Environmental Analysis of Tesla

The report provides an environmental analysis of Tesla, Inc. including PEST analysis, Porter's five forces analysis, and SWOT analysis. It also recommends different advances that can be taken to gauge and deal with its difficulties, issues and dangers.

Running head: Environmental analysis of Tesla
Environmental analysis of Tesla
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1Environmental analysis of Tesla
Executive summary
The aim of the report is to focus on the environmental analysis based on the organization
mentioned in the case study that is Tesla, Inc. It states the importance of environmental analysis
in the sphere of business strategy. The report has elaborated on the different issues or difficulties
that Tesla faces because of various reasons as per the case study. Meanwhile, the report also
analyses the quality and chances of the organization. The study continues the discussion by
recommending the different advances that can be taken to gauge and deal with its difficulties,
issues and dangers. The paper starts with a discussion which gives a general review of
environmental examination and then proceeds with PEST analysis, Porter's five forces analysis
and SWOT analysis.

2Environmental analysis of Tesla
Table of Contents
1. Introduction..............................................................................................................................2
2. Literature review......................................................................................................................2
3. Discussion....................................................................................................................................3
3.1. Evaluation of the industry trends using PEST Model...........................................................3
3.1.2 Political factors...................................................................................................................3
3.1.3 Economic factors................................................................................................................4
3.1.3 Social factors.................................................................................................................4
3.1.4 Technological factors..........................................................................................................5
3.2. Analysis of the competitiveness of the U.S. Automobile Industry – Porter’s Five Forces
Model...............................................................................................................................................6
3.2.1 Buyer’s power – Moderate.................................................................................................6
3.2.2 Supplier power – moderate.................................................................................................7
3.2.3 Threat of substitution – Moderate.......................................................................................7
3.2.4 Competitive rivalry – Moderate..........................................................................................8
3.2.5 Threat of new entry - Low..................................................................................................8
3.3. Analysis of the SWOT for Tesla Motors, Inc...........................................................................9
3.3.1 Strength...............................................................................................................................9
3.3.2 Weakness..........................................................................................................................10
3.3.3 Threats..............................................................................................................................10

3Environmental analysis of Tesla
3.3.4 Opportunities....................................................................................................................10
4. Conclusion..............................................................................................................................11
5. References..............................................................................................................................13

4Environmental analysis of Tesla
1. Introduction
The examination aims to give an internal and external market investigation on account of
the organization named Tesla, Inc. It expresses the significance of environmental analysis in
central administration. The report will center on the different issues or difficulties that Tesla is by
and by looking because of various reasons. In the meantime, the report likewise investigates the
quality and chances of the organization. The report finishes up by prescribing the different
advances that can be taken to gauge and deal with its difficulties, issues and dangers while
rolling out improvements in its current approaches with the end goal to build item deal and hold
its situation in the market. The paper starts with a writing audit which gives a general review of
environmental examination alongside PEST investigation, Porter's five powers investigation and
SWOT investigation. The whole talk gives a rundown of it in the closing passage with significant
discoveries.
2. Literature review
According to E Dobbs (2014), environmental analysis comprehends the impact of the
outer and inward condition on an organization's development. Such kind of examination is the
key factor of a market investigation External investigation decides the business methodology by
auditing of the external components or condition, while, an internal review is the investigation of
variables internal the business. On the other hand, as per Ho (2014), Porter’s Five Sources
investigation is by and large led by performing full-scale environmental segments that is PEST
analysis – political, financial, social, and innovative components Porter's five powers
investigation. Bull et al. (2016) suggests that in the event of internal examination, SWOT

5Environmental analysis of Tesla
analysis is performed. Interior and external research is the significant piece of essential
administration to comprehend the probability, existing position, and further tasks of business.
Hence the paper leads the research dependent on the organization named Tesla.
3. Discussion
3.1. Evaluation of the industry trends using PEST Model
3.1.2 Political factors
Tesla Inc. is one of the leading companies in the automobile sector of the United States.
The automobile industry of US is one of the fast-growing areas among the business sphere. The
company has gained enough popularity at the forefront of electric vehicles. Instead of traditional
fuel run vehicles, the cars manufactured by Tesla Inc. run by both gas and electricity (Hill, Jones
and Schilling 2014). Moreover, the vehicles used by Tesla use less fuel, unlike the traditional

6Environmental analysis of Tesla
cars. Thus, it can be seen the US government’s directives of industrial low carbon emission
influence the Tesla significantly which can be evident as the company use such advancement in
its business development. The free trade policy, on the other hand, impacts the company in a
positive manner due to which the company focuses more on foreign markets.
3.1.3 Economic factors
The automobile industry of the United States generates a tremendous amount of revenue
to the overall economy of the company. The current decrease in the cost of the battery within the
US market helps the company to produce more with a high quality of the battery (Hitt and Duane
Ireland 2017). On the other hand, due to the cost reduction in the area of battery usage, the
company has been able to invest more in other areas which can enhance its competency than
other rival companies. The primary current trend in the US Market is the use of renewable
energy source at an exponential rate. Using the advantage, Tesla makes its products more
affordable as well as environment-friendly for its target customers (Ethiraj, Gambardel and
Helfat 2018). However, in this regard, it needs to be discussed that the unstable economic
condition in the international markets where the company operates business impact grossly since
it determines the market prices while having a significant effect on the purchase behavior of the
customers. The political and trade acts and its recent changes similarly have an adverse effect on
the sales of the company.
3.1.3 Social factors
The United States with its world class institutes is the hub of skilled professionals which
enable the company to hire the best talents from the reputed institutes and use their excellence in
its business process (Schaltegger and Wagner 2017). As a result, it is seen that the individuals of
different cultural diversity are included in the workforce of the company since a large number of

7Environmental analysis of Tesla
students from different corners of the world used to come to the United States with the aim of
studying. Most importantly, with more students choosing the engineering studies as a career
option, the company is benefitted since it deals in the electronics and technological field (Burns,
Bush and Sinha 2014). On the other hand, influenced by the environment-friendly drive globally,
the company is driven to implement low carbon measure along with renewable energy source in
its business process.
3.1.4 Technological factors
With an exponential rate technological advancement and its uses are being rapidly used
in the entire business sphere of the United States, and the automobile industry is no exception
(Wheelen et al. 2017). The company over the years has been using newer technology keeping the
marketing requirement in mind so that it can provide the customers with a more user friendly,
affordable, latest technology based cars.

8Environmental analysis of Tesla
3.2. Analysis of the competitiveness of the U.S. Automobile Industry –
Porter’s Five Forces Model
3.2.1 Buyer’s power – Moderate
Tesla Inc. is one of the leading companies in the automobile sector of the United States.
The automobile industry of US is one of the fast-growing sectors among the business sphere. The
company has gained enough popularity at the forefront of electric vehicles (Grant 2016). Instead
of traditional fuel run vehicles, the cars manufactured by Tesla Inc. run by both gas and
electricity. Moreover, the vehicles used by Tesla use less fuel, unlike the traditional cars. Thus, it
can be seen the US government’s directives of industrial low carbon emission influence the Tesla
significantly which can be evident as the company use such advancement in its business
development (Burns, Bush and Sinha 2014). The free trade policy, on the other hand, positively
impact the company due to which the company focuses more on foreign markets. Hence, it can

9Environmental analysis of Tesla
be stated from the above analysis that the bargaining power of the buyers or customers of Tesla
is moderate.
3.2.2 Supplier power – moderate
The vehicle business of the United States creates a great measure of income to the
general economy of the organization (Schaltegger and Wagner 2017). The current reduction in
the expense of the battery internal the US advertise encourages the organization to create more
with a high caliber of a battery. Then again, because of the cost decrease in the territory of
battery use, the organization has possessed the capacity to contribute more on different zones
which can improve its competency than other adversary organizations (Ethiraj, Gambardella and
Helfat, 2018). The significant current pattern in the US Market is the utilization of sustainable
power source at an exponential rate which suggests a moderate bargaining power of the
suppliers of Tesla Inc..
3.2.3 Threat of substitution – Moderate
Utilizing the preferred standpoint, Tesla makes its items more reasonable and additionally
condition inviting for its objective clients (Hitt and Duane Ireland, 2017). In any case, in such
manner, it should be examined that the shaky financial condition in the global markets where the
organization works business effect terribly since it decides the market costs while hugely affect
the buy conduct of the clients. There are several companies in the US automobile industry like
Porche which focuses not only on products rather on the services in order to compete with rival
companies. Hence, it implies a moderate rate of threat of substitution for the company.

10Environmental analysis of Tesla
3.2.4 Competitive rivalry – Moderate
The United States with its reality class foundations is the center point of gifted experts
which empower the organization to procure the best abilities from the presumed establishments
and utilize their magnificence in its business procedure (Hill,Jones and Schilling 2014).
Subsequently, it is seen that the individuals of various social assorted variety are incorporated
into the workforce of the organization since a substantial number of understudies from different
corners of the world utilized to go to the United States with a point of examining (Ethiraj,
Gambardella and Helfat 2018). Above all, with more understudies selecting the building
contemplates as a lifelong alternative, the organization is profited since it bargains in the
hardware and mechanical field (Hitt and Duane Ireland 2017). Then again, impacted by the earth
neighborly drive all-inclusive, the organization is headed to actualize low carbon measure
alongside sustainable power source in its business procedure. Thus, with the existence of top
automotive manufacturer, it can be stated that the competitive rivalry for Tesla is moderate.
3.2.5 Threat of new entry - Low
Along with exponential rate, innovative headway and its uses are as a rule quickly
utilized in the whole business sphere of the United States and the car business is no exemption
(Schaltegger and Wagner 2017). The organization throughout the years has been employing
more up to date innovation remembering the advertising prerequisite with the goal that it can
give the clients a more comfortable to use, moderate, most recent change based autos. This
suggests a lower rate of the threat of new entrants in the automobile industry of US since the
company uses the latest technology based innovation in its products which new companies can
hardly think of.

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3.3. Analysis of the SWOT for Tesla Motors, Inc
3.3.1 Strength
Tesla Inc. is one of the leading organizations in the car part of the United States. The car
business of US is one of the quickly developing divisions among the business circle. The
organization has sufficiently increased prevalence at the bleeding edge of electric vehicles
(Burns, Bush and Sinha 2014). Rather than conventional fuel run vehicles, the autos made by
Tesla Inc. keep running by the two elements gas and power. Additionally, the cars utilized by
Tesla utilize less fuel dissimilar to the conventional vehicles. Subsequently, it very well may be
seen the US government's mandates of mechanical low carbon outflow impact the Tesla
altogether which can be apparent as the organization utilize such progression within its business
advancement (Grant 2016). The unhindered commerce arrangement then again positively affects
the organization because of which the organization concentrates more on foreign markets.

12Environmental analysis of Tesla
3.3.2 Weakness
The vehicle business of the United States makes an enormous proportion of pay to the
general economy of the association. The present decrease in the cost of the battery internal the
US promotes urges the association to make more with a high gauge of the battery. Of course, as a
result of the cost diminish in the domain of battery utilize, the association has had the ability to
contribute more various zones which can enhance its competency than other associations
(Wheelen et al. 2017). The outstanding current example in the US Market is the use of a practical
power source at an exponential rate. Using the favored point of view, Tesla makes its things
more sensible and moreover condition welcoming for its goal customers.
3.3.3 Threats
Regardless, in such way, it ought to be analyzed that the unstable budgetary condition in
the worldwide markets where the association works business influence frightfully since it
chooses the market costs while huge influence the purchase lead of the customers (Grant 2016).
The political and trade acts and its progressing changes additionally adversely influence the
offers of the association.
3.3.4 Opportunities
The United States with its existence class establishments is the internal purpose of skilled
specialists which enable the association to get the best capacities from the assumed foundations
and use their radiance in its business strategy (Ethiraj, Gambardella and Helfat 2018). In this
manner, it is seen that the individuals of different social grouped assortment are joined into the
workforce of the association since a significant number of understudies from different corners of
the world used to go to the United States with a point of analyzing. Most importantly, with more
understudies choosing the building mulls over as a long-lasting option, the association is

13Environmental analysis of Tesla
benefitted since it deals in the equipment and mechanical field (Schaltegger and Wagner 2017).
On the other hand, affected by the earth neighborly drive comprehensive, the association is made
a beeline for realizing low carbon measure close by a maintainable power source in its business
method. At an exponential rate, imaginative progress and its uses are standard speaking
immediately used in the entire business sphere of the United States and the vehicle business is no
exclusion (Burns, Bush and Sinha 2014). The association consistently has been using more a la
mode advancement recollecting the publicizing essential with the objective that it can give the
customers an all the more simple to utilize, moderate, latest development based automobiles.
4. Conclusion
Thus, in order to conclude, it can be stated that the point of the examination is to give an
internal and external market examination provide a record of the association named Tesla, Inc.
Additionally, it communicates the hugeness of environmental investigation in the key
organization. The report will base on the diverse issues or troubles that Tesla is before long
looking a direct result of various reasons. Meanwhile, the statement similarly examines the
quality and odds of the association. The report completes up by recommending the distinctive
advances that can be taken to check and manage its challenges, issues and perils while taking off
enhancements in its current methodologies with the ultimate objective to manufacture thing
arrangement and hold its circumstance in the market. The paper begins with a composition
review which gives a general survey of regular examination close by PEST examination, Porter's
five forces examination and SWOT examination. The entire talk gives a summary of it in the end
entry with huge disclosures. Normal examination grasps the effect of the external and internal
condition on an association's improvement. Such sort of analysis is the critical factor of market

14Environmental analysis of Tesla
examination. External examination chooses the business approach by inspecting of the external
segments or condition, while, internal inspection is the examination of elements internal the
business. External examination is all things considered driven by performing full-scale
environmental sections that is PEST examination – political, money related, social, and
imaginative parts Porter's five forces examination. In the case of inward examination, SWOT
examination is performed. Internal and external investigation is the noteworthy bit of key
organization to appreciate the likelihood, existing position, and further errands of business. Thus
the paper drives the examination subject to the association named Tesla.

15Environmental analysis of Tesla
5. References
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C.,
Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services
framework. Ecosystem Services, 17, pp.99-111.
Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management. Strategic
Management Journal, 39(6), pp.1529-1529.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.

16Environmental analysis of Tesla
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management
and business policy. pearson.