What Is Strategic Management?

Reading Head: STRATEGIC MANAGEMENT
0
Managem
ent
March 6
2020

STRATEGIC MANAGEMENT 1
Executive Summary
This report aims at analysing all the possible strategies that a company can adopt. These
strategies will help the company in achieving its goals and objectives. Market development
United Arab is at a pea level as people there are attracted to innovations and technology.
Companies are also adopting new and advance technologies in developing their products.
There are high chances of a company to earn maximum amount of profit but the company
should involve itself in innovations. Strategies are also adopted by companies that can
provide the components of growth and innovation. Every organization before implementing
strategies evaluates those strategies by using the appropriate strategic model. These models
enhance the advantages and problems that a company may face in the future after
implementing business strategies. The decision of implementing strategy in an organization is
also based on two major factors such as internal and external factors. These two factors affect
the organization at a higher rate. Recommendations of strategy are also mentioned in this
report.

STRATEGIC MANAGEMENT 2
Contents
Executive Summary...................................................................................................................1
1.0 Introduction.....................................................................................................................3
2.0 Corporate Strategies.............................................................................................................3
2.1 Market Penetration...........................................................................................................4
2.2 Market Development Strategy..........................................................................................5
2.3 New Product Development...............................................................................................5
2.4 Consolidation Strategy.....................................................................................................6
3.0 Choice of Corporate Strategy...............................................................................................6
4.0 Business Strategy.................................................................................................................7
5.0 Evaluation of Strategy..........................................................................................................9
5.1 Acceptability.....................................................................................................................9
5.2 Suitability.......................................................................................................................10
5.3 Feasibility.......................................................................................................................10
6.0 Recommendations..............................................................................................................11
References................................................................................................................................14

STRATEGIC MANAGEMENT 3
1.0 Introduction
TESLA is the best electric vehicle selling company. Electric cars are also been manufactured
and sold in 2019 by the company (TESLA, n.d.).
In this report Motors is an American electric vehicle and clean energy company. This
company is based in Palo Alto, California. This company was founded in 2003 by Martin
Eberhard and Marc Tarpenning. The main specialization of the company is electric vehicle
manufacturing. These electric vehicles consist of battery energy storage and vehicles are
charging from the solar city, collar panel, and solar roof tile. Tesla also operates in multiple
production and assembly plants but its main manufacturing facility is at the TESLA factory.
TESLA is also ranked as the world’s identification of possible strategic plans that can be
implemented by the company will be discussed. The evaluation of these plans will also be
presented by using appropriate strategic models. Recommendations and suggestion are also
been provided to the company so that they can implement plans effectively. Critical analysis
of those implications will also be done to know different aspects of the chosen strategy.
2.0 Corporate Strategies
There are many corporate strategies that a business can adopt to work effectively and achieve
goals. These strategies also provide a framework by which a company can also develop their
strategy. The main purpose of these strategies is to expand the organization and gain control
in the competitive market. There are four types of corporate strategy that can be used by
businesses such as Market penetration, Market Development Strategy, New Product
Development Strategy and Consolidation Strategy (LYNCH, 2018).

STRATEGIC MANAGEMENT 4
(CFI Education Inc., 2020)
2.1 Market Penetration
Market Penetration is the strategy that occurs when a company is trying to get access to those
markets that already exist in the market. It is a product strategy where organizations try to
gain competitive advantage and control over the existing market. The main focus of this
strategy is to capture a large volume of the market. This strategy requires a high level of
competitive strength and a strong bond between customers and the company. It is a risk
approach (Davydov, 0928).
Tesla can also penetrate the market so that the company can also have a maximum amount of
market share. This can be done if the company will supply a unique product in the market.
Tesla can achieve this strategy effectively as the company is developing vehicles that are
having advanced technology For example company is developing vehicles that will charge
through solar energy.

STRATEGIC MANAGEMENT 5
2.2 Market Development Strategy
Market development strategy is the growth strategy and it is used to expand the market and
attract new customers through the development of new products. This strategy is effectively
implemented when the needs of the individuals can be identified. Market research is also the
most important and critical part of this strategy. This strategy targets customers that are not
involved in the market. New customers can be identified through geographic, demographic
and psychographic segments of the market (Czarniewski, 2014).
Tesla believes in applying a strategy that will help the company in gaining a competitive
advantage. In Michel Porter’s model, a competitive strategy is that which helps the company
in competing in the market. Tesla's strategy is that the company is focusing on developing
vehicles with advance technology. Tesla is competing against General Motors Company,
Toyota, Honda, Nissan and many more. Tesla is also looking for an intensive business
growth strategy.
2.3 New Product Development
Product is the main component of every business. Therefore the development of products
according to the needs of the customers is also considered important. New product
development is the process of developing, researching and creating a new product. It is also
the process of bringing new products in the market with proper marketing and effective
strategy is also the major task for the business (Kuka, 2018).
Tesla Inc. is focusing on those strategies that will help their business achieving competitive
advantage and growth. The main focus of the company is on two strategies i.e. Market
development and New Product Development strategy. This strategy is helping the company
in initiating new technology in electric vehicles.

STRATEGIC MANAGEMENT 6
2.4 Consolidation Strategy
It is the strategy that refers to the mergers and acquisition of small companies into large
companies for economic benefits. This strategy is helpful for both organizations that are
merging because it will create new opportunities for the business. The main goal of this
merger or acquisition is to reduce the cost of the business. It also helps the business in
improving efficiency and processes (Deans, 2003). By applying this strategy effectively in
the market company can earn high profits and they can also develop a customer base. There
are several ways for companies by which they can adopt this strategy (Weedmark, 2019).
Tesla has also adopted this strategy as Tesla has acquired Maxwell Technologies. The main
aim of this acquisition is to improve electric automaker. It also helped the company in
reducing the cost of the company and it helped the company in gaining competitive
advantage and reducing competition in the market (Korosec, 2019).
3.0 Choice of Corporate Strategy
Four corporate strategies can be used by any business and these strategies are mentioned
above. All this strategy has different aims and motives. The organization will choose strategy
according to its needs. These strategies will help the organization in achieving a competitive
advantage in the market.
If Tesla will use Market Penetration strategy it will be helpful for the company as it will help
the company in gaining competitive advantage and creating more customer base. The
company believes in applying those strategies that can help a company in innovations and
attracting more customers. Michael Porter’s model refers that a competitive strategy
represents the approach towards a competitive market. Tesla focuses on using new and
advanced technologies in its vehicles and other products (ROWLAND, 2018). Market
penetration strategy consists of four components such as

STRATEGIC MANAGEMENT 7
Cost Leadership Differentiation
Cost focus Differentiation focus
Cost is the main factor for every business. Cost also affects many factors of the organization.
Cost Leadership is applied in the business to gain a competitive advantage in the market. But
cost leadership is the different concept from price leadership as this will help the company in
reducing the cost of producer. This feature will not reduce the cost of products. And if the
company can successfully implement this component in its company they can earn the
maximum amount of profit in the market. This factor also helps the company in reducing the
cost of the company. This factor is generally dependent on efficiency, size, scale, scope, and
experience of the company. Since the company is having several competitive advantages in
the market in terms of market and technology company can easily adopt this component in
their business strategy. Since Tesla has mastered its value chain and the company also has
experience in the market and supply chain of the company is also strong in comparison to
other competitive companies all these factors will help the company in controlling its value
system.
4.0 Business Strategy
This Strategy will focus on business growth. By applying effective business Strategy
Company can gain a competitive advantage. There are different models of business strategies