Written Analysis of an Industry and a Firm - Tesla

This report provides a written analysis of Tesla, an American automotive corporation, and its industry. It includes a PESTLE analysis, Porter's Five Forces analysis, identification of strategic capabilities, VRIO analysis, dynamic capabilities, core competencies, value chain analysis, and SWOT analysis. The report aims to evaluate various factors affecting Tesla's growth and sustainability in the market.

Written analysis of an
industry and a firm

Executive Summary
The organisation can make a healthy working environment to maximize the productivity.
In this report there will be brief discussion about using various tools and make the organisation
perform better in the market. Along with that, there will be evaluation of various strategies
through which the company can achieve the goals and objectives in an systematic manner.

Table of Contents
Executive Summary ........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Conducting a Pestle Analysis ................................................................................................4
Porter five forces could improve the organisation position and helps hem to gain a
competitive advantage............................................................................................................6
Identifying strategic capabilities of Tesla Resource based view............................................7
Tesla capabilities and competencies VRIO analysis..............................................................8
Tesla value chain analysis......................................................................................................9
Swot Analysis of Tesla.........................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES:.............................................................................................................................11
Books and Journals...............................................................................................................11

INTRODUCTION
There are various driving forces which helps the organisation to achieve the goals and
objectives in an systematic manner. It includes power, energy, approaches, strategies etc.
Business environment includes various components like customers, competitors, stakeholders etc
(Teece, 2018). The organisation needs to maintain healthy working structure by optimizing the
resources in an effective manner. Tesla is an American automotive corporation it is based in
Austin Texas. The company design electric vehicles to maintain sustainable performance in the
market. Due to these ethical practices the company has acquired huge share in the automotive
industry and attaining maximum customer satisfaction. On the other hand, in this report there
will be brief discussion about the pestle analysis and various driving forces of the car
manufacturers. Along with that, there will be brief evaluation various industry environment
factors which includes porter five forces model. For further instance, identifying the strategic
capabilities of Tesla and how they capitalise to become more systematic in terms of carrying out
the operations.
MAIN BODY
Conducting a Pestle Analysis
Pestle analysis is an strategic framework which helps the organisation to asses different
components. It includes various political, Economic, social, technological environmental and
legal factors (Alghalith, 2018). Analysing the impact of these factors could help the company to
improve their overall performance and become sustainable in terms of every manner. The
components are described below:
 Political – This the first and foremost factor in this model. It includes government
policies, foreign trade policies and various political trends etc. Tesla is growing at an
exponential rate in the market. The organisation is complying to become more
sustainable with their systematic performance. The main vision is to reach various
customers in different regions by following all the laws and policies in an appropriate
manner.
 Economic – This factor suggests that the organisation is asses various components to
achieve an overall economic growth. It includes interest rates, job growth, impact of
globalization etc. Tesla works to benefit all the employees and help them to achieve an

efficient growth for the future. They are studying the market trends effectively and
provide products according to the customer change preferences.
 Social – It includes various demographics factors to asses the market conditions. The
components are customer preferences, buying pattern, attitude etc. Tesla includes various
cultural changes at an efficient rate to judge the customer preferences.
 Technological – There are various factors which helps the organisation to innovate new
products and services according to the market trends (Chen, and Perez, 2018). Tesla
promote their products in a systematic way which helps them to communicate better with
the audience in the market. The main vision of the company is to enrich the lives of
various consumers by improving the technological factors.
 Environmental – The business needs to sustainable and the working operations does not
affect the environment. There must be a balance between these two factors.
 Legal – This factor includes health and safety, equal opportunities, various rights and
laws etc. Tesla make their products by complying safety with their vehicles in accordance
to the laws and regulations.
Driving forces which impact car manufacturers
There are various key driving factors which affects the automotive industry are mentioned
below:
 Economic Conditions – The manufacturers needs to attain a sustainable performance in
the marketing to reach the economies of sale. Tesla is popular among the customers
because of innovative inventions which reflects in their vehicles.
 Consumer Demand and Interests – This is the second key driving factor it helps the
organisation to evaluate the customers behaviour and preferences towards a service or a
product. Tesla make the vehicles according the customer demands and the technology
which they used is way ahead of time. It help them to attract different customers in the
market.
 Technological innovation – The car manufacturers needs to innovate the technological
and do further improvements to maintain a stable performance in the market. Tesla use
new age features like automated driving assistance and these technological
implementation helps them to acquire a huge share in market.
Tesla changes according to the external business environment

 Political factors – This the inherent part of pestle analysis Tesla needs to identify the
governmental factors and in which way it can impact the business. Tesla needs to find
various energy solutions to make the growth of electric vehicles in an significant way.
While, emerging their operations in different regions the organisation needs to comply
with various trade agreements.
 Economic factors – There are various market conditions that influence the automotive
business. Tesla needs to improve their operation in order to improve the performance.
They can decrease the battery costs of their electric vehicles which gives them a
competitive advantage in the market (Khan, 2021). The organisation needs to improve the
stability of the products in an effective manner. This is the main threat of the business
and they can face various challenges over the coming future.
Porter five forces could improve the organisation position and helps hem to gain a
competitive advantage.
Porter five forces model is a tool which helps the organisation to analyse various factors
depending upon the market trends. This model is proposed by Michael E Porter in 1980. The
components helps the company to understand the market better. Various factors are described
below:
 Competition in the Industry – This is one of the first component in the five forces
model. Analysing the competition in the market or industry can help the company to
achieve a sustainable performance in a limited period of time. Tesla has asses the market
competition very effectively. This help them to gain a competitive advantage in the
automotive industry. The electric vehicles is the new upcoming future on which the
organisation has capitalised and cease this opportunity in an systematic manner.
 Potential of new entrants in the Industry – The organisation power is affected by the
new entrants in the industry. New companies can acquire a huge market share. This is a
serious threat for most of the organisations in the market. Tesla has seen an efficient
growth in the recent times due to their rich practices. The organised has managed to
attract different customers by implementing new innovative ideas. They are currently the
top manufacturers of electric vehicles in different regions.
 Power of suppliers – Appropriate supply of raw materials helps the organisation to make
the products in a better way. On the other hand, they can fulfil the demand of the

customers with the products and services. The main factor which makes the brand name
Tesla superior is their incredible technology. They share a healthy relationship with
different automotive parts manufacturers and suppliers (Huang, 2022, March). Due to this
they gets an adequate supply of raw materials in the market. It includes the electric car
batteries which is the most important component.
 Power of customers – This is one of the most important factor in this model. Customers
the make the brand successful in the market. They can maintain positive brand integrity
by providing maximum customer satisfaction. Tesla had focus on their growth by
implementing new ideas. This helps them to achieve maximum customer satisfaction the
ethical practices has created a positive brand integrity in the market.
 Threat of substitutes – This is the last factor in the porter five forces model. Market is
inherently changing with the newer trends. There are various goods and services in the
industry. Customers can choose the products depending upon their preferences. The
competition is certainly growing and it will be increased over a significant period of time.
Tesla has managed to acquire a huge share in the automotive industry with the new
technological implementation. Their electric vehicles segment has seen an immense
popularity among various consumers. They are providing specific products according the
preferences and the substitutes did not match the quality of Tesla's products and services.
Identifying strategic capabilities of Tesla Resource based view
Resource based view is an framework which helps the company to evaluate the
performance based on their resources. They had to enhance their operation by utilising the
resources in an efficient manner (Nieuwenhuis, 2018). This will help them to create a sustainable
performance in the market. Barney introduces this concept in 1991 to formulate the limitation
which the company faces while commencing their operations. Tesla has certain capabilities in
order to achieve their goals in the market. The main factor is workforce the management
motivates employees to innovate new ideas which will help the organisation to become more
profitable in the market. They can gain a competitive advantage by carrying out the operations
smoothly in the workplace. Tesla current strategy is to focus on installing energy generation
solar roofs and storage products. This help them to achieve a sustainable performance and the
strategy is basically different from other companies which are commencing their business. The
core competencies and improvements has created a path for the company to achieve and higher

growth in the future. Innovative manufacturing techniques, and valuable vehicle engineering
helps them to acquire a huge share in the industry and provide maximum customer satisfaction.
Tesla capabilities and competencies VRIO analysis
Vrio analysis is used to measure the competitive advantage of the company by using
various resources in a systematic manner.
 Value – This factor suggests that what are unique capabilities in the organisation
products which makes it different from other substitutes in the market. Tesla products
complied with all the quality standards and provide maximum customers satisfaction. The
design is unique which attracts a lot of potential customers. They use the resources in an
systematic manner.
 Rarity – This factor is totally dependent on the availability of the resources. The unique
capabilities of the organisation make its products and service different from other
competitors. Tesla has a product rarity the quality is bay far superior from other
companies. This helps them to achieve an overall success by fulfilling all the quality
standards and provides quality products to the consumers.
 Imitability – This factor is similar to the rarity of the products. The organisation needs to
have special qualities in their product which makes it different from other brands in the
market (Kancherla, and Daim, 2018). Tesla electric vehicles are build to enrich the lives
of the customer with new technology . They provide a never imaging experiencing to the
customers.
 Organization – The business needs to structured in an agile manner. The internal
analysis can help the organisation to asses various critical factors. They can carry out the
operations more smoothly and generate revenues in a systematic manner. Tesla achieves
an overall success because of their core competencies. Technological factors also plays
an major role to make the company better at various aspects.
Discussing the dynamic capabilities of Tesla
Tesla are true competitors in the automotive industry. The organisation use various
traditional ways to carry out the operations effectively in the workplace. The main dynamic
capability of the organisation is that they prioritize with the new technology (Hoelzlhammer,
2018). This help them to gain a competitive advantage in the market by utilising all the
resources. They adapt to new changes and study the changing customer preferences to provide

good services. Ther are various other brands which are making the electric vehicles but there is
not enough sustainability in the products.
Core Competencies of Tesla
There are various core competences of Tesla which are described below:
 Other manufactures sell their cars through the dealership. On the other hand, Tesla sell
their cars directly to the consumers (Lugtu 2019). The company has created an
established framework to provide products.
 Other core competences of Tesla is their innovative manufacturing techniques. They had
created positive brand integrity in the electric vehicle segment. The cars is designed to
provide safety to the customers which makes it different from other competitors.
Tesla value chain analysis
Value chain analysis is a process which helps the organisation to finish the final products
by using various activities (Muflikh, Smith, and Aziz, 2021). The characteristics are described
below:
Primary activities in value chain analysis
Inbound logistics – To carry out the operations effectively in the workplace. The raw
materials which are delivered in the organisation gets proper receipts and storage. Tesla
maintains the inbound logistics to work in an systematic manner. This is comprised into two
factors:
Tesla operations
 Automotive – Tesla comprises the segmentation of the products in an systematic manner.
It involves design, development, manufacturing and the sale of electric vehicles in the
market.
 Energy generation and storage – Tesla installs various important components in the
final products with different technological factors.
Outbound logistics – It involves various logistics like warehousing of raw materials and
distribution of products in the market (Fernandez-Stark, and Gereffi, 2019). Tesla use a
systematic structure in the workplace to carry out the operations appropriately.
Tesla marketing and sales – The promotion of the products is unconventional. This
helps them to gain a competitive edge in the market.

Swot Analysis of Tesla
It is a tool which helps the organisation to evaluate various factors with the changing
market trends. It includes strength, weaknesses, opportunities, threats of Tesla which is
described below:
Strengths – The main strength of Tesla is that they use technological factors more
effectively. It reflects in their products and services the electric vehicles of the company has
managed to reach new heights in the market.
Weakness – There are various weakness of Tesla which is stopping their growth and
restricts their market presence over other competitors(Ahmad, and Khan, 2019). The
organisation only make premium products which targets a segmented audience in the market.
There is also a limited presence of the company in several regions. They are finding various
ways to acquire a huge share in various countries.
Opportunities – There are various opportunities on which the organisation has capitalise.
This helps them to perform well in the market and generate enough revenues in the industry. The
main factor is environment friendly vehicles. This helps them to achieve a sustainable
performance in the market. On the other hand, they are saving the environment by using electric
vehicles.
Threats – With the increasing competition in the automotive industry Tesla is facing
tough competition from different competitors. There are various threats which could affect the
performance of the organisation. Increased competition is the main threat which the company is
facing (Movsesyan, and Anokhina, 2020). Different brands are also providing the quality
electric vehicles in the market. This is the min threat for the organisation.
CONCLUSION
From the above report it has concluded that the organisation needs to evaluate different
factors which could help them to perform better in the market. Along with that, there will be
brief discussion about various tools which could improves the companies overall performance.
For further instance, there are various opportunities ion which the firm can capitalise to achieve a
sustainable performance in the industry.

REFERENCES:
Books and Journals
Teece, D.J., 2018. Tesla and the reshaping of the auto industry. Management and Organization
Review, 14(3), pp.501-512.
Alghalith, N., 2018. Tesla: innovation with information technology. International Journal of
Business Research and Information Technology, 5(1), pp.37-51.
Chen, Y. and Perez, Y., 2018. Business model design: lessons learned from Tesla Motors. In
Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Khan, M., 2021. A critical analysis of Elon Musk’s leadership in Tesla motors. Journal of Global
Entrepreneurship Research, pp.1-10.
Huang, Z., 2022, March. Research on Business Model Innovation of Electric Vehicle Industry.
In 2022 7th International Conference on Financial Innovation and Economic
Development (ICFIED 2022) (pp. 738-742). Atlantis Press.
Nieuwenhuis, P., 2018. Alternative business models and entrepreneurship: The case of electric
vehicles. The International Journal of Entrepreneurship and Innovation, 19(1), pp.33-45.
Hoelzlhammer, A., 2018. A Strategic Audit of Tesla.
Lugtu Jr, R.C., 2019. Tesla: Testing a Business Model at its (R) Evolutionary Best (Doctoral
dissertation, DE LA SALLE UNIVERSITY-MANILA).
Ahmad, S. and Khan, M., 2019. Tesla: Disruptor or Sustaining Innovator. Journal of Case
Research, 10(1).
Movsesyan, E.K. and Anokhina, M.E., 2020. Tesla Vertical Integration Strategies: Theory,
Practice, Results. Business Strategies.
Kancherla, Y.D. and Daim, T.U., 2018. Technology Roadmap: A Roadmap for Tesla. In
Infrastructure and Technology Management (pp. 347-366). Springer, Cham.
Muflikh, Y.N., Smith, C. and Aziz, A.A., 2021. A systematic review of the contribution of
system dynamics to value chain analysis in agricultural development. Agricultural
Systems, 189, p.103044.
Fernandez-Stark, K. and Gereffi, G., 2019. Global value chain analysis: A primer. In Handbook
on global value chains. Edward Elgar Publishing.