Tesla Strategic Management

This document provides an overview of Tesla's strategic management and its mission to accelerate the global transition into sustainable energy. It discusses the stakeholder groups of Tesla and their impact on the company. The document also analyzes the cooperative potential and competitive threat of stakeholders and categorizes them into offensive, swing, hold, and defensive categories. Finally, it concludes with the importance of government support and meeting stakeholders' expectations.

Running Head: TESLA 0
STRATEGIC MANAGEMENT

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Contents
Overview...................................................................................................................................2
Tesla Stakeholder Groups.......................................................................................................2
Stakeholders’ analysis and Category.....................................................................................4
Conclusion.................................................................................................................................7
References.................................................................................................................................8

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Overview
Tesla Motors is the first company who tried to shift the petrol car market segment to electric
car transportation. The dynamic elements of market and industry trends force various
automobile company to renovate their production strategy and related product concepts and
move to the new era.
Tesla mission is to accelerate the global transition into sustainable energy. In light of their
mission, the company has launched up various models of electric cars including roadster,
Model X, S and now they are continuously investing huge amount in research and
development. However, the company is primarily facing major two issues or challenges such
as development of lower price segment models of electric cars affordable by majority of the
population, and second challenges are in the form of autonomous vehicles like self-driving
cars. It is significant for Tesla to move with current industry trend to attain competitive edge
in the market.
Tesla Stakeholder Groups
Every organisation has some significant groups of stakeholders who provide all the necessary
information in relation to industry, competitors and markets. In case of Tesla, it is important
to develop a tight relationship with these group of stakeholders in order to attain the vision
and mission.
The list of stakeholder in case of Tesla includes managers, owners, employees, investors’
consumers and suppliers. These stakeholders impact Tesla directly or indirectly while taking
out key business decisions as per the business environment.

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Now, these are explained below -
Consumers
These are the most significant group of stakeholders who help the company to attain
maximum profit with the offering of premium products from Tesla Motors. The company
continuously cater dynamic needs of these stakeholders by constantly adding capital in
research and development. For instance, considering research and development department of
Tesla, the company have invested more than 1.5 billion U.S. dollars in 2018.
Employees
Tesla corporate productivity and performance based on these groups of stakeholders. It is also
evident that Tesla corporate culture is associated with various career development
opportunities that help the company to attain mission of the company. In Tesla at present, the
company have provided job roles to around 45,000 employees’ individuals (considering after
recent layout).
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STAKEHOLDE
RS
Employees
Media
Competitors
Environmentalists
Government
Customers

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Environmentalists
The brand value of Tesla is originated from this stakeholder group as the company is
bounded to satisfy the significant needs and attain various other objectives too such as
environment protection and conservations. Moreover, it was also recognised that this group is
highly satisfied due to the Tesla practice and ideology like it allow other companies to user
and exploit their patents in order to cater innovation and development of clean energy in the
country also.
Owners and Investors
Owners and investors support Tesla with the help of funding. The motive and behaviour of
these investors and owners are linked to Tesla growth and profitability. The principal interest
of these investors will be fulfilled when there is rise in electric transportation all over the
world. In addition, the business also needs to be linked with the “Green movements” so that
these shareholders could gain maximum profitability with satisfaction of larger number of
customers.
Governments
In every country, there is some specific law that put significant impact on the business from
both positive and negative perspectives. Considering Tesla, government plays a vital role
having various practices of law. For instance, Tesla was fined for misleading hazardous waste
and the company have paid $31,000 fine for the same (O'Kane, 2019). In addition, the
decision of government proved to be an inevitable impact on the different groups of society.
Competitors
Tesla directly or indirectly impact the performance of its competitors. Major competitors of
Tesla motors include traditional auto companies like Ford Motors, GM, HMC and NAV.
Often a marketing plan is build to attain market share from a specific rival or reinforce
customer loyalty in the face of competition from a new up-and-comer.

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Media
They are considered secondary stakeholder who have power to destroy a unit of multinational
firm. In addition, with the help of social media and internet, these are increasing their
influence on organisations. This considered as a course of challenge to the company,
however, this stakeholder group also help the company to stay interconnected with various
other stakeholders.
Stakeholders’ analysis and Category
In the below diagram, the cooperative potential and competitive threat considering the
stakeholders are being discussed which states the relative capability of stakeholders that is
prevailing in the internal structure of an enterprise so as to identify alternate strategies or
actions that may significantly influence business in both positive and negative way.
Subsequently, four categories of stakeholders are being recognised –
 Offensive – In this category, it is comprised of those stakeholders are characterised by
high cooperative potential and low competitive threat (Reed, 2008). This signifies that
these sort of stakeholders can be proved beneficial for the enterprise towards
achievement of the respective goals. Though, there are some particular tactics which
are significant to deal with them. For instance, their objectives can be modified or
change their actual beliefs, and also the enterprise needs to put effort to embrace the
stakeholder positions.
Offensive
Hold
Swing
Defensive
Cooperative
Potential
Competitive
Threat

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It was identified that the company sells their electric cars at premium prices to the
customers and also many customers prefer their vehicles due to its secure and
environment friendliness attributes. Other than this, Tesla also invests huge amount in
their research and development department and thus provides quality services at the
right time, specifically for the new vehicle delivery (Cornell and Damodaran, 2014).
Therefore, it can be said that these customers fix perfectly in elaboration of these sorts
of stakeholder and it does not matter that firm can lose amount or is required to adopt
some different approach.
 Swing – This stakeholder attribute imitates high cooperative potential and high
competitive threat. It implies that these shareholders have the capability to influence
the outcomes of a particular situation inside the business and at any time (Saebo, Flak
and Sein, 2011). Moreover, there are some particular three approaches to cater to the
needs of these kinds of stakeholders. Considering the situation of first one, it is to
change rules by enforcing law whereas another one is focused towards modifying
decision forum and the last one is associated to start another kind of decision unlike
from the ones they like to take.
Considering this, it can be effectively harmonised with the government agencies and
an example elaborated above in relation to a specific case connected to (SEC) which
is also one of them. The time when the CEO of Tesla was penalised for “false and
misleading advertisement”, they clasp the board to establish a negotiation until and
unless an agreement was provided amid both ends (O'Kane, 2019).
 Hold - This stakeholder attribute imitates low cooperative potential and low
competitive threat. It implies that the organisation can considerately deal up with
these kinds of stakeholders. Moreover, an enterprise may not found any big challenge
from these groups of stakeholders but they need to embrace three significant
approaches (Elijido-Ten, 2011). The first approach is related to improve their belief
towards the enterprise, second approach is to protect them while establishing change,
and in last, adoption of a follow-up plan in relation with the primary strategy.
Therefore, with these kinds of stakeholders, suppliers can be perfectly aligned.
Considering this case, solar city is one of the battery providers of Tesla who possesses
some sort of identical values like Tesla comprising trust and belief system in direction

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of a common objective. With regards to this, Tesla and SolarCity are also known as
production allies.
 Defensive - This stakeholder attribute imitates low cooperative potential and high
competitive threat. It implies that these kinds of stakeholders may not offer necessary
any sort of significant value to the enterprise however while attaining goals of
business, their decisions may be get affected.
The three key strategies for managing these stakeholders comprise of improving the
actual belief considering enterprise, setting up constant plans with ensuring enterprise
results and to regulate them to realize the transaction procedure (Vazquez-Brust et al,
2010).
Shareholders or investors can come under defensive Stakeholders who always strive
for firm earning maximum profit and also their opinions and decisions impact
corporate strategy in order to be productive.
It can be said that Tesla CEO is an idealistic leader who has also invested huge
amount in the organisation. For instance, Elon Musk spends $10 million of his own
money on Tesla shares.
Conclusion
Tesla has shown their effectiveness in various segments other than electric cars and due to its
huge investment in research and development domains, the company is able to successfully
cater the different and dynamic elements of the business environment. However, it is also
important for the company to build up a global influence like many other organisations
including Audi, BMW, General Motors and big brands also working towards the
development of electric cars.
It can also be said that Tesla stakeholders show various responsibility in developing and
implementing of organisation strategy. With regards to this, the support of government is also
necessary to encourage people to buy electric vehicles considering environment safety
sustainable solutions. In addition, it is also necessary for Tesla to reduce costs at various
levels so as to make available their electric vehicles to the mass population all over the

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country. Other than this, the company also need to ensure that all their stakeholders’
expectations are met on timely basis in order to fulfil long term commitments.

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References
Chen, Y.S., Lin, M.J.J. and Chang, C.H. (2009) The positive effects of relationship learning
and absorptive capacity on innovation performance and competitive advantage in industrial
markets. Industrial Marketing Management, 38(2), pp.152-158.
Cornell, B. and Damodaran, A. (2014) Tesla: Anatomy of a Run-up. Journal of Portfolio
Management, 41(1), p.139.
Elijido-Ten, E. (2011) September. Media coverage and voluntary environmental disclosures:
A developing country exploratory experiment. In Accounting Forum (Vol. 35, No. 3, pp. 139-
157). Taylor & Francis.
O'Kane, S. (2019) Tesla penalized for violating hazardous waste law at California factory
[ONLINE] Available from: https://www.theverge.com/2019/4/1/18291091/tesla-epa-fine-
hazardous-waste-fremont-factory [Accessed 01/05/2019].
O'Kane, S. (2019) Tesla penalized for violating hazardous waste law at California factory
[ONLINE] Available from: https://www.ndtv.com/world-news/elon-musk-to-step-down-as-
tesla-board-chairman-pay-20-million-fine-1924418 [Accessed 01/05/2019].
Reed, M.S. (2008) Stakeholder participation for environmental management: a literature
review. Biological conservation, 141(10), pp.2417-2431.
Sæbø, O., Flak, L.S. and Sein, M.K. (2011) Understanding the dynamics in e-Participation
initiatives: Looking through the genre and stakeholder lenses. Government Information
Quarterly, 28(3), pp.416-425.
Vazquez-Brust, D.A., Liston-Heyes, C., Plaza-Ubeda, J.A. and Burgos-Jiménez, J. (2010)
Stakeholders pressures and strategic prioritisation: An empirical analysis of environmental
responses in Argentinean firms. Journal of Business Ethics, 91(2), pp.171-192.
Verbeke, A. and Tung, V. (2013) The future of stakeholder management theory: A temporal
perspective. Journal of Business Ethics, 112(3), pp.529-543.