Business Strategy - Tesla Assignment

Business Strategy

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact and influence of the macro environment on given organisation...........................1
TASK 2............................................................................................................................................3
P2 SWOT analysis of an organisation ...............................................................................3
TASK 3............................................................................................................................................5
P3 Porter's five forces model to evaluate auto-mobile industry.............................................5
TASK 4............................................................................................................................................6
P4 Strategic management plan for the organisation by implementing different concepts and
theories...................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is the combination of different actions and decision that are performed
by an organisation to attain their goals. It work as backbone for the business by formulating
effective methods that lead them towards accomplishing their desired goals. The main functions
of business strategy is to develop effective plan to increase their strength that helps them to
complete their work with efficiency and effectiveness. The organisation chosen for this
assignment is Tesla which operate their business in auto-mobile industry. They manufacture
electric cars and solar panel to reduce the negative impact on the organisation. In the present
report SWOT and PESTLE are covered for analysing the macro environment. Moreover Poster
five force model will be discussed in the report to analysis the market conditions. As business
strategy is beneficial for them because it helps to retain at top position in competitive industry.
TASK 1
P1 Impact and influence of the macro environment on given organisation
Tesla is the largest manufacture of electric auto-mobiles they predict the opportunity and
convert them into potential market that helps them to increases their revenue. In order to analysis
the market environment PESTLE is executed in this task. It the best tool or framework that helps
an organisation to formulate effective strategy to achieve their goals.
Political factor- The term political factors includes all the rules, policy, legislation etc.
that are developed by the ruling government of the country. Tesla was recently started in the year
2003 therefore it is essential for them to operate their business in those countries in which they
are political conditions of UK are stable (Bouzas Ramos, 2014). Therefore it results that there is
there are no or less changes in the policies of industry so it is easy for organisation to operate
their business smoothly in difficult market conditions also.
Economical factors- UK is developed country which determines that the per capita
income of individuals is high due to which it is easy and beneficial for organisation like Tesla to
expand their business their. It includes all the factors such as interest rate, foreign exchange and
tax rate and other factors that control or effect on the financial position of country. Tesla
manufactures their auto-mobiles which does not affect on the environment like their cars are
operate through electricity. Thus they focus on developing countries due to which their operating
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cost will be low which results in for the increase of profits. For this Tesla execute premium price
strategy to sell their goods in the market.
Social factor- The term society factor includes the individuals of society, behaviour,
value and culture that is followed by particular country. Along with this it also includes
education level and the purchasing power of the consumer(Aithal, 2017). In context of Tesla it is
beneficial for them because it helps them to identify needs and wants of the customers. Moreover
Tesla brings an innovative product in the society that lead them for the safe environment. For
this growth strategy is adopted by organisation that helps them to cover wide area of market.
Technological factor- In present market condition technology impacts on all the business
operations that are performed by organisation. It governs that from production aspect to the
marketing aspect all the factors are affected by technology like they help to complete their goals
with in minimum time period. It creates an opportunity for Tesla because this factor helps them
to increase the sale of their product as their product are already technology friendly. Therefore
corporate level strategy is used by organisation that help to attain their goals through improving
the skill for organisation.
Environmental factors- In the recent years government, NGO, stakeholders of
organisation are aware about the environmental conditions of a country. This includes several
factors such as climate, recycling procedure, waste management etc. that create affect on the
surroundings of environment. This conditions creates positive result for the organisation
therefore they implement turnaround strategy due to which it is easy for them to adopt necessary
changes according to the market conditions of environment(Berchicci, Dowell and King, 2012).
This also helps Tesla to promote their products because their car does not negatively impacts on
the environment of organisation.
Legal factors- Each and every country formulate laws and legislation in order to protect
their country. The main purpose of this is to this is to protect the interest of local industries that
are operating their business in local region. In context of Tesla it is essential for them to
understand all necessary laws of the country because it helps them to complete their task
ethically in a particular country. In these situation they implement functional level strategy so
each department of the organisation is aware about rules and regulations that need to be followed
by them.
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TASK 2
P2 SWOT analysis of an organisation
This table contains the SWOT analysis of an organisation in order to measure their
strength, weakness, opportunities and threats which is given below:
Strength
 Tesla introduced their product in the
market which is totally unique and
innovative. For manufacturing electric
cars this adopted update technology
that lead them at top position in market.
 Another benefit for Tesla is that their
management and marketing team is
very effective. It helps them to develop
creative advertisement for the
organisation in order to attract more
number of customers.
 The future of auto-mobile industry is
mostly relates with artificial
intelligence and automation. For this
Tesla introduce automated process to
manufacture their product.
Weakness
 It is difficult for organisation to
develop to establish charge source for
their countries due to which they face
regular difficulties to sale their product.
 Company established themselves in the
recent years. Therefore they are limited
model are present in the organisation
that create barrier for organisation to
purchase their product.
 Management of Tesla is only focused
for the development of electric cars.
But usually purchaser or buyer are not
interested in this types of cars.
Therefore it is difficult for Tesla to
influences the consumer.
Opportunities
 Most of the consumer are aware about
their surroundings and conditions of
environment which determines it create
opportunity for Tesla. Therefore they
implement effective CSR activities that
helps them to promote their products in
environment easily. In regards for the safety of environment
Threats
 In the UK auto-mobile industry there is
huge competition exists in market.
Therefore it creates competition for
Tesla due to which it is difficult for
organisation to complete their goals in
order to sale their products.
 Tesla does not have effective supply
chain management due to which they
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stakeholders of organisation,
government and different NGO all are
aware about the safety of environment.
So Tesla has opportunity to sale their
product in overall world.
face different problems to approach
potential buyers to enhance the sale of
their products.
Implement of VRIO model in context of Tesla
Value- In VRIO model the word V stand for values that is provided by an organisation in
its products. It helps an organisation to develop major strength in order to complete their goals
with more efficiency and effectiveness(Teece, Peteraf and Leih, 2016). For the management of
Tesla it is essential to adopt those factors through which it is easy for them to complete their
goals with in minimum time period by determining the effective value in their products. It results
that they implement corporate strategy to provide essential information about their electric cars
to the customers.
Rare- In order to gain top position in the industry it is essential for organisation to
develop innovative and unique product that is not exists already in the market. Like Tesla
provides their cars with electric feature which is not available in other competitive cars which
determines that innovation plays an crucial role in the organisation that help to attract more
number of customers. Apart from this Tesla introduced an effective supply channel with
developing positive relationship with its stakeholders.
Imitability- The term imitability it is the combination of different factors through which
an organisation achieve their effective goals. The main intention of this factor is that
management of Tesla introduce those aspect through which they manufacture those product
which is difficulty for organisation to copy (Chen, Eshleman and Soileau, 2016). Example- Tesla
introduced large number of products through which it is easy for them to complete their goals by
executing the updated technology in their production system. As they are the first mover so they
already has competitive advantage that help to gain positive results.
Organisation- The term organisation relates with different factors through which they
develop their goals that match with the needs of society. In VRIO organisation is the
combination of all factors Tesla analysis all above factors in order to find out their value,
imitablity and rarity of their products for enhance the productivity of their activities or
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operations. Moreover it helps Tesla to utilize all the resources that improves the value in their
products. Employees who are working with Tesla also raises their skills through following VRIO
model effectively.
TASK 3
P3 Porter's five forces model to evaluate auto-mobile industry
To understand the current position in the market Porter five force model is implemented
by an organisation. There are five different approach exist in this model through which an
organisation covers all aspects which includes change in technology, availability of raw
materials, impact of buyer and supplier etc. This helps an organisation to adopt essential changes
so they achieve top position in the market.
Bargaining power of buyers-. Within circumstances of automobile industry this approach is
moderately strong because there are low number of buyers exist in the market. Along with this
consumer invested huge amount in order to use a vehicle for longer time period (Cheong, Song
and Hu, 2016). Therefore they are in more power that due to which it is easy for them to bargain
for product before purchasing them. Organisation such as Tesla focuses on increasing their brand
value. This results that they generate loyal customer for their products.
Bargaining power of supplier- Small number of manufactures are present in industry that
develops the product for satisfying the need of consumer. Among this some of the organisation
are dominant player of auto-mobile industry which govern that they cover large area of market.
Therefore this approach is low in industry as organisation is in power to change their supplier. So
they need to follow the instruction of organisation in order to sell their products (Kessler and
Buck, 2017).
Threat of new entrants- Auto-mobile industry is very expensive which determines it is
difficult for an organisation to enter in the market. In context of new entrants this approach is
high because large amount of funds are required by the company to operate their business. The
other issue with that it is an oligopoly market due to which there is tough competition is raised
among existing players of the organisation. Like Tesla introduces new product due to which it is
easy for them to stand unique from other competitors.
Threat of substitute products- Substitute products are those which replace the need of
current product like instead of purchasing a vehicle. Consumer find develop different alternatives
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as their mode of transaction such as Bus, trains, taxis etc. It determines that this approach is
medium in industry as consumer are in position to use different need. Like for long term distance
consumer prefers public transport system to move from one place to another.
Competitive rivalry- Due to small number of players the auto-mobile industry refers to an
oligopoly market which determines this approach is high. Due to this different firms are
competing with each other with aggressiveness in order to gain the top position in the market.
Therefore it is difficult for new business to enter in the market(Mangram, 2012). For these the
major option is that an organisation need to enter in market with launch of new product like
Tesla generates new concept among consumers by providing them electric cars which determines
that innovation is essential for organisation to enter in the industry.
TASK 4
P4 Strategic management plan for the organisation by implementing different concepts and
theories
This is essential for an Tesla to update their products on regular basis. This helps them to
bring innovation in their current products. In this task Ansoff matrix is implemented in the
organisation for formulating effective strategy that help to launch new product easily in the
market.
Market penetration- Market penetration is implement by Tesla to sell their existing
products in the existing market. This helps them to approach new potential customers that are
present in the society.
Product development- Under this factor management of Tesla introduced new product in
the market for sustaining longer period in the industry or market. In this approach Tesla
implement this with low because it includes large amount of cost.
Market development- This strategy is just the vice versa of product development. Tesla is
recently launch in their product in the market. So this strategy helps them to cover wide area of
market for their products (Iacob, Quartel and Jonkers, 2012). In order to effective implement
them Tesla determines all aspect for the organisation.
Diversification- This stage is beneficial for all types of organisation as the main purpose
of this strategy is to introduce new product in the new market. This approach is risky for Tesla
but it also help them to earn more amount of revenue.
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Strategic management plan
Executive summary
Tesla is the first organisation that manufactures the electric cars for the organisation. This
uniqueness helps them to stand differently from the other auto-mobile companies. Their major
element of their cars that they run with electricity (Ghezzi, 2013). To cover wide area of market
Tesla decided to launch new product which is a sports car that leads them to give tough
competition in the market.
Mission
The mission of Tesla is to develop new technology that generates dynamic changes in the
automotive industry. In order to this Tesla introduce new sport car to capture more area of
market.
Vision
To accomplishing their vision Tesla delegates their goals into smaller task to achieve
their mission effectively. It includes all activities from planning to the sale of their products.
Smart objective
 The objective of Tesla is to increase the sale of their product as they manufacture electric
cars. Specifically for this they introduced the sport cars in order to increase their market
area.
 Another objective of this is to cover markets of all developed countries. By this they
want to increase their revenue by 30%.
 Management of Tesla developed effective strategy for their new product due to which
they effectively launch their products in market. In last factor it is essential for organisation to achieve their goals within minimum time
period so this creates benefits for them.
STP
Segmentation- With the manufacturing of Tesla sport car management is able to target
all customers that are present in industry. Particular for this they introduces geographic area for
their product.
Targeting- In context of sport the target customer of Tesla is youth as they are more
attracted towards speed and new feature. It also helps them to increase their profits.
Positioning- Tesla decide to launch their product in the central market this helps them to
approach new customers easily. Along with this they developed effective advertisement
to create positive perception in mind of customers (Woodard and et. al., 2013).
.
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Budget
The total decided budget for launch of new sport car is 3,00,000.
Particulars Amount
Resources 60000
Advertisement 100000
Machines 50000
Human workforce 90000
Total 300000
Monitoring and control
This is the last factor for the organisation that plays vital role in the organisation it
includes all factors from the manufacturing of products to the sale of them. For this they
developed specific budget for completing their activities within pre-decided budget. In context of
Tesla their manager are responsible to monitor and cut down unnecessary cost that increases
their profits.
CONCLUSION
From the above report it is concluded that strategy plays an essential role in the
organisation in order to gain competitive edge in the market. In present market conditions
strategy works as an effective method that enhances the productivity of an organisation. Along
with this different factors are present in environment that impacts on operation of the business.
For this PESTLE is considered by the organisation that helps to understand the whole
environment of country before launching their product in the market. Along with SOWT it
discussed that defines the strength and weakness of organisation. At last Porter is implemented in
order to measure or evaluate the industry.
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REFERENCES
Books and Journals
Woodard and et. al., 2013. Design capital and design moves: The logic of digital business
strategy. Mis Quarterly, pp.537-564.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management
Decision. 51(7). pp.1326-1358.
Iacob, M.E., Quartel, D. and Jonkers, H., 2012, September. Capturing business strategy and
value in enterprise architecture to support portfolio valuation. In 2012 IEEE 16th
International Enterprise Distributed Object Computing Conference (pp. 11-20). IEEE.
Mangram, M.E., 2012. The globalization of Tesla Motors: a strategic marketing plan
analysis. Journal of Strategic Marketing. 20(4). pp.289-312.
Kessler, T. and Buck, C., 2017. How digitization affects mobility and the business models of
automotive OEMs. In Phantom Ex Machina (pp. 107-118). Springer, Cham.
Cheong, T., Song, S.H. and Hu, C., 2016. Strategic alliance with competitors in the electric
vehicle market: tesla motor’s case. Mathematical Problems in Engineering, 2016.'
Chen, Y., Eshleman, J.D. and Soileau, J.S., 2016. Business strategy and auditor
reporting. Auditing: A Journal of Practice & Theory. 36(2). pp.63-86.
Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk,
uncertainty, and strategy in the innovation economy. California Management
Review, 58(4), pp.13-35.
Berchicci, L., Dowell, G. and King, A.A., 2012. Environmental capabilities and corporate
strategy: Exploring acquisitions among US manufacturing firms. Strategic Management
Journal. 33(9). pp.1053-1071.
Aithal, P.S., 2017. An Effective Method of Developing Business Case Studies based on
Company Analysis. International Journal of Engineering Research and Modern
Education (IJERME), ISSN (Online), pp.2455-4200.
Bouzas Ramos, D., 2014. Optimization of Sample Preparation for the Analysis of Selenium
Metabolites in Trout.
Bralatei and et. al., 2015. Detection of inorganic arsenic in rice using a field test kit: a screening
method. Analytical chemistry, 87(22), pp.11271-11276.
Online
PESTLE analysis for Tesla, 2014 .[Online]. Available Through;
<https://www.swotandpestle.com/tesla-inc/>
Online
Business strategy, 2018 .[Online]. Available Through;
<https://www.envisio.com/blog/benefits-of-strategic-planning>
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