Tesla Motors Progressive Assignment Report

This report provides an analysis of the marketing strategies and internal and external environments of Tesla Motors. It discusses the macro and micro environmental factors, SWOT analysis, and organizational strategy of the company.

Running head: TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
Name of the Student
Name of the University
Author Note

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EXECUTIVE SUMMARY
The following paper attempted an overall discussion of the marketing strategies that have been
employed by the company under perusal, Tesla Motors. The paper has been subdivided into four
parts that dealt with the analysis of the internal and the external environments of the company as
well as the organizational structure that is observed to have been maintained by the concerned
organization. The paper opened with the macro environmental analysis of the company. In this
section, the paper presented an analysis of the external factors that have been affecting the
business through the implementation of the PESTEL model. The model analyzed the
performance of the company on the basis of the political, economic, social, technological,
environmental and the legal factors that have been affecting the organizational performance of
Tesla Motors. The second part of the paper attempted a discussion on the micro-environmental
factors that have been affecting the company. The second part of the paper discusses the
opportunities and the threats that had been faced by the company as well as the other factors that
have been influencing the performance of the company in discussion, Tesla Motors. The paper
proceeded to the third part with the discussion on the internal environment within Tesla. This
part had put forth the SWOT analysis of the company. The third part further focused on the
manufacturing facility and the disruptive technology that has been implemented within the
company as well as on the ethical standards that are maintained by the human resource
department of the company. The fourth part of the report discussed the strategy that had been
implemented by the organization in discussion, Tesla Motors. The fourth part shed light on the
past, the present and the future strategies of the organization. The paper finally ends with a
summarization of the entire paper.

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Table of Contents
Part 1 – Macro Environment................................................................................................4
Introduction......................................................................................................................4
Political factors............................................................................................................4
Economic factors.........................................................................................................4
Social factors...............................................................................................................5
Technological factors...................................................................................................6
Legal factors................................................................................................................7
Environment factors.....................................................................................................8
Conclusion.......................................................................................................................9
Part 2 – Micro Environment................................................................................................9
Introduction......................................................................................................................9
Micro Environment Analysis.....................................................................................10
Summary........................................................................................................................14
Part 3 – Internal Environment............................................................................................14
Introduction....................................................................................................................14
SWOT analysis of Tesla Motors Company...................................................................15
Strength......................................................................................................................15
Weaknesses................................................................................................................16
Business opportunities for Tesla Motors...................................................................17

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Threats in the business of Tesla Motors....................................................................17
The manufacturing facility and its disruptive Technology............................................18
HRM and workplace ethics and Standards....................................................................19
Conclusion.....................................................................................................................19
Part 4 – Organization Strategy...........................................................................................20
Introduction....................................................................................................................20
Organizational Strategy of Tesla Motors.......................................................................20
Past Strategy..............................................................................................................21
Present Strategy.........................................................................................................22
Future Strategy...........................................................................................................24
Conclusion.....................................................................................................................25
Conclusion.........................................................................................................................25
References..........................................................................................................................26

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Part 1 – Macro Environment
Introduction
Automotive world is very competitive with a lot of options, and Tesla has been
recognized for its electric currently with no-emission cars and good value. Founded in 2003 by
Elon Musk, Tesla is improving fast its own cars and getting attention of the market.
Political factors
The governments around the globe are trying to persuade drivers to swap their standard
vehicles to eco-friendly types to stop or minimise pollution in their countries. That is caused by
Paris Agreement to battle climate change which is forcing governments to take different
approach and accelerate sales of eco-friendly vehicles. Many countries around the globe are
providing governmental incentives for electrical plug-in and hybrid vehicles. Incentives varies
from states and countries you are willing to purchase a car which could provide potential
customers with variable tax exemptions, tax credits, grants and even tolls and parking discounts.
In United Kingdom, customers will be eligible to get £3500 as a grant towards new electrical or
hybrid vehicle and exemption from London Congestion Charge. In United States of America
government incentives in form of Credit Tax varies throughout the states with lowest in New
York 500$ towards new plug-in car, and highest in Colorado- 5000$, as well as Federal Tax
Credit of 7500$ which going to decrease in oncoming year to 3750$. For example, in California
all Tesla vehicles are considered as Clean Air Vehicle, which is allowing drivers to use high
occupancy vehicle lanes even if it is no other passengers excluding the driver (Tesla.com 2019).

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Economic factors
Economic factors provide a positive or negative economic external impact over a
company’s macro environment (Kissinger 2018). Global economic growth cost of materials and
disposable income are few of the important factors that influence Tesla’s business performance.
In 2018 Autovista Group stated that as a result of world the economic growth, sales of electric
vehicles increased considerable. International Energy Agency reported in 2018 Tesla sale
acceleration from 1.1 million units in 2017 to 3.7 million in 2018 and a projection to 13 million
by 2020 (Tesla.com 2019). As a result, investors turned their attention to lithium-ion batteries
production. Due to the higher output volume, the cost of the batteries decreased accordingly
(Union of Concerned Scientists 2018). With all these glamorous aspects, Tesla still continues to
be classified as an expensive vehicle, with its price range between $49,000 (Assis 2018) and
$145,000 (Thomson 2017) comparing customers annual discretionary income (Investopedia,
2018) that ranges between $15,436 in Mexico and 46900$ in USA (OECD, 2018). In these
conditions, the next challenge for Tesla’s CEO, Musk is to produce a car that doesn't price itself
into the luxury category (Zetlin 2018), an affordable similar to Model 3 that is projected to cost
$35000 (Pratap 2017). Following the latest reports, Tesla enjoys a leading market position with a
high demand. However, in order to maintain its growth and market competitiveness the company
needs to continuously develop new up up-to date products at an affordable price that meet
customers’ requirements.
Social factors
To increase popularity of fuel free lifestyle Tesla has introduced private house electricity
storage systems that could be connected to solar panels, wind turbines, can be used as a backup
power and to charge electric car. This storage system is called Powerwall and Tesla deployed

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same system with solar panels to power California main grid line. Tesla battery Gigafactory in
Nevada is powered with a 70MW of solar array and has on site recycling (Tesla.com 2019).
Freemont California grid is using 70% non-fossil electricity. Tesla have good recycling practices
of lithium ion batteries and have plans to improve it by recycling on site to lower the impact on
environment. Tesla are leaders in material composition of lithium ion batteries, high energy
densities and clean energy used in production. Their vision of renewable energy and other
aspects of cleaner environment making them the best option for customers who are willing to
make an impact on environment not only by purchasing eco friendly cars, but also by upgrading
house.
Technological factors
Technological factors provide valuable information regarding the impact of technological
development over a company’s micro-environment (Kissinger 2018). In the latest time, as a
result of progress in technology and fast globalization, the vehicle industry expanded
considerably and has been moving towards automation. Tesla has been one of the innovative
companies that embraced this hi-tech evolution. Its aim is to grow the world’s changeover to
sustainable energy and zero-emission future (Tesla 2018). According to Matheus (2017), Tesla
was classified in the highest rank on BrandZ's Top 10 Most Innovative U.S. Brands last 2017,
due to energy transition vehicles, cutting edge technology, and low carbon footprint. There are
few important innovative products developed by Tesla that deserves to be mentioned:
 High performance batteries of the current electrical vehicles that can be charged within
minutes.
 Electric trucks (“Tesla Semi”), with the capability to drive 500 miles with a single charge
(Tesla.com 2019).

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 Mega-charger stations – with the ability to charge a battery in 30 minutes.
 Full self-driving hardware with full self-driving functionality.
 Online mobile systems that can upgrade vehicles software.
Not lastly should be mentioned Tesla’s implication in producing of solar panels, full solar
roofing and “Powerwall” - home batteries systems, with the property of storing solar energy
(Investopedia 2018). Tesla’s business is built upon technology - a critical determinant of its sales
and profitability. The technology is undoubtedly the greatest factor that has an impact Tesla’s
business – from production to marketing.
Legal factors
Legal factors are vital in every company life affecting businesses. Tesla legal factors
determine the effect of existing legal and regulatory framework, law, on the macro environment.
Therefore, our analysed company, Tesla business developments and manager decisions are
influenced by actual legal system. Tesla’s business management, internal policies human
resource management, business partnerships etc. must to be within the scope of the law.
The company long term visions include lot of external factors, among them legal factors,
such as: regulations for energy consumption, dealership sales and one of the most important for
Tesla Motors is to expand the international patent protection. Tesla is expanding into
international markets and keeping up-to-date on their international patents. Also, since the car
focuses on eco-friendliness, they can promote their cars as energy efficient and ensure it abides
by international environmental regulations.
Legal factors could identify the opportunity to facilitate, promote products, in our case,
Tesla´s electric cars and solutions for products based on energy consumption regulation that

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customers need to follow. Moreover, identifying these factors their business has opportunity to
become larger and larger by direct sales and not the least by dealership. This external factor
could be also a threat that is why Tesla had patented many of its technology out of fear that other
renowned companies in car manufacturing would take advantage of company progresses.
Environment factors
In 2010 Tesla Motors has received from Global Green USA the ‘Environmental
Leadership’ Award relating the word’s first all-electric as recognizing for innovative use of
sustainable product design. Tesla is related to macro-environment or remote of the vehicles
industry, as generation and storage energies. Almost all is concern to the effects of ecological
situations and Tesla has opportunities to show its electric vehicles thinking for example of
climate changing, environmental systems and better way of waste disposal. Their electric
vehicles, batteries and solar panels are matching to help for low-carbon lifestyles and renewable
energy. Some of external factors are pointed to business with sustainability and environmentally
suitable products and therefore macro-environment present opportunities for global expansion
towards a world sustainable and secure future. The most important factors are:
 Increasing popularity of low-carbon lifestyles
 Stimulating the preference for renewable energy
 Making a better way of distribution in developing markets
Electric cars would reduce carbon dioxide emissions as they produce fewer greenhouse
gases. Electric don't produce toxic waste with heavy metals, poisonous substances or need
oil/filter changes as gasoline cars. If a hybrid’s battery runs low the electric, starts an engine with
battery power as extra boost. Hybrid electric cars can use power from a normal electric grid as
from solar and wind power stations and from hydroelectric generators as these cars avoid the use

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of coal-burning power. However less ozone pollution, consumption of water or use of steel and
cooper material will help to combat global warming and can bring a healthy environment.
Conclusion
Tesla Motors is a renowned company for its technologically innovative vehicles and also
for their energy products. It is one of the world leader companies that work for a greener and
more technologically efficient world. They manufacture fully electric cars with high class
technology, hence their sales growing fast. Operating in global environment, they are facing lot
of challenges, Tesla is subject to the effect of external forces which was analysed Pestle in this
essay.
Part 2 – Micro Environment
Introduction
The engineers Martin Eberhard and Marc Tarpenning founded the company Tesla Motors
in the year 2003. The company is engaged in the manufacture of electric vehicles, and clean
energy generation and storage products (Tesla, 2018). The company is originally based at
California, having business operations around the globe. The environmental analysis of the
company refers to the overall evaluation of the external and internal factors that affect the
various business operations of the entity. A number of techniques have been prescribed over the
years that aid in the conduct of the environmental analysis of the entity.
The following report is aimed at investigating the microenvironment factors that affect
the business of the Tesla, as part of the environmental analysis of the company. The report will
explore the threats and opportunities faced by the entity as prescribed in the SWOT Analysis

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technique. This would be in addition to the evaluation of the external environment factors that
play a key role in influencing the business. The report will also consider the elements of the
Porters Five Forces’ analysis, and finally conclude on the same.
Micro Environment Analysis
The micro environment analysis of an entity refers to the evaluation of the internal factors
that influence the decision making, performance and the overall strategies of the business
operations. The micro environment factors include the customers, suppliers, employees,
competitors, shareholders and the media.
One of the techniques to evaluate the internal factors governing a company, is SWOT
analysis that comprises the evaluation of strength and weaknesses of the entity. In addition, the
technique states that in order to evaluate the micro environment of the company, it is also
essential to evaluate the opportunities and threats to the business.
The analysis of the opportunities and threats of the business of the Tesla Motors is
presented as follows.
Opportunities for the company
 One of the major opportunities for the company Tesla as in the industry of electric cars is
that the crude oil prices are consistently on the rise. As the crude oil prices are
consistently on the rise, the competitors would find it difficult to maintain the cost. In
addition, the rising oil and petrol price directly impact the interests and the buying
capacity of the customers as well. The same is an opportunity for Tesla to consistently
engage in the research and development to capitalise the opportunity arising from the
rising petrol and diesel prices.

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 Another opportunity for the company can be stated that the company is yet to expand its
business operations in the emerging markets of the Asia Pacific like that of India. The
emerging markets of Asia Pacific are yet to be introduced with the energy run vehicles
and devices. The markets of India are covered by the competitors like Maruti Suzuki,
GM, Ford and others. The opportunity lies for the Tesla to grab and convert the lower
market share to its benefit.
 Another opportunity for Tesla lies in the fact that the electric vehicles marker is further
divided into various segments such as the road vehicles, underwater vessels, electric
spacecraft, rail vehicles, electric aircrafts and more. Thus, as the company has already
launched its home battery product, the Tesla Powerwall, it is one of the only companies
in the world that is engaged in the residential energy storage market. Thus, the company
can further introduce its products and diversify in the area of rail vehicle market, aircrafts
and such other than road markets.
Threats for the company
 One of the major emerging threats for the company is that the competitor Volkswagen
AG has also launched its own charging and electricity unit (Sachgau, 2019). This will not
only make the Volkswagen battery operated cars more attractive to the customers, but
would also pose competition for the Tesla in the energy services market.
 Another threat to the company is that the competitors like Porsche have already jumped
into the area of electric vehicle. As per the reports, the customers have already started
showing interests in the form of pre booking for the Taycan, the first electric vehicle
product of Porsche (Business Insider, 2019).

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It can be stated, in short that the company’s long existing business, large pool of
customers and the in-house battery manufacturing provide the entity an opportunity to diversify
in emerging and untouched markets, and other areas such as residential, rail, space and others.
The major threat is continuous challenges posed by competitors and changing customer
preferences because of the introduction of the options in the market.
Analysis of other factors
The micro environment analysis of the entity in relation to the external organisation
aspects, and other factors as per the Porter’s five force analysis is presented as follows. The
knowledge of the following is essential to gain an overall insight of the various factors that
influence the company.
Customers
The company has built a large base of customers over the years. The attributes of the
customers considered to be highly educated and considerate of environment values. In order to
maintain the base in case of the US customers for the newly launched Model 3, Model S, and
Model X, the company has decided to cut the prices. This is because the federal tax credit for
electric vehicle customers has begun to expire for Tesla (Matousek, 2019). Thus, it shows the
company also makes efforts to keep intact the customer base.
Suppliers
The company relies on the Chinese suppliers for some specific parts. As the US is facing
the issue of tariff agreements with the China, it would be difficult for the entity to source the
components from the Chinese suppliers at the affordable rates. This could further impact the
profitability of the enterprise. In response to the above, the company recently made a request to
Trump administration for tariff exemptions for some Chinese-made products (Lambert, 2019).

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Thus, it can be stated that as of now, the suppliers are irreplaceable and play an important role in
the manufacturing process.
Competitors
The entity has been facing a lot of competition in the automobile industry. The
competition level has been growing as the competitors too are taking a plunge in the race of
electric vehicles. However, the company is having an edge in terms of the driving range and the
number of charging stations (Ray, 2019).
Shareholders
The shareholders play an important role in any entity, as their investment is on the stake.
Recently, the shares of the company traded at a high with the launching of the first overseas
Gigafactory in Shanghai, China (Jiang 2019). This is good news for the shareholders. One of the
major shareholders of Tesla is the Oracle founder Larry Ellison, who has recently disclosed a $1-
billion stake in Tesla (Beals 2019).
Regulators
Recently the company launched its deal of the first plant in China with the manufacturing
capacity of 500,000 cars. This was followed by the long-anticipated deal being signed in July
with the Chinese authorities. The above move is a significant as it was in response to the
increasing trade tariffs barriers as posed by the Trump government, and with the deal the
capacity would be doubled. Thus, it can be stated that the company takes into consideration of
the regulatory changes and make changes into its business strategy accordingly.

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Technology
The company has sustained itself over 30 years on the basis of technological innovations
and has emerged a market champion on lines of the same. The company’s technological
investments and outcomes has led to the revolutionising the customer buying habits and the
behaviours over the last decade (Sheetz, 2018). One of the negative facets of the technology of
electric vehicles is that there exist risk of defective components and inadequate safety measures,
as in the organic models. One of the incidents was 2018 car crash in Florida (The Guardian,
2019).
Summary
As per the discussions conducted in the previous parts it can be stated that analysing the
micro environment factors is essential for the entities, as it aids the management to evaluate,
review and amend the current strategies, together with introduction of new strategies in response
to the environmental changes. The work was an attempt to identify the threats and opportunities
to the business of the Tesla. In addition, the various other factors were evaluated in terms of
recent environmental changes. It can be concluded that such group of stakeholders had an
important role to play in the functioning of the business of an enterprise.
Part 3 – Internal Environment
Introduction
Tesla Motors Company was established in 2003. The Organisation was founded by a
group of Engineers with an intention of breaking conventional mind-sets regarding electric cars.
There are also a number of first and innovations against the name of the company and that has
also forced several competitors to innovate new designs in the domain of alternative energy
vehicles. Tesla Motors is an organisation that has vehicles from almost all the categories

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including sedans convertibles hatchbacks and another sector of cars where all the above-
mentioned categories are available and are driven by alternative energy (Stringham, Miller and
Clark, 2015). The vehicles company has its headquarters in Fremont California and one of the
essential business goals is to ensure the development of an absolutely sustainable energy-based
ecosystem. As per Tansel (2015), there is variety of other products of the company that enables
the customers to manufacture as well as store forms of alternative sustainable options of energy.
Being owned by Ellen Musk Tesla, the company has been able to successfully make an annual
turnover of US dollars 29 billion and are currently operating with about 38,000 successful and
promising employees.
SWOT analysis of Tesla Motors Company
Strength
The most essential strains of the company are the technology related aspects. The
company has been able to innovate cutting edge Technologies like no other organisation and in
fact many companies are purchasing the copyrighted machineries from Tesla which is the big
source of income for the company also (Chen and Perez 2018). Amazon example of such a
company is Daimler which purchases battery packs of Tesla and so as is Mercedes-Benz that
makes use of the power trains of Tesla. Other major components that gives strength to the
company are the ample amount of support that the gift from the local government. The national
power saving scheme has awarded Tesla with US dollars 465 billion for their successful Energy
Management and for the purpose of indulging into Energy Management projects that have been
patronized by the U.S. Department of energy. As highlighted by Hettich and Müller-Stewens
(2017), they are major drivers of the clean-tech initiatives of the United States and as such they

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have gained lots of advantages from the American government with the life that include tax
evasion and reduction of Corporate tax rate along with some anonymous market entry facilities.
Among the major strength factors, the Monopoly that Tesla enjoys can also be included.
In the initial days the company used to target a quite niche market segment that was in favour of
purchasing electric as well as alternative energy cars. However, the company's strategy was to
penetrate into an existing segment and as such they have developed a market segment of their
own that encompasses a large demography and geography. On top of that, Hess and Andiola
(2017), states that the major aspect is that Tesla Motors have the absolute monopoly over that
target segment and farmers people in their growth merging compared to their counterparts in the
market.
Weaknesses
Among the important factors that might be counted as weaknesses for the company the
first factor that deserves mention is their poor liquidity. Compared to their competitors like food
that has an accumulated market value of about US dollars 20 billion, General Motors having
about US dollars 25 billion or Fiat having US dollar 40 billion value, Tesla has been having a
market value of only US dollar 3 billion. As stated by researchers like Motors (2015), such
market strength is not sufficient for a company in the automobile sector to survive the immense
market competition and very soon Tesla might have to adopt cost cutting strategies like
termination of employee segment or other similar strategies.
Then again, Tesla Motors have been facing capacity issues also. Namely, one major issue
is that the company has been conducting their manufacturing operations in a single plant only
situated in Fremont of California. The plant is having a capacitance of developing 500000
vehicles only and this is the maximum production capacity for the company and as such will

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make it difficult for Tesla Motors to achieve larger target markets or if they are to raise the
volume of their production (Voigt, Buliga and Michl 2017).
The last factor that can be counted as a weakness for the company is the poor awareness
level of their customers. The products that the company manufacture is essential for sustenance
of the environment since the future sustainability is always preferred objective for the
organisation. How is work, as several researchers like Kwan (2015), have derived, the products
that are manufactured by Tesla Motors are absolutely futuristic and maximum number of
customers are confused whether they should invest in purchasing the products of Tesla or not in
the current market. Although, several organisations that are developing industries and investing
into futuristic Technologies, or pertaining to the Technologies developed by Tesla get more
expensive technological disruptions developed by the organisation have not seen the face of
profit so far.
Business opportunities for Tesla Motors
The First Avenue for futuristic opportunities that can come in the way of the companies
is their preference towards new technologies. Vehicle technology is taking and absolutely
innovative turn and there are a cluster of new technologies like green cars, battery cars, hybrid
vehicles, electric cars as well as self-driven autonomous vehicles also. Tesla, through their
disruptive research and development, has been able to launch many of the products that are being
driven by this future reach Technology. About 55% of the vehicles manufactured by Tesla green
cars and among them about 9% are hybrid vehicles. There are 15 US patent for self-driven
autonomous cars of Tesla that are still in the stage of conception and is expected to hit the road
by the end of 2035. Another important area of opportunity for the company is that the
governments of the developing countries also adapting and inviting the organisations that Foster

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disruptive Eco sustainable Technology and related products (Krebs 2016). Hence, there is a
chance of future expansion of the company in new markets and as such the company will enjoy a
better number of profit-making channels by means of which they can invest in production and
for the technological developments.
Threats in the business of Tesla Motors
Business traits can be classified as factors in external as well as internal business
environment which might suggest being detrimental for the growth of the company. Some of the
similar threats that the company face is competition, alternative technological impacts, lack of
acceptance and other similar factors. Of these, the most essential factor is competition from
existing market players. a lot of competition is shown towards Tesla Motors from organisations
like food, that holds about 31% of the entire automobile market of the USA, followed by Fiat as
well as General Motors who hold in Unison about 23% of the market and the rest is occupied by
other bearing companies that are also top-notch automobile manufacturing companies in the
country. In fact it is true that the company is being patronized by various Agencies as well as
government forums for their technological disruption that drives sustainable development for the
ecosystem, there is sales parity are falling in the last five financial year and current trends show
that the awareness level of the general public has not reached such a level that they might
consider buying Eco-friendly products as far as high budget purchases are concerned (Rogerson
2017). In fact, technology companies like Google also making carbon output that is higher than
that of Tesla Motors and hence it is suggestible that probably the market for the company has not
yet been set up by means of which they can drive Technology into sales and profit.

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The manufacturing facility and its disruptive Technology
The Fremont facility of Tesla Motors have been pioneering Lee integrating
manufacturing that is self-contained with each division supporting a different supply chain for a
different production unit and in the end the products are combined for satisfying a common need.
This is one benefit of disruptive technological innovation of Tesla that is enabling the
appointment of people from various sectors and does creating employment opportunities also
(Chen and Perez 2018). To talk about the manufacturing facility of Tesla, the SMG hydraulic
press in the Fremont facility that is of 7stories tall. By means of this facility the company can
finish 6-million-dollar worth production in 23 model vehicles at a time and Tesla has been
planning to install 35 such process into the domain of auto manufacturing all over the world. As
an impact of this, it can be projected that in the future the carbon output, waste generation as well
as human labour will be reduced to a great extent so far as industrial production is concerned.
HRM and workplace ethics and Standards
The total recordable incident rate in the company’s production units has dropped by
about 25% in the year 2018 compared to as it was in the year 2016. This shows that in spite of
driving in experimental as well as technological disruptive productions, the production line of
Tesla is very safe, though, the condition of the production unit was not the same always (Hettich
and Müller-Stewens 2017). Through the year 2017 the factory workers had waste in thorough
inspections of the manufacturing units and the employee Union paint larger part of the Year
throwing partitions for better safety standards in the workplace. In terms of reducing employee’s
risks also, the company drove technological disruption. They have developed a semi-automated
manufacturing line so that exercise as well as mandatory overtime that were complementary for
the employees of Tesla at a time can be overthrown and as a direct impact of that the rate of

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accidents in the company has reduced (Kwan 2015). The company also developed an ergonomics
team for ensuring that none of the workers were experiencing unnecessary strain at the time of
production as well as also in the Assembly line of their approaching orders.
Conclusion
In conclusion it can be stated that Tesla has been the major driver behind disruptive
technology and they have used it for not only product innovation but for also driving invention in
manufacturing as well as sales. By means of these the company has been an iconic leader in the
market of alternative cars. It is a fact that the sales parity of the company has not increased,
however major signals from the governments as well as the foreign markets shows that the
market proximity as well as opportunity for alternative fuel or alternative energy given cars
manufactured by Tesla is very high in the future.
Part 4 – Organization Strategy
Introduction
The report aims at providing an insight into the past, present and the future of the
organizational strategy of Tesla Motors (tesla.com 2019). The company was found by engineers
Marc Tapenning and Martin Eberhard in the year 2003 and is located in California. The company
has expertise in the manufacture of the electric car and solar panel. The company is known for its
multiple assembly and production plants. According to the reports of the year June 2018, Tesla
sold Model S, Model 3, Model X, Powerpack and Powerwall batteries, solar roof tiles and solar
panels. The company ranked as the worlds’ best in selling the plug-in passenger car in terms of
both the automotive group and the brand. The company had a market share of close to 12 percent
in the segment of plug in sales. The vehicle sales of Tesla rose from 48,000 in the year 2017 to

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close to 182,400 in the year 2018 in the United States. This represented a hike of close to 138
percent from the year 2017.
Organizational Strategy of Tesla Motors
An organizational strategy represents sum total of actions that a company intend in taking
for achieving the long-term goals (Benn, Edwards and Williams 2014). Altogether, such actions
define the strategic plan of the company. A strategic plan takes a year to get completed and
ensures the involvement at all the company levels. The key purpose of the organizational
strategies remains in connecting the key areas that defines the purpose of the business.
Organizational strategy is vital for the organization since it puts across sense of direction thereby
outlining the measurable goals. Thus, strategic planning acts as a useful tool for guiding the day
to day decisions while evaluating the progress and changing the approaches while moving
forward (Grant 2016).
Past Strategy
Tesla puts across generic strategy for achieving the competitive advantage in comparison
to the other firms within globalized automotive industry. According to the Porter’s model the
generic competitive strategy represented the approach of the company in competing into the
market (Tanwar 2013). In this regard, the generic strategy of Tesla reflected the focus of the
company in using the advanced technologies in the electric vehicles and the other related
products as the mean of competing with the Toyota Motor Corporation, General Motors
Company, Volkswagen and Bavarian Motor Works (BMW). Apart from generic competitive
strategy a company uses the intensive strategies for the growth of the business. Tesla believes in
gradual evolution of the growth strategies. This evolution reflects the increased popularity and
the improved profitability of the company. The strategic adjustment of the company ensured the

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resilience of the corporation in face of the technological advancement and the changing
preferences of the customers.
The generic strategy of Tesla Motors enabled the company in maintaining the
competitive advantage and in attracting the initial adopters in international automotive market.
On the other hand, the matching intensive strategies supported the organizational growth based
on rising sales revenue from the present market where the company operated. The generic
competitive strategy of Tesla lay in it’s the broad differentiation. This strategy helped in
building the competitive advantage depending on the product development that helps in
differentiating the company from the other firms within the industry (David and David 2013).
For instance, the products of Tesla Inc are competitive since they are able to integrate the
advanced environment friendly technology while considering the fact that majority of the
automobiles made use of the internal combustion engines. The strategy helped the company was
able to attract the potential customers who express increased interest in the environment-friendly
product. Tesla made use of differentiation focus as the generic strategy in gaining an advantage
over its competitors. In applying the differentiation focus strategy of the company that not only
stressed on uniqueness of the products but at the same time emphasized on the early adopters of
the electric vehicle. The early adopters have been affluent customers who possess a higher
tendency of purchasing the new products. With the popularity and the declining production cost,
the generic strategy of Tesla presently shifted to broader differentiation. The decline in the
production cost and the increasing popularity of the brand enabled a company in broadly
targeting customers in automobile market.
Thus, the generic strategy of Tesla Motors put across strategic objectives for ensuring
that the competitive advantage. For instance, the strategic objective of the company lies in

23TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
increasing the investment in the research and the development for the development of the newer
products that helps in satisfying the market demand for the improved renewable solutions of
energy such as batteries for the varied purposes. The other strategic objective of Tesla lies in
strengthening the competitiveness through broadening of the market reach for generating
increased sales and in supporting the popularity of the brand.
Present Strategy
The present strategy of Tesla has been the intensive growth strategy known as the
market penetration (Hardman, Shiu, and Steinberger-Wilckens 2015). This strategy helps the
company in business growth through the increase in the sales revenue in the current market
(Nykvist and Nilsson 2015). For, instance, through the aggressive marketing the company
focuses on rolling out and selling of increased number of electric cars in United States (US). In
this manner, the corporation is able to maximize the revenue from the market where it operates
currently. The intensive strategy of growth for Tesla connects with the generic strategy of Tesla
through development of the competitive advantage depending on the enhanced market share.
Hence strategic objective surrounding the intensive strategy will help in enhancing the sales
revenue of the company through aggressive marketing.
Product Development refers to the secondary intensive growth strategy of the company
where the company grows through the development of the newer products for the generation of
the newer sales (Stringham, Miller and Clark 2015). The company applies the strategy through
the development of the newer products through advanced technology for minimizing the impact
on the environment. For instance, the company puts across solar panels along with the
development of Tesla Roadster, which was one of the first electronic sports cars. This particular
intensive strategy supported the differentiation generic strategy of Tesla through focusing on the

24TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
unique higher technology mobiles and the related products for attracting the targeted customers.
In this regard, strategic objective for intensive growth strategy lie in maintaining the far-reaching
investments in the development and research.
Market Development refers to the tertiary growth intensive strategy of Tesla Motors.
The strategy involves entering newer markets for generation of increased sales and growth of the
global business (Rothaermel 2013). For instance, the company gradually expands the market
reach worldwide through establishment of the new office and the facilities. Presently, the
company undertakes selling of only in few countries with the expectation of further international
expansion. This particular intensive strategy supported the vision and mission statements that
highlighted global leadership in automotive industry with energy solutions for transportation and
the other sectors.
Diversification is applied by Tesla Motors as a minimum growth intensive strategy. This
particular intensive strategy enables the company in growing through new business creation
(Hill, Jones and Schilling 2014). For instance, the firm aims at the creation of variety of battery
products for non-automotive applications. This particular strategy for growth presently does not
have a significant impact on the financial performance of company. The company focuses most
of the efforts on the product development and the market penetration for growing the energy and
automotive business solutions.
Future Strategy
The future strategy of Tesla is concentrated on the aspect of innovation (Mangram 2012).
This is because growing companies like Tesla requires ideas for ensuring a profitable growth
Tesla has repeatedly put across that income growth and healthier ideation results in an innovation

25TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
culture. This will result in reduction of the cost of the batteries for the electric cars and enhance
the sell millions of solar systems that would help in introducing an electric car company that
would create the best car in the world. The planned reincarnation will enhance the ability of
Tesla to learn, improve and test. Profitability of the Tesla represented a concoction of the
production and originality directed towards the future innovation. The loyal Tesla customer base
demanded faster, better and smarter products with enhanced capabilities. Besides, they also have
the demand for innovative products that needed constant emergence without any delay in
production.
This would ensure a shifting risk of the landscape. This would involve articulation of the
value propositions for the users, identification of the market segment for product and structure of
value chain for getting the products to customers (Karamitsios 2013). In other words, the
adoption of the innovation strategy within broader ecosystem along with formulation of a
competitive strategy will allow Tesla Motors in gaining a foothold for the future innovation that
would act advantageous for the possible competitors.
Conclusion
On a concluding note it can be said that Tesla Motors had a successful past and present
organizational strategy that allowed the company to not only gain competitive advantage but also
operate successfully. The operational effectiveness is determined through the matching of the
generic competitive strategy and the growth intensive strategy. The company also plans to adopt
a future strategy based on innovation that would result in outcomes required within an era of the
digital transformation.

26TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
Conclusion
In lieu of the above discussion it might be stated that the concerned company in
discussion, Tesla Motors is known to have a proper discussion on the issues that are faced by the
organization in terms of the macro as well as the micro environmental factors that affect the
organization. The report further discusses the internal environment of the organization. The
manufacturing facility and the disruptive technology and the ethical standards that are
maintained by the human resource department of the company have also been discussed widely
in the paper. The report in its entirety has focused on the factors that influence the overall
operations of the company and in turn the competitive advantage of the company in the given
international markets as well.

27TESLA MOTORS PROGRESSIVE ASSIGNMENT REPORT
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