cars
in the more then 30 countries (Nickols., 2016). They are making a new cars which can give better
mileage I and better concert to the customers. They are having good reputation in the market
because they have better market prediction they are giving competition to the other moter
companies because they are giving better vehicles in affordable price.
Product development
In the product development strategies it employees the new product which can be selled in
the existing market. Tesla is not that much developing the new product because development of new
product cost high and recently they have develop the electric vehicle and power storage sectors.
And also their alternative fuel vehicles manufacturer are working in the development of pick up
trusts and semi trucks. Along with a range of the energy storage products. They have spent amount
of the money on recent projects and still they are looking for better development of those product.
Market development
Market development strategies are implement in the search of new market where they can
sell their products (Gurcaylilar-Yenidogan and Aksoy., 2018). Tesla company is bringing new
product to evaluating in different markets.
Company is having a join ventures with the many company so they can enter in new market. Tesla
is also using Diversification strategies for company growth. This growth strategies help in the
development ion the company through the different different product development. They are
looking for the new places and different countries so they can enter in those countries market.
Diversification
In this method organization develop new products for their new market so they can compete
with competitors. Tesla was using this strategies past years . In 2003 they only started a electric cars
but after some times they change their name to the Tesla Mothers Inc. then they purchase solar-city
company in 2016 to enter in the energy storage sector (Nickols., 2016) . The alternative fuel
vehicles manufacturer is exacted to the further diversify then it mangers to overcome To it's
current financial issue.
Justification
In this all strategies product developments strategies are best for Tesla as compare to the
others they can bring new product which can be helpful for company growth and they can give
more competition to the other motor company (Schawel and Billing., 2018). They should research

about the new product and analyze the target market. They have to make new product according to
the demand of the customers because customer satisfaction is the first Aim for company. If they
will satisfy with the product then they will bring new customer for Tesla and it will also increase the
growth of they company. Product should be unique and different from the others so they can give
better competition to the others. Involvement of new trends in the product is also important because
customer always follow the new trends. company can also enter in potential make if they have
better product and better design.
strategic management plan
Strategic plans help Tesla to achieve objectives and goals of the company. During the
making of this plan some objectives that the Tesla is trying to satisfy during the execution of the
plan. This strategic plan helps to understand the objectives and main goals of the company.
Goals- The the main objective of those plans are to identify goals of the company and
develop the new ways to use resources of the company to achieve goals (Schawel and Billing.,
2018). Strategic plans outline the objectives including the ways in which the success or failure will
be measured in this.
External Factored- this plans directly affect to the external factors like sub contractors ,
economy , competition and arability of the qualified employees. This plan helps to identities all the
external factors of the Tesla company and it also create a comprehensive image of how they will
affect the successful exaction of the plans, and strategic planing helps to develop the new methods
to deal with external factor's. Reports that are used to help develop this portion of the strategic plans
including the revenue forecast of the company. And sales projections
M1 Critically analyse the macro environment to determine and inform strategic management
decisions.
Political factors analysis of Tesla determine the governmental impacts on business and macro
environment. New global trade agreement and political stability in the major market are the political
factors are significant to Tesla. Decreasing battery costs and renewable energy cost , economic
stability issues are the economic factors which affects the Tesla automotive market. Increasing
popularity of low carbon lifestyle, preference for renewable energy and high rate of technological
change , increasing automation in business are the social and technological factors affect the Tesla
automotive market. Rising standard on waste disposal and energy consumption regulation are the
factors that affect the Tesla automotive market(Zhou and Wen., 2019).

M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.
Tesla has the support from the both government and political bodies, Tesla started its operation due
to this Tesla is taking lot of advantage from the government. The CEO of the Tesla have great
leadership and the team spirit, it is inspirational and highly motivating is success factor for the
Tesla. Weakness in the SWOT analysis of the Tesla are the poor liquidity as compare to other
competitors such has ford has USD 20 billion where as Tesla has only USD 3 billion which is very
poor and it is not sufficient for survival of the Tesla. Tesla has only one plant with having capacity
to make 500000, it is difficult for Tesla to achieve higher volume or target(Serra and Kunc ., 2015).
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes.
Being Tesla first in the market able to take advantage of having no competition in the narket and
stable their position in the market, Tesla establish expertise by focusing on particular to develop
specialization in the market Tesla market specific expertise will set apart from the competition.
Tesla study their competitors and learn the skills of there how they target a market problem , by
identifying the market problems tesla see solution in a different way than there competitor(Aithal.,
2016).
M4 Produce a strategic management plan that has tangible and tactical strategic priorities
and objectives.
Strategic management plans define as the set of goals , strategies, objective and tactics that Tesla
use to coordinate and align action and resources with the values of the company strategic plan is the
part of the strategic management. It is a document which helps to communicate within the Tesla
organisation, strategic planning is important for the Tesla to create cohesive vision , diretion and set
goals for future growth of the Tesla(Matt., Hess and Benlian., 2015).
CONCLUSION
This report will provide a brief information related to the Tesla, it is a auto motive company which
deals in the electric cars. and analysis the SWOT, PESTLE and internal environment and
capabilities of the Tesla. Under this report strategic plan based on the environment analysis is
prepared on the Tesla, porters five forces model is applied to evaluate the competitive forces of a
market sector of the TESLA, it is also analysis under this report the impact and influence which the
macro environment has on an Tesla and its business strategies.

REFERENCES
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