Strategic Analysis of Tesla

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Strategic Analysis of Tesla
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1STRATEGIC ANALYSIS OF TESLA
Table of Contents
PESTEL Analysis................................................................................................................2
Five forces analysis..............................................................................................................4
Critical success factors........................................................................................................7
Opportunities and threats.....................................................................................................9
Strategic position of the company.....................................................................................11
Anticipated future strategies..............................................................................................13
Evaluation of options- Suitability, Feasibility and Acceptability......................................14
Description of selected strategy.........................................................................................16
Risk evaluation and management......................................................................................16
References..........................................................................................................................18

2STRATEGIC ANALYSIS OF TESLA
PESTEL Analysis
PESTEL Analysis of Tesla facilitates in determining the impacts of industry’s macro-
environment within the automobile industry. These external factors impact other aspects of the
business that includes community based or consumer organizations. With effective brand image
and enhancing profitability, Tesla can improve its long term success through considering the
results of this evaluation in strategy development.1
 Political- Politucal stability of the major markets makes the macro-environment
favorable for market penetration strategies of Tesla. Tesla has the opportunity to improve
its financial performance by means of attaining government incentives. Such external
factor is directly associated with insignificant carbon emissions from the company’s
offerings. Free trade agreements present several opportunities to the company in
expanding its global business operations.2
 Economical- Economic conditions in the macro-environment are observed to impact the
business of Tesla. Business performance of the company attains advantages from low
battery expenses. For instance, such external factor transforms into the affordability of
Tesla’s automobile products. In consideration to same, decreasing renewable energy
1 "Tesla - Annual Report." Ir.tesla.com. N.p., 2018. Web. 19 Apr. 2018.
2 Aaij, R., et al. "Tesla: an application for real-time data analysis in High Energy
Physics." Computer Physics Communications208 (2016): 35-42.

3STRATEGIC ANALYSIS OF TESLA
expenses makes the products of the company more attractive.3 This also considers that
economic stability concerns threaten the company’s financial performance in Asia and
Europe.
 Social- The socio-cultural trends that impacts Tesla’s macro-environment are increasing
popularity of low carbon lifestyles, enhancing [reference for renewable energy and
enhancing wealth distribution within advancing markets.4 The company has growth
opportunities relied on increasing popularity of low carbon lifestyles along with
enhancing renewable energy preferences. These are the external factors that are deemed
to enhance market demand for Tesla's electric vehicles along with associated products.
 Technological- Increasing rate of technological changes presents high opportunities for
Tesla to improve technologies related with its products. In addition such external factors
also presents risks for the company in consideration to the potential fast obsolesce in
technology employed within products.5 The company also has growth opportunities
3 Abbas, Zaheer, et al. "Analysis of proton‐density bias corrections based on T1 measurement for
robust quantification of water content in the brain at 3 Tesla." Magnetic resonance in
medicine 72.6 (2014): 1735-1745.
4 Ajuied, Adil, et al. "Diagnosis of glenoid labral tears using 3-tesla MRI vs. 3-tesla MRA: a
systematic review and meta-analysis." Archives of orthopaedic and trauma surgery (2018): 1-11.
5 Asgar, Majid, Ebrahim Afjei, and Hossein Torkaman. "A new strategy for design and analysis
of a double-stator switched reluctance motor: Electromagnetics, FEM, and experiment." IEEE
Transactions on Magnetics 51.12 (2015): 1-8.

4STRATEGIC ANALYSIS OF TESLA
through high automata ion of its business processes. In addition, growing popularity of
online mobile systems facilitates Tesla to integrate such systems within its automobiles.
 Environmental- Tesla has attained better opportunities in promoting all its electric
automobiles relied to certain issues such as climate change, growing environmental
programs and increasing standards for disposal of waste disposal. For instance, Tesla’s
electric automobiles are deemed to be suitable in dealing with the external factors elated
with the business sustainability along with environment friendly offerings.6
 Legal- Tesla has increased opportunities to expand safely its business internationally in
consideration to expanding global patent protection. Moreover, the organization has the
chance of promoting its electric vehicles. This is relied on consumption of energy
regulations that the consumer company needs to follow. Moreover, the company has also
attained the opportunity to grow its business by means of direct sales that is allowed in
several states in US.
Five forces analysis
Tesla sustains its profitability by means of strategic measures that facilitates in attaining
competitive advantages though addressing challenges revealed within Porters Five Forces
analysis of global automotive industry.7
6 Beiker, Sven A. "Evolution–Revolution–Transformation: A Business Strategy Analysis of the
Automated Driving Industry." Road Vehicle Automation 2. Springer, Cham, 2015. 139-151.
7 Birk, Dominic. Evaluation of the Marketing Strategy of Tesla Motors Inc. GRIN Verlag, 2015.

5STRATEGIC ANALYSIS OF TESLA
 Competitive Rivalry (Strong Force)-Tesla operates within a high competitive market.
This aspect of indicates the impact of competition on energy and automotive solutions
industry environment. There are just a few numbers of companies operating within
automobile industry that impacts the competitive environment of the company. To
maintain a competitive position within the industry, Tesla intends to follow aggressive
innovation and product promotion. For instance, large automotive organizations tend to
follow aggressive marketing campaigns.8
 Bargaining Power of Buyers (Moderate Force) - Low switching costs decreases
barriers for the consumers of Tesla for purchasing cars from other manufacturers. In
consideration to the five forces analysis, the external factor is deemed to exert a high
force against the organization and its business rivals in automobile industry. For instance,
the substitute’s availability is moderate with several cases that decrease bargaining power
of its Tesla’s consumers. Moreover, the decreased volume of purchases decreases the
impact of consumers on Tesla. For this reason, consumers bargaining power acts as
moderate force and a secondary management priority.9
 Bargaining Power of Suppliers (Moderate Force) - Tesla’s suppliers are deemed to
have low forward integration level. Such external factor indicates limited control of
suppliers in sale and distribution of their products. For instance, certain suppliers employ
8 Dawes, John. "The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems."
(2018).
9 E. Dobbs, Michael. "Guidelines for applying Porter's five forces framework: a set of industry
analysis templates." Competitiveness Review 24.1 (2014): 32-45.