Influence of External Factors on Tesla's Business Strategies

Business strategy

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1. Influence of external factors ................................................................................................1
M1. Critically Analysing external environment and its impact .................................................3
LO2..................................................................................................................................................3
P2. Impact of Internal Environment ...........................................................................................3
M2. Critical Evaluation of Internal Environment ......................................................................6
LO3..................................................................................................................................................6
P3. Evaluation of competitive forces..........................................................................................6
M3. Designation of proper strategies for improving market position and competitive edge.....8
LO4..................................................................................................................................................8
P4, M4. Strategic management planning....................................................................................8
D1. Critical Interpretation ........................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
A business strategy is a competitive actions and moves set which is utilised by an
organisation for various purposes such as in attracting consumers, strengthening their overall
performance and in attaining overall objectives of an enterprise. These strategies serves the
business to identify the way in which a business has to be carried out in order to meet its overall
objectives and goals (Anderson, 2019). This report is based upon Tesla, which is an American
based automotive multinational organisation located in California. This enterprise has expertise
itself in the manufacturing of electric cars by using innovative business strategy.
This report covers the influence of macro environment upon Tesla and its business
strategies. It also covers critical analysation of external forces for determining strategic
management decisions. Further, it includes analysation of internal capabilities, skills set and
structure of this business enterprise by using SWOT analysation and VRIO model. It also covers
evaluation of competitive forces that can affect this enterprise with the help of Porter's five
forces model. In addition to this, it also includes a strategic management plan for this
organisation which covers its strategic goals and objectives.
LO1
P1. Influence of external factors
External forces are the factors that exists outside a business organisation and has large
impact upon its overall operations and strategies. These factors includes political, social,
environmental, technological, economical and legal forces which affects the overall productivity
of an enterprise. These factors can be properly identified and determined by using PESTLE
analysation.
PESTLE Analysation- It is an approach or a framework that can be applied by an organisation
to identify the influence of external forces and factors upon the operations and activities of a
business. These factors are legal, political, environmental, economical, technical, and social
factors that has large affect upon overall functioning of a business enterprise (Tesla, Inc.
PESTEL/PESTLE Analysis & Recommendations, 2019). All these forces affects Tesla and its
strategies which can be determined as follows-
Political- The political condition of UK and many other countries in which Tesla
operates its business activities is stable which facilitates its overall business activities. Tesla can
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grab an opportunity for strengthen its overall financial position by taking incentives from the
government. It relates itself directly towards minimised carbon emissions of products and
operations of an organisation. These factors also helps in determining that expansion of free
trade agreements can open up certain opportunities for Tesla and political stability of countries
where it operates is favourable for this organisation towards its growth and generic competitive
strategy that includes market penetration strategy (Anwar, 2019).
Economical- As per Tesla, the economical factors includes trade levels, currencies,
market growth and other such factors which has influence over automotive business. The
business performance of Tesla has been benefited from the low price of batteries. Also, it helps
in translating towards affordability of electric auto mobile products of Tesla. At the same time,
the issue of economic stability had threatened the financial performance of Tesla particularly in
Asia and Europe. This has negatively affected the market development strategy of Tesla as many
countries has instability in its economies.
Social- Tesla has certain opportunities to grow in multinational auto mobile business. For
instance, this enterprise has growth opportunities due to increased popularity of low-carbon
lifestyles and increased renewable energy preference. This organisation has a chance for
boosting up its financial performance which is dependent upon increased distribution of wealth
in many developing markets. This distribution of wealth has increased the overall number of
customers of expensive cars of this company. This factor can help Tesla to grow its business at
international level as it has certain social cultural opportunities in other countries. This has
positive affect upon its market development strategy.
Technological- Due to increase in technology and innovation, it has developed certain
opportunities for Tesla. For instance, this enterprise has growth opportunities for further
automation of its business process by using latest innovative techniques and innovation. Due to
popularity in online mobile system has lead the company for increasing its systems in company's
auto mobiles (Blank, 2019). For instance, its zero emission electric power generation from giga
factory has been successful due to enhanced technology and innovation. It has positively affected
the product development strategy of Tesla by which it produces products which are made out of
innovative technologies.
Environmental- These factors are important forces that has an impact upon industrial
environment of Tesla. For instance, this organisation has an opportunity for promoting its
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