Global Corporate Strategy

The report evaluates details about the actions taken by Elon Musk group in order to succeed in the target market. It discusses disruptive innovation, Ansoff matrix, country of origin effect and differentiation strategy used by the Elon Musk Group. The report also highlights the positive and negative aspects of the case study.

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Global Corporate Strategy
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Global Corporate Strategy 1
Contents
Question 1........................................................................................................................................1
Question 2........................................................................................................................................3
Question 3........................................................................................................................................6
Question 4........................................................................................................................................8
References......................................................................................................................................10

Global Corporate Strategy 2
Question 1
Elon Reeve Musk is an investor and technology entrepreneur who was born in US in the year
1971. The entrepreneur believes in working with innovations and technology consistently so that
the organization can attain competitive advantage in the market without actually sustaining it for
a longer period of time. According to Musk, moat is something that reduces the competency of
an organization to earn more and grow. In fact, using innovative techniques and capabilities of
the organization will successfully help the companies present in the market to grow (Afonina
2015). Further, the below mentioned report evaluates details about the actions taken by Elon
Musk group in order to succeed in the target market. The report answers to four questions with
the help of various strategic tools and models studied in the module. Further, more details about
the group and their strategic actions are discussed below:
Disruptive innovation
Disruptive innovation refers to the innovation that creates new market and value networks by
eventually disrupting the existing business functions of the company and displacing various
activities in order to lead innovation. This type of innovation is the innovation that is majorly
produced by the entrepreneurs for their startups for the purpose of becoming different from the
herd. This type of innovation is not support by people as it can take away the scare resources
present in the sustaining or current innovation. Because of having high degree of risk in it, the
disruptive innovation factor tend to earn growth with higher penetration and higher degree of
impact on the established market segment as well (Frick 2018). Further, the ways in which
disruptive innovation factor is used by the Elon Musk Group is discussed below:
As Elon Musk is known for his nature of moulding things according to his own way so as to
earn growth by making disruptions in regular activities, so his group initiated this type of
innovation in many industries that are discussed below:
Tesla Group: There are many automobile companies present in the external market, but Tesla is
not recognized just as an automobile company that comes under the segment of automobile
industry. Disruptive innovation initiated in manufacturing the cars in the market has made the
company different. Elon Musk Group builds the best and first lowest cost electric vehicle in the

Global Corporate Strategy 3
target market that does not require dependence on the driver (Cameron, and Green 2015). The
company build a scalable clean energy group that helps in reducing the use of fossil fuels present
in the world. The Tesla group management adequately understood the need of the era that
automobile companies should minimize the use of fossil fuels so as to save it for the future
generation. Due to which the company invented electric vehicles. The company made use of
cutting-edge battery technology and electric powertrain. The company combined clean transport
and clean energy production with the automobile industry so as to provide accessible and
sustainable products to the customers in the target market.
SpaceX: Elon Musk Group found SpaceX that is regarded as the most innovative and ambitious
private aerospace company that was founded in the year 2002. Further, in the year 2017, the
company stepped into the field where no aerospace has gone. The company delivered 48
satellites into orbit and 22700 pounds of supplies to the international space station. The company
also launched reusable rocket system that helped them to make use of available resources
repeatedly, now NASA also relies on the company for the carriage and other aeronautical
services. The company is also planning to colonize Mars so as to save the humanity from some
eventual extinction events (Andersen, and Andersson 2017).
Hyperloop: It is a passenger and freight transportation design that was launched by Tesla and
SpaceX for the purpose of high speed transportation. This is a kind of technological disruptive
innovation that is hard to find in most of the companies. The concept of Hyperloop Alpha was
published by the group in the year 2013 to examine the route running from Los Angeles region
and San Francisco Bay Area. This system helped the passengers to travel 560 km route at a speed
of 1200 km/h and the preliminary cost of the above-mentioned route was expected to be $20
each way only.
So, above mentioned innovations clearly explains the disruptions made by the Elon Musk Group
to differentiate their business in the market and increase the advantage for the customer as well
as the company. Success and Failures for the group from the occurrence of such events are
discussed below:
Success Failure
PayPal Success: The time when PayPal was Tesla Autopilot System Fatal Crash: Tesla’s

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introduced, people thought that the only way to
transfer funds was through bank account
transfer. PayPal helped the people to virtually
transfer the money under the guidance of
ethical code of conduct. The system grew
taking no time because of its differentiation
and need in the external environment. The
company formed alliance with various other
organizations to increase its competence as
well (Hickman, and Silva 2018).
Autopilot system faced fatal crash in the year
2016 because the system was unable to
recognize the truck which led to the death of
the passenger (Herrera 2015).
Hyperloop Success: this is perfect use of
innovation and technology to help the people
travel in no time. Hyperloop is a tube like
machine that travels with a great speed. This
machines helps people in traveling
economically and by saving time as well
(Grünig, and Morschett 2017).
Failure to Deliver: The products manufactured
by the company are specialized in many ways
due to which the management fails to deliver
their products according to the demand present
in the market.
Strategy Success: It is not the products that are
offered by the company are innovative but the
strategies induced behind the product are
innovative that helps in growing.
Low Battery: Many of the car owners have
started facing the problem of low battery. Also,
the company is facing problem of lithium ion
shortage. The demand of EV has led to
production hell for the company (Matthews,
and Brueggemann 2015).
Question 2
Ansoff Matrix: There are basically four type strategies in the Ansoff matrix framework, these
strategies are market penetration, product development, market development and diversification.
In market penetration strategy, the company makes sure that they achieve growth in the current
market segment by increasing the market share. The company can do this by either decreasing
the price or by acquiring the rivals etc. (Rimmer 2018). Further, the company can make use of

Global Corporate Strategy 5
market development strategy by expanding the geographical boundaries of the business actions,
that is by expanding the business in different markets. Product development strategy can be
implementing by creating new product in the market. The company can perform this type of
growth strategy by investing in another product or acquiring it as well. Lastly, diversification
growth can be implement by the Elon Musk Group expanding their core competencies to succeed
in the business and increase the sales margin as well.
The company Tesla along with the Elon Musk Group should make use of diversification business
strategy to grow and succeed in the international market. The group should invest in the field of
digital and virtual space (Motohashi 2015). The company is known for making use of available
technology and procuring them in such a way that innovative products and services are received
to the people present in the market. Entering in virtual and digital space with introduce a new
stream for the company that will ultimately result in growth. Further, the company should make
use of technology in the business in such a way that it is accessible to the customers in the
market. Virtual reality will help in increasing the entertainment factor in the automobiles
manufactured by the company. Further, the company should make use of market development
strategy by introducing the product in different geographical boundaries. As the product offered
by Tesla are not available all around the world so growth strategy of the company through
market expansion will help them to become feasible and increase sales as well (Wan,
Williamson, and Yin 2015).
Country of Origin Effect: This is a psychological effect under which the customers tend to have
more trust on the companies that are founded at their native place. This type of psychological is
also known as made-in image and nationality bias. To some extent, the attitude of the customers
and their purchasing decision is influenced by the product’s country of origin labelling.
Consumers present in the market believe that the products that are manufactured from their
national region are somewhat related to them and if they are purchasing them it means there are
providing a sum of money to their country (Motohashi 2015). Further, the fact should be noted
that country of origin has a significant effect on the marketing of the company as the company in
the external market is symbolized by the name of the country. As Louis Vuitton is a luxuries
fashion brand that is related to the country French. So, this aspect subsequently increases the
sales of the company as people are already fond of French garments so they will purchase the

Global Corporate Strategy 6
product from Louis Vuitton considering it as French fashion. Further, the fact should be noted
that this aspect will benefit the company Tesla and other companies of Elon Musk Group as
Tesla is American Automotive organization and America is known for introducing technology in
the external market (McDONALD 2016). America comes under the group of most powerful
companies worldwide as they have sufficient manpower along technological resources as well.
Also, the Elon Musk Group make use of technology in the business so it relates to the national
attributes of America due to which people attain trust on the company. Thus, it can be said that
due to the national attributes of the company, people purchase the Tesla vehicles. Further, it
should be noted that the trust of people and their perception builds up as the company aims to
reduce the use of fossil fuels in the business and increase the use of renewable resources. Thus it
can be said that perception of the people based on nationality changes their purchasing decisions
in the market (King, and Baatartogtokh 2015).
Differentiation Strategy: The Company Tesla should make use of differentiation strategy to
succeed in the target market. The fact should be noted that the company is already serving in the
market in through their differentiated business strategy. As the company has introduced electric
vehicles which no other organization has manufactured in the market. But, apart from this, the
company should focus on targeting the premium clients but introducing vehicles of premium
category. There is wide range of super-premium category for the Tesla Motors in the market, so
the company should shift their mind from the innovation and technology development and
should focus on the premium clients so as to satisfy the investors and earn profits as well (Musk
2015). This type of strategy will help the company to earn good amount of profits by targeting
the premium clients present in the market. Focused differentiation strategy refers to the strategy
of targeting a small group of customers by introducing differentiated products in the market. The
fact is known to all the premium clients are the skimmed customers present in the market, all the
company wish to maximum premium clients in the market as they provide great amount of
profits to the company (Perkins, and Murmann 2018). So, the company Tesla should shift their
focus from manufacturing innovative products to manufacturing premium quality products in the
market so as to satisfy the need of premium clients. This will increase the sales for the company
and profit margin as well. Premium products have high profit margin that acts as benefit for the
company. Thus, the fact should be noted that with the use of above mentioned strategies the
company can successfully grow and increase profit margin in the market (Waters 2015).

Global Corporate Strategy 7
Question 3
There are various positive as well as negative aspect that are related to the case study given about
Elon Musk Group. The case study mentioned clearly explained the innovations used by the
company Tesla, SpaceX etc. to grow and succeed in the target market. Innovation can be
considered as the most important aspect of the whole business functions of the Elon Musk
Group. Also, it should be noted that disruptive innovation offered various valuable features to the
group that helped them to sustain their image in the target market. In today’s world, companies
that have the capacity to differentiate them from the herd can gain the advantage to succeed and
earn profits in the market; otherwise, all the companies lie on mediocre line only(Rugman, and
Verbeke 2017). Further, below mentioned are few points to consider from the case study of the
Elon Musk Group:
 Innovation should be utilized to the extent it is managed by the people in environment.
Innovation can act in positive as well as negative ways for the company, as companies
not successfully implying innovation in the business can attain heavy losses. The fact
should be noted that innovation requires the use of various resources along with
manpower and if such innovation is not successfully implied in the business then it gets
wasted. However, the company Tesla adequately utilized all the available resource to
successfully deliver innovation in the market (Nykvist, and Nilsson 2015).
 Secondly, it’s not about innovating the product but it is about innovating the internal
functions of manufacturing the product. In order to introduce an innovative product in the
market, the companies does not need to add complete innovation in it but they need to
make use of innovation in the internal structure so as to deliver that innovation in the
product as well (West, Ford, and Ibrahim 2015).
 Lastly, it should be noted that it is important to satisfy all the investors and stakeholders
of the company then only the management would be successfully be abled to attain
innovation in the business. Interruption of different factors can lead to failure of
innovation in the market. Also, it should be noted that disruptive innovation should be
used to the extent it can be managed by the employees in the company (Booth 2016).

Global Corporate Strategy 8
After listing various facts learned from the case study of Elon Musk Group, below mentioned are
the strategic lessons that can help other companies to succeed in the external market using
innovation:
Continue Sustaining Innovation: continue sustaining innovation refers to the innovation that
enables or sustains a product of the company. Under the process of continuous sustaining
innovation, the company gets to make use of innovation and technology for their product in such
a way that the role of product changes and it becomes more useful to the customers in the
market. The companies do not need to change the innovation or introduce new technology in the
business for some years by using sustaining innovation (Dobbs 2016). Further, the fact should be
noted that the company Tesla made use continuous sustaining innovation to grow in the target
market. The company introduced innovation that was not present earlier in the market due to
which they earned first mover advantage, apart from this the company also initiated innovation
that no company would be able to use in near future. This helped them to consistently maintain
their competitive advantage for a period of time. Innovations like Hyperloom and electric
vehicles were not introduced in the market earlier, so introduction of such products and service
initiated continuous sustaining innovation in the market. So, it can be said that this type of
innovation can successfully help the companies to earn sustained competitive advantage in the
target market (Ene, and Ionescu 2017).
First Mover Disadvantage: Most of the people have heard about the fact that the companies that
introduce some actions or products in the external market, they earn the first mover advantage.
However, not all the time this advantage is received to the company, as many times the
companies can face disadvantage in moving first because of not knowing the response of the
customers and other stakeholders present in the market. Similarly, this valuable fact can be
learned from the business functions of the company Tesla (Hill 2017). Considering the case, it
should be noted that the company only faced first mover advantage in all the cases as they played
very safely. The company utilized all the resources available with and they did not expand their
innovation above the boundaries or capacity of the company. The company also took proper care
of stakeholder’s need and requirement and introduced things that were actually required.
Governmental and the environmental needs were also properly satisfied by the company.
However, no organization should assume by looking at the growth rate of Tesla that they could

Global Corporate Strategy 9
also achieve first mover advantage in the market as the company successfully managed the
business functions more than managing the innovation (Hardman, Shiu, and Steinberger-
Wilckens 2015).
Thus, in the limelight of above mentioned events the fact should be noted that the report
evaluated the answer to four questions given in the case study. The case study explained
information about the company Tesla and Elon Musk Group. There are various features that
helped in understanding the advantages earned by Tesla and the ways in which the company
utilized innovation to grow and succeed in the international market. The company majorly
earned succeed in the automobile industry because of maintaining innovation in an adequate
manner. The company earned the first mover advantage in the market because of successfully
utilizing the innovation in the internal structure of the company.
Question 4
The above mentioned assignment successfully helped me to earn information about the changes
happening in the external market. Information about the company Tesla helped understanding
that innovation plays a huge role in influencing the people in the target market. Innovation also
helps the companies in growing and maintains their growth as well. Tesla successfully managed
to sustain its growth by introducing products and services in the market that no other company is
currently capable to introduce. This made the resources of the company rare as well as non-
imitable. Along with this, the company is also placed at the right position in the external market
as the organization perform innovations so its name comes under the most innovative company
worldwide. This assignment helped me in acknowledging the trends present in the global
corporate environment that benefits as well as fluctuates the business strategies of companies
(Stringham, Miller, and Clark 2015). Further, it also helped in acknowledging that the global
strategy used by the companies also plays a huge role in analysing the growth of the company.
The corporate strategy should always be prepared for the contingencies then only the company
can succeed in the external market. Furthermore, the companies should not always think about
profits and growth, they should also think about the overall environmental growth. Sustainable
advantage is a good thing to achieve, also it helps the company to continuously earn profits in the
target market but this advantage will reduce one day or other if the company does not focus on

Global Corporate Strategy 10
managing the competitive advantage. Thus, the fact should be noted that it is more important for
the companies to find out innovative ways to manage or grow their innovation than to sustain the
advantage earned. There are various global corporate strategies present in the market that the
companies can utilize in order to succeed in the external market. In my perspective, the
companies should initially utilize market penetration strategy and then make use of
diversification strategy. They should firstly penetrate the market in which they currently are and
then diversify the business in different sectors.

Global Corporate Strategy 11
References
Afonina, A., 2015. Strategic management tools and techniques and organizational performance:
findings from the Czech Republic. Journal of Competitiveness, 7(3).
Andersen, T.J. and Andersson, U., 2017. Multinational Corporate Strategy-Making: Integrating
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Booth, D., 2016. Strategy Journeys: A Guide to Effective Strategic Planning. Routledge.
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to
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Dobbs, M. E. 2016, Tesla, SpaceX, and the Quest for a Fantastic Future. Journal of Applied
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Frick, W. 2018. “A 40-Year Debate Over Corporate Strategy Gets Revived by Elon Musk and
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Hardman, S., Shiu, E. and Steinberger-Wilckens, R., 2015. Changing the fate of Fuel Cell
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energy, 40(4), pp.1625-1638.

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Herrera, M.E.B., 2015. Creating competitive advantage by institutionalizing corporate social
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