Analyzing Impact and Influence of Macro Environment on Business Strategy: A Case Study of Tesla

This report analyzes the impact and influence of macro environment on business strategy, using Tesla as a case study. It explores the strategic context of Tesla, different strategic planning techniques, and the macro environment factors affecting the company. The report also applies frameworks such as SWOT analysis, PEST analysis, stakeholder analysis, and the Structure Conduct Performance model to analyze Tesla's internal environment and capabilities.

Unit 32
Business Strategy
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Executive Summary
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INTRODUCTION
Business strategy is defined as the achievement of desired ends or objectives. This is
also called long term business planning usually period of 3 to 5 years. It is also knows
actions and moves of competitors that is used by firms for attracting large number of
consumers, improving performance, competing and achievement of organization’s goal
and objectives. It is the master plan of any organization to carry out their activities and
operations in proper manner. The business strategy can be of different types such as
competitive, corporate and strategy in general.
The company chosen for assignment is Tesla which is American start-up powered by
Silicon Valley which is specialized in manufacturing of electric cars. This was founded
by Elon Musk in 2003 and reached to its success as a dynamic automotive and energy
solution organization. The company became famous for its innovativeapproach in the
market and the dominant position worldwide.
This report highlights about impact and influence of macro environment on business
and internal capabilities and environment. The porter's five force model and use of
different theories, concept, models for understanding strategic directions available for
business.
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TASK 1
LO1 Applying appropriate frameworks in order to analyze impact and influence of
macroenvironment and its strategies
It is essential for business to make proper plans and strategy in order to accomplish set
goals and objectives in an effective and efficient manner. This provides guideline to
business to work as per their mission and vision of organization. Therefore, it is
imperative to first understand the strategic context of any organization.
1.Strategic Contextof Tesla
1.1Mission- The mission of Tesla is to speed up world's transition for sustainable
energy (Mission and vision of Tesla. 2019).
1.2Vision- “The future is electric” to be thecompany of 21st century through driving
world's to electric vehicles (Mission and vision of Tesla. 2019).
1.3Objectives- The main objectives of Tesla is to manufacture, design and market for
luxurious electric powered 360,000 - 400,000 vehicles this year as predicted by Tesla
CEO . (Wayland,2019)
2.Meaning of Strategy
It is defined as high level plan in order to accomplish one or more goals and objectives
under uncertainty conditions. This is scope and direction which assist in achievement of
organization advantage through configuration of resources having challenging
environment for meeting stakeholder and consumer expectations. (Pahwa 2019)
2.1Role of strategy
Strategy plays different roles for business to achieve goal and objectives, their strategic
intent and different strategic direction. They helps in providing direction to business to
go to right path and make strategy for business in order to achieve set outcome or
desired results. (Pahwa 2019)
2.2 Different strategic planning techniques
There are different types of strategic planning techniques which helps in proper
planning of enterprise activities and operation. As per size and nature of business,
respective organization has to adopt techniques for positive outcomes. This includes
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benchmarking, budget planning, business analysis, business models, competitive,
financial analysis & market analysis and so on. (Pahwa 2019)
3.Macro Environment
The conditions of the environment which the business operates to influence its
operation for better performance. Consumers’ ability and willingness, to spend
fluctuations in spending, price levels have a direct impact in macro environment
The trends of macro environment are GDP, employment, spending, monetary policies,
government tax policies. .(Chappelow, 2019)
Various frameworks and models have been looked into to analyze the macro
environment of Tesla. Key frameworks such as SWOT, PEST and Stakeholder Analysis
has been conducted with examples.
3.1Tesla SWOT Analysis
Figure 1 SWOT analyses (TESLA motor 2019)
Strength –
The Leading automotive company innovate, develop, competitive and profitable
electric vehicles. And the best In Electric Cars – traveling up to 600km with single
battery charge. Also Tesla engaged in cross sell and diversification- eg: Tesla
insurance program with Liberty Mutual Insurance Company
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The CEO Elon Musk oversees all the product developments, engineering and
design of the company’s products.
Weaknessescould be highlighted withmanufacturing complications with production risk
factors, delays in distribution and also extreme troubles while manufacturing Model X
battery assembly at Giga factory 1 and also unable to meet the customer demand –
( this might affect the brand value.) Battery shortage is also another weakness as this
will have direct impact on the company revenue. On the other hand CEO Musk is the
sole representative of Tesla and there is no other immediate person trained to take his
position in his absence.
Opportunities
Expand its business to the Asian market which is still new to the automotive and
renewable energy market and to make their own battery cells to reduce the production
cost. Currently the primary supplier is Panasonic.
Threats
Aggressive competition from many automotive brands such as Mercedes, BMW, Audi,
Lexus for both self-driven technology and alternative fuel vehicles (Hybrid, Plug-in-
hybrid) and at the same time Often have product defects due to manufacturing designs.
This will affect the company image as all the organizations named above are able to
provide electric and sustainable products (High competition for Tesla. 2019).
Product liability claims over autopilot vehicles which is not very successful.
(Shewen 2019)
Environmental Analysis- The environmental analysis can be performed through PEST
(Political, Economical, Social and Technological) and Porter's Five Forces Model.
Tesla design, manufacture and distribute environmental friendly electric cars to the
market. This reduces the carbon footprint in the environment. Also Tesla has excellent
reputation on environmental impact on their electric vehicles and other energy saving
products, it is also important to work on their product and supply chain more energy
efficient if they expect for higher popularity/demand.
Political:
Any business environment has an impact with the political situation directly or indirectly
in its operating country. The political environment is effects the regulatory environment
too. Economic instability due to political instability will lead to business operational
disruption and therefore financial losses. Political disruptions between nations and
terrorism will also effects business environment.
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Tesla will face the political factors such as, work week regulations in auto manufactures,
mandatory employee benefits, minimum wage and overtime regulations, Industrial
safety regulations etc. in any country operating their business.
Economical:
The country’s economy is based on its rising businesses. The growth of the economic
activities directly contributed to increase the level of global employment and that has led
to higher spending on luxury vehicles and goods. Therefore the market for SUV’s has
increased globally with higher economic activity. The rise of the middle class has been
especially beneficial for the vehicle brands. However, If Tesla can approach the middle
class consumer segment with lower cost models the company can grow faster with
middle class consumers (Higher economy support in growth of Tesla. 2019).
Social
Cultural factors have a major influence on the demand and supply chain. Certain
products are perceived in certain societies and the level of acceptance of these
products are varies on cultural believes. More people are focused on environmental
protection
Tesla is also especially focus on helping the brand transition towards better, greener,
sustainable fuel efficient future. If the Tesla plan “the future is electric” is successful, the
world could save billions that are spent on every year on fossil fuels
Technological
Technology is undoubtedly the largest factor influencing growth of the businesses
globally. It’s makes business efficient and affects the competitiveness. Every business
is look for the newest technology to see their sales growth.
Tesla is also with the modern 21stcentury technology as their sales and profit increases
every year (Technological contribution in the growth of Tesla. 2019).
Apart from the SWOT Analysis, there is another analytical tool which could use to see
the macro analysis of a business.
Stakeholder Analysis- There are different framework which helps in stakeholder
analysis such as stakeholder matrix and stakeholder mapping. Tesla has used
stakeholder matrix which means to analyze stakeholder of project to align goal with
project. It includes power interest, stakeholder analysis and stakeholder engagement
assessment matrix (3 Types of Stakeholder Matrix, 2019). If employees of Tesla has
power and interest then they carry out project work. In order to know analysis of
stakeholder, it is very important to analyze different factors such as religious belief,
value of ownership, demographics, communication and so on. It is very important to
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include stakeholder engagement for given topic in terms of unaware, neutral, leading,
supportive and resistant.
Figure 2 stakeholder analysis and mapping (Larry, 2000)
Structure Conduct Performance Model- This is the framework which helps Tesla in
making relations with market structure, conduct and performance. There are three
elements of such model which are described below.
Figure 3 Structure Performance Model: (Lee, 2007)
 Structure- It is stable for particular time period and affect buying behavior of
buyers and seller. The organization has to depend upon market supply and
demand. In case of any change in those leads impact to business. The
respective organization has to understand structure of market in order to conduct
business activities for their users in effective manner.
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 Conduct- It is the way where buyers and seller behave among themselves and
each other for buying of products and services in an effective and efficient
manner. They chose own investment, research and development, strategic
behavior. Tesla has to behave proper with their seller and buyer so that they can
conduct their activities, operation and functions of business in appropriate
manner.
 Performance- This is measured through comparing results of firms and industry
in terms of profitability and different ratios. The components covers under this are
product quality, production efficiency, resource allocation. Tesla has to improve
their performance for achievement of maximum profits and gains in order to
survive at marketplace. (Lee, 2007)
P2 Analyses the internal environment and capabilities of the given environment
Strategic Capabilities
Ability of entity to use all available skills, knowledge, capabilities and resources in
order to gain competitive advantage over others, improving business value. Strategic
capabilities are of three types Physical (machines, infrastructure, raw materials),
Financial (balance sheets, funds, cash flows) and Human (manpower, consumers,
suppliers). It has three important components:
Strategic Analysis- Its a way of understanding company's environment, make up
view about important factors or resource which can affect organizations present and
future performance.
Strategic Choice- This stage comes after strategic analysis,it helps in selecting
best plan of action on basis of available strategic options for business.
Strategic Implementation- Last but most important stage, it defines structure in
which all planned strategies are being implemented in organization with taking careful
steps in proper execution of predetermined plans.
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Application of McKinsey’s 7S model in Tesla Motors:
McKinsey’s 7S model contain different parts which are used to increase
efficiency and effectiveness of organizations operations (Scholes 2015). These seven
elements are divided into hard ( Structure, Strategy and System) and soft (Shared
value, Skills, Style and Staff).
Hard Elements:
Strategy are plans or designs organizations make to have competitive advantage
over others. Tesla Motors strategy focus on electric vehicles which costs lower than fuel
cars, already gaining competitive advantage.
Structure of Tesla Motors is not clear due to its differentiated nature, but it can be
classified as divisional structure as its very close to it as compared to other business
structures present in market.
Systemmeans day to day activities performed by employees to attain objectives.
Many systems are present in Tesla Motors for long term growth of company as its a
manufacturing unit. Some most important systems it includes are manufacturing,
recruitment and selection, team orientation and customer relation management system.
Soft Elements:
Shared Value are basic values on which business operations depends and
entity's culture is made up of. Tesla Motors has developed electric cars with view
increasing issue of global warming. As well as its production strategy is based on clean
energy generation.
Skills relates to staff knowledge and expertise (Spender 2014). Tesla Motors is
built by three silicon valley engineers, therefore its clear that Tesla Motors has best
talent associated with it.
Style is ways leaders use to motivate employees to obtain firms goals. Tesla
Motors leaders are friendly with workforce, involving them in decision making for
important tasks.
Staff element is very clear by its name here, employees and their abilities are
talked. Its visible that Tesla Motors introduce of new innovative products that employees
are skilled, filled with knowledge showing best results.
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Application of VRIO model in Tesla Motors:
VRIO model is technique used to study organization internal power to sustain
competitive advantage. It has four aspects through which analysis is done whether
company can continue to have competitive advantage over others. These elements are:
Valuable criteria comes first which identity's if resources are adding any value to
business or not. If resources do not satisfy this function its considered as competitive
disadvantage. In Tesla Motors its unique valuable resource is its differentiated products
they offer to customers.
Rare function says about uniqueness of resource that only one or few companies
can acquire. Tesla Motors rare resource is idea of 'giga' battery used to generate power
in factory which gives its temporary advantage from competitors.
Cost to Imitate is high if duplicating resources are difficult for others giving Tesla
Motors upper hand as its result advantageous for company.
Organized to Capture Value feature says about having a systematic operations
to bring potential results from valuable, rare and costly to imitate resources providing
competitive advantage to Tesla Motor.
LO3: Evaluate and apply the outcomes of an analysis using Porters Five Forces
model to a given market sector.
As a strategic management tool, Michael Poter deloped the Porter Five ForcesAnalysis Model
to understand the external factors of organisations and the competitive advantage of their
purtucular industry environment such as bargaining power of customers or buyers and
suppliers, the threat of substitution and new entrants.The Five Forces analysis can help
companies assess industry attractiveness, how trends will affect industry competition,
which industries a company should compete in—and how companies can position
themselves for success. (Puthran, 2017)
The effect of different forces will be different within each industry. This is why it
becomes imperative to develop this model separately for every industry even if the
same company is competing across different markets and industries.
The film business, there is a high threat of substitutes from various other forms of
entertainment. In addition, the power of suppliers (e.g. filmmakers, etc.) is also high as
they supply the vital most input for the industry.Whatever the industry, there may be one
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or two forces that end up driving all strategy formation. It is not always easy to
determine which force is the key one. An obvious force may not be the one increasing
or decreasing profitability. (Dudovskiy 2014)
When applying Five Forces analysis at Tesla, the largest player in the automotive
industry and energy solution industry is very significant that how much those external
factors affect the company. To ensure the company’s long term competence,Tesla
should address effectively the above external factors and resilience be more with their
competitors such as Ford Motor Company, General Motors Company, Volkswagen,
Toyota Motor Co-operation, Nissan Motor Company and BMW. However,Tesla needs
to look into the nature and characteristics for automobiles, batteries and solar panels in
the domestic and international markets when consider the external analysis.
In this analysis it shows how Tesla should tackle its macro business environmentmacro
environment with the pressure from the new substitutes, bargaining power of
suppliers,bargaining power of customers, Threats of new entrants as shown in figure 2
(Kessinger, 2019)
Figure 2 Porters five Forces Model (Puthran, 2017)
Bargaining Power of Suppliers
An assessment of how easy it is for suppliers to drive up prices. This is driven by the
number of suppliers of each essential input; uniqueness of their product or service
relative size and strength of the supplier; and cost of switching from one supplier to
another supplier. (Puthran 2017)
All input sources for the production to keep under control for the following reasons:
 To make sure there are no substitutes for the particular input.
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 The buyer has a higher profitability than the suppliers
 Supplier’s customers are fragmented so their bargaining power is low.
Powerful suppliers can potentially reduce strategic option for the industry. (Reckles
2015)
Bargaining power of Tesla Suppliers:
Forward Integration (Moderate Force)
Size of Supplier (Moderate Force)
Supplier Level (Moderate Force)
A low level of forward integration is shown with Tesla suppliers as they have limited
controls over distribution. So some of Tesla suppliers use third parties to sell their
material while others directly sell their materials to the company. Some of these
suppliers are moderately sized and thereby the influence is very limited on the
environment of automobile industry. Moderate level of supply empowers suppliers to a
limited degree to affect Tesla. (Kissinger 2019)
In the context, it is important Tesla to have various supply list because whenever the
suppliers increase the cost company can switch in to another supplier for the smooth
functioning of the organization.
Bargaining power of Customers
An assessment of how easy it is for buyers to drive prices down. This is driven by the:
number of buyers in the market; importance of each individual buyer to the organization;
and cost to the buyer of switching from one supplier to another. If a business has just a
few powerful buyers, they are often able to dictate terms.
The company revenue is determines the bargaining power of their customers / buyers.
This purely depends on the following:
Low Switching Cost (Moderate force)
Moderate Substitute Availability (Moderate force)
Low Volume of Purchases (Week force)
To increase the Tesla revenue, low switching costs to be maintained and will reduce the
barriers for Tesla customers buying cars from other suppliers. However, the availability
of substitutes limit the customers bargaining power against Tesla. Also low volume of
purchases reduces the volume of Tesla products. (Kissinger 2019)
Tesla to understand the buying behavior and then offer the product to the customers as
it will create a better impact on the minds of the customers. This will help the company
to build the more customer base in well define manner.
Threats of New Entrants:
Profitable markets attract new entrants, which erodes profitability. Unless incumbents
have strong and durable barriers to entry, for example, patents, economies of scale,
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capital requirements or government policies, then profitability will decline to a
competitive rate.
The impact of the market share and financial performance is high with new entrants.
Therefore, the following areas to be looked into:
Low switching costs (strong force)
High variable capital cost (Moderate force)
High cost of brand development (Weak force)
It is verydifficult to match with Tesla brand with company/ CEO’s popularity which is
their strength. The high manufacturing cost impose a barrier to new entrants too. Also
the increasing economies are in favor of Tesla with their well-established current
position in the market.
Competitive Rivalry or Completion
The main driver is the number and capability of competitors in the market. Many
competitors, offering undifferentiated products and services, will reduce market
attractiveness.
This influences the type of business and their aggressiveness in the industry. The
strong force of competitive rivalry is based on the following external factors.
High number of firms – (Strong force)
High aggressiveness of firms (Strong force)
Low switching cost (Strong force)
Due to small number of automotive giants in the market, the effect of competition on
Tesla is very limited. However the automobile firms are generally aggressive in
innovating and promoting their products. Ex: Aggressive marketing campaigns of Tesla
strengthens the effects of competitors against the business.
It is also important Tesla to have proper research before making the product as it help
in providing satisfactory service to the consumers. Beside this, companies have to
minimize the price to due to intense competition present in the market.
Competitive Rivalry is a high priority strategic management area in the automotive and
energy solutions industry environment. (Kessinger, 2019)
Threats of Substitutes
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Where close substitute products exist in a market, it increases the likelihood of
customers switching to alternatives in response to price increases. This reduces both
the power of suppliers and the attractiveness of the market. (Riley, 2018)
The threat on substitute products will depend on the following areas:
If the price and the performance of the industries match the substitute product.
Switching costs and customers loyalty. (Brand image)
Customers’ willingness to switchover.
The above threat could be rectified withperformance improvements of the
product/services by reducing costs and thereafter the prices by differentiation. (Riley,
2018)
.
This refers to the likelihood of the organization where they face the impact of the
substitute on the automotive and energy solution (Peng 2017). This model help to
identify the internal factors which leads towards the threat of substitution which include
low switching costs as well moderate performance of the product can be threat for the
Tesla.
The over all advantage that can be ascertained by Tesla through effective
application of porter is that this will provides an opportunity to effectively apply the
strategies in accordance to the analyzed situations. This not only help to attain
competitive advantage but also help in ascertainment of high market share. The
disadvantage that can be faced in respect of the factor that sometimes analysis not
proves right which impact over the chosen strategical direction. So, the main aspect
behind the acceptance and application of this method is about ascertain of the strategic
direction.
LO4 – Applying a range of theories, concepts, and models interpret and devise
strategic planning for the chosen organization.
Ansofe’s Matrix
This matrix is a marketing model useful for businesses to access their position in
relation with the competitors. This model was developed by economists Cliff Bowman
and David Faulkner. Mostly concerns about strategic positioning and the positioning of
a product already in the market.
Ansoff Matrix of Tesla
This is a method which is known as the planning tool which provide the frame
work to execute the plan effectively. This model can be use for the Tesla for making
alternative fuel vehicle for the manufacture for making strategy. Here is the Ansoff
matrix for the Tesla.
Market penetration: This kind of strategy are involve the development of the
new product in the market. The company like Tesla is selling the model s, and model x.
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Along with this, firm sells solar panels, inverters and electrical hardware devices in more
than 29 countries.
Product development: This strategy implies the development of new product to
sell in the market. The Tesla have regularly indulge in product development and they
have the new car which is Roastar which help to attract more and more customers in
the market.
Market development: The market development strategies consists of finding
new market for the existing product. Tesla in making new ways for entering in the
market for growth and expansion. This technique help organization to improve there
production as well as profit.
Diversification: Tesla has use diversification strategies since the beginning as
the company was only started with the electrical vehicles but now it is building the solar
panels and their new product Roadstar. Along with this the alternative fuel vehicles
company is expected to further diversify there product to making larger audience base.
Figure 3: Ansofe’s Matrix ( Business Growth 2017)
Bowman’s Strategy Clock
Figure: 3 Bowman’s Strategy Clock (Deshpande, 2015)
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Bowen Strategy for TESLA
The Bowman’s Strategy Clock was developed by the two famous economists
Cliff Bowman and David Faulkner. The main focus of the model is to make the
companies aware of their position in the market as compared to their competitors. This
help in improving the model and which help the company to analyses the position of
the company. For the company like TESLA the company should provide better services
and to the respective customers. The bowmen strategy clock help in highlighting the
aspect on how the company can position the product and services in offering the
market. Harping both the dimension which help in improving the working position of the
company. The choose its position from the Bowman’s Strategy Clock that offers it the
most competitive advantage in the market as compared to its competitors and results in
its growth and overall development and attainment of its business objectives. Here are
some of the steps which help in this Bowan's in a well define manner.
Low price and low added Value: In this strategy, the person keep the price low
where it means the company can improve there market share by gaining larger market
share. The price of the product or service are offered low product and service by the
TESLA motors. This is one of the most competitive position for the organization to deal
with.
Low price: The company follow this method for doing this in order to provide
large market share. The products are often sold at a low price leading to the low-profit
margins on the individual products but the high volume of the output can still generate
the high amount of profits for the company.
Hybrid: This strategy in the Bowman’s Strategy Clock is very effective if the
added value of the products is consistent in nature and is well applied and offered on
the regular basis. As this company like TESLA , the company can provide better
services to the consumers as they are convinced that the good value product at the low
price.
Differentiation: The company is opting the differentiation which provide the high level
best level of services while maintain the high level of the quality. This help in providing
better services with some value added in them. Beside from focusing on the product
quality, they put the significant efforts in developing the brand image in the minds of the
customers. Along with this the user are ready to pay more for these products as they
are sensitive to the high-quality products of a renowned brand in the market.
Focuses differentiation: This step is applicable on the brand which focuses on the
luxury and exclusive product which are high on the quality. The higher the profit margin
the more the company earn profit. So the company like TESLA should focus on keeping
the price low in order to attract more and more in the well define manner. Their
competitors are in the similar market segment and there is a tussle by keeping the
prices of products high than the other.
Risk high margins: The company uses the strategy for charging high price. So the
organization like TESLA the management of the company should provide better
services if they are keeping the high margin. This is done by different firm for creating
goodwill and reputation in the market. If the company is keeping the high margin than
customers will look for the better quality product in the similar price range or a similar
type of product at a lower price to cut their costs with an objective of value for money.
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Monopoly pricing : This are the pricing which are used by the company if they are the
single player present in the market. Hence the company enjoy the monopoly which help
in providing the better services from the competitors. In this the customer are left with
two choices to buy the product or not to buy the product as they are totally dependent
on the products or services offered by the monopolistic brand. Mainly most of the
company regulates the monopolistic market to prevent the companies from increasing
the prices and offering faulty products and services.
Loss of the market share: This strategic position in the Bowman’s Strategy Clock is
not a very desirable one for any company as it basically means that the company is not
able to offer the products or services that the customers value. In the context of TESLA
the company should keep their prices low in order to loss the market share.
So this has been concluded focus differentiation should be taken into consideration as
for the company like TESLA in as this help to focus on the quality of the product and
services. Along with this it help in creating brand image in the minds of the customers.
In this case Tesla motors must use cost leadership strategy because it help to capture
large market share which directly increase the profit of the company. Along with this it
help in keep away the competition which is present in the market. Cost leadership style
help in reducing the production cost which leads towards the cost effective method.
Porter’s Generic Strategies,
Porter generic strategies is the method through which organization usually figure out the
ratio of profitability which can be above or below (Scholes 2015). The basic principle of
this model is to develop a sustainable business model. Here is the elements for Porters
generic strategies:
Cost and price leadership: In this method the company becomes the low cost
producer in the sector. For the organization like Tesla it is important to have their price
low in order to provide the capture large market share with the assistance of technology
and economic of scale.
Differentiation: Tesla is unique in its sector as their customers are the most valuable
assets for the company. The company now offers new product such as Tesla Roadstar
which help in making more loyal customers.
Focus: This indicates the strategy the firm focus on the similar strategy for improving
the quality. Tesla is focusing on the target segment which is used for developing loyal
customers.
Vertical and Horizontal Integration
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Vertical Integration will define as a business strategy which control over one or more
stages in the production with raw materials or distribution process of company’s
product.
Backward Integration-
Forward Interrogation-
Advantages/Disadvantages
Horizontal Integration is another business strategy relates to acquisition ofbusiness in
the same level of the value chain in similar or different industry.
Hybrid strategies:
This kind of strategies are used for the managing the production and
organization structure which help in facilitate in achieving the quality as well as
productivity at the same time. There are two type of hybrid strategy which can be used
by Tesla.
Sequential strategies: This kind of method was given by the Gilbert which tell
that company can offer the high value product to the customers. In the context of Tesla
Roadstar it is important to provide better quality cars to grab larger market share. Hence
this help firm can lower the prices enabling to sustain the rivals.
Simultaneous strategies: This generate the cost and differentiation advantages at
the same time. For the organization like Tesla it is important to have provide option of
customization for the customers as per their choice and preferences. This can be often
achieve by mixing and matching the components for the better outcomes.
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Strategic Management Plan - TESLA
Company Overview: TESLA is one of the most innovative as well as American
automotive company which provide electric cars for the individual. The headquarter is
located in Alto California. The company was founded in the year 2003 by Elon Musk.
Vision : The vision statement of the company to provide one of the best car of the
present century by driving the electric vehicle. They want to become one of the most
compelling electric vehicle and focusing on renewable energy (Mission and vision of
Tesla. 2019).
Mission: The company have the mission to provide the world sustainable transport.
The company is aiming in making renewable energy in order to make a world a better
place. New mission is to recognize the relevance system the providing batteries which
save the natural environment (Mission and vision of Tesla. 2019).
Objectives:
 The main objective of the company is to provide better and sustainable source of
energy within 6 months of time period for transporting to the consumers. Along
with this it help in achieving the TESLA aim as well as objective effectively
regarding improvement in the profit by 20%.
 By using unique method the company can develop the brand image within 1 year
which help them to improve the sales and growth of the organization by 10%
effectively.
Strategies for TESLA
The company is using the generic strategic method for providing better services to the
consumers with the help of advance technology. Here are some measures though
which company measures the strategies effectively.
Suitability: The company is using high technology as future is electric. The company is
using high investment and advance technology the company can improve the strength
and avoid weakness in a well define manner.
Acceptability: The technology which is used by the company is acceptable as this will
help in increasing the profit of the company through which stakeholder can make profit.
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Feasibility: The company is using new technology for improving the performance of the
battery as this is feasible for the company as TESLA can spend million of dollars on
research.
Implementation and control
In respect to the resource allocation and control measures in accordance to the
achievement of both objectives includes the use of resources like high volume and
voltage electric batteries, human resource and funds along with solar panels which help
to charge the batteries self. The effective usage of overall aspects help an organization
in effective formulation of the electric car which enhances the value in respect of the
transporters. This will not only help to save the natural resources but also in very budget
of the consumers.
In respect to the control KPI and Bench-marking techniques are used which help
in overall monitoring and evaluation along with the determination of deviations which
help an organization to attain goals in determined manner. The responsibility in respect
to their effective implementation is over the management of an organization along with
the team which having specialized in the same tasks.
Market-mix of TESLA
TESLA marketing mix comprises of different elements such as which are explained
down below:
Product: The company produce electric vehicle along with that the organization also
provide solar panels and sells to the customers.
Place: The company sells its vehicle through its own sales and service network. Tesla
stores and galleries are highly visible, premium outlets in major metropolitan markets.
Some Tesla stores and galleries combine retail sales and service.
Price: The TESLA pricing strategy used premium pricing policies as only high income
group people can purchase the product.
Promotion: The company is using the personal selling as to create a public relation
and provide cars as per the needs and requirements.
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Process: The company mainly used direct selling and have their own premium stores.
They do not include any middle man or dealers in order to provide better services to the
consumers.
People: The buyer of the TESLA product are high and middle income group of people
as they provide expensive cars as compare to petrol cars.
Physical evidence: The company staff and stores are the physical evidence for the
company. The main purpose of the company
Evaluation
The effectiveness of the same is ascertained on the basis of the evaluation of
market and sales figure. The different teams working in the process of calculation of the
results and ascertained from the determined figures in respect to the increment in
market share is about 10%. Talking about the improvement in sales figure then this will
also in positive. All the consumers have positive opinion and they are very happy. The
percentage increase seen over the sales figure is around 15%. This justifies that the
planned strategy is effective in nature and organization is working towards the
accomplishment of the objectives.
CONCLUSION
From the above mentioned report it has been identified that the business strategy is
important for growth and development of the organization. Along with this, various
model are take place such as porter five model and Mckinsey’s 7s model which
help the organization to understand the market scenario to maintain the demand as
well as supply in the market. Beside this it is important to use effectively strategies
for making quality product which help attracting more and more customers in a well
define manner.
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