Analyzing the Influence of Macro Environment on Tesla

BUSINESS
STRATEGY
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Appropriate frameworks to analyse influence and impact of macro environment on
TESLA........................................................................................................................................3
LO 2.................................................................................................................................................6
P2 Internal environment and abilities of company.....................................................................6
LO 3.................................................................................................................................................9
P3 Porter’s Five force model......................................................................................................9
LO 4...............................................................................................................................................12
P4 Strategic management plan..................................................................................................12
CONCLUSION.............................................................................................................................14
REFERENCES .............................................................................................................................15
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INTRODUCTION
Business strategies is a set of appropriate actions and competitive moves that companies
used to attract consumers, compete successfully, achieve organizational objectives or goals and
strengthening performance (MENDOZA, 2018). It helps business to reach at desired results,
business strategy is understood as set of decisions which support company in achieving
particular objective. It prepares top management with integrated or systematic framework, to
analyse, exploit and discover beneficial opportunities. The present report is based on TESLA
company, it is an American automotive firm based in California. They are specialized in
manufacturing electric car, through solar panel and their solar city subsidiary. They operate
assembly plants and multiple production system. This study explains influence and impact of
macro environment factors on company, internal capabilities and environment of business. It
justifies, Porter’s five forces model and strategic management plan for firm. Furthermore, it
explains models, concepts and theories to assist with interpretation and understanding of
strategic directions available to TESLA.
LO 1
P1 Appropriate frameworks to analyse influence and impact of macro environment on TESLA
PESTLE analysis is a tool or appropriate framework used by many organizations to
analyse the macro environmental factors and to monitor external marketing environment that
impact on business as well as their strategies. It is considered as one of the most correct
frameworks which help to analyse the external factors affects on TESLA company.
Political factor-
Government policy, labour law, trade restrictions and tax policy are including in political
factor that affects how company do their business. Governmental entities are the most common
societal forces that influence business strategies (Mbithi, Muturi and Rambo, 2015). Policies on
trade made impact on TESLA organization and its current strategies. According to the trade
policy they need to pay extra charges on export and imports services which helps to run its
business effectively (TESLA PESTEL/PESTLE ANALYSIS, 2018). They need to follow the
overall trade regulations and rules accordingly which affect on its strategies. When they pay
extra charges it impacts on profit margin of organization. Management has to make changes in
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previous strategy and modified it according to the policy of trade. Brexit impact negatively as it
increase the trade barrier which affect the trade procedure of company goods.
Economic factor-
It has significant impact on how company do their business and run operations, it
includes economic growth, exchange rates, disposable income of people and inflation. Sales for
electric cars has been risen as global economy increased, it projected that economy grow by
3.5%. these rises in Europe and Asia as well as US, let to more electric developments (Tervo and
et.al., 2018). The costs of battery are decreased that impact on TESLA performance as it is
one of the best opportunities for them to gain competitive advantages. The business performance
of company gets benefits from lower battery costs. It also impacts on their strategies of
manufacturing electric vehicles; they need to used battery rather than fuel engines. Renewable
energy cost is another external factor that makes business products more effective and attractive.
Unemployement rate in specific state impact on company growth in which they have to
do some changes in their employment structure.
Figure 1: PESTLE Analysis Model
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