Strategic Management: Evaluating Tesla's Strategy and Response to Internal and External Factors

This report evaluates Tesla's strategy and response to internal and external factors, including PESTLE and SWOT analysis. It covers the company's adoption of the Giga factory strategy, new architecture, and controlling bottlenecks. The report also discusses the effectiveness of the company's tactics in achieving its strategic goals.

STRATEGIC MANAGEMENT
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Table of Content
INTRODUCTION...........................................................................................................................3
SET 1- CASE STUDY....................................................................................................................3
1. Evaluating the strategy adopted by tesla and its impacts on the decision and activities:.......3
2- Analysing internal & external factors of company and how it responses to them..................6
SET 2- STRATEGIC SOLUTION..................................................................................................8
SET 3- RFLECTIVE VIEW............................................................................................................8
Outlining how company's tactic help in its strategic evaluation and how effective it has been in
achieving purpose using effective actions..................................................................................8
A personal reflective statement based on my experience on module........................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is the process of monitoring, setting goals, analysing and assessing
the organizational needs to meet the objective and making the organization more competitive. It
can also be defined as the planned use of the resources of the business for reaching the standard
goals. Strategic management is important in the organization as it helps in planning for the future
existence. Organization who nee to gain competitive edge over their competitors basically need
the strategic management. This report will give the details about the strategies being adopted by
tesla and its implications on their decision-making and other activities. Also, analysing the
external and internal factors of tesla and the company responses.
SET 1- CASE STUDY
1. Evaluating the strategy adopted by tesla and its impacts on the decision and activities:
Background information-
Tesla motors founded by Elon musk originally established for the electronic vehicles and
expanded for the generating the energy and the storage products. The mission of the company is
to accelerate the sustainable transport by bringing the mass electric cars to market as soon a
possible and vision is for establishing a successful business model (Saxena and Vibhandik,
2021). For the worldwide growth and the expansion in the market tesla motors has adopted
various strategies.
Detail information-
Basis Information
Portfolio Model X, S, and Model 3, Supercharger, etc.
Segments Energy generation, automotive and storage are
included in list of organizational segments. In
order to sell above product that are covered in
list of portfolio, firm may attempt to target
wealthy and households individuals.
Market position It may have top position in the market which
consider as its biggest strength in term of
gaining customers attention toward purchasing

stylish cars.
Rivals General motors, Ford, Nio Inc, Nikola, Li auto,
etc. are covered under category of TESLA
rivals.
Tesla entered the electric battery market in 2015. It has also adopted the Giga factory
strategy- which supports the efforts of the battery manufacturing. Panasonic and tesla has
planned the capacity of producing the 35 Giga watt batteries each year this goal was achieved in
the 13 production lines. The move to create the Giga factory for car battery outside Berlin has
positive and the negative impacts. Positive impacts are :The factory announcement has
encouraged a lot of attention and the interest from the different states for hosting the plant (Liu,
2021). The Giga factory announcement has integrated fully battery manufacturing which it takes
the raw ,material, lithium were made available for the packages. The entire process of the raw
materials to cells results positively as it is highly automated which increases the efficiency and
reduce the costs. The mobile robots will also help in this factory for moving from one place to
another with the laser sensors.
The Giga factory provides handling of the batteries, finished products, and recycling of
the old to the new one. This impacted the decision-making in workforce of tesla as the increase
in production of batteries, which assigns more engineers or developing the equipments. Tesla
Giga factory also lowers the cost of the lithium-ion batteries, which is used by company in
vehicles. Also it becomes more and more attractive battery supplier with the portable device and
lowering the cost for growing profit. The factory will help to support the production of the
company vehicles in its growing energy division ,which develops the storage solution and the
commercial battery. (TESLA WILL LIVE AND DIE BY THE GIGAFACTORY., 2018). It also
gives the negative impact on the organization with the high requirement of the financial, human
resources which will enable the company to hire more and more skilled workforce as early as
possible. The financial results of the Giga factory may fall in the trap because of the company
debt increases around dollar 3 billion. Giga factories will require the global expansion strategy.
Which increases the production and delivering to the consumer faster. The factory is not on the
auto production but on the battery technology. There was also many of the protest being made in

respect of the factory for establishing and building because the thousand of trees have cut and the
people around Giga factory was not in this support.
Building a new architecture as a strategy: Tesla company produces cars who invest in
new technologies. It encourages people at the multiple level for the technology up gradation and
also encourages the components and the system. In every model tesla company is adopting the
different architecture both in terms of hardware and software. Tesla company has unveiled the
latest visionary plans for the network tunnel under the Los Angeles (Chen and et.al., 2021). The
new Hawthorne test tunnel build the space for parking lot, this new architecture mission is based
on the activity for reducing the traffic in the cities to transform them from fully electric,
autonomous transport. The architecture of the latest cargo truck of Tesla will change the future
in shipping . Furthermore, the company has introduces the massive storing of the solar farm on
Hawaii and also unveils the integrated solar roof system .
The BEV system goes beyond the pre established requirements with the higher standards
of the organization enabling the dynamic environment which faster the product with the rapid
improvement and innovation. The company is using the strategy for improving the mass and
range of the vehicle, single piece casting strategy is being used to design for the model Y of
Tesla. This casting gives the positive impact on the decision-making as it increases the
manufacturing efficiency with the safety which impacts the internal system process of the
company (Jing, 2020). The Giga press machine helps in decreasing the cost of the underbody
design. Furthermore, the minimization of negative mass has impacted the management of tesla to
review their decision-making process for positioning the excessive structures within the specific
time.
Controlling Bottlenecks of the tesla: Tesla has the strategy of lowering the prices of the
batteries by manufacturing at the scale for adopting the electric vehicles. Entire business of the
company depends on the electric cars which further depend on its batteries. The shortage of the
chip results in shortage in batteries result in the bump for accelerating the growth in the future.
Tesla controls the biggest profit pool for auto manufacturing (Luo, 2017). The production of
tesla model 3 has affected the decision-making in resolving the bottleneck, after developing the
semi automated lines for the improvement in the real aspects. For the bottlenecks the tesla should
reduce the manufacturing cost of the newly automated products (How Tesla’s Battery
Mastermind Is Tackling Electric Vehicles’ Biggest Problem., 2021). In addition, Tesla 4680

battery cells is facing the bottleneck in the production levels which is delaying the product for
bringing into the semi market. The cell starved the firm to force the scale back the solar
production to meet the car demand. Bottleneck will further hinder the decision-making in the
flow of manufacturing the cars and shaping them will increase the time and expenses in the
process.
All above its actions reflect concepts and theories from ventures and corporate extents at
a tactic concept level perspectives because it drives the attention of management toward taking
approach to enhance customer satisfaction, through which they may gain benefit in form of
increasing sales.
2- Analysing internal & external factors of company and how it responses to them.
For purpose of conducting external and internal business environmental analysis in case
of TESLA, PESTLE and SWOT as strategic frameworks are utilized, which encompasses key
elements that define who a firm may sustain in the specific industry and how each factor impact
on that.
Political factor-
Any form of change related to political factor may put direct impact on automotive
industry as well as companies such as TESLA because it operates under this sector (PESTLE
Analysis, 2019). For example, political stability in the nation where firm is established its venture
may put positive impact on success of chosen brand in term of strengthening capability to
expand business abroad and provide chance to gain key benefits.
Economic factor-
Fluctuation in the context of economic factors may affect the current plans and strategies
of a company. In case of Tesla, global economic growth impact in negative manner, as people
are losing their jobs and due to that they prefer to utilize public transport instead of purchasing
big vehicle to travel from one place to another. It may lead to decrease the sales of firm as it may
also take action to lower prices of batteries by producing at scale.
Social factor-
It can be said that social situations and trends that people prefer to follow may affect
organizational strategy and strategic decision in negative manner. As customers expect to
purchase those vehicles that may have good battery power and run longer, which may put

negative impact on management in company in term of putting a lot of pressure to consider this
need and take right action as they may restructure the current strategies.
Technology factor-
Technology advancement may put positive impact on automotive industry success, which
directly or indirectly affect TESLA growth positively (Automobile Industry PESTEL Analysis,
2021). For example, due to this factor, firm and its stakeholder may drive their attention towards
using and adding one of those beneficial technologies that enable them to enhance customers
satisfaction and also provide change to retain them for longer time to gain benefit in bulk.
Environmental factor-
In case of automotive industry, environmental factors may put positive impact in term of
driving organizations' attention toward adopting and conducting sustainable practices. For
instance, TESLA in order to overcome the negative impact of carbon foot print may effort to
develop battery pack to be utilized in conjunction with solar panels that may enable brand to help
usage sun's abundant power totally that make firm eco-friendly.
Legal factor-
Change related to employment Act, business law, customers safety and protection
regulations may put negative impact on TESLA in term of putting a lot of pressure on
management to reconsider and reform their each tactic according to the legal factor changes. It
may consume a lot of time and require more efforts which is not possible for company to do so,
but still it may need to be.
SWOT analysis-
Strengths-
Huge financial resources, and skilled employees are included in list of TESLA strength
that may put positive impact on its rapid growth and success in effective manner. Organization
may also have another power to sustain and that is brand loyalty and variety of products that may
assist to be competitive.
Weaknesses-
Lack of USP is one of its biggest weakness that may put negative impact on firm success
in term of decreasing sales (What Is a SWOT Analysis, 2021). Furthermore, insufficient research
is another weak point of company may lead to decrease its operational effectiveness more than
rivals which is not beneficial and suitable for continuous progress in automotive industry.

Opportunities-
Technology advancement play vital role in the context of enhancing TESLA operational
efficiency. It may contribute to increase profits margin, revenue and production process even
better than last few years. Also put positive impact in term of driving management attention
toward developing the best batteries that provide customers full on satisfaction while driving
vehicles that they may purchase according to needs and requirements under budget.
Threats-
Intense competition in the market or automotive industry may lead to decrease TESLA
performance and put pressure on management to develop the best strategies that may provide key
benefit in bulk. Another threat that posses the biggest challenge for company is changing
technology, which lead to increase work pressure on stakeholders.
Responses of TESLA in the context of above factors-
It is quite important for company to provide appropriate and strategic response in the
context of those forces that put negative impact on its success in the industry and lead to
decrease operational as well as functional efficiency. For example, due to economic factor, firm
may take strategic decision to low its prices and EMI offer to customers which enable them
purchase products what they want to do so. Along with above manner, firm may response to
other factors as well, in term of following legal terms and acts that put positive impact on its
success. For example, in order to retain and acquire new employees it may offer the best and
equal opportunities to people, which enable them to work with this amazing and most productive
company in the market for longer. Furthermore, in order to deal with intense competition in the
market, organization may take approach to develop strategic plans such as establishing batteries
factory which enable firm to give tough competition to its rivals that is important for its
stakeholder to do so in term of appropriate support and better directions as well as suggestions.
SET 2- STRATEGIC SOLUTION
Covered in PPT
SET 3- RFLECTIVE VIEW
Outlining how company's tactic help in its strategic evaluation and how effective it has been in
achieving purpose using effective actions
TESLA and its owner Elon Musk has build great image in the market or business world
in term of innovative brand and inspiring as well as creative business leader. As he takes

initiatives to grow rapidly and never step back after facing challenges obtaining desire outcomes.
Gigafactory is the best example of chosen company, which it may implement in term of its
strategy that may help in strategic evaluation. With the help of this tactic, organization become
much effective than every because it may contribute to achieve organizational strategic goals
excellently (Cooke, 2020). It is fact that Gigfactory Shanghai has been an excellent success
experience for company, as it helped to achieve an annualized manufacturing capacity of 500,
000 electronic vehicles at establish factory within just two years of establishment at a new
location. It has been developed or established outside Berlin, where skilled and experienced
employees are working together for purpose of obtaining benefits with the help of using strategic
actions such as establishment of Giga Factory. TESLA decision to work on this project made it
effective and productive firm, which in return increase profits margin, generate revenue and
enhance operational effectiveness more than last few years or months.
It is one of the biggest and most expensive project of company for which it may invest
approx 200 million. It may drive their attention toward expanding this factor at international
level that is a great achievement (Moradlou, Roscoe and Ghadge, 2020). It is fact that in the
recent time, organization operates out of four full operational and functional facilities, as it run
three factories in US and one is in China. Along with this strategy, firm may take more initiatives
in term of building a new architecture that may support success of its above plan and tactic,
which in turn contribute to make its venture productive as well as profitable more than other
automotive companies in the industry. Inside productive factory where organization might be
soon make more than 60% of the world's lithium-ion car batteries.
Along with above tactics, tesla might be adopted many more that play significant role in
the context of venture growth and unpredicted success, which varied companies tend to obtain
but due to some barriers and challenges as well as risk that put negative impact on their progress
within specific sector or market (Schwabe, 2020). Organization taken initiative to control the
bottleneck which is quite essential for its business reputation and image in the market. This
component is utilized for electric vehicles that Tesla effort to produce now and further that
named as batteries.
There are different types of strategies that company has utilized in term of making
changes and introducing new, which in turn increase sales and permit gaining competitive
advantages. For example, firm attempt to deliver a quality and great experience to all customers,

in term of adding and providing cars or other vehicles with better features such as charging
facility, upgraded system with better battery life cycle and more. All over its strategies are quite
risky and challenging but still these makes a lot of chances for company to grow continually and
rapidly in effective and competitive manner that is not much easy for many firms to do so as they
are still facing challenges to grow (Tesla is investing almost 200 million to expand Giga factory,
2021.). All above strategies that firm utilize as key approaches have improved its strategic
performance in the industry in form of increasing production effectiveness and capability to
enhance customers satisfaction that is essential for a firm to enhance more than last certain eras
from establishment to current year. It may give firm power to gain competitive edge in varied
manner and also permit giving tough competitive to existing and new organizations as no one
might be able to expand and invest as TESLA does.
Strategic solutions-
In order to gain additional competitive benefits, TESLA can take approach to hire
experience holders and knowledgable candidates who are expert in field of IT and engineering,
from all over the world whether it is India or China. As it could enable company to take pleasure
of enhancing or maximizing customer base. Firm can implement this solution in effective and
systematic manner that contribute to stand competitive in automotive industry worldwide that is
not easy for it to do so.
Differentiation as Porter's generic strategy-
It is one of the best and most effective tactics in the business world that Tesla may utilize
to grow profitably and productively. It is fact that organization is using this tactic as its generic
strategy drive firm and its stakeholders attention toward gaining benefit in intense competitive
market (Islami and et.al., 2020). By implementing and adopting this strategy, it may emphasize
the excellent and uniqueness of its goods, but also concentration usually on early adopters in
high end segment for electronic vehicles. This strategy may enable firm to affluent consumers
who may have a high expectation to purchase newly introduced cars and other vehicles
according to their needs and requirements. However, in the current era, it is already famous and
production costs are decline, chosen company generic competitive tactic has moved to wider
differentiation. It can be said that TESLA should continue to adopt their tactics in term of
implementing new technologies and using in its Giga Factors with better infrastructure and
skilled workforce at workplace who may perform even better than last eras.

A personal reflective statement based on my experience on module
While conducting varied activities and practices, an individual person has gained
essential and useful experience, which they utilize recently or in the future as it depends on
situations. They may take approach to reflect their experience and feeling with the help of
reflective models that are accessible in bulk. By considering and using Gibbs reflective model, I
want to reflect my experience and learning during this module. I want to describe my personal
feeling and understanding as well as activities that I had conducted to gain desire outcome. My
overall experiences on this module is quite good because I have utilized my strengths to collect
the key information about company and what tactic it used to be competitive in the industry
forever. I have posing good understanding about research skill, which made me able to conduct
appropriate research based on specific topic or subject. This competence provide varied benefits
to individual person if they have so just like me. With the help of research skill I have conducted
proper and in-depth investigation about TESLA tactic that put direct impact on its activities,
business operations and decision-making process, whether it is negative or positive. I have
collected important and useful information just because of having above discuss skill that play
vital role in my career growth such as personal & professional as well. Along with these things, I
have developed certain skills during this module that assist to enhance my experience level more
than last few weeks when I am accountable to conduct a research based on particular concept.
I want to share my feeling when I take initiative regarding this module. As I can say that I
am quite nervous and stressed as I am not posing better understanding about different skills and
competencies, which put negative impact on my growth and success on module. Organization
may take action to establish fundamentally unique architecture in term of software and hardware,
because it may help to adapt and understand new technology.
During module I have taken positive experience in term of developing and improving
skills that I would utilize further for purpose of gaining key benefit related to employment or
employability that is play vital role for carer growth. I have improved my capability in the
context of research, in term of conducting search based on several topics during module. Just
because of improving this skill my work experience reach high and I felt highly motivated to
conduct any investigation and collect useful data by using varied sources whether it is primary or
secondary.

CONCLUSION
From above analysis, it has been concluded that organization has gained competitive
edges and generate a lot of revenue by implementing the best and most effective strategies. It has
developed one of those ideas and plans that helped to overcome the key challenge occur due to
certain external and internal factors. Furthermore, by summing up above discussion, it has been
summarized that by adopting and utilizing the key methods, company has enhanced its
operational effectiveness, which is quite beneficial for it to do so in appropriate manner. It has
gained varied benefits in bulk more than other brands. Moreover, it has been determined that
differentiation strategy with implementation of Giga factory and other tactics enhanced
organization success and its operational effectiveness. It has enabled company to gain
competitive benefit for longer time which made it tough competitor for other brands that are also
operating in automotive sector.

REFERENCES
Books and Journals
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Cooke, P., 2020. Gigafactory logistics in space and time: Tesla’s fourth gigafactory and its
rivals. Sustainability. 12(5). p.2044.
Gans, J. S. and et.al., 2021. Choosing technology: An entrepreneurial strategy approach. Strategy
Science. 6(1). pp.39-53.
Islami, X. and et.al., 2020. Does differentiation strategy model matter? Designation of
organizational performance using differentiation strategy instruments–an empirical
analysis. Business: Theory and Practice. 21(1). pp.158-177.
Jing, X. U., 2020. Analysis of the Operation Strategy of Tesla Inc. in China. Frontiers in
Economics and Management Research.1(1).pp.21-25.
Liu, S., 2021, March. Competition and Valuation: A Case Study of Tesla Motors. In IOP
Conference Series: Earth and Environmental Science(Vol. 692, No. 2. p. 022103). IOP
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Luo, J., 2017. System-of-systems innovation: Proactive methods for conception and strategies
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Matthews, T. and et.al., 2020. Tesla Energy. In Innovation Management in the Intelligent World.
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Moradlou, H., Roscoe, S. and Ghadge, A., 2020. Buyer–supplier collaboration during emerging
technology development. Production Planning & Control. pp.1-16.
Saxena, N. and Vibhandik, S., 2021. Tesla's Competitive Strategies and Emerging Markets
Challenges. IUP Journal of Brand Management. 18(3).
Schwabe, J., 2020. From “obligated embeddedness” to “obligated Chineseness”? Bargaining
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