Stakeholders Analysis: Dynamic Strategy and Disruptive Innovation

This report includes various researches made on Tesla and its stakeholders. Tesla is known for its innovation in the automobile segment with the development of electric vehicles. The first part of the research includes exploring Tesla Motors, its vision and mission, challenges, industry trends and future goals. The second part of the research includes application of various theories and practice in relation with the stakeholders’ perspectives. The third part is associated with the stakeholder behaviour in relation with four quadrant table including discussion of generic strategic programme. In last, various recommendations are being suggested to ensure the growth of the company and its future sustainability.

Running Head: STAKEHOLDERS ANALYSIS 0
DYNAMIC STRATEGY AND
DISRUPTIVE INNOVATION

STAKEHOLDER ANALYSIS 1
Executive Summary
This report includes various researches made on Tesla and its stakeholders. Tesla is
known for its innovation in the automobile segment with the development of electric
vehicles. The first part of the research includes exploring Tesla Motors, its vision and
mission, challenges, industry trends and future goals. The second part of the research includes
application of various theories and practice in relation with the stakeholders’ perspectives.
The third part is associated with the stakeholder behaviour in relation with four quadrant table
including discussion of generic strategic programme.
In last, various recommendations are being suggested to ensure the growth of the
company and its future sustainability.

STAKEHOLDER ANALYSIS 2
Table of Contents
Introduction................................................................................................................................3
Organisation Model View of Tesla Motors with Stakeholder Groups......................................4
The Four Behaviour Model and generic strategic programs......................................................6
Recommendations......................................................................................................................9
Conclusion................................................................................................................................11
References................................................................................................................................12

STAKEHOLDER ANALYSIS 3
Introduction
The deterioration of environment causes various industries and companies to change
their practices towards development of products (Lee, 2009). This also contributes to the
green movement promoting the conservation, restoration, and the overall improvement of the
environment.
The clean energy is not an exemption of this green movement, and Tesla is one of the
major company consisting inhabited solar energy but including Tesla Motors. Though, the
company age is not so long while considering various other organisations. Tesla Motors is
one of the first company to progress electronic car technology and thus works as the
facilitator to push the shift from petrol cars to electric cars transportation (Mangram, 2012).
In addition, the company has open patents considering their technology and this allows to use
their invented technology for free.
It is also evident that stakeholders are the significant sources to give all the data
related to market, customers, and the rivals (Walker et al, 2011). These are also considered as
barometric measure aids in motivation or attitude factors for the internal and external
structure of the enterprise. To ensure the success of the enterprise, it is very important to have
a strong relationship between the management of Tesla and its stakeholders so as to attain the
final objective.
About Tesla Motors
The company was founded in 2003 by a group whose purpose was to develop a high-
performance sports cars. In 2004, Elon Musk comes up at the position of Chairman and in
2008, he became the CEO with investment of 50 million dollars (Davis, 2010).
There are two business segments in Tesla Motors where the first one includes of
automotive that is responsible for developing, designing and marketing of electrical car and
the other section relates to generation of energy and storage segment to both commercial and
residential consumers.
According to Tesla view towards electric vehicles, the world can be quickly changed
to fossil fuels to a zero-emission future (Nilsson & Nykvist, 2016). It also completes Tesla
mission to accelerate the world transition to sustainable energy. The company also have

STAKEHOLDER ANALYSIS 4
specified in many of the reports that the right thing for the world is that all the car brands
need to manufacture most of electric cars as they can.
Up to know, different models of electric cars are introduced by Tesla Motors. The
first model was named as the roadster that was launched in 2008. Then, the company has
introduced its new sedan premium in the globe by combining various safety and performance
features. In 2015, the company introduced Model X Sport Utility Vehicle (SUV) and per their
internet website, the car holds 5-star safety scores in relation to various categories (Karaaslan,
Zhao & Tatari, 2018). In Last, the company introduced its lower price and high capacity
electric car specially developed for the overall population. However, for some people, it was
still unaffordable. The company approach is to build luxury electric cars and so there are
various key rivalries in the automotive segment including BMW, Audi, Fiat and GM.
From future perspectives, there is two principle challenge that company may face.
The first challenge is in relation to develop low price models that enable to purchase more of
the population and this will create a substantial effect on the global environment. Considering
second challenge relates to autonomy and electrification (self-driving cars), as if Tesla needs
to disrupt the market, it is important for them to start working on Artificial Intelligence as
integration of vehicles with AI will provide the company to attain first mover advantage in
the industry and this will positively lead in formulation long term goodwill of the company.
Organisation Model View of Tesla Motors with
Stakeholder Groups
According to Somerville & McElwee (2011), stakeholder in an enterprise is known to
be a group or an individual that reflects a particular interest in one organisation or company.
There are various reasons for the stakeholders’ influences such as organisations policies,
actions, aims that they are concerned too.
The list of stakeholders includes owners, managers, government, employees,
customers, investors and suppliers. All these are categorised into internal and external
stakeholders in the below figure 1. In addition, all these stakeholders consist of different roles
and responsibilities considering both outside and inside the organisation (Crane &
Ruebottom, 2011).

STAKEHOLDER ANALYSIS 5
Figure 1
Communities
This group of stakeholders ascertain the brand value of the organisation and help
business to position it’s Brand in the market but first ensure that the company is doing
something good by satisfying the wants and needs of their group (Jiao, 2010). Considering
Tesla, the group of communities may include all the individuals or group of people that are
concerned towards conservation and protection of environment. However, it was identified
that this group of stakeholders are fully satisfied due to the notion and ideology of Tesla
Motors as the corporation enable other organisations to practice their copyrights in order to
build clean energy.
Consumers
This group of stakeholders considered as most significant Stakeholders of Tesla as it
provides the company a high return of profit offering them quality products at a reasonable
price. This is one of the reasons that Tesla is investing huge amount in their research and
development department by continuously improving quality and decreasing prices. In the
fiscal year of 2018, Tesla's R&D costs amounted to around 1.46 billion U.S. dollars
(statista.com, 2019). One of the examples can be seen with their strategy to no buy batteries
of cars from Panasonic rather than develop and manufacturer in collaboration with the
company. This will lead to the cheap production of cars in relation to various price
consequences.
TESLA MOTORS
External
Stakeholders
 Customers
 Government
 Communities
 Suppliers
Internal
Stakeholders
 Employees
 Shareholders

STAKEHOLDER ANALYSIS 6
Employees
Employees of Tesla are considered to be key success stakeholders for the organisation
as they are responsible for business performance and productivity. The organisation culture
of Tesco also embedded with various career growth and opportunities that direct company
workforce to achieve strategic goal of the corporation. At present, the company have more
than 45000 employees in their corporation (Lambert, 2018).
Investors/Shareholders
Investors and shareholders are responsible for Tesla capitalization and funding and
their key interest is the profitability and growth of the firm. With the growth of electronic
vehicle transportation, the demand will increase and thus lead to fulfilling the principal
interest of the shareholders. Another significant aspect is to be a part of one of the major
“Green movements” of the globe considering high growth to gain maximum profitability if
there is proper management of the business is made (Sandhu, 2010).
Governments
This is also one of the vital stakeholders for the business due to the authority of law
and their expectations and decisions may put a significant impact over Tesla in both positive
and negative way. Though, considering this circumstance, there is a specific corporation from
which Tesla was fined with $20 million dollars as they include a sequence of tweets posted
by Musk stating about company private considering various accusations (Disparte, 2018).
The Four Behaviour Model and generic strategic
programs
For this exploration, Stakeholder Behaviour model is being used. In the below figure,
the competitive threat and cooperative potential in relation with the stakeholders are
evaluated in this archetypal; it implies that Stakeholders relative capability or power that have

STAKEHOLDER ANALYSIS 7
inside the organisation to develop alterations in their strategy or actions may have impact in
both negative or positive way the corporation (Jamali, 2008).
In this model, 4 categories of Stakeholders are being identified –
(i) Offensive
This category includes those stakeholders who have various attributes related to
low Competitive threat and high Cooperative potential. This implies that these
sorts of stakeholders can benefit the organisation to attain its objectives, however,
there are certain clue approaches which important to deal with them: One of the
approaches is to change their aims, other one is to modify their actual beliefs and
considering the final one, the corporation need to try to approve the locus of its
stakeholders (Akpinar & Vincze, 2016).
Tesla Company sell their vehicles at high prices and they are at the peak position
in the market and most of their consumers go for their product due to their
attribute of environment-friendly and secure. In addition, the company invest huge
money in their vehicles in align with giving quality services at the right time and
mainly for the new car delivery. Hence, it can be said that these costumers fix
perfectly in extent of this sort of Stakeholders, does not matter that organisation
can lose needs or money to change their tactic.
Offensive
DefensiveHold
Swing
Cooperative
Potential
Competitive
Threat

STAKEHOLDER ANALYSIS 8
(ii) Swing
In this group, the attributes of the stakeholder reflects high Competitive threat and
high cooperative potential. It signifies that these investors have the influence to
impact the consequences of a condition inside the corporation and at any time. In
addition, to deal with these sorts of stakeholders, there are 3 key clues. As per the
condition of first one, it is to modify rules with the help of law whereas the
another one is concerned towards changing decision forum and the final one is
related to initiate another sort of decision unlike from the ones they use to take
(Shrestha & Saxena, 2018).
Here, it can be perfectly matched up with the government agencies and an
example explained above about a particular case related to (SEC) which is also
one of them. When CEO Elon Musk was fined for “misleading and false”, they
embrace the board to initiate a negotiation unless and until an agreement was
delivered among both ends.
(iii) Hold
In this group, the stakeholder has the attribute to be low Competitive threat and
low cooperative potential. It reflects that the company can effectively and easily
deal up with this sort of stakeholders. In addition, these groups of stakeholders
may not cause any big issue to the organisation, though there are three approaches
to keep them at this stage, the first one is to enhance their belief towards the
organisation, secondly to shield them while initiating change, and lastly to set out
a follow up strategy considering actual strategy.
Hence, suppliers can be perfectly matched up with this sort of stakeholders. In this
case, one of the battery providers of Tesla is SolarCity. It was found that this
corporation has identical values like Tesla including belief and trust in an
integrated strategy considering a common purpose. In addition, SolarCity and
Tesla are also production allies.
(iv) Defensive

STAKEHOLDER ANALYSIS 9
In this category, the stakeholder has the attribute to be high Competitive threat and
low cooperative potential. This shows that these sorts of stakeholders may not be
very significant to provide additional value to the organisation however their
decisions may impact in gaining corporate objectives (Yang, Wang & Jin, 2014).
The three strategies to manage these stakeholders include enhance the real belief
related to enterprise, ensure organisation outcomes by establishing their on-going
plans, and to control them to accomplish the process of transaction.
Investors or shareholders can come under defensive Stakeholders. For instance,
shareholders always seek maximum profit from an organisation and they always
influence corporate strategy in order to be it productive.
The CEO of Tesla i.e. Elon Musk is a idealistic leader that has capitalised millions
of bucks in his organisation. Every part of the company is his control and like
shareholders, he seeks to earn maximum profitability.
Recommendations
Considering the existing positioning of the corporation, it is suggested to initiate
developing of permanent strategy for the purpose of managing suppliers and customers and
mainly the shareholders. Elon Musk has visionary leadership attributes which will positively
push Tesla to offer good results and with earnings of more profits. Hence, the company needs
to come with new strategies and approaches something like Amazon.
When Amazon was just established in 1997 selling of various books through the help
of web, his founder starts issuing a letter of shareholder annually. He is a visionary leader and
knows how profit will increase year by year and therefore, use the letter to explain and drive
the defensive stakeholders to be listen and comprehend the company approach and in relation
with long term perspectives. In his letter, he states about all the matters in relation to the
company objectives and aims and this develops trust among the stakeholders. Today, also this
letter must be addressed by various corporate professionals.
To make the company at a good position, it is important for Tesla to adopt massive
car manufacturing approach where it will give the power to company to produce vehicles for

STAKEHOLDER ANALYSIS 10
millions of population around the globe and it will solve most of the viable issues like
business solvency. Tesla is currently one of the most innovative company in the world and
this helps them to attract shareholders easily however, the company also is in big debt. In
addition, the shareholders are mostly only care about organisation profitability.
With adoption of mass production, it allows Tesla to save costs at several levels and
build a competitive edge in the market. It will also help the company to expand into global
markets by enhancing their promotional strategy, sales services, efforts to mergers and joint
ventures with new energy stations and all this will help Tesla to compete with other brands in
parallel circumstances. In this report, the generic programs for each stakeholder are
successfully evaluated and also some commendations for each stakeholder is also stated in
this report.

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Conclusion
Tesla offers innovative solutions to the adverse impressions of petrol vehicles in the
atmosphere. It is not just as of their manufacturing of electric cars however, the company has
showcased their effectiveness in various areas and strategies such as open up their use of the
patent in the external business environment. However, the company is perceived as a young
enterprise due to its age, internal management and ambitions.
In 2017 Global Electric Vehicle Outlook, it was stated by IEA that globally, there was
a new record set with registration of electric vehicles with more than 0.75 million sales at an
international level. However, to create a global influence, it is considerably very small.
Considering this, only few organisations including Toyota, BMW, Nissan and GM focused
positively towards manufacturing electric vehicles and also only few nations have adopted
this technology like Sweden, France, UK, Norway and China.
In last, all stakeholders of TESLA reflects a significant responsibility in building and
implement of company strategy, however, it is also important that government needs to
promote benefits of these vehicles and make encourage the population to adopt these sorts of
vehicle as soon as possible. Supplier needs to follow high sustainable standards to enhance
quality with reducing costs as to make these electric vehicles affordable to mass population in
the world.

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References
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German automotive industry. Industrial Marketing Management, 57(1), 53-63.
Crane, A., & Ruebottom, T. (2011). Stakeholder theory and social identity: Rethinking
stakeholder identification. Journal of business ethics, 102(1), 77-87.
Davis, J. (2010). HOW ELON MUSK TURNED TESLA INTO THE CAR COMPANY OF
THE FUTURE. Retrieved from https://www.wired.com/2010/09/ff-tesla/
Disparte, D. (2018). Elon Musk Versus The SEC: When A Tweet Costs $40 Million. Retrieved
from https://www.forbes.com/sites/dantedisparte/2018/09/29/elon-musk-versus-the-
sec-when-a-tweet-costs-40-million/#31b34c071556
Jamali, D. (2008). A stakeholder approach to corporate social responsibility: A fresh
perspective into theory and practice. Journal of business ethics, 82(1), 213-231.
Jiao, Y. (2010). Stakeholder welfare and firm value. Journal of Banking & Finance, 34(10),
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Assessment, 23(2), 333-347.
Lambert, F. (2018). Tesla has grown to 45,000 employees despite laying off ~4,000 people
earlier this year. Retrieved from https://electrek.co/2018/10/15/tesla-45000-
employees-elon-musk/
Lee, K. H. (2009). Why and how to adopt green management into business organizations?
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Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan
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Nilsson, M., & Nykvist, B. (2016). Governing the electric vehicle transition–Near term
interventions to support a green energy economy. Applied energy, 179(1), 1360-1371.

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Sandhu, S. (2010). Shifting paradigms in corporate environmentalism: From poachers to
gamekeepers. Business and society review, 115(3), 285-310.
Shrestha, P., & Saxena, N. (2018). An offensive and defensive exposition of wearable
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