Strategic Management - Case Study on Tesla

This case study on strategic management of Tesla discusses the possible strategies at corporate and business level, critical evaluation of different possible scenarios, and recommended route forward. It includes insights on Ansoff growth vector matrix, BCG matrix, Bowman strategy clock, and McKinsey matrix. The study highlights Tesla's focus on product development, differentiation, and differentiation focus strategies. It also discusses the company's unique organizational structure, participative leadership style, and core values.

Strategic Management- Case study

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................2
MAIN BODY.............................................................................................................................2
Presenting the possible strategies at corporate and business level.........................................2
Critical evaluation of different possible scenarios.................................................................5
Recommended route forward...............................................................................................10
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................12

INTRODUCTION
Strategic management is the process through which company set goals, procedure and
objectives that assist company to be more competitive. It effectively deploying staff and
resources in order to attain goals. It is considered one of the most important aspect that
provide overall direction by implementing effective plans and policies. The current study is
based upon Tesla which is one of the best automotive company in the world and operated
thousands of units at global level. The company have strong financial performance and that is
why, there is a need to expand a business at different level in order to be a leader in the
world. The report will identify the possible strategies at corporate level so that company can
generate an effective outcome. Further, the study will critical evaluated the different possible
scenarios by using variety of strategic models. Lastly, the report will recommended the route
forwarded by expanding the scenario chosen and critical analysis implications.
MAIN BODY
Presenting the possible strategies at corporate and business level
In order to determine the strategies, it is suggested to use Ansoff growth vector matrix
which in turn assist to analyse and plan company’s strategies for growth.
Market Penetration: The concept of this strategy is to increase the sales for an
existing products in an existing market. This in turn help to company to seek sell into an
existing products and maintain the relationship with the customers (Chen, Jin and Xie, 2022).
With the help of this strategy company decreases the prices to attract customers and acquire a
competitor in a same market so that brand image can be sustained.
Market development: It is consider more risky from penetration because it does not
require any significant investment in Research and development department so that
management can supply the existing products and take the same into a new market. With the
help of this method, company is able to expand the business at international market and this
in turn help to create a better outcome for the business as well. The reason of its successful
market is to focus upon selling existing products into new market in order to generate a better
outcome.
Product development: This is deal with focusing upon new products into an existing
market. With the help of this method, company can offer the products into same customers
and meet the defined aim as well (Ansoff growth vector matrix, 2022). With the help of this

method, company increase the sales of a firm and this causes positive impact over the
business sales. That is why, it can be stated that this method is highly used by the company in
order to remain competitive and strong.
Diversification: The concept is all about entering into new market with new products
so that best outcome can be generated. This is one of most riskiest strategy that affect the
business performance and this is mostly used by the company whose financial performance is
quite strong in order to generate a better outcome and improve the sales as well.
From these, Tesla uses product development in which company keep changes its
strategy in order to remain competitive. Through this method, company can sustain the brand
image and attract new customers towards it.
BCG Matrix
With the help of this model, company can help with long term strategic planning and
assist to understand Tesla’s strategic choices. Thus, the highlight areas of each activity of a
company are determined by using these methods:
 Star Products: In the context of Tesla, the start products are continuously innovative
products offered by the company like electric vehicles and production of cleaner
energy. Also, the quoted company is considered as a sustainability leader in an
industry and it keep providing healthier environment (Kaipainen and Aarikka‐
Stenroos, 2022). That is why, it can be stated that the series of its latest vehicle are
considered as a star products that help to grow the market.
 Cash cows: The products fall in this category are provide profit to the business even
company exist in the low market. Thus, in the case of Tesla, its all vehicle models are
considered as cash cows that require little investment. Powerwall is also fall in this
category.
 Question marks: The company faces any dilemmas are considered in this category
and it includes miscellaneous accessories, energy storage and solar power. In this
competitive era, company also wants to make itself differentiate that helps to run for a
longer term (Park, K., Grimes and Gehman, 2022). However, ecology is also remain
niche market in this world where more players play. Thus, Tesla plays an important
role because the quality of products offered in the market is competitive and strong.

 Dogs: In this category, the material used by Tesla that degrade the environment are
considered which include plastic bags that affect the entire environment into negative
manner. Thus to improve the same, it is to be suggested that business need to convert
the same into cash cows that helps to grow in the market again so that effective
outcome can be generated.
Through this model, it has been identified that company offer the products and services
without compromising its quality and that is why, the company keep increases its brand
image at global level. So, BCG matrix assist the company to invest into different country that
helps to develop more options for increasing the company’s sales.
Generic strategy
This method is mainly used by business in order to make its position different within
an industry. The strategies used by the company involve executives in order to concentrate on
the core elements of a firm’s business level. There are four strategies used by the company in
order to remain competitive which are as mentioned below:
Cost: This strategy help to gain the competitive advantage in order to sell the existing
products at different level. Also, by using this method will help the company to increase
profit and increase the profit if a business by reducing its cost (dos Santos, de Miranda Mota
and Alenca, 2021). The quoted firm did not uses this method because it is not possible to
reduce the cost of cars and that is why, it is not used by the company. However, this strategy
help the company to be a leader but being a brand image, it is not possible to decrease the
cost.
Differentiation: The generic strategy is used by Tesla in order to remain competitive.
Such that under this method, company is able to build competitive advantage by building the
development of product. This helps to make the company differentiate from others in an
industry. As company’s products are competitive in nature because they integrate advanced
environmentally friendly technology that consider the vast majority of automobiles which
uses internal combustion engines. Therefore, it can be stated that by using this methodology,
company attract range of new customers towards it and offer environmental friendly products
as well.

Differentiation focus: Tesla also uses this method in order to be competitive in
nature. With the help of this methodology, company is able to emphasized its uniqueness in
the market and also adopt in the high market. It is so because company uses high end market
for an electric vehicles and these early adopters are also effluent in order to purchase the new
products. That is why, it can be stated that with the help of effective strategy, company is able
to improve the results and reduce the extra cost incurred during this product.
Focus: This strategy is not adopted by the company because it mainly focus upon the
single product sales and raise the sales by focusing upon single product (Wu and et.al., 2021).
This is not possible in the case of Tesla because company offer range of new products that
helps to improve the brand image and also create a brand image at global level.
Therefore, it can be stated that with the help of Porter generic strategy, company
mainly focus upon the differentiation and differentiation focus that assist to generate a better
outcome and improve the results. That is why, applying such strategy in the company will
help to improve the overall performance and generate a strong brand image as well.
Critical evaluation of different possible scenarios
Bowman strategy clock
Another tool which is used to determine the strategy for the company that provide
options for positioning within a market based around price and perceived value. There are
eight position provided within a clock that highlight different strategy to success.
 Low price and low value added: This is all about selling the products in bulk and
here product are in low value and price will be lowest so that customers can be afford
the same (Bodi and et.al., 2020). Thus it can be stated that it is a combination of least
competitive area. In the case of Tesla, company is not able to use this strategy because
company’s products are of high quality and that is why, it will not apply the same.
 Low price: This is used to sell the products at low rate in order to increase the
financial margin of a company. Further, due to high output volume, company can

generate a huge profit. In the context of Tesla, it also offers high value product to the
customers in order to improve the value of company.
 Hybrid: This is quite effective strategy used by the company where the values added
and offer the product at a consistent quantity at regular basis. This in turn assist to
offer the value at effective manner within a low price (Aula and Mantere, 2020). In
the context of Tesla, it also uses this method in order to offer the product at strong
prices without compromising into its quality.
 Differentiation: Under this strategy, company offer the product at unique manner
which help to improve the overall performance and attract the customers towards it.
Moreover, product quality and branding also play a crucial role and in the context of
Tesla, company is also offer the cars in a unique characteristic that help to attract the
customer
 Focused Differentiation: It is all about offering product at high value at a high price
and when the company successfully done then the chances of earning profits will be
high. In this strategy, Tesla might face challenges because company cannot be
successfully launched in many other countries due to lack of resources. That is why, it
is not suitable for the company to expand the business.
 Risky high margins: With the help of this strategy, company also added extra offer
within its value that helps to increase the performance and attract the customers as
well. Through this company provide a chance to draw attention towards the business
in order to create a better outcome (Al-Shawi and Manhal, 2020). Tesla also opt this
strategy in order to increase the customers and offer the high value products to sustain
the brand image.
 Monopoly pricing: It defined as the only one business in a market who offer the
product. In the context of Tesla, there are many other companies who also offer the
same products at low rate in order to attract the customers and improve the sales as
well.
 Loss of market share: It involve standard or middle price for a service with a low
perceived value which help to attract the customers. That is why, Tesla do not use the
same because it already have a huge market share in the world that help to attract the
customers towards it.
Overall, it can be stated that there are some strategy used by the company which in turn
attract the customer and sustain the brand image at global level. Through this model, it

has been identified that Tesla need to identify further option and reduce the company’s
price so that middle class people can also afford the same in order to attract the customers
towards it.
McKinsey matrix
It is an organizational tool that assess the well-being and future success of the
company. There are seven internal factors of a firm that provide structural support to the
firm in order to be successful. Also, it can be stated that through the model, company is
able to determine its strength and weakness so that further steps can be taken in order to
manage the improvements by comparing the same with the competitors. The list of seven
internal factors for the company are as mentioned below:
 Strategy: The business strategy used by Tesla is to focus on the electric cars so that
company can meet the defined aim and in order to meet the customer need, an
alternative fuel vehicle manufacturer can be provided. Also, company differentiated
its product from other firm in order to improve the performance and maintain the
environmental sustainability as well (Verma and et.al., 2021). Apart from this
alternative fuel vehicle manufacturer position also cost low in order to gain the
competitive advantage.
 Structure: It is quite difficult for the company to classify the organizational
structure into a single category because it is of unique in nature and the CEO
delegate the task into different people by analyzing their employee’s capability.
 System: The system adopted by the company is good and is identified in the long
term growth prospects. This include employee recruitment and selection,
development of a team and orientation system that helps a business to improve the
overall performance and raise the brand image. Also, it can be stated that
manufacturing system of the company is also as important for the company, as
company keep taking feedback from their customer in order to understand the
loopholes within a business.
 Style: The management style adopted by Tesla is participative leadership style in
which company keep engaging the employees for a longer term (Abdel-Basset,
Mohamed and Smarandache, 2018). Through this, company also provide a chance
to make their employees to be part on the decision making process so that

effective outcome can be generated. This in turn shows that both team and
individual people are welcome and perform the work in effective manner so that
best outcome can be generated.
 Shared values: The values defined by the company is creative and supportive
because it allow employee to perform optimally and raise motivation level as well.
The core values included in the company is creativity, honesty, transparency,
trust, Heritage etc. The culture of the company is also supportive such that it helps
a business to improve the overall performance and maintain a strong relationship
between the employees. Also, leader of the company adopt participative style and
that is why, team get enough support from their leader in order to improve the
performance. That is why, it can be stated that employees of the company are
satisfied with the job and they maintain the performance of a company in an
effective manner.
 Skills: Tesla Motors have a high workforce with a strong skills and capacities.
Company also hire their best professionals and grooming them further by
providing effective growth and development session. This shows that company
value their employee’s skill and it is necessary for the company to hire such a
talented employees in order to gain the competitive advantage (Chupryna and
et.al., 2020). Further, Tesla defined task and job roles and then hire employees for
a skill levels. This shows that company respect their job and employees and
always provide ways to motivate them in order to improve the brand image.
 Staff: There are range of employees who are working within a firm for a long term
and the number of employees are varies from country to country as per the
requirement so that they can meet the business goals. Also, the level of employees
working in this field have higher capability and they can perform the work
effectively so that effective outcome can be generated. Company also implement
different strategy like training and development session in order to improve the
business performance so that effective outcome can be generated.
Overall, it can be stated that with the help of McKinsey model of strategy, company
can develop a strong culture which in turn assist to maintain the strong performance of a
company. Also, it can be stated that it has a strong shared values which assist firm to
maintain the better outcome and raise the business performance so that it might expand its
operations in further level.

Roger model is mainly used to classify the adopters of innovation into different categories.
This is also known as Multi-step Flow Theory which is divided into different forms which are
as mentioned below:
 Innovators: Tesla have brave and intelligent people who always promote company
towards innovation and that is why, company stand at the top in order to improve the
brand image.
 Early adopters: In this, opinion leaders recruited who provide new ideas in a careful
manner that helps to improve the brand image of a company.
 Early Majority: People are careful but also accepting the change more quickly that
average that is why, company is able to improve the brand image at global level.
Tesla is also improving its brand image by accepting new change and provide the
products accordingly (Holtström, 2022).
 Late Majority: The people also uses new ideas and products when most of the, uses it.
It is not used by the company because it already have different people who mainly
create a better output in order to create a best outcome.
 Laggards: In this, innovation is not accepted by the people due to their stereotype
thinking and in the context of chosen company, there are no old tradition employees
who do not accept the same. This shows that company only accept those key aspect
which help a business to improve the brand image.
Safe model is a set of organisational and workflow pattern for implementing agile practices
within a business. This framework help a business to determine the employee’s roles and
responsibilities so that company can manage the work and values to uphold. There are four
main types under the model through which Tesla can make investment in order to improve
the brand image.
Suitability: It determine the option which is suitable for the company which in turn assist to
improve the overall performance. Also, in order to accept this, there is a need to determine
the company’s strategy so that better option can be generated (Kaipainen and Aarikka‐
Stenroos, 2022). In the context of Tesla, it has a strong financial performance and that is why,
it keep expanding in developing countries that help a business to generate a better outcome.

Acceptability: It is all about to measure the risk and return by using stakeholder reactions.
That is why, company need to be ensure about the new strategy assist the firm to improve the
business performance. Also, return need to be calculated in effective manner so that further
steps can be derived (Wu and et.al., 2021). In the context of Tesla, company should also
measure the risk by evaluating the profit and then make effective decision whether company
should invest into it or not.
Feasibility: It reflect to make a break of any chosen strategy in order to determine whether
the strategy is feasible or not. Also, the financial feasibility can be determined by using break
even analysis and number of financial test so that effective outcome can be generated. Tesla
is also performing the same because it have a financial experts who keep providing a figures
regarding the sales and then provide effective results as well.
Recommended route forward
By analysing the situation, it has been identified that Tesla is uses range of new
innovative strategy and that is why, there are different ways suggested that help the company
to proceed further, some of them are as mentioned below:
 It is to be recommended to use Product development strategy in which company
should provide effective outcome in term of new products. This will help the
company to improve the results and raise the financial performance as well. That is
why, for the future routes, company need to focus upon its products.
 In accordance with the pandemic situation, the sales of the company is decreases and
that is why, it is to be suggested to the company that it need to add new services
within a business that create a better outcome. Also, it has been identified that due to
offering innovative service will definitely assist Tesla to become a leader in the
coming years.
 In accordance with the 7 S model, company is also adopting all the S which create a
better outcome for the company performance. In this, there is a need to focus upon the
strategies that assist to generate a better outcome. Hence, through such models,
company may improve the ways and generate a strong performance within a business.

CONCLUSION
By summing up above report it has been concluded that there are different ways
through which Tesla can implement new strategy and run the business at successful manner.
That is why, it can be stated that by applying different business strategy model, company
identify the ways through which business can survive in a better way. Also, it has been
concluded that company sell its products at high rate and that is why, focusing upon its cost
will be more beneficial for the business to increase the financial performance. Apart from
this, it has been also concluded that by adopting product development as a growth strategy,
Tesla can improve the brand image and attract new customers towards it. That is why, opting
right decision for the welfare of a firm will be beneficial in order to generate a right decision.

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