Business Strategy: Analysis and Opportunities for Tesla

This report analyzes the business strategy of Tesla, including the impact of macro and micro environment factors, SWOT analysis, and the use of Porter's Five Forces model. It also identifies opportunities for Tesla to gain a competitive advantage in the market.

Business Strategy

Table of Contents
INTRODUCTION....................................................................................................................3
TASK 1......................................................................................................................................3
PASTEL.................................................................................................................................3
TASK 2......................................................................................................................................5
SWOT & VRIO....................................................................................................................5
TASK 3......................................................................................................................................8
Porters five force model........................................................................................................8
TASK 4....................................................................................................................................10
Strategic analysis with Ansoff's Matrix...............................................................................10
M4........................................................................................................................................11
CONCLUSION........................................................................................................................12

INTRODUCTION
Strategies are those action plans which are meant and follow for achievement of
target. Business strategy are the framework which is consist of different number of activity
and will help an origination to identify a work plan for achievement of its objectives for long
survival of firm. It also help in identifying the right way in which origination can work for
achieving profitability. Strategies are basic for survival of business firm in dynamic
environment as it facilitate firm in planning function by analysis origination resources and
capacity of origination(Barberá. and et. al., 2012). In the context of this report tesla will be
the base company. Tesla is a car manufacture which is famous for its innovative product as
well as for manufacturing designer electric car. In this report study is conducted how macro
and micro environment have their impact on business strategic decision and how firm can get
benefit in competitive business environment. Strategic plan will also formed here which will
guide firm how it can get benefit of that pan and can gain competitive advantage in market.
TASK 1
PASTEL
Business is surrounded by different factors which have their dynamic effect on business
there are number of factors which have their effect on business but some have their great
consequence on firm . These environment must be analysed by business firm for planning for
uncertainty. The method use for this is called as PESTEL analysis. In this method six factors
are studied which are political, economic, social, technological, environmental and legal
factors. These all factors are study and their impact will be identify in context of Tesla which
is stated below:
 POLITICAL FACTORS: These are those factors which are relate to involvement of
government in business activity of firm. This is interruption of government for
controlling activates of business in economic benefits. UK government is promoting
electric cars in there economy and providing exited rebate on these cars. This can
work as an opportunity for Tesla that it can get benefit of promotion of its product
because firm have main business of electric cars which is promoted by government of
nation, in global context other nation government is also promoting electric vehicles
in there nations. All this will impact positively on Tesla as political factors are in there
favour. (Buckley, Burton, and Mirza, 2016)

 ECONOMIC FACTORS: These are those factors which are related to economic
conditions of nation where origination is working. It includes exchange rates, inflation
rates, employment rate, interest rate, GDP growth of the nation and many more
thinks. This have also different impact on Tesla as promotion of recyclable and
renewal energy products help in increasing market of tesla cars, rebates in impart of
products and solid GDP growth of UK also aid Tesla in gaining advantage in selling
their product to open market without any hustle bur there are some negative impact of
this like high interest rates are leading in increase cost of firm production and
ultimately lead in increase price of firm product.
 SOCIAL FACTORS: Factors like culture, population composition, trends, social
thinking are include in social factor. The positive impact of this factor on tesla is that,
there is tend in society of UK to shift towards electric cars and this will benefit to
company ad it will lead in increased sale of company vehicle which also leads in
increase market share of company with rise in number of profit. there is also negative
impact of this factor on Tesco as electric vehicles are costlier and there is fixed mind
set of middle class that they can’t afford this as it is out of there budget.
 TECHNOLOGICAL FACTORS: These are those factors which are related to
change in technology and use of new and more innovative ideas in firm. In vehicle
manufacturing industry there is rapid change in technology and innovation. Tesco is
that firm which is famous for its innovation and rapid change in technology which
help firm in gaining advantage in market as it can attract customers more essay than
its competitor and can sell its product on its decided prices which will growth its
profit margin(Chen and et. al., 2018). There is also a negative impact of this as cost of
innovation is high which Tesla have to pay to and it will lead in increase price of
product as well as decrease in sale because of huge cost.
 ENVIRONMENTAL FACTORS: It include factors like weather. Geographic
location, climate of the area where origination is working .it can also be said as
surrounding of business which include nature. Environmental factors like pollution
have work positively for Tesla this is because. Cars is the main cause for pollution in
environment but Tesco manufacture electric cars which have zero transfer to
environment and help in saving nature this has provided opportunity to firm to sell
their product more and more . Tesla also deals in solar panels and environment

friendly battery this also which are in demand. This also facilitated firm in growing its
business.
 LEGAL FACTORS: These are those factors which show relationship between firm
and legal authorities like government, laws, etc. these all institutes have formed to
save the employees and society form any fraud and cheating in business transactions.
These factor also help firm in saving its interest. Tesco have innovative and unique
cars which every one wants to copy but legal remedies like patent right, etc. protect
interest of firm. Some time it will also impact as negative point for firm as it have to
face some challenges because of their law and legal requirements these problems are
rigidity in structure , restriction to implement new and innovative idea.
In business environment there are different number of opportunities which a firm can
use for gaining competitive advantage and more profits but company have to analyse these
opportunities. By making changes in origination working company can control the negative
impact of these factors and will gain competitive advantage in business environment.
Political impact have more positive impact than negative one on Tesla. But technological
changes should be identified by company after considering cost of their product.
Environmental factor are in full favour of Tesla as it is producing product which is
completely environment friendly. This is the major advantage to it. It have also help firm in
getting trust of investor in firm and rice in profits of firm. (Dodgso , 2018)
TASK 2
SWOT & VRIO
The ability to effect business decision is in hands of internal environment of
company which includes internal culture, members, management and whole staff. For
identifying strengths and weakness of origination it is important to evaluate internal
environment which is present in organtion.it will also facilitate in managing resources of
origination as well as their policies. There is no need of size or nature of firm for doing
internal analysis of firm. In context of tesla the SWOT analysis will be used which
stated that company have four aspect which are strengths, weakness, opportunities and
threats to origination. Evaluation of all this will help firm in getting access to the path of
success(Drnevich. and Croson., 2013). To achieve the goals and objectives of origination
a dedicated approach is mandatory which is in nub of this analytical farmworker or
tool. SWOT analysis of tesla is mentioned below:
Strengths Weaknesses

 Investment in innovating and
development will work as their strength
because it help firm in maintain
innovative product in market.
 Tesla have full government support
which also became there strength as
firm is dealing in product which help
environment to survive (Grover and
Kohli, 2013)
.
 Product availability is also act as
strength for Tesco this is because firm
have self-made distribution channel
which facilitate firm in smooth
working.
 The firm have weakness in their
production department that it is
capacity is to low that it is not available
to produce products in bulk.
 Products offered by Tesla is
environment friendly but firm is people
are confused between two concept that
they should invert or not in company
product because of down market.
 Price is also a problem for Tesla
because it is higher if compare to its
competitor which acted as firms
weakness because unable to target all
type of customers.
Opportunities Threats
 Tesla have a great opportunities for
more opting more improvise
technology which can help in attracting
more customer .
 Targeting middle class people is also
work as an opportunities to firm this is
because it is using the new technology
which can easily attract new customers
of middle class.
 Company have clear opportunity to
expand its operation in global context
as it have solid brand value as well as
good distribution channel.
 Competition can act as the major threat
to Tesla this is because its competitor
are using sane methods and ideas to
lunch there product in market.
 Fluctuating exchange rate is also a
threat to Tesla because firm have to
import products and raw material form
other nation where there is difference of
currency and it leads in loss to firm
(Hoejmose, Brammer, and Millington,
2013)
 To minimise the cost of procuring from
other countries they may procure in
bulk which is why they storage cost

may increase.
For gaining competitive advantage and analysing opportunities firm have to identify
its ability and get them out for effective utilization of resources. For doing this there is a
model called as VRIO framework (Karami, 2016). It is that set of activity which include three
stages. Analysis of capabilities facilitates the organisation to take the strategic competitive
advantage
The VRIO stands for value, rareness, imitability and the organisation. The framework
is used in context of tesla Tesla:
Resources Valuable Rareness Imitability organized Result
Product Yes Yes Yes Yes Competitive
advantage
Employees Yes Yes No No Need more
work
Direct sales Yes No No No Disadvantage
Innovation Yes yes Yes No Temporary
advantage
Valuables : these are those resources which have value in eyes of firm and are most
important to firm for its functioning thee are described as below:
Product: Product is a valuable resource for Tesla because that have unique product
with innovative idea and have capacity to satisfy customer needs in long run
Employee: Employees of origination also work as valuable resources for Tesla this is
because it has spender huge amount on their employees and they will help firm in getting
access to new market.
Direct sale: direct sale will also work as the valuable resource of Tesla this is because
firm have the business policy to sell their product directly without interruption.
Innovation: innovation act as a valuable resource to firm this is because it is the firm
which is based on innovation so all there resources are rare for firm.
Rareness: it means that this resources rare for origination and there is no one who can use it
other than firm. Direct sale is not a rare concept in business of Tesla as there is many firms
which are using this direct service east her mode. Other factors are rare for firm and can help
firm in gaining neutral advantages

Imitability: these are those resources which can be copied by competitors of firm. In context
of Tesla its employee can be imitate buy other easily this because they can also provide good
training to them (Verbeke, 2013).
Organized: it include that factor which help firm in gaining competitive advantage in long
run of business. For Tesla this resources is its product which it is using in well organised
method.
Internal analysis helps the administration to categorise the strengths and the
weaknesses of the establishment. For getting future benifit, organtion use it as the booster of
opportunities and helps firm in geting the benifits. The market is identfied for using the
benifits of different opportunities avalable for firms groth and expaention these will help firm
in getting acces to new market as well as coping its threats wich it is facing in business
enviromant. (Suarez, Calvo-Mora, and Roldán,, 2016)
TASK 3
Porters five force model
Porters five force model : Michael Porter developed this five-force model, that
allows the company define and evaluate different competitive factors affecting the
organization's operations. This model is essentially used toCultural Awarenessgether with a
corporate strategy to evaluate the industry influences. This model offers five forces which
make it easier for organization to assess a sector's profitable strengths, competitiveness
(Marx, 2015). Such five forces are applied to Tesla, specified beneath :
 Competition in the industry : Such aspects allow a company to recognise its rivals
that may impact its functions. Its effect of car manufacturers on Tesla is evaluated on
either the grounds of such a force. Rivalry levels are high among businesses that offer
low-priced vehicles, but Tesla provides innovative electric vehicles and because of
that they have significant power. Tesla frequently adapts vigorous creativity and
marketing that allows themselves achieve growth opportunities. However they pose a
solid challenge from competitiveness as different car manufacturers also started
working throughout this market (Sirén, and Kohtamäki, 2016)
 Threats of the Substitutes Products : If there are more alternatives accessible, the
danger is high, but when there are fewer replacements, the threat is less. Increasing
increasing demand, the challenge of substituents is rising year by year towards Tesla.

Often, low transaction costs raise alternatives that affect their activities, such as public
transport, etc. For reduce the impact of substituents, the need to increase the quality of
the cars offered by Tesla (Köseoglu and et. al., 2013).
 Powers of the suppliers : This power distinguishes the capacity of the providers to
impact the business. Tesla is needy upon their providers for the batteries and for the
dissemination. As they have been working in various area so they effectively change
to different providers however visit change in provider can influence the activities and
in this way the quality. This suggests providers have moderate forces to deal.
 Powers of the customers : This power assists with distinguishing the capacity of the
clients to impact the business. Tesla gives electric vehicle which are effective then
whatever other contender which constrains the haggling intensity of the clients.
Likewise vehicle is such an item isn't every now and again bought by the clients and
this suggests they have lesser effect of the purchasers (Reich, and Benbasat, 2013).
 Potential new entrants : Whenever a new competitor comes on the market it impacts
established companies' businesses. Foreign entrant's challenge for Tesla is weak
because of numerous barriers to entering the market. The new companies are also
limited by the size of the rivals and massive investment in infrastructure and growth.
Tesla need to concentrate more on the established players that offer them rivalry than
on new competitors. The threat to enter this industry is low, as the investment level
needed is quite high (Karami, 2016).
Strategies enable every organization to plan through which they cannwhich tasks they
will perform to attain the objectives well in time. With either the aid of Porters study, it will
be found that perhaps the new competitors and buyers ' negotiation have such a lower impact
as they provide firm with powerful energy. The suppliers ' danger is mild because of
wholesellers ' competitive supply but they do have a heavy risk of rivalry and a replacement
for which they have to develop strategies (Hoejmose, Brammer and Millington, 2013).
Different tactics which they can adopt are presented underneath:
 It has been analysed that, Tesla may effectively take into considerdation of
advanced technology through and reduce the clients dependability programs which
will lessen the effect of intensity over quality product and services offered by the
company and so on (Oldman, and Tomkins, 2018).

 Through expansion, it can be said that Tesla may start gaining attention over
businesses and on nature of different items as well, which may help company in
structuring itself and may directly offer them the upper hand as well.
 On the other hand, it is said that aggresive advertising done by Tesla may lead
company to gain competitive advantages right on time and in much effective and
efficient manner as well.
TASK 4
Strategic analysis with Ansoff's Matrix
Strategic analysis is a mechanism that allows managers identify the approach and
direction that would aid them make resource management In such process, an organization's
representatives determine the company's vision for their future and determine the priorities
they must achieve. Different approaches are coupled through some help of tactical guidance
in order to maximize efficiency within the organisation. The vision and purpose of strategic
direction that determines their mission are included (Grover and Kohli, 2013).
To analyse various strategic options for Tesla Ansoff's matrix is used which is given
below :
Ansoff's Matrix : This matrix is used by the management to identify various
strategies that they can adopt to achieve the goals which is growth. Various strategies are :
Market Penetration : Tesla could use this technique effectively, wherein the
enterprise works with current products onto the established industry. To achieve the results
they will have to follow the proactive marketing which will allow them to build recognition
among the consumers. For instance: Tesla can follow this by enhancing its current marketing
approach (Noe,. and et. al., 2017).
Market development : This methodology can effectively utilized by Tesla as right
now moving to new market with their current items for which they have to embrace the
exploration which will assist them with understanding the market well. For instance: Tesla
can embrace this methodology with the assistance of broad research of the objective market.
Product development : This methodology can be utilized by Tesla as right now new
item in the current market for which likewise they need to embrace the examination for the
taste and inclination of the clients. It is unsafe as it incorporates an enormous speculation

(Drnevich and Croson, 2013). For instance: Tesla can receive it with the assistance of
research in the adjustments in taste and inclination of the organization.
Diversification : This procedure can be utilized by Tesla as it is a technique wherein
the association goes into new market with new item. It is reasonable for the association when
they are prepared to attempt the serious hazard additionally when they need to extend their
business in new region. For instance: Tesla can embrace this system with point by point look
into and higher speculation which will assist them with expanding their piece of the overall
industry.
Business growth is acceptable for Tesla, because they have experience in electric
vehicle production. Tesla will exploit its core competencies to extend its business. We had
room for growth, as each economy is environmentally based. It was also found that they have
the highest capacity to expand their operations among different new markets (Dodgson,
2018).
Strategic marketing Plan for Tesla is given below:
Vision: To offer customers with high quality and innovative cars through continuous
improvement among technology such as artificial intelligence and so on.
Mission: Mission of Tesla is to become the leader of automotive industry in the whole world.
Strategies: specific strategy which can be adopted by Tesla is market development where
existing products and services are required to be offered in in new markets and which Tesla is
not performing at the moment (Murthy, 2012).
Objectives: Primary objective of Tesla is to improvise market share by 20% within 3 years
which will help company in enhancing the revenue by 20%.
Tactics: With the help of marketing mix Tesla could effectively develop different range
of fuel efficient for economic cars considering different electric and other type of system
that can help their cars running and to become the best car manufacturer in the whole
world.
Product The products that Tesla offers are batteries, electric vehicles, solar panel. They
can enter into new market with same products.
Price Tesla's pricing strategy is premium pricing strategy, as its goods are creative

and of high value. They will follow the same approach in the new market too.
Place Tesla has their own stores and strong distribution channel with the help of
which they will enter into new market.
Promotion With the help of magazines and television, Tesla can promote its goods as the
target group regularly goes through them (Maté, Trujillo and Mylopoulos,
2012)
Implementation : The organization needs to adopt the strategy which they've already
developed successfully. This can be achieved by planning the expenditures to assist
themselves in allocating their capital and making good use of everything (Chen and et. al.,
2018). Tesla's advertising budget is planned that is pointed out below:
Evaluation: This is another crucial approach, which may help Tesla in grabbing a
good position within the market in a short span. Including this, it is also said that performance
of this company may regularly enhance and assist the organization with being on track
(Marx, 2015). Likewise the correlation between the real and the planned exhibition assists
with assessing the accomplishment of the execution.
Strategic goals seem to be the set of actions that push the organization to accomplish
the company's target systematically. It also requires an organization culture that is established
to regulate subordinates' behaviour and expectations (Buckley, Burton and Mirza, 2016). The
company needs to determine various internal and external variables that will help them reach
the organization's strategic goals. They established the possibilities as well as the risks with
both the aid of the PESTLE when identifying Tesla's abilities from either the VRIO system
(Köseoglu, and et. al., 2013).
Differentiation strategy
Differentiation strategy is one of marketing strategy which is used by business for effective
marketing of its product. This strategy helps business in making differentiation in their
product from other companies. It includes some basic points where differentiation is made
according to needs.

Innovation: Innovation in product which is the first point of differentiation strategy where
form use the product which have some innovation this make from product different from
other brands.
Product level differentiation: real Tesla identifies the product of other companies and their
policies for making different product from them.
Price differentiation: price differentiation is that policy where Tesla adopt pricing of their
product in comparison of other brands which help company in easy promotion of its product
in market.
Branding: Tesla use high rate of promotion mix which help company in increasing the brand
value of organisation which is also differentiation strategy of product.
Packaging: Tesla is dealing in automobile industry where no need of packaging is so this
factor is not related to the industry where Tesla serves.
Point of interaction: Tesla always focuses on increasing and maintaining the view of
company showroom where customers come, this help company in maintaining differentiation
and its advertisement and marketing of product.
CONCLUSION
It is specifically inferred from the above study that somehow the company needs to
create a comprehensive plan to develop the approach which will help them find different
tactics, targets, etc. It is necessary for a company to recognize the impact of the business
context which is conducted for the internally and externally atmosphere with the aid of
PESTLE & SWOT. VRIO system is implemented on the enterprise to recognize capabilities
and resources. It has also been believed that five force system is being used to recognize
sector.
REFERENCES
Books and Journals
Barberá, L. and et. al., 2012. Advanced model for maintenance management in a continuous
improvement cycle: integration into the business strategy. International Journal of
System Assurance Engineering and Management. 3(1). pp.47-63.

Buckley, P.J., Burton, F. and Mirza, H. eds., 2016. The strategy and organization of
international business. Springer.
Chen, C. J. and et. al., 2018. How business strategy in non-financial firms moderates the
curvilinear effects of corporate social responsibility and irresponsibility on corporate
financial performance. Journal of Business Research. 92. pp.154-167.
Dodgson, M., 2018. Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Drnevich, P. L. and Croson, D. C., 2013. Information technology and business-level strategy:
toward an integrated theoretical perspective. Mis Quarterly. pp.483-509.pp.1326-
1358.
Drnevich, P. L. and Croson, D. C., 2013. Information technology and business-level strategy:
toward an integrated theoretical perspective. Mis Quarterly. pp.483-509.
Grover, V. and Kohli, R., 2013. Revealing your hand: caveats in implementing digital
business strategy. Mis Quarterly, pp.655-662.
Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the
relationship between business strategy and socially responsible supply chain
management. International Journal of Operations & Production Management.
33(5). pp.589-621
Karami, A., 2016. Strategy formulation in entrepreneurial firms. Routledge.
Köseoglu, M. A. and et. al., 2013. Linkages among business strategy, uncertainty and
performance in the hospitality industry: Evidence from an emerging
economy. International Journal of Hospitality Management. 34. pp.81-91.
Marx, T.G., 2015. The impact of business strategy on leadership. Journal of Strategy and
Management. 8(2). pp.110-126.
Maté, A., Trujillo, J. and Mylopoulos, J., 2012, November. Conceptualizing and specifying
key performance indicators in business strategy models. In Proceedings of the 2012
conference of the center for advanced studies on collaborative research (pp. 102-
115). IBM Corp..
Murthy, V. P., 2012. Integrating corporate sustainability and strategy for business
performance. World Journal of Entrepreneurship, Management and Sustainable
Development. 8(1). pp.5-17.
Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive
advantage. New York, NY: McGraw-Hill Education.
Oldman, A. and Tomkins, C., 2018. Cost management and its interplay with business
strategy and context. Routledge.
Reich, B. H. and Benbasat, I., 2013. 10 Measuring the Information Systems–Business
Strategy Relationship. Strategic Information Management. p. 265.
Sirén, C. and Kohtamäki, M., 2016. Stretching strategic learning to the limit: The interaction
between strategic planning and learning. Journal of Business Research. 69(2).
pp.653-663.

Suarez, E., Calvo-Mora, A. and Roldán, J.L., 2016. The role of strategic planning in
excellence management systems. European Journal of Operational Research.
248(2). pp.532-542.
Verbeke, A., 2013. International business strategy. Cambridge University Press