Organizational Strategy Development: A Case Study of Tesla Motors

This report provides a strategic analysis of Tesla Motors, an American automotive and energy company, using tools such as Porter's Five Forces analysis, value chain analysis, and SWOT analysis to develop effective organizational strategies. The analysis reveals that Tesla Motors is currently focused on new product development, particularly in self-driving car technology and sustainable transportation solutions. The report suggests that while the company excels in technology and sustainability, it needs to focus on cost reduction to broaden its market appeal and compete effectively. Recommendations include implementing training programs to support a low-cost strategy and using PESTEL analysis for a better understanding of external environmental factors. The ultimate goal is to enhance Tesla's competitiveness and profitability while maintaining its commitment to sustainable transportation.

INDIVIDUAL ASSIGNMENT

Table of Contents
INTRODUCTION AND AIM.........................................................................................................1
CRITICAL ANALYSIS..................................................................................................................1
Concepts, tools, and techniques...................................................................................................1
Justification for choosing the concepts........................................................................................4
DEVELOPMENT OF ORGANIZATIONAL STRATEGY...........................................................5
Current business strategy and key elements of the organizational strategy................................5
Result of the concepts applied.....................................................................................................5
Developing a strategy for Tesla motors.......................................................................................6
Strategic plans must include issues..............................................................................................6
RECOMMENDATION...................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10
Application of concepts.............................................................................................................10
Value chain analysis:.................................................................................................................10
Porter’s five forces analysis.......................................................................................................10
SWOT analysis..........................................................................................................................10

TABLE OF FIGURE
Figure 1 Value chain analysis..........................................................................................................2
Figure 2 Porters five forces model...................................................................................................3

EXECUTIVE SUMMARY
Strategic management is being regarded as the systematic process of framing strategy for
the company. In this study, the discussion is being carried out in relation to the case study of
Tesla Motors which is an American famous automotive company. With an aim to develop the
strategy of the company, assistance is being taken from the tools like Porter’s five forces analysis
and value chain analysis. By using the given tool, detail information in relation to the internal
and external environment of a company can be gained. The respective information will help the
company in the process of making the right decision.
In addition to this, from the conducted analysis it is found out that the manager of Tesla
Motors is complying with new product development type of tactic. Thus, it is making efforts in
terms of developing such type of cars in the market which is far better than the normal cars. It is
recommended to Tesla Motors that it should arrange training and development programs for the
company. This is because; it is through this way only a firm is able to attain the new strategy
which is low-cost services to the firm. Further, the firm should also use a tool like PESTEL in
order to get the idea about the factors in the external environment of the firm.

INTRODUCTION AND AIM
Strategic management is the process of managing organizational resources in such a
manner so that the goals and objectives of the firm can be met. For any company, the concept
such as strategic management has significant importance. This is because; it is through this way
only a firm is able to attain its strategic objectives. This will also help in improving the profit of
enterprise in an effectual way (Ansoff and et.al., 2018). This report is based on the case study of
Tesla motors. Tesla is an American automotive and Energy Company that has it’s headquarter
situated in California, US. The firm operates its operation all over the world and it has
specialization in making solar cars.
The main aim of this project is to develop a strategy for the cited company by taking help
from different tools and concepts. At first, the report will present the critical analysis of selected
tools and techniques. Further, this report will also state about the strategy that can be used by
Tesla with an aim to work well in the market. Finally, at the end of analysis recommendation
will be suggested that will assist Tesla in the right direction.
CRITICAL ANALYSIS
Concepts, tools, and techniques
The main mission of Tesla motors is to transform the whole world transportation into
sustainable transport. However, the case reveals that with an aim to attain the respective mission
the company making use of its technology as well as value creation activities. On the other hand,
the company is also using a forward integration approach with an aim to cut down the overall
cost of the manufactured product in an effectual way.
In this regard, it can be said that value chain analysis, SWOT analysis and Porter's five
forces model are being regarded as three most important concepts that can be used with an aim to
develop an effective strategy for the cited company. The very first concept is of value chain
analysis.
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Figure 1 Value chain analysis
(Source Moutinho & Vargas-Sanchez, 2018)
The given model tends to give a description of the primary and supporting activities of
Tesla motors. Here, by using the given model the manager of Tesla motors can give detail
description of its activities. Thus, it is through this way only it can get an idea in relation to the
activity which is increasing its overall cost or which is not working as per the set vision of the
company, etc. The given information will help the company in the task of making the decision
about the firm’s strategy. This is the manner in which value chain analysis model is being
applied in Tesla motors in an effectual way.
Besides this, the porters five forces model is being regarded as another concept that will
also be applied in the operation of Tesla motors.
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Figure 2 Porters five forces model
(Source: Meyer & Xin, 2018)
This is a competitive analysis tool with the help of which the manager of Tesla motors is
able to get the information about its external environment. By using this tool information about
competitors, suppliers, buyers and substitutes can be gathered. By having all these kinds of
information manager of the firm can take the correct decision in relation to the strategy which it
needs to obtain. However, it is to be critically evaluated that porters five forces model is effective
but it is proved as appropriate when a firm has gathered as accurate information about the
external environment has. This is because; if this will not happen then the tool will not be
considered as effective.
The SWOT analysis of Tesla motors is carried out and it is depicted below.
Strength Weakness
 It makes use of highly advance
technology for the purpose to
manufacture its products.
 The company has its own distribution
 Many customers are not aware about
the products of company.
 The firm is very much poor in
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channel which enables it to save the
cost of middlemen.
 The firm is putting major focus over the
concept such as sustainability.
maintaining liquidity.
Opportunity Threat
 To introduce product with new
technology
 To get entry in the untapped market
 From the competitors like general
motors and ford.
 From the changing tastes and
preferences of buyers.
Justification for choosing the concepts
For the case of Tesla motors, these both concepts are taken into consideration. This is due
to the fact that the case reveals that cited firm complies with the forward integration type of
approach with an aim to attain its tactical goals. In forwarding integration, the main motive of the
firm is to reduce the overall cost of the firm (Aracil Fernández & Forcadell, 2018). This can be
done by getting the information about the activity that can be eliminated from the process.
Hence, with the help of value chain analysis manager of a firm can get an idea about the roles
and responsibilities that need to be performed by different individuals in each activity of value
chain analysis. On the other hand, by using porters five forces model information about the
firm’s external environment can be gathered. This will also guide the firm towards the correct
path in terms of selecting a suitable tactic for Tesla motors. It is because of the given reason only
both concepts are taken into consideration for analysis purpose. Overall, it can be depicted that
with the assistance of these two given concepts the Tesla motors can improve its competitiveness
in the market which is generally affected when a firm makes a decision without giving
consideration to the internal and external environment (Slack & Brandon-Jones, 2018).
The SWOT analysis is selected as concept because with the help of given tool Tesla
motors can get idea about the main strength which it can use in order to perform the practical
implementation of the selected strategy. It is through this way only firm can direct its efforts
towards correct direction. It is the reason why SWOT is selected as concept.
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DEVELOPMENT OF ORGANIZATIONAL STRATEGY
Current business strategy and key elements of the organizational strategy
Organizational strategy is being regarded as the sum total actions which are taken by a
firm with an aim to accomplish the long term goal of the enterprise. For any organization, it is
very essential that they should frame a strategy for its enterprise (Coen & Vannoni, 2018). This
is due to the reason that if the firm will not formulate the strategy then in this situation it will
become very difficult for it with regard to marking an effectual presence in the market which is
highly competitive in nature.
In this regard, there are some key elements of organizational strategy examined. These
are vision, values, clearly defined outcomes, accountability, and key performance indicators.
These are the major elements of any strategy. Here, vision defines the long term direction of the
firm and thus on the basis of the same Tesla motors can frame short term goals. Similarly, values
define the ethical aspect of the organization which it wants to follow. On the other hand, a person
should also be clear KPI’s which will help in performing evaluation of the strategy which is
being framed by Tesla motors (Köseoglu and et.al., 2019).
On the basis of the same, it has been analyzed from the case study of Tesla motors that in
terms of business strategy cited firm major focused is towards the development of its existing
product. The firm has a goal to develop the self-driving capability in its car which is 10 times
safer than the manual car. On the other hand, to provide the best quality of the solar car to the
customers is being regarded as another strategy of the cited company. Thus, the firm is directing
its efforts towards these two major goals and for this, it is making use of different types of
technologies.
Result of the concepts applied
The results of the value chain analysis and porters five forces model are being applied to
the operation of Tesla motors. Here, from the value chain analysis, it is assessed that the firm has
very qualified research and development team that has specialization in giving solution to any
kind of automotive related problem. Thus, the given result is giving support to the current
business strategy of the cited firm. This is because, for the purpose to develop the new product,
the firm always needs expert suggestion but if they will not get the same then in this situation
there are chances that firm efforts could be directed in the wrong direction (Kerzner, 2019).
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Further, Porter's five forces model also gives support to the product development
strategy of Tesla Motors. Herein, this model gives a description of the factors which have an
influence on the operation of the firm. Thus, by taking actions towards the identified factor the
Tesla motors can direct its efforts towards the strategic goals and objectives in an effectual way.
Thus, the results of the concepts are giving support to the Tesla motors current strategy.
Developing a strategy for Tesla motors
It can be said that from the porters 5 generic strategies, focus strategy or the low-cost
strategy is being regarded as one of the most effective strategies for Tesla Motors. This is
because the vision of the firm states that it wants to make the whole world sustainable. However,
with an aim to attain the same, the firm is making the production of automobiles which do not
cause a negative impact on the natural environment of the nation. But, along with the product
development strategy, it is also required by the manager of Tesla Motors that it should comply
with the low-cost type of strategy. This is due to the reason that it is by making the production of
low-cost automobile only, the firm can influence its buyers with regard to purchasing the goods
and services of the firm. This will also have a positive impact on the overall profit of the
enterprise. Additionally, by employing a low-cost strategy the cited firm can also give tough
competition to its respective competitors. This is because it has been seen that in the present
business environment it is essential for the firm that it should use low pricing approach with an
aim to attract a large number of buyers towards the firm (Stoyanova, 2018).
Strategic plans must include issues
In the process of pursuing the strategic plan like a low-cost strategy, there are different
issues examined that need to be considered by the manager of Tesla Motors. The very first issue
is related to sustainability. This issue reveals that it is the responsibility of the firm that it should
make its efforts in such a manner that no impact will be caused by the natural environment of the
nation (Chernev, 2018). On the other hand, fulfilling the expectation of stakeholder is another
issue. The stakeholders of the company always expect a high quality of goods and services from
the firm. However, here it is the responsibility of Tesla Motors manager that it should make sure
that in the process of delivering the low-cost product to buyers, it should not make any kind of
compromise on the quality of product delivered. Further, the firm should also fulfill the ethical
responsibility and thus should communicate the correct things about the products and services. It
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is by managing these all given issues only; Tesla Motors is able to attain the goals and objectives
of the firm in an effectual manner (Ma & Seidl, 2018).
RECOMMENDATION
After considering the whole scenario there are a number of recommendations are
suggested to the manager of Tesla Motors. By complying with given recommendations, the cited
firm can mark its effectual presence in the markets where it is running its functions. At first, it is
recommended to Tesla Motors that with an aim to pursue its goal it should put more focus on the
training and development of its employees. This is because the case reveals that the firm has a
strategy to manufacture a self-driving car. However, with an aim to convert the given plan in a
practical way, a team of skilled and talented employees will be required. However, they can be
gained with the help of training and development related program of the company.
On the other hand, it is also recommended that the manager of Tesla Motors should also
perform a thorough analysis of the business environment. For this purpose, the firm should take
help from a PESTEL analysis tool. This is because by using this firm can get the idea about the
factors which could affect its strategic plan such as low-cost strategy. Hence, these are the major
things that need to be considered by Tesla Motors in an efficient way.
The aspects of ethical strategic leadership are evaluated. An ethical leader is the type of
leader that has a capability to judge between what is right and what is wrong. Such type of leader
tends to exhibit morals and values in the managerial position. The ethical leader tends to give
respect to the values of others. Thus, whatever decision it will make does not cause an impact on
the employees who are working in a firm. In addition to this, such type of leader always involve
employees in the decision-making process. However, it is to be critically evaluated that the given
type of leadership is proved as effective when a firm has sufficient time in making a decision.
Thus, it will be proved as ineffective when the firm does not have sufficient time it needs to
make a quick decision. In the given circumstance, the firm cannot take opinion from the other
individuals who are working in a firm.
In addition to this, the ethical leader also fosters the concept of team spirit within the
firm. In accordance with the given context, such type of leader main objective is to attain the
goal of the firm. But, it does not want to attain it alone. Here, such kind of leader wants that
whole team of the organization should be committed in the task of attaining the goal of the firm.
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But, it is to be critically evaluated that respective form of ethical leadership aspect is effective
but there are some goals which cannot be accomplished by the firm in the group. This is because
there are some confidential things that a leader cannot share with its teammates. Thus, in the
given situation a leader is not able to attain its ethical goals and objectives.
CONCLUSION
From the conducted analysis, it can be said that for the manager of an enterprise like
Tesla Motors it is very much essential that it should frame its organizational strategy after
considering the internal and external environment. However, with an aim to perform the same it
should take help of some type of tools. This is due to the reason that it is with the help of tools
only a firm is able to get the idea that whether it is directing its efforts towards the correct path or
not.
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