Strategic Management: Internal and External Factors of Tesla and Strategic Solutions

This report evaluates the internal and external factors of Tesla and how the company reacts to it with strategies adopted by Tesla which impacts the company during making decisions and activities. It also explains how the company can deal with the external environment which is directly linked with the growth of business as well as analysing the external factors which are beneficial to them to understand the different opportunities to avoid the market-based risks. Additionally, it explores the strategic solutions of Tesla and Ford Motor Company.

Strategic Management

Table of Contents
INTRODUCTION 200....................................................................................................................2
TASKS.............................................................................................................................................2
SET 1: Case Study 1233.........................................................................................................2
SET 2:Strategic Solution Slide 1233......................................................................................4
SET 3: Reflective View 1233...............................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
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INTRODUCTION
Strategic management refers to the process in which continuous planning analysing
monitoring and assessment of various requirements of the organisation are made so that the
company can be able to meet their goals and objectives. In order to have effective strategic
management a company is required to analyse the changes in the business environment so that
they can be able to formulate effective strategies for their success. There are various stages that
can be used for a strategic management in an organisation that has setting of goals and objectives
analysis formulation of strategy implementation of strategy and monitoring the strategy. All
these factors helps an organisation to have effective strategy and provides them and direction
towards effective development of plans and policies for the company. In short the strategic
management adopted in an organisation helps them in attaining competitive advantage in the
market. This report is going to evaluate about the internal and external factors of Tesla and how
the company reacts to it with strategies adopted by Tesla which impacts the company during
making decisions and activities. It also explains how the company can deal with the external
environment which is directly linked with the growth of business as well as analysing the
external factors which are beneficial to them to understand the different opportunities to avoid
the market-based risks.
TASKS
SET 1: Case Study
 Strategy adopted by Tesla impacts the company's decision and activities 617
There are various strategies adopted by Tesla which creates major impact on the activities and
decisions of the company.
◦ Building a new architecture- The
◦ Controlling the bottleneck-
◦ Delivering solutions-
The external and internal factors of Tesla and how the company responses to the factors-
PESTLE Analysis of Tesla is explained below-
It assists in knowing the market growth or decline, potential and direction for operation. It is
widely used tool by marketers to monitor the macro environmental factors that have an major
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impact on an arrangement, company or industry. It was known as PEST Analysis. It is an form
used in marketing to examine external factors.
The PESTLE Analysis is applied and estimated in the context of Tesla below:
Political Factors- When the government policies interfere in the economic and other factors that
can affect a business. These include various points such as the labour law, trade traditions, tariffs
trade restrictions political stability, bureaucracy and tax policy. In case of Tesla, the
government's involvement has strengthened the financial position of the Tesla to boost its
performance. The policies of government have also supported Tesla to expand its operating in
the other countries (Grassi and Vallati, 2019).
 Economic factors–Economic factors refers to the economic growth or decline, interest,
exchange,inflation, hours unemployment, credit availability, cost of living and its
profitability. In case of Tesla, sales depend upon the local economy of the country. This
can be done by making cost effective cars for ordinary customers for their benefit to meet
the growing demands of the market.
Social Factors-Social factors are directly attached to the consumers which includes cultural
norms, age distribution, population growth rate, health and safety. These factors are helpful for
companies to better plan their marketing analytics and strategy. Tesla is one of a kind under the
category of luxurious electric cars in the knowledge of people. Social factors are in favour of
Tesla because the environment friendly attitude of people towards renewable energy )(Jones and
Kierzkowski, 2018)(Karpenko and et.al., 2019)(Köseoğlu and Parnell, 2020) (Liu, and et.al.,
2019)(Mayer, 2018)(Nazarova, 2019)(Pasch, 2019)(Phillips, 2018)(Shaner, 2019)(Stephens and
Martin,2019)(Yin and et.al., 2018)( Zahari and Romli, 2019)
 Technological Factors- It includes Innovations and developments in the industries.
These factors create an impact on organization's daily operations. Several new
developments like Deep learning, Artificial intelligence, machine learning are being
made in the technology field and if a company fails to match up the trend it may lose its
place in the market. Technological factors help Tesla to have a competitive edge for the
competition in the market which allows it to be fuel efficient which is possible by
adopting the newer technology.
 Legal Factors-These legal factors have an impact on the business environment in a
country. It includes various laws such as employment laws , discrimination law,
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consumer protection, industry specific regulation, regulatory bodies, antitrust law, health,
safety law and many more. Tesla is also expanding into another markets too so, they will
need to keep itself updated on the legal aspects otherwise they may face legal issues.
 Environmental Factors- These environmental factors are mainly concerned with the
effect of the surrounding environment and the power of ecological aspects. These
consider water disposal laws, environmental protection laws, energy consumption
regulations and many more. The main strength of Tesla's products is environmentally
friendly that's where its biggest strength lies. Its vehicles are abided by the environmental
regulations and also barely impact the carbon emissions.
Tesla's PESTLE Analysis has always helped the company to understand how the external
environment is directly related to the growth of overall business. It also helps in analysing the
external factors which are beneficial to them to understand the growth opportunities avoid the
market-based risks.
SWOT Analysis of Tesla is explained below-
It is a tool to find out the firm's strategic planning methods utilised to assist an organisation to
determine its strengths, weaknesses, opportunities and threats related to business survival. It is a
method that provides assessment of company's competitive position and to develop strategic
planning. It is frequently used by investors, individuals, governments and many others. SWOT
Analysis is an incredibly easy analysis but effective method to identify the component that helps
the business to develop and grow. Strengths and weaknesses are internal factors whereas
opportunities and threats are external factors for any business or company (Ervural and
et.al.,2018).
Strengths
Energy Efficiency- Tesla is a leading brand
when it comes to the eco-friendly cars due to
its prominent use of renewable energy sources.
Different acquisitions of technology companies
have made the brand stronger moreover
billions of dollars have also been invested by
Tesla in making driverless or self-driving cars
Weakness
Premium Product Range-Tesla is already a
well-established premium clean energy brand.
Main problem is that it takes a lot of time to
build the trust of the consumers when it comes
to the electric vehicles. The company has a
tough competition as compared to cheaper cars
running on diesel or petrol.
Opportunities Threats
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Environment-friendly cars- Now a days,
consumers are becoming more aware about the
environmental activities which tends to
increase the awareness about the more electric
vehicle. Launching Tesla cars in newer
markets which are still adopting to electric
cars.
New Technology- There are many innovative
ways of energy which are being used by the
companies for the vehicles. To be in market,
competitive pressure may lead to high
operational cost and low profit margins. Tesla
is currently competing against a technology
which has been in use for many years like
combustion engines and also their technology
may take time for being optimal for use of
masses
There are different challenges which are likely to be faced by the Tesla. It requires to
focus on expanding to different part of the world and re-evaluate the strategies as Tesla is already
an well-established brand in the innovation and suitability.
SET 2: Strategic Solution Slide
Strategic solution is related to mainly a long term- permanent solution of formulating,
implementing and evaluating cross-functional decisions that will enable an organisation to
achieve its objectives and goals. These solutions are the statements that particularly indicate the
crucial and important strategy of the organisation to track the progress
Analysing the strategic solutions of two different companies that is Tesla and Ford Motor
company:
Tesla has accelerated its speed for the completion of mission of the sustainable energy as the
company has started its innovation towards the auto-mobile industry in the form of luxury
electric vehicles. Tesla has a high performance in electric sports car and is still working to
become the extremely high in quality. It provides a variety of products and services all over the
world with customizable seats and storage (Dias and Ferreira, 2019).
.  Research and development- Tesla spend a lot in R&D expenses which requires a huge
investment for investing more because Tesla is focusing on software updates, automation,
research and development. R & D allows a company to stay ahead in the competition.
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Without R&D a company may not survive on its own and through R&D Tesla can design
new innovative products and improve their existing products. Production-Tesla produces its own key components such as electric motor, charger and
the battery pack and it also buys its product from different countries like Europe and
China. Tesla's future depends upon the high-volume production so it focusing on making
the machine that makes the machine. In fact, Tesla is planning to increase the speed of
the production. Moreover, Tesla can adopt few improvements using cheap and ready
options available such as usage of proper track inventory that will help to allow vendor's
direct access to the inventory counts and also keeping track of rejected quality or late
deliveries. Ford Motor company was founded by Henry Ford on June 16,1903. It is an
American multinational automobile manufacturer which has its headquarters in United
States. The company sells commercial vehicles and automobile. Ford once owned five
other luxury brands such as Aston Martin, Land Rover, Volvo, Jaguar and Mercury.
 Human Resources- Human resources are required to fulfil the strategic actions for proper
functioning of the company through the hiring process. Tesla's main mission is to
accelerate the world's transition to sustainable energy by appointing the suitable and best
people that share the same passion in the innovative culture. Tesla involves training
programs to orient employees to improve the organisational culture. It also creates human
resource competence necessary for innovative products in the global automotive
business. It empowers its workforce to search for ideal solutions that make the business
stand out in the automotive industry along with it, Tesla encourages employees to
innovate so that it can support continuous improvement of the business.
The strategy of Tesla is to enter at the high end of the market where customers are ready to pay a
premium and move market as fast as possible as per its requirement. Main vision is to create the
most compelling car of the 21st century by driving the world's transition to electric vehicles. Ford Motor company was founded by Henry Ford on June 16,1903. It is an
American multinational automobile manufacturer which has its headquarters in United
States. The company sells commercial vehicles and automobile. Ford once owned five
other luxury brands such as Aston Martin, Land Rover, Volvo, Jaguar and Mercury.
Strategic solution is related to mainly a long term- permanent solution of formulating,
implementing and evaluating cross-functional decisions that will enable an organisation
6

to achieve its objectives and goals. These solutions are the statements that particularly
indicate the crucial and important strategy of the organisation to track the progress
Ford Motor company was founded by Henry Ford on June 16,1903. It is an American
multinational automobile manufacturer which has its headquarters in United States. The
company sells commercial vehicles and automobile. Ford once owned five other luxury brands
such as Aston Martin, Land Rover, Volvo, Jaguar and Mercury. Strategic solution is related to
mainly a long term- permanent solution of formulating, implementing and evaluating cross-
functional decisions that will enable an organisation to achieve its objectives and goals. These
solutions are the statements that particularly indicate the crucial and important strategy of the
organisation to track the progress
Motor company was founded by Henry Ford on June 16,1903. It is an American
multinational automobile manufacturer which has its headquarters in United States. The
company sells commercial vehicles and automobile. Ford once owned five other luxury brands
such as Aston Martin, Land Rover, Volvo, Jaguar and Mercury. Company was founded by Henry
Ford on June 16,1903. It is an American multinational automobile manufacturer which has its
headquarters in United States. The company sells commercial vehicles and automobile. Ford
once owned five other luxury brands such as Aston Martin, Land Rover, Volvo, Jaguar and
Mercury.
Ford Motor company was founded by Henry Ford on June 16,1903. It is an American
multinational automobile manufacturer which has its headquarters in United States. The
company sells commercial vehicles and automobile. Ford once owned five other luxury brands
such as Aston Martin, Land Rover, Volvo, Jaguar and Mercury ( Chen, Chowdhury and Donada,
2019).
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 Research and development- It requires team and supportive people for the research work
to take management decisions on the basis of innovation and research. For this there can
be expansion of the labour such as splitting the team into two. One is for R&D purpose
and another one is for innovation team which helps in saving the precious time.
 Production- The manufactures find it difficult to forecast the future demand which lead
to failure of products to meet the customer demand and they will suffer lower sales so,
the company can forecast the demand right way which leads to accelerate the target sales
and estimate how many and which items they should produce in the future.
Human resources- There are different type of uncertainties such as absenteeism, market
fluctuations, and labour turnover. As business grows, its internal process and strategies
also grow some find it difficult to cope with the changes which leads to experience of
decreased productivity during the period of change. So, company should focus on
communicating the benefits of the change for all. The good place to start is regular staff
meetings (Alghalith, 2018).
SET 3: Reflective View
Strategic management is all mainly about detailed description of the bundle of decisions that
supports in achieving the better performance for the organization. A company is said to be in
profit when its profitability is larger than the normal profit for the company in the industry. The
main role of strategic management is to incorporate various functional areas of the organisation
to ensure the functional areas harmonize and get together well. Companies, non-profits,
universities and the organisation also use strategic management as a way to make goals and meet
the desired objectives. Moreover, a strategic manager may oversee the management plans and
analyse the ways to meet their benchmark goals. It also keeps an eye on the goals and
objectives of the organisation. In my opinion strategic management is the process of setting
procedures and goals in order to make a company more competitive. It’s all about identification
of the various strategies so that company can carry to achieve better performance for their
organisation. Strategic management plays an important role for the company because it allows a
company to analyse the areas for operational improvement. A company may choose to follow
either a descriptive or preceptive approach to strategic management. For example, a large
company wants to achieve more ambitious outline sales to meet this demand the company has to
develop a stregy which can be applied to all the units and department to execute accordingly. As
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per my knowledge it is suitable for both small and large both the organisations so that they can
attain sustainable competitive advantage. I have analysed that various strategies which are
adopted by Tesla creates a major impact on the activities and decisions of the company. I found
that external environment is diverse in case of Tesla due to variety of the company's products and
market. Government also creates a main impact on the performance and revenue generation of
the company like it has the opportunity to boost the financial performance through government.
Conditions like market growth, trade level and currencies that influence the automotive business.
It is seen that social conditions affect a firm's macro environment through employees, customers
and investors. PESTLE analysis helps the business to align with the social trend to target market.
With the help of SWOT Analysis, Tesla developed new innovative designs which gained
popularity among the American public in the form of premium electric car model. Tesla became
the first automobile to use the lithium battery cells. It also helps to provide a deeper
understanding of its future projections and working model. Its slogan is Burn rubber not gasoline
Tesla has a broad differentiation strategy is a long-term play with a focus on electric automobile
automation, battery technology and environmentally friendly products such as solar roof tiles.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. It is also trying to
enter the high end of the market
The strategy that has been used by Tesla in their organisation help them in gaining
competitive advantage in the market and fulfil the requirements for their strategy valuation. I
have analysed that the company has focused their strategy towards providing solutions to the
customers which helps them to attain more and more customers in the market. Becoming a
member customer of Tesla the feel very lucky and effective as their production services helps
them to gain great experience with solutions of their problems. This helps the organisation
strategy to be effective for their customers for stop in order to evaluate the strategy of Tesla it
has been analysed that the company is able to fulfil their strategic purpose by providing effective
solutions to their customers. The company has effective strategy in every aspect which as their
impact on the decision making of companies activity. The strategies that has been made by the
company are completely based on their internal as well as external factors that has been
identified with the help of SWOT analysis and pestle analysis in the company. Being a large
organisation Tesla always have effective external factors analysis which helps them to analyse
the factors that can have a negative as well as positive impact on the profitability of the company
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and the demand of their customers. This helps the company Tesla to earn competitive advantage
in the market and fulfil their strategic purpose. With the help of this module I am able to develop
my skills that are related to the strategic approach that can be used in a company and its impact
on the decision making of a company. I have learnt to make effective strategies to become an
effective entrepreneur in future which is very helpful to gain relevant experience of various kinds
of internal as well as external factors of the business organisation. I have learnt various types of
analysis that can be used by a business organisation to make their strategic decisions and gain
competitive advantage in the market for the case study of Tesla helps me to analyse the ways in
which a company can be able to fulfil their strategic purpose.
CONCLUSION
The above report summarizes the evaluation of the Tesla's strategic solutions for the
corporate decisions and actions. It also summarizes the various extrinsic issues which helps the
organisation to deal with the external factors. This report also critically evaluates the strategies in
terms of competitive advantage and fulfilment of strategic purpose. Moreover, it further explains
the strategies adopted by Tesla which create an impact on the company's activities along with the
external and internal factors of Tesla which helps the company to examine the effects of the
macro-environment of the automotive industry. For example, Tesla's customer base is related to
the cost-effective factors with the strong brand image which will enhance the profitability of the
business. Strategic solutions are strategic marketing, brand management and public relations
Company with a focus on working with organisation wishing to speak in a planned manner for
the reputation for clients and their brands. Strategic actions tend to help in setting the process of
setting goals and mobilizing the resources required for taking actions which will help in
achieving the goals. For example, it includes ordinance, planning, community practise, education
option and education option. Such plans explain how the company is going to make the strategy
step by step. This plan boosts the internal morale and public confidence so that employees know
exactly what the need to do in order to achieve the organization’s goals and everyone can track
results. Every strategy has multiple interdependencies and a big part of equipping employees for
success is allocating the proper resource for the all tasks. Its is called a strategic action a
particular reason just like with a strategic plan creating an action plan only means something if
the company take the steps to implement it. Tesla has a broad differentiation strategy is a long-
term play with a focus on electric automobile automation, battery technology and
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environmentally friendly products such as solar roof tiles. Tesla’s mission is to accelerate the
world’s transition to sustainable energy. It is also trying to enter the high end of the market
where customers are ready to pay premium to drive the market. It also has strategy of direct
selling where all the stores and service centres worldwide directly owned by the company. The
growing demands of the market.
Social Factors-Social factors are directly attached to the consumers which includes cultural
norms, age distribution, population growth rate, health and safety. These factors are helpful for
companies to better plan their marketing analytics and strategy. Tesla is one of a kind under the
category of luxurious electric cars in the knowledge of people. Social factors are in favour of
Tesla because the environment friendly attitude of people towards renewable energy )(Jones and
Kierzkowski, 2018)(Karpenko and et.al., 2019)(Köseoğlu and Parnell, 2020) (Liu, and et.al.,
2019)(Mayer, 2018)(Nazarova, 2019)(Pasch, 2019)(Phillips, 2018)(Shaner, 2019)(Stephens and
Martin,2019)(Yin and et.al., 2018)( Zahari and Romli, 2019.
11

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(Alghalith, 2018)( Chen, Chowdhury and Donada, 2019)(Dias and Ferreira, 2019)(Ervural and
et.al.,2018)(Grassi and Vallati, 2019)(Jones and Kierzkowski, 2018)(Karpenko and
et.al., 2019)(Köseoğlu and Parnell, 2020) (Liu, and et.al., 2019)(Mayer, 2018)
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(Nazarova, 2019)(Pasch, 2019)(Phillips, 2018)(Shaner, 2019)(Stephens and
Martin,2019)(Yin and et.al., 2018)( Zahari and Romli, 2019)
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