Analyzing the Internal Environment and Capabilities of Tesla Motors

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Analysis of macro environment on the business strategies...................................................1
M1 Evaluate the macro environment to determine strategic management decisions.................3
TASK 2............................................................................................................................................4
P2 Analyse the internal environment and capabilities of an organization..................................4
M2 Critically evaluate the internal capabilities to access on the strength and weakness of an
organization.................................................................................................................................6
TASK 3............................................................................................................................................7
P3 Applying porter's five force model to evaluate the competitive forces.................................7
M3 Invent appropriate strategies to improve the competitive edge............................................8
TASK 4............................................................................................................................................9
P4 Apply theories, concepts and models to interpret strategic planning....................................9
M4 Prepare a strategic management plan...................................................................................9
D1 Critically evaluate the environment and competition to produce strategic decisions,
objectives and tactical actions.....................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES 11

INTRODUCTION
Business strategy is a set of activities that an organization uses to attract customers,
improving performance as well as achieving the objectives in effective manner. This is a
combination of all activities and decisions that are required to accomplish the goals of business
and secure a competitive position in the marketplace. These plans of actions assist the
organization in identifying product strengths, setting value, getting new business concern,
distinguish products etc. For analysing the business strategies and its impacts Tesla Motors is
chosen in this report. It is an American automotive and energy company founded in Palo Alto,
California and established on July 1, 2003. The company specialise in manufacturing electric car
through solar panel and operate multiple production and assembly plants. In this report studied
about the internal and external environment of an organization which effects the strategic
decisions as well as competitive positions. This also disclose the theories and concepts that are to
interpret the strategic planning for an organization by setting up strategic decisions, objectives
and tactical actions. Also, facilitates the recommendation to develop the strategic growth and
achieve competitive advantages.
TASK 1
P1 Analysis of macro environment on the business strategies.
Strategic management plan is a framework which is used to communicate the long-term
goals and measure or evaluate the performance of an organization. It provides a clear
understanding about the mission, vision, objectives as well as strategies of a company which are
needed to achieve the goals and objectives (Ayala, 2016). In the context of Tesla Motors,
strategic management plan can be described as:
Vision: The vision statement of Tesla's is to appoint the most persuasive car
establishment of the 21st century by impulsive the world’s transformation to electric vehicles.
Mission: Tesla's mission is to speed up the world's change of state to sustainable energy
as well as transport.
Objectives: To increase the customer base as well as market shares by 15% & 16%
respectively by expansion in the market area.
Strategies: The company adopts market development strategy to expand their business in
new geographical location to increase the customer base in the marketplace.
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SWOT analysis: It presents the internal report of the Tesla Motors by examining internal
and external strategic factors. Strengths and weaknesses are the internal forces in that strength
helps in examining the positive and valuable aspects of the company. Whereas, weaknesses helps
in understanding the drawbacks of a company which reduces the organizational performance
(Scholes, 2015). Along with this external force includes the opportunities and threats that focus
on the emerging changes of growth for a company and analyse traits that introduce as a
roadblock for the company.
Tesla is the top leading automotive company as a highly innovative advancements and
processes. Have a positive aspect in product differentiation by introducing electric technologies
and on the top of the selling electric vehicles considered as a strength. The company suffers
more from the manufacturing complications because it delays at a time of launching highly
innovative and new products. Sales of electric vehicles and energy storage system decreased
because of the limited supply of batteries and also have limited marketplace are the weaknesses
of company. Tesla have opportunities to make its own battery cells which helps in increasing
the manufacturing rate as well as decrease the production cost. In relation to weakness, Tesla
must consider the opportunity for expansion in their global sales. Brexit deal between the UK
and Europe is main trait for the company. Large competition in the automotive sectors and
fluctuations in the foreign exchange rates creates a roadblock in grabbing the opportunities.
Stakeholder analysis: Tesla has corporate social responsibility strategy which impacts
on the business at a great extent. The electronic car of Tesla viewed as an antipode to traditional
cars which use combustion engines and impacts negatively on environment. Stakeholder
priorities in accordance with the CSR strategy can be described below: Communities: Tesla is a automotive business that influenced by communities because
they design corporate image. Communities interest as a significant stakeholder is related
to environment protection. Customers: It impacts on the product quality and pricing level which effect the income of
Tesla. To satisfy the customers and fulfil demand by minimising cost of car batteries to
reduce the overall cost of final goods. Employees: They are the crucial factor of the company which impacts directly on the
productivity and profitability. Tesla trying to satisfy them by facilitating competitive
compensation and professional growth.
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 Investors: They are crucial for maintaining cash flow and capitalisation for the company
because they concern on profits and business growth. Tesla CSR needs to satisfy their
interest by using long term strategies.
 Governments: It concerned about legal actions and compliances of company and
contribution to the state economic growth. International expansion strategic plan satisfy
the government interests.
Macro environment factors are existing in the overall economy rather than specific
sector which directly impacts on the operational performance, strategies as well as decision-
making of a company. These factors are uncontrollable that includes political, economic, social,
technological etc. elements are involved. Macro external factors facilitates the detailed
information’s related to the operating challenges which Tesla Motors will face in prevailing the
macro situation rather than competitive forces (Tesla, Inc. PESTEL/PESTLE Analysis &
Recommendations, 2019.). The external factors that can impacts on the Tesla Motors and its
factors:
Political factors It includes the introducing new policies, political corruption as well as
regulations related to the environmental issues, legislations and policies of
automotive industry, taxation etc. impacts on the strategies and performance
of an organization. The government of UK is stable and supportive, so it
positively impacts on the Tesla Motors. Also, initiatives are being interpreted
by the government to cut down the usage of oil and alter to more eco-friendly
energy resources to bring down global warming. Due to the Brexit deal the
changes in adopting the carbon emission regulations are introduced which
negatively impacts on the UK's auto-mobile industries because for
manufacturing car approx 60% parts are imported in this country (Johnson,
2016). However, Brexit may cause instability and uncertainty in UK so Tesla
needs to develop its plan of action in a way that this does not consequence its
operational activities.
Economic
factors
These factors are related to the inflations, growth, income and wealth
distribution, trade etc. which effects the business strategies. The economic
growth of UK is positive which provides more opportunities to increase their
sales in future. Along with this there is a quite fear of fluctuations in currency
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as well as duties. In the UK technologies and batteries are available at a
cheaper rate which can be used by Tesla to produce electric auto-motives thus
minimising its operation costs and prices to made them affordable for their
customers (Oussama, 2017). However, due to Brexit the value of pound can
be a reduced which might force Tesla to change its prices. Brexit might also
affect in fast trade between US and UK which will affect the strategies of
company so that prices can be obsessed.
Social factors Socio-cultural factors includes demographics of population, lifestyles, trends,
preferences as well as culture effects the performance of business operations
and strategies. For taking social advantages a company needs to invest in
heavy R&D activities to meets millions of social media followers
(Chodakowska, 2018). UK has a big consumer marketplace which belongs to
the different cultures and religions with unique mixture of needs and wants.
However, there is a broad income difference in UK as compared to other
developed countries which might influence company plan of actions in
pricing strategies of its products.
Technological
factors
These involves the technological advancement, automation and innovation in
techniques as well as introducing new ideas by developing in the business
strategies to take a competitive advantage. Tesla has a large opportunity to
spread out its business in UK as technologies for advances in renewable
energy is accessible in UK (Akter, 2016). Auto-mobile industry concentrate
on creating a changed business state of affairs, developing technology road
maps for CO2 emission free vehicles and hydrogen propelled cars, it also
centring on the research and development schedule of the UK automotive
industry.
Environmental
factors
It includes the weather condition, climate, temperature, availability of water
as well as environment protection and pollution act which effects the
performance of an organization. Environmental determinants affiliated to
CO2 emission, petrol and gasoline usage etc. if the auto-mobile has a high
CO2 emission rate there will be high TAX charges (Velazquez, 2017). The
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