Tesla: Internal and External Assessment, PESTEL Analysis, Strategic Action Plan

This document provides an internal and external assessment of Tesla, including a PESTEL analysis and a strategic action plan. It also includes a value chain analysis of the Model X, Tesla's market position, and a SWOT analysis. Recommended actions for Tesla's growth and expansion are also provided.

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TESLA
Tesla Motors
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Contents
Internal assessment..........................................................................................................................3
External assessment/Environmental Scan.......................................................................................3
PESTEL analysis.............................................................................................................................3
Political:...........................................................................................................................................3
Economic:........................................................................................................................................4
Social:..............................................................................................................................................4
Technological:.................................................................................................................................4
Environmental:................................................................................................................................4
Legal factors:...................................................................................................................................4
Perspective strategic action plan......................................................................................................5
PORTERS’ MODEL.......................................................................................................................5
Business rivalry:..............................................................................................................................5
Negotiating power of suppliers........................................................................................................5
Threats of newcomer:......................................................................................................................5
Ratio analysis...................................................................................................................................9
Recommendation.............................................................................................................................9
Bibliography..................................................................................................................................11

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Internal assessment
Tesla is an automotive company founded in 200, with revenue of $50 billion. Currently,
Tesla for all three models of Tesla cars produces power wall, battery modules, and power-pack
product. Currently, Tesla has a positive brand image because of the high demand for the
products as model 3 has a reservation of 32,500 in the first week of release. By launching the
Model X and Model S company providing cheaper options with the software limited battery
pack. Specifications of Model X and Model S are (Jeff, 2010).
Model X: This model has a price of $88,000 with a range of 270-miles. Model X can be
travel 0-60 mph: 4.1 sec.
Model S: Model S has a price of $85000 with a range of 310-miles. Model S can be travel 0-
60mph: 4.7 sec.
External assessment/Environmental Scan
The trend of environment-friendly, transforming of electric cars is far-reaching through
the industry. As per the US Department of Energy, electric engines transform on ordinary
59% to 62% of the power put in storage to the power of wheels while ICE (Internal
combustion engine) only transform 17% to 21% of the energy. Major competitors of Tesla
are Ford and General Motors who concentrating on the electric vehicle market due to the
trend of environment-friendly. Tesla has more experience in the production and assembly of
products. In reference to the foreign market, Tesla has a good performance record in the US
market and earns 45% revenue from Model S and Model X. The company is planning to
open the factory in the chin to increase the electric vehicle market share in China (Hwee,
2015).
PESTEL analysis
The PESTEL analysis is a vital administration tool that defines the macro environment of
the company. (Bharwani, 2012)

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Political: According to the current situation, nowadays government taking steps to
enhance economic conditions by supporting technological innovation in that case Tesla has
an opportunity to use government incentives for revolution, environmentally friendly
products, and sustainability. Political factors directly relate to the reduced carbon emissions
of the company’s procedures and products. PESTLE analysis helps the company increasing
free trade agreements and has an opportunity to expand its operations
Economic: There are certain economic factors that have a significant effect on the
company:
1. Lower battery costs
2. Lower cost of renewable energy
3. Economic stability issues
Lower battery costs give performance benefits to Tesla. For example, decreasing
battery costs translates to the sustainability of the automobile products in company.
Fall in the costs of renewable energy makes the products of the company more
attractive.
Social: Progressively trend of low-carbon lifestyles provide the company growth
opportunity and expand more operations. The increasing trend of renewable energy helps the
company to boost up the financial performance in the market. Better wealth distribution in
emerging markets leads to an increase in the number of potential buyers in the company.
Technological: Increase in the technology of automotive technology, gives the
opportunity to Tesla to increase its product’s technology. The increased rate of automation in
the business leads the company towards growth and development. The increasing trend of
online mobile network should adopt by the company in the integrated system of its
automobiles. Technological enhancement led the company towards better performance.
Environmental: Ecological factors have significant forces on the company such as
climate change, increasing environmental programs, growing principles on waste disposal.
Tesla‘s solar panels and electric vehicles are measured as a suitable way to address business
sustainability and ecologically friendly products.

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Legal factors: Laws and legal system in the automotive industry affects the decisions
of management and business. For example, the Tesla marketing mix or 4P are executed with
legal constraints. Tesla has chances to expand its operations such as international patent
protection. An energy consumption regulation helps the company to promote electric
vehicles and energy products, which leads the company towards growth.
Perspective strategic action plan
PORTERS’ MODEL
Business rivalry: The U.S automotive industry is a multi-billion oligopoly and
industry is highly competitive. The competitor is for large market share introduce new car
models and redesign prevailing car models. For example, Tesla opened Giga-factory for the
production of Tesla cars and battery products in the U.S and produces 500,000 cars in the
factory, and will reach full capacity by 2020 (Borwick, 2018)
Negotiating power of suppliers: In relation to this, the negotiating power of
Tesla’s consumers is moderate since all electric and hybrid alternatives offered by the rivals.
Tesla generally does not negotiate in the sale prices of the products.
Threats of the newcomer: In the automobile industry the threats of new entrants is
comparatively low because of the high cost of production and huge cost involved in the
research and development. More funds and cost are required to design the car.
.

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Value chain analysis of Model X
Fig: Model X
Source: (Tesla, 2019)
The Tesla models X have falcon wing doors rather than traditional automobile doors.
Model X is the safe and secure SUV of tesla that ground up as an electric vehicle. The modern
flag doors of Model X are furnish with sensors to detect the proximity of surroundings, and can
open in even the congested parking spaces. The top speed of Model X is 155 mph with the range
of 295.

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Tesla growth rate
Fig: Growth rate analysis of the company
Source: (Tesla, 2019)

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Tesla’s market position
Fig: Tesla market position in the BCG matrix
Source: (Tesla, 2019)
The ford’s motor company use BCG matrix to see an actual position in the automotive
industry.
SWOT analysis
Strength: Tesla is famous for the sucessful rate of innovation mainly in launching the
world’s first fully electric sports car. Tesla is a powerful symbol of the invention and
renewable energy solutions. Tesla has a strong brand image, which attracts potential buyers
and new customers. The major strengths of Tesla are efficient innovative processes, powerful
brand or Effective control on production processes (Mubaraki, 2010).
Weakness: Tesla market shareholding is very limited. For example, Tesla earns major
profit from the United States but has a minor shareholding in China and the emergent world.
The production process of Tesla involved high cost due to the production of electric car

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major drawback of Tesla is its products are comparatively more expensive which results in
lack in the customer base.
Opportunity: Tesla cana make vital use of opuurtunities when there is a minor or
insignificant market presence in the industry. For example, Tesla can raise its revenue
through expansion in the automobile and renewable energy marketplaces. SWOT analysis
provides the opportunity for the company to improve its supply chain through the expansion
of manufacture and sales operations.
Threats: Automobile companies use aggressively market strategies to maintain a good
position in the automotive industry. Variation in the prices of raw material is the main threat
for the company. For example, fluctuation in the prices of lithium can give threat to the
company because lithium used the company’s energy storage products.
Ratio analysis
Fig: Financial data and ratio analysis of Tesla Motors
Source: (Tesla, 2019)
Recommendation
1. Foreign markets: Company must expand its operations on a global level to utilize the
worldwide growth of the renewable energy industry.
2. Production innovation: Company must increase the investments in the product
innovation to attract potential buyers in the company.

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3. Customer service and support: The management should permit the customization
of the product on both online and offline.
4. Support network: Implementation of appropriate management is very crucial where
parts of the vehicles or product can be exchange and delivered on time.
5. China market share: Tesla must take a major shareholding in the automotive
industry of China.

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Bibliography
Bharwani, S. (2012). Risk identification and analysis in the hospitality industry: Practitioners'
perspectives from India. Worldwide Hospitality and Tourism , 410-427.
Borwick, I. (2018). Organizational Role Analysis: managing strategic change in business
settings. Coaching in depth, 3-28.
Fred, D. R. (2013). Strategic management: Concepts and cases: A competitive advantage
approach. . Pearson.
Hwee, E. Q. (2015). Building & Sustaining Strategy: . Journal of automotive industry.
Jeff, D. (2010). Driver input analysis and feedback system." .
Mubaraki, M. A. (2010). Business incubators models of the USA and UK: A SWOT analysis.
World Journal of Entrepreneurship, Management and Sustainable Development,, 335-
354.
Tesla. (2019). Retrieved from https://www.tesla.com/

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