Strategic Management of Tesla: Position, Choice and Action
Added on 2022-10-06
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Running head: MANAGEMENT
Strategic Management
Name of the Student:
Name of the University:
Author Note:
Strategic Management
Name of the Student:
Name of the University:
Author Note:
1MANAGEMENT
Table of Contents
Introduction:....................................................................................................................................2
Question 1: Brief Outlining of the Doings of Tesla and its Corporate Level Strategy Statement. .2
Question 2: Strategic Position, Strategic Choice and Strategic Action of Tesla.............................3
Strategic Position of Tesla:..........................................................................................................3
Strategic Choices of Tesla:..........................................................................................................5
Strategic Actions of Tesla:...........................................................................................................7
Question 3: Market Reaction to Tesla’s Strategy............................................................................8
Justification of the Response Based on Following:.........................................................................9
Growth Market Share...................................................................................................................9
Share Price Increase:....................................................................................................................9
Market Commentary:...................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................11
Table of Contents
Introduction:....................................................................................................................................2
Question 1: Brief Outlining of the Doings of Tesla and its Corporate Level Strategy Statement. .2
Question 2: Strategic Position, Strategic Choice and Strategic Action of Tesla.............................3
Strategic Position of Tesla:..........................................................................................................3
Strategic Choices of Tesla:..........................................................................................................5
Strategic Actions of Tesla:...........................................................................................................7
Question 3: Market Reaction to Tesla’s Strategy............................................................................8
Justification of the Response Based on Following:.........................................................................9
Growth Market Share...................................................................................................................9
Share Price Increase:....................................................................................................................9
Market Commentary:...................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................11
2MANAGEMENT
Introduction:
The report provides an overview of Tesla Motors. The company is headquartered in
California and headed by Elon Musk, a charismatic chairman who is also the co founder of
PayPal and the CEO of Space X. The company has been adored for its gigantic capitalization of
the market of close to about $33bn (tesla.com 2019). More recently, the company has been
looking forward to alternative fuel sources for reducing global warming. The report commences
with a mention of corporate level strategy and then goes on to discuss strategic position, choice
and action for Telstra along with outlining the market reaction towards Tesla strategy.
Question 1: Brief Outlining of the Doings of Tesla and its Corporate Level Strategy
Statement
Tesla specialized in the manufacture of the electric car and believed in accelerating its
transition towards sustainable energy (Bohnsack, Pinkse and Kolk 2014). The company which
was the brainchild of Silicon Valley Engineers tried to prove that people did not require
comprising in driving electric cars since such cars could be quicker, better and fun for driving
compared to the gasoline cars.
The corporate level strategy of Tesla depended on the three pronged approach that
involved servicing, selling and charging of the electric vehicles. The company also undertook
direct sales instead of franchised dealerships (Rothaermel 2013). The company also tried to
create an international network of company owned galleries and showrooms in the urban centre
across the world. By owning sales channel, Tesla believed in gaining advantage in the product
development. It also created unique buying experience of the customer. Tesla showroom did not
Introduction:
The report provides an overview of Tesla Motors. The company is headquartered in
California and headed by Elon Musk, a charismatic chairman who is also the co founder of
PayPal and the CEO of Space X. The company has been adored for its gigantic capitalization of
the market of close to about $33bn (tesla.com 2019). More recently, the company has been
looking forward to alternative fuel sources for reducing global warming. The report commences
with a mention of corporate level strategy and then goes on to discuss strategic position, choice
and action for Telstra along with outlining the market reaction towards Tesla strategy.
Question 1: Brief Outlining of the Doings of Tesla and its Corporate Level Strategy
Statement
Tesla specialized in the manufacture of the electric car and believed in accelerating its
transition towards sustainable energy (Bohnsack, Pinkse and Kolk 2014). The company which
was the brainchild of Silicon Valley Engineers tried to prove that people did not require
comprising in driving electric cars since such cars could be quicker, better and fun for driving
compared to the gasoline cars.
The corporate level strategy of Tesla depended on the three pronged approach that
involved servicing, selling and charging of the electric vehicles. The company also undertook
direct sales instead of franchised dealerships (Rothaermel 2013). The company also tried to
create an international network of company owned galleries and showrooms in the urban centre
across the world. By owning sales channel, Tesla believed in gaining advantage in the product
development. It also created unique buying experience of the customer. Tesla showroom did not
3MANAGEMENT
experience any conflict of interest. Besides, Tesla also undertook unique approach in getting the
first vehicles to the market. Instead of building an affordable car it undertook the opposite
approach and focused more on the creation of a compelling car. This approach was undertaken
since it was impossible to mass market the first products for a company that never produced car,
followed one technology and did not experience any economies of scale. The first product of the
company had thus been expensive irrespective of the looks and hence the company decided in
building sports car as it proved to be the ideal chance of becoming competitive made of the
gasoline alternatives.
The strategic statement is arrived from the Tesla’s strategy in entering higher end markets
where customers are ready to pay premium thereby driving the market down as fast as possible.
The company also possessed the aim of ensuring zero level emission that ensured a step towards
an economy inclined towards solar electricity.
Question 2: Strategic Position, Strategic Choice and Strategic Action of Tesla
Strategic Position of Tesla:
Strategic Position Source Result
1. Macro environmental
opportunities and threats
External strategic forces Opportunities:
i. Diversification of the
business
ii. Global expansion in the
supply chain
iii. Global expansion in the
experience any conflict of interest. Besides, Tesla also undertook unique approach in getting the
first vehicles to the market. Instead of building an affordable car it undertook the opposite
approach and focused more on the creation of a compelling car. This approach was undertaken
since it was impossible to mass market the first products for a company that never produced car,
followed one technology and did not experience any economies of scale. The first product of the
company had thus been expensive irrespective of the looks and hence the company decided in
building sports car as it proved to be the ideal chance of becoming competitive made of the
gasoline alternatives.
The strategic statement is arrived from the Tesla’s strategy in entering higher end markets
where customers are ready to pay premium thereby driving the market down as fast as possible.
The company also possessed the aim of ensuring zero level emission that ensured a step towards
an economy inclined towards solar electricity.
Question 2: Strategic Position, Strategic Choice and Strategic Action of Tesla
Strategic Position of Tesla:
Strategic Position Source Result
1. Macro environmental
opportunities and threats
External strategic forces Opportunities:
i. Diversification of the
business
ii. Global expansion in the
supply chain
iii. Global expansion in the
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