Global Strategy - Tesla Motors Inc

Global Strategy
Introduction
Tesla, Inc. (formerly known as Tesla Motors Inc.) is a US-based automobile company
that designs, manufactures, and sells electric cars and electric vehicle power train
components, with a focus on energy innovation (Tesla n.d.) ` the company was
founded by a group of innovative Silicon-Valley engineers in 2003 with its CEO Elon Musk the
company has made quite a name for itself over the years both at home and abroad given that it
delivered the world’s first fully electric car model, the Tesla Roadster in February 2008. Tesla
has over 272 stores worldwide. Today, Tesla builds in addition to all-electric vehicles,
infinitely scalable clean energy generation and storage products. Tesla believes the
faster the world stops relying on fossil fuels and moves towards a zero-emission
future, the better. All Tesla vehicles are produced at its factory in Fremont,
California, where the vast majority of the vehicle’s components are also made.
In the past two decades, companies have shifted their orientation from domestic to
global and are using global marketing techniques to reach international markets
(Davis and et. al. 2000).The purpose of this paper is to analyze the strategic
activities and decisions of Tesla. Tesla is available in Romania through several car
dealers; the company has no official representation in this market. One of the car
dealers that imports Tesla models in Romania is a company by name Auto Vision,
which is directly sourced from the Tesla Germany stock.
Multi domestic strategy
A multi-domestic company refers to a business that uses a different approach in
each of the markets it operates in. According to this strategy the headquarters
delegates considerable autonomy to the country managers given them the freedom
to operate on their own and according to local preferences and differences. A multi-
domestic approach typically entails the presence of geographic divisions and/or a
portfolio of relatively independent national units(Verbeke and Kenworthy, 2008).
When considering an expansion into a new market, it makes sense for any firm to
choose a region where it already has a competitive advantage. If a business is able
to offer a product or service no one else is already providing, it will have a high
chance of success.

Transnational strategy
A transnational strategy is most commonly understood as a middle ground between
a multi domestic strategy and a global strategy. This strategy requires the firm to
blend its desire for efficiency with the need to adjust to local preferences within
different countries. The company tries to modify its products by meeting local
market needs by applying the model ‘standardize whenever possible; adapt when
necessary.’ But not only that they are able to operate at highest efficiency and at
high customization levels but also the transnational strategy is concerned with
transfer of knowledge and continuous learning (Henry, 2008)
Global Strategy
A global strategy entails sacrificing responsiveness to local requirements within
each of its markets in favor of emphasizing efficiency unlike the multi domestic
strategy that focuses on responding to local market demands. The highlight of this
strategy is the idea of centralized coordination and control of R&D, production,
marketing, and after-sales service. It may or may not involve minor modifications
to products and services different markets. A global strategy lays emphasis on the
need to gain economies of scale by basically offering the same products or services
in each market. According to the global strategy the company seeks to control the
country operations so as to minimize duplication and maximize efficiency,
effectiveness, and learning worldwide. The major advantages of this approach
relate to the fact that costs are lowered and it is easier to manage and avoid
duplication.
International strategy
The main advantages of the international strategy include lowering costs, through
economies of scale that lower production costs and access to cheaper supplies.
Another advantage is that risks are diversified when operating in different countries.
If a firm focuses completely on one country and the negative events in the said
country ruin the activities of the firm it will be more damaging compared to if there
were other wings of the company in different countries.