Analyzing the Influence of Macro Environment on Tesla's Business Strategies

This report analyzes the influence of macro environment on Tesla's business strategies using frameworks like PESTEL and SWOT. It also discusses the capabilities and internal environment of the company using appropriate frameworks.

BUSINESS
STRATEGY

Contents
INTRODUCTION.......................................................................................................................................3
TASK 1......................................................................................................................................................3
P1 Apply different frameworks to analyse the influence of macro environment on a company and
their business strategies..........................................................................................................................3
TASK 2..........................................................................................................................................................6
P2 Evaluate the capabilities and internal environment of a company by using appropriate frameworks
.................................................................................................................................................................6
TASK 3..........................................................................................................................................................7
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm............7
TASK 4..........................................................................................................................................................7
P4 Apply different models, theories and concepts to interpret strategic planning for a company.........7
Strategic management plan that includes strategic priorities and objective...........................................9
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11

INTRODUCTION
Business strategy refers to the set of tactics and tools which helps an organization in carrying
out all the activities in an effective manner. This also has defined a master plan which is implemented by
a firm in order to get higher position in the marketplace. This following file is based on Tesla which is an
American automotive and Energy Company based in Palo Alto, California has formed in 2003. This report
will cover about the influence of internal and external environment of the business with the help of
PESTEL and SWOT. Along with this porter’s five forces model also will discuss in this file as it will help the
business in understanding the competitive factors within the marketplace. Also, different models,
theories and concepts will discuss in this file in order to make effective strategic planning.
TASK 1
P1 Apply different frameworks to analyse the influence of macro environment on a
company and their business strategies
Vision: The main vision of Tesla is to become the most compelling car company in this
competitive market by driving the world’s transition to electric vehicles.
Mission: Mission of Tesla is to accelerate the world’s transition to sustainable energy so that the
advantage of market opportunities can be taken (Amran and et. al).
Objective: The main objective of Tesla is to enter in a high end of market where the
people are ready to pay premium prices for new developing cars. It will help the organization in
attaining the higher profitability and recognition in the marketplace.

Strategy is depicts as the functions or activities of an organization which are carrying out by the in order
to attain their business goals and objectives in an effective manner. By making effective
strategies for their business, management of Tesla can operate all their activities in a significant
manner which is enables them to get the higher competitive advantage over their competitors.
This will help them in performing their functions in an appropriate manner which will allow the
organization in achieving higher sales and profitability as well. As it will tell that how they needs
to operate all their activities so that the success and growth of their business can be assured at the
both national and international market (Ghezzi, 2013).
Different strategic planning techniques
 Benchmarking: This is an effective tool which helps the organization in comparing
effectiveness of their strategies and methods as compare to their competitors. With the
help of this framework Tesla can ascertain their market position as it allows them to
compare their performance with market leaders. So that they can formulate best or
appropriate strategies for their business in terms to earn higher profit.
 Business analysis: By evaluating business and its activities in an effective manner Tesla
can identify their strengths and weaknesses that help them in making right decisions for
their business which results attainable of desired outcomes.
Various analytical frameworks to acknowledge macro environment
Stakeholder analysis
In order to operate all the business activities effectively consideration of stakeholder
analysis is essential as it helps the organization in recognizing those people who can impact on
the organization or can impacted by organizational activities. It provides huge benefit to the
Tesla in grouping stakeholders as per their interest, impact in project and level of participation.
In this aspect, three steps can be utilized by Tesla in terms to conduct stakeholder analysis:
Step 1: The ascertainment of different stakeholders is necessary by formulating a list of
possible individuals which can turn into potential customers for the organization. Same with
Tesla, it will help them in determining stakeholders that are investors, employees, supplier,
business suppliers, customers etc.
Step 2: After citing all curial stakeholders, manager of the organization will require to prioritize
all the stakeholders as per their several categories like level of participations, interest, influence and
many others (Hoejmose, Brammer and Millington, 2013).
 High power, high interest: All these stakeholders have more significance for Tesla as by
prioritizing them organization can carry out all business functions in a smooth way.
 High power, low interest: Stakeholders which are included in this category have huge
impact on the working of the organization but these have not much interest in activities of
project of Tesla.
 Low power, high interest: Stakeholder which are coming in this needs to be stay more
informed so that conflicts or issues cannot take place in the business.
 Low power, low interest: In this, stakeholders have not higher interest in business
activities and also have sufficient power in terms to affect the working nature.
Step 3: Herein, manager of Tesla will establish effective communication with their
stakeholders as per their priority which enables them to get the higher support of stakeholders in
accomplishing project without any issue.

PESTLE analysis
It is an appropriate tool which is beneficial for the Tesla as it helps them in ascertaining
the impact of external environment. Details explanation of this tool is as follow:
 Political factors: These types of factors related to the government rules and regulations
like tax rate, policy, stability of central government etc. As in the UK, rules and
regulations does not change rapidly which open up the success path for the Tesla.
 Economic factors: These are related to the growth rate, interest rate, GDP, inflation rate
etc. As in UK Growth rate is higher which make it profitable for Tesla to operate their
activities in marketplace.
 Social factors: It defines about the different attitude, opinions, perception and belief of
the people. In the UK people wants to take more advantage of innovation in cars which
makes it profitable for Tesla.
 Technological factors: UK is a technological advanced country due to which people
wants to use digital media and internet at higher level. Tesla is required to update its
technology, distribution process and machine so that they can sustain their business
position for a longer time.
 Legal factors: This define about the legal rules and norms of the UK government for the
welfare of employees and customers which needs to be followed by Tesla in order to
make higher brand image among the employees as well as customers.
Environmental factors: This refers to those factors which are required to consider by Tesla in
terms to maintain protect ecology and environment (Köseoglu and et. al., 2013).
Ansoff's matrix
Ansoff's growth matrix depicts as an impressive tool for planning which is utilized by an
organization to make effective strategies for attaining growth. In respect with Tesla, this tool is
defining below:
 Product development: In this strategy, an organization launches a new product in the
marketplace so that they can enhance the interest and attention of their existing and
potential consumers towards their products so that they can get higher sales and revenue
as well.
 Market development: Herein, company is offering their existing products among their
new customers so that the marker share of the organization can increase.
 Market penetration: In this strategy, company is focusing on enhancing its market share
with the help of existing products in existing market. Herein, company will come up with
effective pricing strategy or some extra services.
 Diversification: This is seen as more risky strategy as in this organization focus on
bringing new products in new markets. In case, if organization will able to satisfy the
customers then it will able to attain higher success in other case it will vice versa.
As per the above discussion, it can be recommended to Tesla that they must focus on
adopting market penetration strategy as it allows them to get success with their existing products
with some effective changes or modifications.
SWOT framework
This is very effective tools which helps the organization in ascertaining their strengths
and weaknesses. Also, it will help them in determining their business threats and opportunities as
well so that they can operate all the business activities accordingly.

Strengths Weaknesses
 They have strong brand recognition in the
marketplace which enables them to earn
higher profitability and attain higher
growth.
 Tesla has limited market presence like it is
mostly operating their activities in United
states.
Opportunities Threats
 It is huge opportunity for Tesla to expand
their business at global level so that
higher market share and profitability can
be attained.
 In the market cut throat competition has
taken great place. Various competitors of
Tesla are available in market like BMW,
Nissan Leaf etc.
TASK 2
P2 Evaluate the capabilities and internal environment of a company by using appropriate
frameworks
Strategic capabilities and their key components
Strategic capabilities considered as a procedure in which several strategies are formed up
and implement them so that merits against competitors can be achieved. It has six main elements
like strategic purpose, key goals, action planning, and tools for analysis, value and vision. All
these components help the business in utilizing their implemented strategies in an effective
manner.
Resource based view strategy
Resource based view is referred as an effective tool which is using by a firm to ascertain appropriate
resources which can use by the company to get higher competitive advantage. In this aspect, there are
two types of resources physical like buildings, lands, capital, equipments, land and many more. Other,
intangible resources which have not any kind of physical presence like patent, trademarks, copyright etc
(Maté, Trujillo and Mylopoulos, 2012).
McKinsey's 7S model
McKinsey's framework is a tool which helps in examining organizational design of a firm
by determining seven key internal components. The components which are included in this must
align in an effective manner so that desired outcomes can be attained. These are as follow:
 Strategy: This is refers to the formulation of plan which has made by organization to
carry out all the activities in an appropriate way. In case if Tesla will make robust
strategy them company will be able to gain higher customers base and revenue.
 Structure: It defines the manner in which various departments within the organization
communicate with each other. In order to make proper motivation and encouragement
among employees an appropriate structure is required by Tesla in their workplace.
 Systems: This is the process of company that aims to depict the daily basis activities and
decision making of a company. This refers to the daily basis operations of the company
due to which it have huge significance in adopting organizational changes effectively.

 Skills: It defines the skills and talent of employees which requires having in order to
perform the job roles in a significant way.
 Style: It pertained to those styles which have adopted by the management in terms to
make appropriate relationship with employees. In Tesla, Participative leadership style has
adopted where they give their emphasis on including the employees in decision making
process.
 Staff: It contains the number of employees who are working in Tesla. It defines the
techniques which are using by them in hiring, training and motivating their employees.
Shared values: This is the last element of this model which includes all the norms and standards that
guides activities of the business like Tesla and behavior of employees in an appropriate manner (Scholes,
2015) .
TASK 3
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a
firm
Porter’s five forces is an effective framework which helps the organization in taking
proper decisions by considering future outcomes not only by considering present situations. This
contains five forces which are defining in the aspect of Tesla:
 Threat of new entrants: Threats of new entrants are higher as Tesla is a highly
recognized organization as because it is operating their business across the world. As
Tesla have invested huge funds in their business which makes it impossible for others to
invest funds as much they have invested. Due to this, new entrants are not able to
compete with Tesla in terms of their higher market share, customer base and introducing
standardized products among the consumers.
 Bargaining power of suppliers: In the present market, various firms are situated which
are dealing in automotive industry. Due to this, the bargaining power of supplier remains
high. In the case if other organizations will reimburse higher amount to supplier then it
will create issue for Tesla in the required material and resource due to which their success
and growth will be affected badly.
 Bargaining power of buyers: The bargaining power of buyers is higher in the
marketplace for Tesla as they have to face competition from other rivals. In case if
company will keep higher price for their products without considering the satisfaction
factor then it might happen that customer change their perception towards their products.
 Threat of substitutes: It is less chance to availability of substitutes for Tesla as because
they are operating in automotive industry. However, in case if the offered products are
not in good conditions then the customers will feel uncertainty in purchasing the products
of the company.
 Rivalry among existing competitors There are various automotive firms in UK and
across the world like Nissan, Hyundai etc. which increase the competition in the
marketplace. Due to this other competitive firms charging competitive prices so that they
can sustain their business position in the marketplace for a longer period of time.
TASK 4
P4 Apply different models, theories and concepts to interpret strategic planning for a
company
Porter's generic strategies

This defines all those strategies which describes that how a company can attain higher
competitive advantage within their marketplace. In this aspect, the three types of strategies are
included in this which can be used by Tesla. These are as follow:
 Cost leadership: By using this strategy pricing sensitive customers can easily target by
organization. Herein, Tesla can introduce their products in the marketplace at lower price.
Along with this, they can also give discounts and offers to their customers so that a range
of customers can be attracted towards their products and services which will incur the
results as higher sales and profitability.
 Differentiation: In this, organization gives their emphasis on launching new and
innovative products in the marketplace in order to make their products different from
their competitors. Here, management of Tesla will give their focus on introducing new
products in market so that they can enhance their market share.
Focus: In involves two factors such as differentiation factors and cost focus. In aspect of Differentiation,
Tesla needs to come up with new innovative cars so that they can differentiate themselves from other
rivals. Other, cost focus, they need to offer their products at lower price so that customers can take
interest in buying all the products (Moseley III, 2017).
Bowman's strategic clock
Bowman strategic clock is a model which helps a business organization in exploring
suitable strategic positioning i.e. the way by which Tesla can position their products so that high
advantage over competitor companies can be attained in an appropriate manner. Some of the
aspects which are related this are describing beneath:
 Low price and low value added: Herein, organization of Tesla have less competitive
position as in this they are considered as not differentiated, as per the customers
preferences even after their lower prices.
 Low price: Herein, Tesla will make their position by offering the products at lower price
by using cost minimization techniques. In the case, profit of each unit will low but
because of the higher sale volume overall profitability will increase.
 Hybrid: This includes two techniques like lower price and products differentiation which
help the organization of Tesla in making a higher position in market.
 Differentiation: In this, Tesla needs to offer their products by making some
differentiation so that they their own identity can be made within the marketplace.
 Focused differentiation: This is most suitable in case of luxurious products as in this
customers are ready to pay higher prices for the products.
 Risky high margins: In this strategy, an organization has to face higher risk due to
which business also have to face failure. In this stage, Tesla will choose higher price
without focusing on offering anything extra in perceived value.
 Monopoly pricing: It refers to the condition when only one organization is exist in
market due to which the price factor is neglecting here as customers have to purchase the
products at any price.
 Loss of market shares: Herein, company have to decide standard price for the middle
range of products due to which firm is able to earn less market share.
In context of Tesla, after evaluating these two models of strategic direction, it has
recommended to Tesla organization needs to use differentiation strategy as it helps them in
introducing new and unique products among the customers which will results higher profitability
and market share as well.

Strategic management plan that includes strategic priorities and objective
Strategic planning refers to the activities which are making by an organization to determine the
set of preferences, priorities, resource, operations and many more in terms to ensure that people within
the organization are working towards a common goal (Oldman and Tomkins, 2018).
In context of Tesla, strategic plan for them is given below:
Vision: To become the most popular car company by introducing innovative electric vehicles
globally.
Mission: Main mission of this company is to intensify the word by sustainable vehicles.
Strategies: Strategy which can be adopted by Tesla is market development as they are able to
use their sufficient capabilities in utilizing their core competencies. It will make easy for them to
target their customers and get the support of government as they are concerning for making their
environment fresh and healthy.
Objectives: The main objective of this company is to enhance their customers’ base by 15% by
entering into new markets so that revenue can be increased by 12% in 15 months.
Tactics: These refer to the short term efforts of an organization which are making by them to
achieve objectives. Tactics which are using by Tesla is selling directly without taking the help of
dealerships. Other they are using charging stations and establishing their own service. In addition
to this they in order to make market development strategy they are using marketing mix also.
Product Products which are offered by Tesla are auto-mobiles, batteries, solar panels,
electric vehicles through which they are entering into a new market. They are
mainly known for its electric vehicles which enables them to develop their
marketing with their already exist products.
Price Due to their huge brand value and higher quality products they are charging
premium price for their products. Along with this, they are using market oriented
strategy for their some products like solar panel.
Place Company has their own outlets and stores from where customers can take
advantage of their products.
Promotion Management at Tesla is considering various promotional methods like digital
marketing, social marketing, viral marketing etc. but in terms to enhance the market
share they requires to give their focus on using television and magazines according
to the social class and income so that can easily target those customer which they
wants to target.
Implementation : This is essential for the organization to implement all the decided their plans
which they have made for which they required to effectively allocate their resources. In regard of
Tesla, they can use marketing budget. While, in order to make control on performance they can
adopt various measures such as internal audit which will assist them in comparing their actual
and desired performance. Along with this, Key performance measure can use by them to measure
and enhance their performance level.
Evaluation : It is related to collect the information or data about that how all the activites are
going and what are the conflicts are affecting the performance. While creating the market Tesla

will evaluate and compare its actual performance of marketing team so that they can determine
the success of their marketing plan.
CONCLUSION
From the above file, it can be understood that without considering effective business
strategies succession of the business organization cannot be assured. The consideration of
PETEL, stakeholder analysis, ansoff’s matrix, SWOT helps the business in carrying out all the
activities in a significant way. By using porter’s five forces organization is able to ascertain its
competitive market. Along with this, by using different theories, frameworks and models like
Bowman strategy, porter's generic strategy company can implement all the right strategies and
make effective decision for their business.

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