Dynamic Strategy and Disruptive Innovation

This report comprises the stakeholder analysis of Tesla which includes the five purposes. Tesla operates in different business segments like solar energy and electric vehicles. The first purpose of the report defines the Tesla motors, its history, mission, vision, challenges and the goals to be faced in the future.

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tesla
Dynamic strategy and disruptive innovation

Dynamic strategy and disruptive innovation 1
Executive summary
This report comprises the stakeholder analysis of Tesla which includes the five purposes.
Tesla operates in different business segments like solar energy and electric vehicles. The first
purpose of the report defines the Tesla motors, its history, mission, vision, challenges and the
goals to be faced in the future. The second purpose is all about the stakeholder view of the
organization which comprises stakeholder view model and the specific stakeholders within
each stakeholder group. The third purpose of the report is all about the stakeholder analysis of
four selected stakeholder groups. The behavior and motive of the different stakeholders have
been analyzed. The fourth purpose identifies the stakeholder group and generic strategic
programs for the stakeholders. Finally, the strategic program is recommended for all the
selected stakeholder groups comprising reasons for the recommendations.

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Contents
Executive summary...............................................................................................................................1
Introduction to Tesla motors..................................................................................................................3
Stakeholder view of the organization....................................................................................................4
A stakeholder analysis of four selected groups......................................................................................6
Stakeholder category identification and generic strategic programs......................................................6
Recommended strategic program for the stakeholder groups................................................................9
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction to Tesla motors
The high index of population, deterioration of the ozone layer, the cars moved the massive
ingestion of the human being and the global warming in the last years has raised the concern
of humans towards doing somewhat to assist the domain and avert adversities in the planet. It
led to the initiation of the green movement. People now days have started to recycle and are
not using plastic bags any longer. Some organizations have even made the variation in the
packaging and people also use their ampules.
The clean energy is not an exclusion of the green movement. Tesla is considered as a small
corporation in the association of other brands. Tesla is the 1st one to advance electric car
technology. Elon Musk is the CEO of Tesla and he has augmented the transition from petrol
cars to electric cars. The company has even provided accessibility to its open copyrights from
technology and everybody can use them for free of charge.
The management of the corporation and the relationship with the stakeholders is important in
order to guarantee the success of the company. Therefore, Tesla can attain its purpose. Tesla
was established in 2003 with the aim of producing a high performance sports car. Elon joined
Tesla as chairman in 2004 and became CEO in 2008 after making an investment of 50
million dollars. Tesla is working in 2 business subdivisions, automotive and energy
generation. The automotive division focuses on designing, emerging, producing and vending
electric vehicles. The energy generation and storage division emphasis on residential and
commercial customers.
Tesla has changed the world from fossil fuels to the zero emission future like electric
vehicles. The mission of Tesla is to hasten the globe’s evolution to sustainable energy. Tesla
has augmented the evolution from petrol cars to electric cars conveyance. The appropriate
thing for the globe is that the car brands manufacture electric cars as they can. Tesla has
propelled 4 electric vehicles models. The first model of Tesla, Roadster was launched in 2008
and then all-electric premium sedan was launched. The Model S sedan has become the best
category comprising safety, productivity, and enactment. The Model X SUV was launched in
2015 and it holds five-star safety ratings across every category. Finally, in 2016, the company
bring out the inferior priced and high size electric vehicle. Model three has been produced for
the corpus market. Though, it is still exclusive. The strategy of Tesla is to advance luxury
electric vehicles and the opponents of the company in the motorised segment are Audi,

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Lexus, Mercedes, BMW, Toyota, Daimler, Ford, general motors, Mitsubishi is more. The
opponents in the energy generation and storage division include LG Chem, Samsung, AES
energy storage, Sunrun Inc, Vivint Solar Inc., and Trinity Solar.
There are mainly two challenges which are to be faced by Tesla looking towards the future.
The chief challenge is to create low price cars so that maximum population can be bought. It
can even put a considerable impact on the global environment. The other challenge faced by
the company is electrification, autonomy, and self-driving cars. Tesla needs to work on
artificial intelligence if it wants go ahead in the technology.
Stakeholder view of the organization
The stakeholders have some interest in the organization. The stakeholders of Tesla are
prejudiced by the aims, guidelines, and actions of the organization that they are involved in.
the stakeholders of the company are divided into internal and external stakeholders which
suppliers, government, employees, customers, investors, suppliers, owners and community
(Akakpo, et al. 2019). All the stakeholders have different roles, for instance, customers and
employees have different roles, rights, and accountabilities. The customers are the part of the
outside company whereas the later ones are inside the company.
Employees: The employees are the foremost important stakeholder of Tesla as they are
accountable for the performance and productivity of the organization. The employees of the
company are enabled with competitive compensation, significant career opportunities,
leadership development along with the exceptional organizational culture. All these efforts
warranty the organization and lead to a low rate of issues (Välikangas, 2018).

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Investors: The investors are liable for the funding and capitalization of the company. The
major interest of the investors relies on the growth and viability of the organization. In order
to attain this aim, the investors require persistence and time for the increased demand and the
growth of the motorized and energy market. It is also an important factor for the investors to
be part of prevalent “Green movements” of the globe with the great possibility to earn a lot of
money and it is possible if the organization is well managed (Voigt, Buliga & Michl, 2017).
Government: The government is considered important stakeholder as they have attained the
power of the law. The decision of the government affects in both a positive and negative way.
In the case of government, there is a specific association SEC (Securities and Exchange
Commission). SEC has fined Tesla’s CEO Elon Musk with the amount of $20 million dollars
as the organization considered that Musk posted tweets about the private information of
Tesla. The organization claimed that Elon secured funding where ‘false and misleading’
(Bao, 2018).
Customers: The customers are given priority by Tesla as a part of the stakeholders as they are
the one who gives the company profit. So the company believes in offering a good quality
product at a good price (Teece, 2018). Tesla regularly invests in research and development in
order to improve quality at reduced prices. For instance, Tesla has started to produce batteries
in collaboration with Panasonic then buying the whole batteries from Panasonic. It can lead
to the cheap production of the cars along with the prices.
Communities: The community defines the goodwill of the company and assists the company
in positioning the brand in the market if they feel that the company fulfill their necessities. If
it is talked about Tesla then community comprises individuals or a group of people who are
concerned in safeguarding and conversation of the environment. The community feels
satisfied with the products of Tesla as the company allows using its patents for producing
clean energy (Stringham, Miller, & Clark, 2015).
Suppliers: The suppliers are the foremost important stakeholders for the success of Tesla. The
traditional approaches generally create supply issues like constancy, low quality, and
commoditization of the products. The suppliers help the company in bringing better results
like Panasonic provides batteries to the company. it has even created opportunities for the
company.

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A stakeholder analysis of four selected groups
The stakeholder analysis has been categorized into four parts:
Swing: The swing kinds of stakeholder are great cooperative prospective and cause high
modest threat. These stakeholders have a robust capability to stimulate the consequence of a
specific situation. The government is assumed as swing stakeholders.
Defensive: These are having low cooperative potential along with the high competitive threat.
The defensive stakeholders can take steps to avert organization from attaining the objectives.
The investors are undertaken as defensive stakeholders (Shalender, 2018).
Offensive: These stakeholders are high cooperative potential with a low competitive threat.
The offensive stakeholders can assist for a great deal in attaining objectives but they pose a
little threat further.
Hold: This category is having low accommodating potential and low competitive threat.
These stakeholders assist to the company by a little extra help or harm. It does not indicate
that such stakeholders are less important. Such stakeholders made possible strategic programs
sufficient for those who are suspect to move (Boudette & Musk, 2018). The suppliers are
regarded as to hold stakeholders.
Stakeholder class identification and generic strategic programs

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Swing stakeholders
The generic strategic program pursues to change the rules suitable for the swing stakeholders.
The program identified for the swing stakeholders comprise rule strategies for handling the
stakeholders:
 Formal rules changes through government: The government agency is considered
often swing stakeholders. The strategies of formal rule change comprise lobbying
officials for legislative reform (Peytcheva-Forsyth, 2017). The federal support
government in 2013 has pushed successfully the disability support groups for the
initiation of the insurance scheme.
 Change the verdict forum: The verdict forum change strategies comprise flowing the
forum from the courtroom to the concession table (Chen & Perez, 2018).
 Modify the type of decisions which are made: It comprises the type of decision
change strategies including flowing the debate from one substance to the alternate.
The mining interest group has moved the debate from taxation to economic impact.
Defensive stakeholders
The generic strategic program for the defensive stakeholders pursues to protect the
organization from impending competitive threat suitable for the defensive stakeholders.
There are three strategies for handling defensive stakeholders:
 Reinforce current beliefs concerning organization: The investors are the defensive
stakeholders. Reinforce current belief strategies comprise holding shareholder
meetings and preparing yearly reports which endorse that management is regularly
endeavoring to create shareholder value (Perkins & Murmann, 2018).
 Maintain prevailing programs: Maintaining prevailing program strategies confirm that
the competitive threat is nullified along with preserving the stakeholder behavior.
 Let stakeholders initiate the transaction process: This process comprises executing
investor relations programs which enable shareholders to pledge and drive
communication. It can help shareholders to vote on the important matters (Musonera
& Cagle, 2019).
Offensive stakeholders

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The generic strategic program which pursues to exploit prevailing opportunities for gain is
significant for handling offensive stakeholders. The strategies in order to manage offensive
stakeholders are:
 Modify current principles about the company: The subdivisions of the market which
are unconcerned to the company are often regarded as offensive stakeholders.
Changing current beliefs undertake product repositioning programs. For instance,
Tesla can undertake the campaign to add the features preferred by the customers (Liu
& Meng, 2017).
 Try to transform the stakeholder’s objectives: Changing objectives of the stakeholders
pursue to persuade the group to do the same thing as wanted by the company.
 Assume the stakeholder’s place: Assuming stakeholder’s position comprises
harmonizing with the stakeholder’s censure of the company and obligating to the
advancement (Christensen, et al. 2016).
Hold stakeholders
Here are three key hold strategies in order to manage the hold stakeholders.
 Monitor existing programs: The programs are required to be evaluated for the
supplier’s ability to sustain current behavior. A management plan informs suppliers
regarding how their enactment will be evaluated and verified (Huang, 2019).
 Emphasize contemporary beliefs concerning organization: The modern belief
strategies are reinforced comprising instigating supplier relationship management
ingenuities facilitating 2 way communications. For instance, Tesla sustains trust,
validity and volume guarantees with the suppliers by handling them as partners in the
production. Panasonic is one of the suppliers of the company (Li, Porter & Suominen,
2018).
 Safeguard against changes in the transaction process: Defending against the change
strategies comprise repelling projected alterations whether internal or external. The
strategic programs that pursue to modify the rules with other stakeholders do not
unintentionally vary the rules (Cornell, 2016).

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Recommended strategic program for the stakeholder groups
After attaining the expected results, it is recommended to Tesla to implement a permanent
strategy in order to manage all the stakeholders. The prevailing and current performance of
Tesla guarantees a robust future. Musk is a visionary leader but the stakeholders do not seem
to wait long for the expected results accompanied by good profits. In this scenario, Tesla is
required to go for a strategy which can work appropriately for Amazon (Latini, et al. 2016).
Amazon started its functioning by selling books over the internet. The CEO of Amazon, Jeff
Bezos published a shareholder letter annually as he was visionary and knew that the income
will be attained with each passing year. He made use of the letters to describe, convince and
inspire defensive stakeholders to deal with patience and comprehend that the strategy and
profitability are all about the future. This letter contained everything appropriately concerning
the company and the stakeholders started to believe and let the company work and waited for
the coming years to look for the returns. Nowadays, this letter is undertaken as a must-read
by the business professionals (Jiang & Lu, 2018).
In order to gain good results, it is suggested to the company to start producing a massive car
which is affordable for any category of the people to grab. The company is even
recommended to start solving its most important issues like business solvency. Tesla is
regarded as one of the most invested company and it has raised a lot of amounts. The
company is even having a huge debt. The stakeholders of Tesla even keep on asking about
the profitability. The mass production can even assist the company in reducing costs and in
developing a competitive strategy in order to aboard the international market. In order to
position its brand, Tesla is required to improve its marketing strategy, after sale service and
enhance efforts to expand the business. The company is even suggested to open new stores
and make joint endeavours with energy stations so that it can strive with other brands in the
present scenario (Hughes, et al. 2018).
Conclusion
Tesla has proved itself by reducing the negative impact of petroleum cars which is made
possible by the manufacturing of electric cars. The electric cars are better than traditional cars
in all the aspects. Tesla has even opened up the use of its patents to hasten the changing
process by letting other organization to use its technology. Although, Tesla is young because

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of its determinations and management. According to the International Energy Agency (IEA)
in Global Electric Vehicles stance of 2017, the new listing of the electric cars attained a
record number of 2016 with more than .75 million sales universally. The increasing number
of vehicles has increased respect.
It is observed that there are just a few companies manufacturing electric vehicles like BMW,
Tesla, Nissan, and Volkswagen. Add on, here are just a few countries which have adopted
electric vehicles like Germany, France, Japan, UK, USA, Norway, Sweden, Netherlands, and
China.
In the end, it can be concluded that all the stakeholders have imperative accountability in the
development and execution of Tesla’s strategy. The investors are required to deal with the
patience, the government as a stakeholder should inspire people to use the electric vehicles,
the suppliers are obligatory to work hard to enhance quality and reduce costs so that electric
vehicles can be made affordable in every corner of the world.

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Bao, B. (2018, November). Tesla: A good company to invest in?. In 2018 International
Conference on Economics, Business, Management and Corporate Social Responsibility
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Boudette, N., & Musk, E. (2018). For Tesla,‘Production Hell’Looks Like the Reality of the
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Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
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Christensen, C. M., McDonald, R., Altman, E. J., & Palmer, J. (2016). Disruptive innovation:
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Cornell, B. (2016). The Tesla run-up: A follow-up with investment implications. Journal of
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Latini, A., Campiotti, C. A., Pietrantonio, E., Viola, C., Peral, V., Fuentes-Pila, J., & Sagarna,
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Li, M., Porter, A. L., & Suominen, A. (2018). Insights into relationships between disruptive
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