Strategic Management for Tesla: An Analysis using Ansoff Matrix and Generic Strategy Tool
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This report provides an analysis of strategic management for Tesla using Ansoff Matrix and Generic Strategy Tool. It includes recommendations for market entry, growth, and profitability, and evaluates internal and external models and tools such as BCG matrix.
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BSS0506 STRATEGIC MANAGEMENT
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TABLE OF CONTENT EXECUTIVE SUMMARY.............................................................................................................3 INTRODUCTION...........................................................................................................................4 MAIN BODY..................................................................................................................................4 CONCLUSION..............................................................................................................................14 RECOMMENDATIONS...............................................................................................................14 REFERENCES..............................................................................................................................17
EXECUTIVE SUMMARY with providing the recommendations will help the company in growing and sustaining into the dynamic future market by resolving all the issues related to market entry, growth and profitability for attaining premium consumer market.the current study has involved ansoff matrixwhichhashelpedinidentifiedthatmarketdevelopmentandproductdevelopments strategies are taken into process. there is execution of generic strategy which depicts that for overcomingchallenges the firm uses differentiation strategy. The report evaluated various internal and external models and tools such as BCG matrix which analysed various products and need to make decisions about them in order to cope up with challenges.
INTRODUCTION Strategic management is mainly defined as the process for establishing gaols, objectives, processesforachievingthecompetitivepositionswhileoperatinginthedynamic environment. Is is very important for the organization as for setting the goal, mission, vision by allocating the available resources for achieving the objective. This supports business in increasingprofitsandrevenuesbyadoptingvariousstrategiesasforachievingthe competitive position for sustaining in the dynamic market. This report specifies details about Tesla, recognized as the automotive company which is distributing various electric, solar roof cars and trucks to large number of consumers. Strategic management for the company is mainly established by Tesla, as for entering into the new and highly premium market whichsupportsinattractinglargeconsumersforpurchasingtheelectricandother automations, where consumers are willing to pay premium prices. This report provides details about designing the two coherent strategy with logical reasoning with using the quantitative and qualitative data. Lastly, evaluating the proposed strategy with using the framework. MAIN BODY Applying the range of tools for addressing challenges Ansoff Matrix It is one of the significant strategy that is helpful in having the framework to the management for gaining the information of the growth initiative (Yaqoob and Omer,2021). In order to become successful in the current era, Tesla pay attention on overcoming the challenges that has impact on its operational practice. There is distinct form of the issues which are basically faced by the firm such as higher competition, changing demand in market, etc. For having the successful practicing, it is important for the enterprise to get the effective understanding about the growth opportunities which can be used for having competitiveness in achieving higher results. The particular matrix involves following matrix that provide assistance in obtaining effective information which are as follows:
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Market penetration it is one of the crucial objective that is related with having focus on expanding sales in exitingmarketbyofferingalreadyofferedproducts.Teslafocusson havingthemarket penetration strategy for its current primary intensive growth strategy. This intensiveness strategy enables it to incline sales so that higher attention on having the greater market share can be assessed. Tesla as being the international organization develop competitive advantage so that higher revenue through aggressive marketing approach can be attained. On the basis of this it can be interpreted that there is various distinct form of strategy so that better effective approach of growth by overcoming the prevailing challenges can become possible. This is the primary strategy that helps in gaining the better insights to attract & retain exiting market asrevenue source by executing appropriate and highly effective marketing strategy. Product development In the Ansoff matrix the product development is considered to be one of the crucial strategy that helps in gaining the competitive edge to operate in market. There are distinct form of the advantages that are attained by firm through possessing this strategy which basically comprises having development of new products for having new sales. In this the existing market is targeted for offering the new products which is found to be little risky procedure. The main reason behind this is to involve certain level of investment for developing the new products which are required to be emphasized by organization for having higher position to deal with the competition.This is considered to be the Tesla second strategy for achieving growth so that
effectual working pattern to overcome the prevailing challenges such as frequent alteration of taste & preferences, gaining competitiveness, overcoming the prevailing challenges which leads to result in having the processing of enterprise. On the basis of this, it can be interpreted that there are various h products which are basically offered by the enterprise in its existing market so that coordinating with changing demand, higher level of competition can be achieved. . Market development- TESLA is one among the top performing organization and notching up great success form last couple of years, the entire focus of the entity is on its market development which is prominent to expand its reach and also hiking market domain, making new customers, exploring new realm etc. As it has been evaluated in Porter's five forces model that there is high cost to make entry in the market so the company is having great opportunity to enhance its capabilities and drastically expanding market growth. TESLA is practising strategy to explore new market for generating higher sales and paving way for being a global giant, with this regard TESLA is building its new offices and offering attractive facilities in order to grab attention of potential customers. The vision and mission of the entity are living testimony of its policy pertain to market growth, the vision “to accelerate the world's transition to sustainable transport” which is only possible if it expands its market grab. There are a range of generic strategies are being practised by it in attempt to make the market development plan achievable. To make the path clearer, TESLA is also formulating collaboration with some other organizations so can take advantage of their stability and deep understanding of local market(Serohi, 2021) For instance, to wipe out competition challenges it has formed its collaboration with Sona Comstar, Sandhar Technologies, Bharat Forge etc. This is essential to mitigate risk to work in new realm. The Ansoff matrix is aiding here, to nurture ideas about market development. Diversification- As it has been evaluated that the changing social dynamics of the market there is strong need to meet the demand of customers, with the changing technological environment the company has need to diversify its products so can give tough fight to the competitors.
Ansoff matrix aids the work on diversification, it addresses the areas where an entity is having need to go for diversification, over the time as it has been seen that TESLA incorporated a range of new businesses and even performed better in the market. It usesIntensive growth strategyin the market. For instance- Different brands of electric cars, solar power plants, some other tools photovoltaic solar panels, lithium-ion battery etc. are being produced by the entity which is significant at this stage where the market is getting globalized and there are number of other competitors, who are making their fresh entry. It can be concluded that some new products and some new entities for instance- SolarCity are paving way to be a great innovative organization (Reshetko, et al. 2020) Tesla is facing some issues such as pernicious pandemics, global chip shortage, supply chain crisis etc. these perils affected its productivity and ability to get the business diversified yet in order to prevent such notions in the future, the only strategy to go with innovation and diversification. So from the analysis above it can be concluded that by applying Ansoff matrix, TESLA plc may explore new in the market and may deal with its both internal and external challenges which are somehow affecting its productivity and ability to work with full potential(Ackoff, 2019) Ansoff matrix may assist to guide various options which are available to the organization and how some or all options can be used in attempt to improve overall performance of the company in the market, dealing with prevailing circumstances. Generic Strategy tool There are different kinds of the challenges which are basically faced by the particular organization has impact on the overall working of the enterprise. It is important for the firm to get the proper insights about the prevailing circumstances so that proper action for gaining the competitiveness can be exerted. Generic strategy is helpful in gaining the general way of positioning a firm in an industry (Emam, 2019).This particular strategy helps in gaining the appropriate information regarding the prevailing situation so that effective identification of profitability&sustainabilitycanbedone.Thisaidsinascertainingtheprevailing competitiveness that can promote the firm's ability to coordinate with prevailing business environment. Tesla is one of the international organization that is having the great level of
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success in the automotive industry which has provided it ability to position in market in highly effective manner.This involves the gaining the information regarding the strategic advantage and target so that proper evaluation of its performance can be exerted. Cost leadership It is one of the significant strategy of Porter that helps in gaining theinformation regarding the cost structure followed by firm. Tesla as being one of the international organization has the objective o offering the goods to the customer in most quality manner so that effectual pattern of growth in market can be derived. There are various challenges which are basically that faced by the enterprise that hampers its ability to pay attention on having the effective processing by reducing expenditure so that maximum level of benefits in terms of profitability matrix can be derived. This firm sells its goods on the premium pricing strategy that is due to its good brand image in the market. In addition to this, having effective ability to achieve & sustain overall cost leadership so that positioning in industry can become possible. It targeted audience can afford the premium pricing strategy so that firm pay attention on having the higher revenue generating by keeping the greater market share. For accomplishing the objective of higher market share the
challenge of facing competition by competitors selling products on lower price firm highlight higher quality aspects with fair price. Differentiation There are distinct form of the products which are basically offer by the company to its targeted market that is helpful in gaining the approach to coordinate with the changing demand of market (Greckhamer and Gur,2021). The competition in the particular industry is inclining on the large basis which require the firm to pay attention on having the appropriate level of competitiveness so that higher customers can be attracted. Differentiation generic strategy of Porters model is basically followed by Tesla that gives it the capability to have proper technology utilization so that significant action of profitability & sustainability in industry has been derived. For addressingthe distinct challenges such as threatening of the technological development by rivals the particular organization has given emphasis on having the significant course of action so that competitiveness to have strategic approach to deliver unique products so that significant position to get the better approach of growth can be derived. It targets the audience who have the tendency of adopting the unique products in initial level so that their objective of having such produces can be full lied. This focuses on having differentiation by declining cost & inclining the brand image in market so that enabling firm to get greater market share in automotive sector. This particular strategy of the Tesla is helping it to address the threat such as higher level of competition & technological issue. On the basis of this it can be interpreted that it is getting greater level of benefits with help of this strategic approach. Cost Focus This is basically related with having the competitive advantage which aids in targeting the niche market by offering the lowest possible price. The targeted audience offers the ability to understand the niche market by paying attention on its dynamics of these market so that focus on less expenditure can be provided in this form of the generic strategy the firm pay attention on having the cost advantage so that higher level of focus on attaining the customers can become possible. This helps in possessing the better strategy which can provide assistance in having higher market share with maintaining good profit margin in turn having effectual pattern of capability to eliminate those aspects that has irrelevant cost to organization. On the basis of this it can be interpreted that Tesla pay attention on having the effective strategy so that proper ability
to focus on reducing cost by maintaining the focus on overcoming challenges that are arising due to higher expenditure can be eliminated. Differentiation focus It is related with targeting the niche market on the basis of having g little competition and focusing on audience. In this type of the strategy the firm focuses on having the higher focus on having the effective strategy by possessing the differentiation can be derived (Tesla, Inc.’s Generic Strategy & Intensive Growth Strategies,2022). This concentrate on having the awareness about the products to the customers so that customers can be attracted. These all helps in gaining the competencies which can help in focusing on offering the distinct form of the products.On the basis of this having the target on the niche market in the precise manner becomes possible for the purpose of overcoming challenges. On the basis of this, it can be interpreted that there is different form of the strategy that can be helpful in accomplishing the organizational objective so that higher profitability & stability achieving has become possible. There is various form of the challenges which are basically faced by the enterprise and higher level of focus is provided on having the competitive approach so that precise manner of ability to have higher position by offering distinct form of products in automotive industry can be achieved As being an international organization the firm has given emphasis on having the competitive advantage of overcoming issue of competition by possessing differentiation approach. BCG matrix TESLA- Tesla is one of the fastest growing American organization, with the progress of time the organization is making great efforts and getting higher success in reciprocation. Yet there are some challenges existing which are hindering its way and placing some obstacles to eradicate. With the progress the entity is also having some issues and challenges as it has been seen earlier while carrying out PESTEL analysis of the organization where a range of challenges were found, so with this regard there are some tools or strategies which may pave the way to perform better and wiping out potential trouble makers.
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This is the tool which is used by internal management in order to make proper assessment about prevailing or current circumstances in the organization, its state of value, growth etc. This tool is helpful to decide which product of the organization must be given higher priority when it comes to decide its selling, keeping or investing more (Wang, Qin and Zhang, 2021) As It is known that the market competition is very high for Tesla and it is facing sort of issues in automotive and energy solution sector. At the same time the bargaining power of customers is looking in favour so in such circumstances for sorting out challenges of market the tool is very helpful. This matrix is being decided to analyse each area where the entity is getting operated, here a matrix is fabricated which articulates a few types of products- Star Products and Cash cows, dog and question mark. Star products are such products which consume a mammoth amount of cash but at the same time also turn out higher amount of cash flows. As the market matures these products
would be successful so their success lies in the maturity of the market. On the other hands there are Cash cow products too. Which means the products gives profit even if the market is showing lower growth. Both star and cash cow products are internally related since a star product may turn into a cash cow product, it depends on how the entity is paving way and how it is managing its production, innovation, marketing etc. with this regard the BCG matrix tool aids a lot. Dog are such products which are having low market growth rate and low relative market share, and question marks are the products having high market rate and low market share(Kim, Kang and Chung, 2020) There have been a few problems with the organization such as moderate performance of substitutes which may take drastic turn at any stage, high cost of brand development is pouring in much burden on new organization so here it offers a challenge to make itself stronger in order to eradicate any possibility to get competition from others in the market. As BCG matrix is suggesting about Tesla, For TESLA their Clear Energy Production is astar product,having high market share and high market growth rate too. Since the entity is making higher investments to innovations, it is turning out better performance in the market. On the other hands Power walls of TESLA can be sited ascash cow productsince it is notching up higher market share and having less market growth rate which indicates that there is need to work on the product and may be taken to the top. Question mark productsare energy storage, Miscellaneous accessories, solar energy which has been key attraction of the organization and performing better in the industry, these products are having their escalated market growth rate but their share in the market is not as high as it should be, here cash flows are also in negative direction. Dead-weight or dogs’ productsare some manufacturing issues or complications with models, it is having lower market growth rate and relatively lower market share so this is a severe matter of contemplation, as the entity is growing there is strong need to work with such aspects.
The BCG tools can be applied in attempt to suggest something better to the entity and it may form its strategies to prevent such types of challenges in the market, furthermore, may strengthen its position(Nedoma, et al. 2019) As it has been seen while evaluating external factors affecting TESLA by going through PESTEL analysis, the company is having great opportunities in the market which can be accomplished by developing well-articulated strategies in order to cope up with all potential barriers. Strategy for addressing challenges- For star products there is need to make more investments since they have good scope in the market and with extra efforts the entity may grab bigger share. Furthermore,thereisinevitablerequirementof payingattentiontoquestionmark products, miscellaneous accessories and solar energy, they are having low earning and negative cash flows so there is strong need to work on them and by analysing all relevant factors may fabricate proper policy to raise performance. Cash cow products of the entity are looking high growth givers and their cash flows are also increasing, so the Power wall, Model S, Model X and Model Y, which may be given more attention since such products are having good ability to pour on intensive returns to the organization. At the end Dog products for Tesla these are some manufacturing complications with some of its models so there is rigorous requirement to wipe out these barriers or may fabricate hyper plans to make it lucrative. So the discussed BCG matrix above will be helping organization in copping up with its market challenges and can get better positioning too. The plan would be dealing with economic, social, technological and so on, issues which are a hindering way to be top and hiking its market share with maximum capacity.
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CONCLUSION From the above report it can be concluded that strategic management for th business mainly help in analysing and developing strategies for achieving the competitive position of the company in dynamic market. Tesla the multinational automotive company mainly adopting strategies for achieving competitive position in the company. With using the porter generic strategy help in achieving the competitive position to the company by adopting the differentiation strategy in business, this mainly helps selling unique products than the competitors which helps in achieving competitiveness. Also with using the BCG matrix support in identifying and establishing the product portfolio for expanding the market share of the company. Further using the Ansoff matrix helps in growing the performance and revenues for the company. RECOMMENDATIONS The company must improve its manufacturing efficiency by creating low cost products and using all the available resources for optimising the results obtained. Further, for reducing the battery supply impacts the company must provide low voltage charger for ever-increasing the battery efficiency (Habib, and et.al., 2020). also providing the DC as of the fast charging the car battery with helps in improving the efficient supply of batteries in the market. For strengthening the company and its growth it must adapt th ethical code of practices for providing benefits to th employees a by engaging and training employees and rewarding the ethical behaviour practices for establishing trust and working ethically. For improving the multinational presence in the global countries, teslamust expand its market into international regions by lowering the costs and adding more public transports (Alomrani, 2022). As by diversifying its product line and introducing the new products for expanding into th new market and gaining growth and competitiveness. This helps in earning more revenues and profits by diversifying the market and target market for the company. The company must adapt strategy and approach for minimising the delays of all stock and the orders, for this it must diversify its range of suppliers for obtaining the raw materials. Thus by establishing the strong supplier power diversifyingpotential sources helps in
fulfilling the future delay of all the products and raw materials for manufacturing automotive. Tesla must invest into more research and development practices as by adopting all the newtrendsandchangingtechnologieswhichhelpsinmaintainingthecompany competitive position while operating into dynamic market (Zhang and et.al ., 2019). As for producing latest technologically advances products for earning more revenues by distributing premium products into market. The company must diversify its supply chain by reducing the risks and tesla should also increase its investments into innovation practices as for providing new range of product portfolio to th consumers for growing into the dynamic market. Tesla must enter into the new and other industries as for growing and achieving the objectives as for earning more revenues and profits (Eledlebi and et.al., 2022). It must enter into the video games, toys, the source of entertainment which helps in improving thecompanyconsumerbasemorestronglyandexpandingintonewindustryfor achieving better growth. Further the company must establishing the strategy for establishing the electric car sharing services, this supports the company in advancing its growth and building more reputation with serving more for social purpose.
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