Strategic Management Report: Tesla

Running Head: STRATEGIC MANAGEMENT REPORT: TESLA 1
Strategic management report: Tesla

STRATEGIC MANAGEMENT REPORT: TESLA 2
Introduction
Tesla designs, develops, manufactures and sells energy storage and generation systems,
solar electricity and high performing electric vehicles. The company is also involved in the
installation and maintenance of such systems. Being a vertically integrated company dealing
with sustainable energy and as such offers end- to-end clean energy solutions and products (SEC,
2019). Tesla provides innovative solutions that help in generating, storing and consuming
sustainable energy. At present the company sells three electric vehicles and these are Model 3
sedan, Model S sedan and Model X sports utility vehicle. Headquartered in California, Tesla has
several stakeholders including shareholders, employees, investors, customers, suppliers,
government, business partners etc (Atkins, 2019). As compared to the global trend of adopting
electric vehicles supported by favorable government policies, the story in Australia is somewhat
different. Australia has stood outside the global trend towards electric vehicle. However, recently
the debate around electric vehicle started again after the Bill Shorten of labour shared his plan of
making 50% of all vehicles sold by 2030 to be electric (Probyn, 2019). As such Australia can
serve as a big market for Tesla in future. However, Tesla is suffering from a number of woes at
present ranging from an eccentric, overworked CEO to financial woes and unstable top
leadership (Business Times, 2018)( Currie, 2018)( Gelles, Steward, Silver-Greenberg & Kelly,
2018). Thus, although the company has a lot of potential in future there are several things that
the company has to make amends to at present.
External Analysis
Macro environment Analysis
An analysis of the external environment of Australia is performed using PESTEL analysis
Political
Australian government follows parliamentary democracy that operates under a
constitutional monarchy. Queen Elizabeth 2 of England is considered as the queen of Australia.
It is currently ruled by the liberal party. The country is known for its safe and stable political
environment. However, it is criticized with respect to deportation laws, rights of indigenous
people and treatment of refugees (Cody & Nawaz, 2017).

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Economic
Australia follows an open market economy. Its GDP at PPP is 1.248 trillion which makes
it 19th largest in the world. It has number of free trade agreements with a lot of countries and is
member of WTO, OPEC and G20. However, the real wage growth of Australians has stagnated
in recent time and their discretionary spending has reduced.
Social
The population density in Australia is low and the population growth rate is also low.
Additionally like other developed countries, the population is aging and most of the population
belongs to the old group. Australia spends 5.3% of its GDP towards education and the life
expectancy of its citizens is also large (CIA, 2019).
Technological
Australia is one of the few countries in the world that is technologically very advanced.
There has been good growth of technology over the years and the local companies are investing
in technology to bring innovative products to the market. However, when it comes to adapting
Electric vehicles, the Australian government is behind many other countries. Even the ambitious
target of making 50% of all vehicles sold electric by the year 2030 is far behind other countries
like Netherlands to sell only electric vehicles by 2025 (Newton, 2019).
Environmental
In terms of land area Australia ranks 6 among the countries. Australia has a highly
diverse geography and is party to several climate agreements. There are several issues being
faced by the country. Thus, the country would have to adapt a more definite policy with respect
to electric vehicles. However, due to its geography many places in Australia are located at far off
places from the town where there are no charging points en route. Thus, owners of electric car
would be at a disadvantage if they wish to use to car for travelling to far off places rather than
staying within the city limits.
Legal