Key Competencies and Core Competencies of Tesla

CORPORATE STRATEGY

Corporate Strategy 1
Contents
Introduction............................................................................................................... 2
External analysis......................................................................................................... 2
Opportunities and threats........................................................................................... 2
Industry analysis...................................................................................................... 3
Resources, key competencies and core competencies of Tesla.................................................4
Resources and unique capabilities................................................................................ 4
Link of unique capabilities to competitive advantage.........................................................6
Strategy evaluation...................................................................................................... 7
A recent strategy implemented by Tesla.........................................................................7
Conclusion................................................................................................................ 9
References.............................................................................................................. 10

Corporate Strategy 2
Introduction
The corporate strategy is deliberated to be greatest strategic plan of the organisation. The
corporate strategy comprises corporate overall goals, directions and the ways goals can be
attained within the strategic management activities. The organisations can attain overall value
by defining strategic goals and inspiring workers to attain them. This report comprises
corporate strategy assessment of Tesla which is an electric vehicle company. The company
was formed in 2003 with the purpose of manufacturing not only all-electric vehicles but also
substantially accessible clean energy generation and storage products. This strategic report
includes the external analysis to recognise the framework of opportunities and threats along
with assessing industry attractiveness. The resources and crucial competencies of Tesla has
been discussed along with recognising core competences. Finally, one strategy of Tesla has
been discussed and evaluated through using SAFe criteria.
External analysis
Opportunities and threats
The opportunities cause Tesla to enhance its business performance, management
effectiveness, and strategic growth.
Tesla has attained opportunity to improve its profits by decreasing its costs first. The
opportunity for improved profits can be made possible by decreasing the costs first. Tesla can
overcome the issue of fewer profits by constructing Gigafactory. The Gigafactories have a
great role in accomplishing targets and increasing automobile production. Tesla can build
more Gigafactory to produce more models.
Tesla can successfully overcome the issue of being environmental pollution by being
environmentally friendly. People also nowadays like to have vehicles that do not harm them
and the environment. The government in every nation also provides different facilities for car
manufactures. The nations like the United States provide subsidies to green energy
companies. It will even make Tesla conserve much better capacities (Valentin, 2019).
The company has been working consistently for the innovative technology in the form of
self-driving of the cars. Tesla has been advancing full self-driving options. Although the
models currently are completely self-driven it is anticipated that new upgrades will be
welcomes by the public. The innovation of self-driving vehicles will assist the company in
coming with the advanced models (Cho, 2018).

Corporate Strategy 3
Tesla needs to prevent the company from the threats of the external world. The threats
of Tesla to identify industry attractiveness are:
The expensive cars produced by Tesla represents threats. The current released model of Tesla
cost near to $100,000. Moreover, the price appears reasonable deliberating the quality. The
model remains unaffordable for most of the middle class of the US. If the company is not
able to cover middle-class people, then it can face a great threat for most of the time.
Tesla is having strong opposition. The company is exposed to threats from well-recognized
companies such as Toyota, Ford, Volkswagen. These companies have robust competences to
be competent in the manufacturing sector and dispersal. Add on, electric cars also have not
reached all over the world. Therefore, the market is still small for the electric vehicle segment
of Tesla.
The number of competitors of Tesla is increasing day by day especially in the electronic cars
segment. It is even resulting in the number of new competitors like Volkswagen. Tesla is also
having competition from the companies which are affluent in manufacturing fuel reliant cars
and are close substitutes (Brenner and Herrmann, 2018).
It has been found by tesla that electric cars are less striking to the young generation: When it
comes to appealing, fuel-driven sports cars are most wanted in the market especially from the
young generation due to the unique features. On the other side, electric cars are less appealing
to the young cohort worldwide (Jencova, et al. 2019).
Auto industry analysis
Competitive rivalry: Tesla is having a robust force of viable competition in the auto industry.
Tesla functions in an extremely competitive market. The external factors and its strengths are
liable for the robust force of modest competition in the case of Tesla. These factors are a
small number of businesses having weak force, high fierceness of the businesses having a
robust force and low switching costs leading to the strong force. The small number of firms
restricts the influence of rivalry on businesses like Tesla. The company can tackle
competitive rivalry by constructing a sustainable differentiation along with building scale
(Akakpo, et al. 2019). Moreover, Tesla can cooperate with its competitors to enhance market
share other than just competing for the smaller market.
Bargaining power of buyers: Tesla is having moderate force in the case of competitors. The
customers are the director factor who regulates the company’s sales proceeds. The external