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Business Strategy - Tesla Assignment Solved

   

Added on  2021-02-20

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BUSINESS STRATEGY

INTRODUCTIONThe term business strategy refers to consolidation of various actions performed anddecisions taken by business organisation to achieve organisational goals and to maintain existingcompetitive position in market (Scholes, 2015). It is basis of organisation because it is ablueprint which develop path in order to achieve predetermined goals. The report exhibitsanalysis of impact and influence of macro environment, assessment of organization’s internalenvironment and capabilities, evaluation and application of outcomes of an analysis usingPorter’s Five Forces model. Apart from this application of different models, theories andconcepts to assist with the understanding and interpretation of strategic directions available in thecontext of Tesla, an American energy and automotive company. Company is operating itsbusiness through Palo Alto, California. This company is leading company in electric car designand manufacturing and, in solar panel manufacturing.TASK 1P1 Application of framework to analysis impact and influence of macro environment:Macro environment: It refers to those factors which directly affects organisation'sdecisions and are beyond the control of organisation (Verbeke, 2013). These factors have directimpact on performance and growth of organisation. In this context, Tesla conducts PESTLEanalysis to recognise all such factors, as follows:Pestle analysis: It is a systematic framework that is applied by big organisations toanalyse and evaluate factors and elements that can have unfavourable impact on growth andperformance of organisation. Following is the analysis in the context of PESTLE, as follows:Political: This factor combines all rules, policies, guidelines and regulations imposed bygovernment. Change in country's government have a great influence on particular product, sectorand organisation. Tesla is mainly associated with automotive and solar manufacturing sectors soconsideration of political influence with respect to these sector is useful to reduce any adverseimpact. In UK governance make policies that only cars that produces smoke less than 23% getthe valid licences, thus it will have a major impact on Tesla strategy because the have to makedecision for improving their engine capacity that would produces less smoke. Advantage: In Tesla policies are formulated according to political forces which helps itto decrease interferences of political parties.1

Disadvantage: If managers in Tesla ignore political factors then it will become difficultfor it to reach all the organisational goals because it can result in interferences ofpolitical authorities in business operations.A favourable policy of government in respect of electronic vehicle can boost Tesla'sbusiness and market share in industry. Economic: Matters regarding foreign exchange, inflation, banking policies, deflation anddifferent interest rates etc. are several economic factors which can influence company's strategyand actions positively or negatively (Spender, 2014). In large scale organisation like Tesla it isimportant for organisations to consider all these factors to operate its various activities in marketeffectively.Due to sudden modification in interest rate made by local banking authority, theentire business strategy of Tesla will get impacted because they have to make a considerablechanges in the price of cars so that they can maintain favourable profit. Advantage: Tesla deals with futuristic technology like advanced electronic vehicle, solartechnologies etc. So company is not considerably affected by economic inflation andother factors which is an opportunity for company. Beside this company is availing someextra benefit for contribution in nation development through its dream projects.Disadvantage: Tesla requires huge capital investment for its projects but due to inflationand rescission in economy it is hard for company to attract investments. Also due toinflation purchasing power of consumers decreases which affects company's sales.Economical change like reduction in price of cost of battery, stability and decline in costof renewable energy etc. has affected business of Tesla positively. Social: Consumer's dynamic taste and preferences, social trends and cultural behaviouretc. are considered as social factors that can affect turnover and profit margin of companies likeTesla. To achieve sustainability in growth Tesla is required to consider and identify these factorsby Tesla while formulating and implementing strategies. Plan and actions performed as per suchpolices helps to reduce and eliminate adverse or negative effects.Likewise, in UK now customerare attached to save ecosystem thus they prefer using cycles or electrical bikes and cars. This willmake a greater affect to Tesla strategy as they would produces cars and other vehicles by makingsure that they can fulfil the needs of customer. Advantage: Tesla sale products to clients according to their taste and preferences whichhelps it to attract large number of customers.2

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