Tesla Management Consultancy Report: Global Strategy and Sustainability

This report evaluates the external and internal environment of Tesla, analyses corporate strategy, and evaluates strategic purpose. It also discusses critical factors emerging from the analysis and recommended strategies that can be utilized by Tesla to compete in the global environment.

Global Strategy
and
Sustainability
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Table of Contents
INTRODUTION..............................................................................................................................3
MAINBODY....................................................................................................................................3
TASK – 1: Discussing external and internal environment of the organization..........................3
TASK – 2: Evaluating strategies in the global environment.......................................................8
TASK – 3: Analysing corporate strategy....................................................................................9
TASK – 4: Evaluating strategic purpose – Ethics and CSR.....................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
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INTRODUTION
The concept of global strategy refers to the development of a strategy within an
organization that is oriented towards expansion of business operation in the global markets. The
primary purposes of developing a global strategy is to enhance the current sales of the business
relative to the world. In addition to this, the development of a global strategy also a business to
increase sales in the new markets and improve the brand image of the business in the global
market. Moreover, the concept of global strategy provides and organization with opportunities to
learn conceptually as well as experientially on how it can create value for its stakeholders
through more sustainable and equitable approach. The following report is based on Tesla which
is an American electric vehicle as well as clean energy company based in Austin, Texas. The
following report will evaluate the external and internal environment of the organization along
with an evaluation of strategies relative to global environment. Furthermore, the report will
analyses corporate strategy that can be utilized by the chosen business as well as evaluating its
strategic purpose.
MAINBODY
TASK – 1: Discussing external and internal environment of the organization.
Internal analysis:
In order to conduct internal analysis of Tesla SWOT can be utilized which is an effective
tool which will allow the business to identify its strengths and weakness along with its threats
and opportunities (Teoli, Sanvictores and An., 2019).. In addition to this, it will allow the
organization of Tesla to determine its internal operations and gapes within them as well as how it
can overcome them through its strengths. Given below is the SWOT analysis of Tesla:
Strength Weakness
 The organization has embraced the
aspect of innovation within their
organization which allows the company
to gain huge brand image. In addition
to this, the organisation is able to make
use of advance technology in order to
provide high quality and efficient
 The organization has a major weakness
that is related to its limited production
of products as in order to provide high
quality there is huge cost involves. This
huge cost impacts the Tesla's volume of
production.
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products to its customers improving
their level of satisfaction.
 The organization has highly skilled as
well as talented employees within its
operations as it is know as a top
employee in the market. This allows the
business to ensure its workforce is
skilled and can overcome complex
situation in an efficient manner.
 The organisation encounters
complication within its manufacturing
and high standards of innovation
increasing the overall difficulty and risk
of mechanical failure and other
complications during production.
Opportunities Threats
 The global expansion is a vital
opportunity for the organization as
currently it only has presence in 35
countries. The expansion of the
business in other markets will allow the
organization to improve its sales and
enhance brand image.
 The organization can focus on
developing economic vehicles that
consist of less features in order to save
cost. This will help the business to
expand its customer base in a major
manner resulting in improved sales in
the market.
 The overall completion in the market
has increase as various automotive
organisation have oriented themselves
in development of greener products.
These companies are providing
products at cheaper prices which attract
more customers and negative impact
the sales of Tesla.
 The organization faces legal
complexities relative to its self-driving
vehicles which are not allowed in most
areas and consist of no proper
regulations. This leads to legal issues
and continues to threaten the growth of
the business.
External analysis:
In order to conduct the external analysis of Tesla PESTLE can be utilized which will also
the business to evaluate various factors in the external environment and how they influence the
operations of the organization (Alanzi., 2018). Through this analysis the organization will be
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able to evaluate how the factors impact is performance and productivity. Given below is the
PESTLE analysis of Tesla:
External factors Influence
Political The political influence is in the favour of the organisation as the
governments are focused on providing incentives on electric auto
mobiles. In addition to this, the organization operates is a stable
political environment in majority of its major markets.
Economical The economic environment of the organization has stability issues
which majorly impacts the business as it is not able to decrease the
cost of batteries utilized in their products. This diminishes their overall
target market at a significant level.
Social The social factors in the market are in the favour of the organization as
it is able to develop products that have low-carbon foot print. This
attracts a large customer base that is oriented towards improving
health lifestyle.
Technological The organization is highly influenced by technological factors as it is a
primary base on which its operates. The organization focuses on
utilizing new technology in the market in order to reduce its cost of
operations and production.
Legal The organization will have to focuses on various legal factors
especially when expanding their business internationally relative to
patent protection. In addition to this, it will need to pay emphasis on
energy consumption regulations in the market as well.
Environmental The changing environment is a great opportunity for the organisation
as it can use its USP of developing environmental friendly products in
the market in order to attract customers. In addition to this, it can make
uses of expanding environmental programs for its growth in the
market.
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Discussing 3 most critical factors emerging from the analysis:
From the above internal and external analyses it is analysed that are are various factors that
impact the operations of Tesla. In addition to this these factors are crucial for the organization to
evaluate in order to enhance its performance. Given below are three critical factors that impact
business operations of Tesla:
Technological factor:
The technological factor is vital for the organisation as it allows the business to instil the
element of innovation within its products. This helps the business to attract customers and plays
an important role in enhancing the brand image of the business. Although, the factors alos has
negative implication as it increases the cost of operation leading to increased price of products.
Global expansion:
The opportunity of global expansion is vital for the business as it will help the
organization to increase its overall sales as well as market share in the global market. Although
the organisation will have to take various legal factors into account in order to accomplish this
opportunity which can be challenging (Gupta, Gupta and Gupta., 2019).
Economical factor:
The economic factor is one of the most crucial factor for the organization as the overall
change in the stability of this factors influence the operation of the business. The organisation
has to focuses on reducing its overall price of products and focuses on developing economic
products in order to gain a larger market share and improve its sales as well.
Determining Tesla's current sources of competitive advantage and critical evaluation on
how they maintain and build on this competitive advantage.
In order to evaluate the current source of completive advantage in context to Tesla
Porter's Generic Completive strategies can be utilized which will allow in determining the
position of the organization within the industry and whether the organizations profitability is
above or below the industry average. In addition to this, it will consists of the fundamentals
based on above average profitability in the long run relative to sustainable competitive
advantage. Given below are the Porter's Generic strategies in context to Tesla:
Cost Leadership strategy:
In this strategy an organization focuses on becoming the low cost producer in the industry
which allows them to gain completive advantage in the market. This strategy is utilized by the
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compensation of Tesla such as Nissan and Toyota who are trying to undercut the business of
Tesla by offering similar concept products such as the organisation at lower prices in the market.
Differentiation strategy:
This strategy is utilized by an organisation that is focuses on developing unique products
in the industry along with some dimensions that are widely valued by buyers. Business such as
BMW and Audi have focused on developing new concept based on Tesla in order to bring
innovation in the market and gain market competitiveness (Hales and Mclarney., 2017).
Cost Focus strategy:
This strategy is sued by an organisation that is focused on increasing its cost through
reduction in cost at the same time charging industry-average prices for tits products in the market
in order to gain competitiveness. This strategy is adapted by competitors of Tesla such as Honda
and Kia who are focused on proving least possible price form electric cars in order to make
profits in the market resulting in reduced market share of Tesla.
Differentiation focus strategy:
This strategy is based on developing products or services that are different from and more
attractive than that of the competition in the market. This strategy is adopted by the organisation
of Tesla in order to gain market competitiveness. The brand offers unique products with features
that are not offered by their competitors. This allows the business to stay competitive in the
market. Although with high level of innovation within their operation in order to stay
competitive high cost is involved which increase the price of their produce in the market
reducing their target customer base.
TASK – 2: Evaluating strategies in the global environment.
Analysing how the organization can enter into foreign markets and critically evaluating the
motives for Tesla expanding internationally and explaining how this impact their overall
company strategy:
There are various methods and technique that Tesla can utilize in order to enter foreign
market. This will allow the business to improve its sales as well as prove the organization the
opportunity to expand its operations in an optimal manner. Given below are methods through
which Tesla can enter into foreign markets:
Direct approach:
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In the strategy the organisation of Tesla can offer its products and service directly to the
foreign customers by entering the new market and carry out its sales operations. This strategy
will help the organization to accomplish the motive of the business to enter a new market and
enhance its sales. On the contrary, this strategy can be risky and will require huge financial
resource which will impact the organizational strategy of Tesla at a larger scale (Qi et. al., 2020).
Indirect approach:
Through the use of indirect approach the organization of Tesla can enter a new foreign
markets through distributors and brokers. This can allow the business to gain some support in
saving cost through intermediaries who facilitate its marketing and sales. Although this can
include challenges that are related to controlling of operations in the new market that would
negative impact the strategies of the company.
Hybrid approach:
This approach involve a combination of direct and indirect approach. It involves
collaboration between one business and another in a foreign market. The organisation of Tesla
can use this approach to enter the new foreign market and gain vital support to increase it sales.
Although, it can be difficult for the organization to find a suitable business that is aligned with
their organisation strategy in the new market which can make it challenging to implement.
Business acquisition:
This approach involves acquiring an already established business in the new foreign
market as a means to enter the market in an optimal manner. This approch can be used by Tesla
as it will help the business to acquire existing customer base and facilities of the acquired
business. On the contrary this can be challenging for the organization as there are limited
business Tesla can acquire in a new market which limits their range. In addition to this, it will
have to alter its business strategy relative to the new market as well as the new business acquired.
Recommended strategies that can be utilized by Tesla to compete in the global
environment.
There are various strategies that can be used by Tesla in order to compete in the global
business environment. It will allow the business to compete with the existing competing in the
global maker and provide support to the business in gaining competitive advantage. Given below
are recommended strategies that can be utilized by Tesla to compete in the global market:
Pricing strategy:
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It is crucial for Tesla to alter its pricing strategy and orient it and develop a economical
approach in order to attract customers in the global market and stay competitive. This is vital as
the current pricing strategy of the business is based on high price of products that is justified by
their quality. This will be ineffective when competing in the global market which makes it
important for the business to cut cost and develop low priced products (Yayla et. al., 2018).
Strategic partnership:
It is important for Tesla to develop strategic partnership with new suppliers and other
business in the global market in order to reduce cost of its products as well as gain support
relative to development and manufacturing of products. This will help the business to ensure it is
competitive in the global market and achieve goals related to increased sales and brand image.
TASK – 3: Analysing corporate strategy.
Critically evaluating the use of horizontal integration, vertical integration, and strategic
alliances:
The corporate strategy is a unique plan or a framework that is based on long-term goals
and objectives. It is designed with the objective to gain competitive advantage in the markets
while proving satisfaction to both customers and other stakeholders. In context to Tesla, there are
various corporate strategies that can be adopted by the organisation in order to gain market
competitiveness. This will allow the business to attain high level of growth and enhance
elements such as sales and profitability. Given below are corporate strategies that can be used by
Tesla:
Horizontal integration:
It is a business strategy that focuses on a business to acquire or merge with another that
operates at the same level in an industry. In context to Tesla, this strategy can be used by the
organisation as it can merge with an existing business in the market in order to gain valuable
support which will enhance its sales and profitably (Mellahi et. Al, 2021).
Vertical integration:
This strategy allows business to streamline its operations by taking direct ownership of
various stage of its production process rather than relying on external contractors or suppliers. In
context to Tesla, through this strategy the organisation can focus on developing its batteries to
power it vehicles rather than relying on a supplier. This may help the business to save some cost
and reduce price of products (Iacocca, Mahar and Wright., 2022).
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Strategic alliance:
This strategy refers to an arrangement between two companies in order to undertake a
mutually beneficial project while each retains its independence. In context to Tesla, it can uses
this strategy to develop a relationship within an existing organisation in the market and utilize its
resource to reduce cost of production. Although it can be challenging due to difference in
organisation goals and objective between the two organizations.
Recommendation to Tesla on how it can increase their profitability:
Re-evaluation of pricing strategy:
The organization of Tesla can improve its profitability by reducing the price of its
products as it will attract more customers improving sales figures of the business. In addition to
this, the business will be able to enter an economic market which has a wider scope was well as a
large pool of customers which will help the business enhance its profitability (Al Jarwan and
Sheikh., 2021).
Expansion of business:
The business can use the strategy of expanding its business operation into a new market
in order to gain an untapped customer base. This will help the business to increase its current
sales and generate high levels of profitability. In addition to this, it will allow the business to
enhance its brand image in the market attracting customers in an efficient manner.
TASK – 4: Evaluating strategic purpose – Ethics and CSR.
Evaluating and analysing Tesla's CSR strategy:
Corporate social responsibility refers to the concept that a business has a responsibility to
do good. It refers that an organization should be self-regulates relative to its actions and should
be socially accountable to its customers, stakeholder and the world at large. In context to Tesla,
the organization focuses on fulfilling is CSR in the market in order to ensure higher satisfaction
to its stakeholders (Lavery., 2019). The CSR of Tesla is based on environmental benefits in order
to safe guard the surrounding environment through its environmental friendlily produces. In
addition to this, the organisation wants to provide lower prices products to its customers in order
to promote a low carbon foot print. Although it has not been able to do so due to its high price
range of products.
Identifying and critically discussing the primary ethical issues which Tesla is currently
facing and providing recommendation as to how they can address them:
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There are various ethical issues that the organisation of Tesla has encountered and have
impacted its overall brand image in the market. In addition to this, it has also impacted its sales
and profitability. Given below are few ethical issues within the organization of Tesla:
Misleading safety ratings:
There has been alligation that the organisation has faked its safety rating of its vehicles in
the market in order to attract customers in an effective manner. In order to overcome this ethical
issues the organisation must develop a transparent and clear set of safety reading through an
authorised organization in order to gain trust of its customers (Dahlin et. al., 2020).
Reselling defective vehicles:
The organization has been accused of reselling defective vehicles to its customers which
has reduced their trust in the operations of the organization. In addition to this, it has negative
impacted the overall brand image as well. In order to overcome, this ethical issue the
organisation must ensure that is develops a structured and systematic framework in order to
ensure its customers that the products received my them are not defective through proper paper
work based on an authorised department (Borglund et. Al, 2021).
CONCLUSION
From the above report it has been conclude that, it is vital for a business to evaluate it
internal and external environment in order to understand it current competitive positioning in the
market as well as evaluate major factors that influence business operations. In addition to this the
report was able to conclude that there are various global strategic that can be used by an
organization in order to compete in the global market. Moreover, the report critically evaluate
corporate strategies and their overall purpose relative to the chosen organization. The report was
also able to highlight that its is important for a business to have positive ethics and CSR in the
market in order to avoid ethical issues.
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REFERENCES
Books & Journals:
Al Jarwan, D. and Sheikh, F., 2021, December. Vertical Integration Strategy Implementation
Through Hybrid Upstream and Downstream Concession Agreements. In Abu Dhabi
International Petroleum Exhibition & Conference. OnePetro.
Alanzi, S., 2018. PESTLE Analysis. Project Management.
Borglund et. al, 2021. CSR and sustainable business. Sanoma utbildning.
Dahlin et. al., 2020. Exploring the business logic behind CSR certifications. Journal of Business
Research, 112. pp.521-530.
Gupta, A., Gupta, N. and Gupta, M., 2019. British Airways-A SWOT and PESTLE Analysis-
The impact of Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business
Laws, 1(1), pp.1-11.
Hales, G. and Mclarney, C., 2017. Uber's Competitive Advantage vis-à-vis Porter's Generic
Strategies. IUP Journal of Management Research, 16(4).
Iacocca, K., Mahar, S. and Wright, P. D., 2022. Strategic horizontal integration for drug cost
reduction in the pharmaceutical supply chain. Omega, 108. p.102589.
Lavery, S., 2019. The UK’s growth model, business strategy and Brexit. In Diverging
capitalisms (pp. 149-170). Palgrave Macmillan, Cham.
Mellahi et. al, 2021. The Oxford handbook of international business strategy. Oxford University
Press.
Qi et. al., 2020. Motivations for selecting cross-border e-commerce as a foreign market entry
mode. Industrial Marketing Management, 89. pp.50-60.
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
Yayla et. al., 2018. The role of market orientation, relational capital, and internationalization
speed in foreign market exit and re-entry decisions under turbulent
conditions. International Business Review, 27(6). pp.1105-1115.
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