Strategy Report of Tesla Motors - Analysis and Recommendations

Degree Title: MBA GLOBAL BUSINESS
Level: 7
Module Title: STRATEGIC MANAGEMENT
Assignment Title: STRATEGY REPORT OF TESLA MOTORS
Word Count: 3790
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Contents
1. Executive Summary.....................................................................3
2. Introduction............................................................................... 4
3. Pestel Analysis............................................................................5
4. Porter’s Focus Model ...................................................................8
5. VRIO Analysis ...........................................................................11
6. SWOT Analysis .........................................................................13
7. Business Strategy.......................................................................14
8. Financial Positions .....................................................................15
9. Conclusion ...............................................................................15
10. Reference.................................................................................16
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1. Executive Summary
This Report will highlight some significant an analysis of Tesla. This report will also
include porters five forces model, SWOT Analysis and Pestel Analysis.
We will also outline the primary as well as the support activities by Tesla motors.
Tesla Motors is a car manufacturer that develops electric vehicles. The company
became the first to produce a zero-carbon vehicle car has become an iconic vehicle
in the car industry. They have different boards of directors and committees that help
in the company's continuous operation.
Tesla is a company that has a social responsibility policy. It produces cars that are
zero-emission. Its batteries are also easily recyclable.
Tesla has a strong management style, which enables it to perform its duties
effectively. It also has a great organizational structure. Its employees also like it
because of its positive atmosphere.
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1. Introduction
Tesla is a multinational organisation that was established in the year 2003 by Martin
Eberhard and Marc Tarpenning who are serving as CEO and CFO of the company.
Later Lan Wright also joined this organisation and becomes the third employee of the
company. Elon musk in the year 2004 has joined this organisation. It is an
organisation that was built by a group of engineers who aims to become of care
manufacturer and also wants to be in a technology company (Tesla, 2022). This
group wanted to prove to people that they do not need to make a compromise to
drive electricity (Abbasi and et. al., 2021). Tesla launched the Roadster unveiled in
2008 with cutting-edge battery technology as well as an electric powertrain. After
that, this organisation is focusing on designing the first-ever premium all-electric
sedan in the world from the ground up the Model S. It is a model that later on ranked
as the best car in its class in every category. It is a car which is combining safety,
efficiency and performance. Model S has set new expectations of the world in the
context of cars with the longest range in an electric vehicle in the 21st century. It
consists the over-the-air software updates which make it better over time. It has a
record of 0-60 mph acceleration time within 2.28 seconds. It measure can be taken
by the Motor Trend.
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2. Macro environment analysis
A PESTLE analysis will look at the various factors that affect Tesla's international
operations and strategy (Aithal and Aithal, 2019.). An explanation of this tools in the
context of Tesla is mentioned below:
Political
Tesla has developed a production facility in China to enable it to reduce its costs and
sell profitably. This facility helped the company reach profitability. But there are
different types of regulations imposed by the Chinese government on international
business like their strict policies. The business also needs to follow government
guidelines strictly to carry out its business in China. Any avoidance of business can
result in a negative impact on the operation of Tesla.
The only reason why Tesla has been able to establish itself in China is due to its
sustainable brand. There are some other foreign automakers who have also
developed local alliances in this country to gain an advantage. The Chinese
government also provides support to foreign companies by inviting them to their
country in order to create employment opportunities for people living in that country
(Bell and et. al., 2018).
Economic
Economic factors are also important for Tesla as they can create an impact on the
cost and profitability of the firm. China has several factors that create positive and
negative situations for Tesla. There is a lower wages rate in China which is creating
a favourable situation for businesses as it allows them to reduce the total cost of the
firm and allow them to increase the profitability of the business. The pandemic has
not affected passenger car sales in the lower-end markets. In India, for instance, the
sales of cars in June declined by almost 60% compared to the same month last year.
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Tesla's sales grew significantly in the third quarter of 2009 in comparison to the
previous year. It is expected to continue its growth momentum in the fourth quarter
as the US economy begins to recover from the pandemic.
Social
Tesla is providing an electric vehicle to its customers which creates an opportunity
for the firm. It does not create a negative impact on the environment and is also in
demand among customers. It allows the firm to successfully operate in the
marketplace and also increase the demand for its products and service. Consumers
tend to buy from companies that have a low environmental impact. This is evidenced
by the fact that Tesla is a company that is performing well and also able to compete
with different competitors in the marketplace.
Technological
Tesla, which is an innovative brand that makes electric cars and energy storage
products. Aside from the usual driving features, Tesla cars also have an impressive
touchscreen monitor that shows the car's position on the road and the surrounding
traffic. The company's latest model called Autopilot is also capable of self-driving.
From the standard features, Tesla also offers a dedicated app that lets users control
their cars remotely (Drobyazko and et. al., 2019). Tesla has been very active in
developing new technologies such as self-driving cars. One of these is the
company's smart summon, which can be utilized by all vehicles that have full
autonomy.
Environmental
Due to the increasing number of customers who are aware of the environmental
impact of their automobile purchases, car brands have to step up their efforts in
addressing these issues. Tesla is one of the few companies that have a sustainable
business model. The company has been able to sustain itself through the ups and
downs of the economy. The most recent example of this is the increase in Tesla's
sales during the 3rd quarter of 2020 which was attributed to the increasing
awareness about the environment.
Legal
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