Unit 32 Business Strategy - Assignment

Unit 32
Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Analysis the impact of the macro environment on the Tesla............................................3
LO 2.................................................................................................................................................6
P2 Analysis the internal environment of Tesla.......................................................................6
LO 3.................................................................................................................................................8
P3 Porter's five force model for evaluate competitive forces.................................................8
LO 4...............................................................................................................................................10
P4 interpret and devise strategic planning for company......................................................10
CONCLUSION..............................................................................................................................14
References......................................................................................................................................15

INTRODUCTION
Business strategy is combination of all decisions and actions which are performed by
business to accomplish goals and objectives of business. It is backbone of business as it is
roadmap which lead to desired goals. Compete successfully, transformation execution and
accomplish objectives and goals of organization. The present study is based on the “Tesla” is an
American automotive and energy company. The company is specialized in electric car
manufacture. Report will analysis by internal and external capabilities of organization by using
SWOT and PESTEL models. Study will also evaluate by competitive forces by using porter's
five force. It will also interpret and devise by strategic management plan for organization.
LO 1
P1 Analysis the impact of the macro environment on the Tesla.
Business strategy of Tesla
As one of powerful organization in the global market. This selected company has chance
to explore into the international market, in order to gain the best relations with consumers in the
world. Tesla foremost come in an international market for compete globally to come in
international marketplace (Ansoff and et.al., 2018). Company is entered into the market by
expensive cars by targeting high class peoples who are financially strong. It is the widely
successful idea, into a more competitive market lower level price.
Mission and objectives of Tesla.
The mission statement of Tesla is to accelerate the advent of sustainable transport into the
international market in order to achieve success to customers worldwide. The vision of company
is to create most compelling car company by driving world shift to electric vehicles.
In order to that, Tesla requires to identify the external capabilities of the business, so that
they determined PESTEL analysis for external capabilities for implement the business strategy.
Analysis of external environment by using PESTEL model
Political factor
This factor is includes government policies, taxation, level of corruption etc. the
government policies are directly impact to the business and its growth of Tesla. The political
stability of the location is worked with certainly chance for the firm. This can give highly impact
on the business and its growth. The limitation of the import and export trade laws hinder success

is highly growing towards the Tesla. It is very difficult sets and follows rules or direction as per
the country because that is impact on the distribution policy of company. For example:
government increase import and export rate on purchases in that company have to pay extra rate
on their import rate. By this it gives negative impact on the other side, by this company is able to
keep safe their product as well as deliver.
Economic factor
This involves interest rate, inflation rate, unemployment rate, exchange rate etc. the
electric car gain success and build the best goodwill day by day in the market that is highly
connected by global economy (David and David, 2016). The other economic factor is decreasing
in the battery cost. It is very important part of car and its cost factor can impact to the business in
positive ways. Other hand, if cost is rises it can give negative impact on the company and its
operations. For example: if battery cost is high so as that car rate is grow then it affect to buying
power of customers. This is gives negative impact on company.
Illustration 1: PESTEL analysis
(Sources: PESTEL analysis of Tesla, 2017)

Social factor
The idea of electric car is interesting for most of the peoples and specially to them who
are truly more eco-friendly. This car is eliminate uses of fuel that is good and best for
environment because it not harms to that. With this, social factor is impact to business in positive
ways. Other hand, this can also give negative impact on business by those peoples who are want
fuel car because it runs fast. For example: if customers taste and preference is changed then
customers move towards others side. On the other side, but more customer is like eco-friendly
car then it increases buying power.
Technological factor
Technology factor can influence the business and its operations. The Tesla company is
automotive and energy solutions business depends on technology. Like material engineering
technology is help to determine the cost and efficiency of batteries. This provides the highest
opportunity for firm which is high rate of technological changes and increase automation of the
business in effective ways.
Environmental factor
The environmental factor is affect to business and its operations. This includes climate
changes waste management, attitude towards green, ecological goods, recycling (Flouris and
Oswald, 2016). Tesla vehicles are also in compliance by the various regulations of environment.
The company has opportunity for promote their business by concerning climate change,
expanding environmental program. This can be directly sustainability of the business. This is
best for the company and its operations.
Legal factor
Legal factor is affect to business by regulatory framework. This includes discrimination,
employment, healthy and safety, patent, data protection laws. Those are influence and impact to
the business and its operations. By following all rules and regulations company is safely done
their business and achieve their missions and objectives of firm.
Those are external factors which are shows external capabilities of Tesla in effective manner.

LO 2
P2 Analysis the internal environment of Tesla.
To analysis the internal capabilities of Tesla, so that they determine SWOT analysis are
as follows:
Strength
 The company Tesla has strong dealer community. There dealer are not only promote
products of business, but they are also given training to their sales team for explain to
customers, benefits of products.
 The company has effective and strong brand image at marketplace. This is very helpful
and useful for Tesla to expand their business at marketplace with new product
capabilities (Higgins, Omer and Phillips, 2015).
 The company have successful intergeneration by using various tools and technology
which is help to streamline operations and build a reliable supply chain model.
 This provides highly of satisfaction to customers because company and its manager are
dedicated towards the healthy customer relationship. By this they are able to achieve high
level of customer satisfaction to potential and current customers.
 Company have strength to perform in the new market by building expertise for making
success of them. The expansion of business is help to generate revenue stream.
 It has the biggest strength which its product electric eco-friendly car. The automation
activities are consisted the quality to products.
Weakness
 The company have weakness which is limited market presence, limited supply chain and
high prices of products and services.
 The company have not good demand of product demand at marketplace and higher
missed that opportunities compete with competitors (Moutinho and Vargas-Sanchez,
2018).
 The weakness is low investment on research and development department with the fastest
growing peoples and players in this industry. Without high investing on research and
development team, company is not able to compete with other leading players.
 The profitability ratio is low in the industry average.

 Company have organizational model which is competed with the present business model
by limited expansion.
Opportunity
 The company have opportunity to global sales expansion at marketplace.
 Advanced and new technologies are provided the best and effective because which is
provided high opportunity to Tesla for differentiate price in new and global market.
 New tax policy can impact to the business or can provide new opportunity for established
players by this they able to rise profitability by selling goods and services.
 Opportunity by market development which is help to compete with competitors at
marketplace (Olson and et.al., 2018). This will help to increase competitiveness of Tesla.
 Decrease transportation cost is because lowest prices is being down cost of Tesla motors
this will provide the great opportunity for to the business and its growth factors in
effective manner.
 To attempt new and advanced technology standard is opportunity for company to enter in
new market.
Threat
 Rises price level is the threat for the organization because that leads serious force on
probability.
 Rises raw material is also threat for Tesla profitability.
 The company face various markets laws problems by different laws and fluctuations
related to product standard.
 Threat from liability laws in different country are different and exposed various liability
claims provide change in policy in market.
 Threat from competition, automotive market is face high competition at marketplace.
 The demand of high profitability products is based on the seasonal in the nature.
With the help of SWOT model, company manager is able to analysis the internal capabilities of
company (Ouma and Oloko, 2017). This help to create the best business strategy of Tesla.

LO 3
P3 Porter's five force model for evaluate competitive forces.
The analysis of competitive is the best idea of business strategy and it is the best way to
relate competition. This has main aim to analysis competitive areas which is defined strength and
weakness of challenges within marketplace. Proper and best strategy is give benefits that is help
to improve relations in order to keep competition by entering in new market and weakness.
Porters five force model is help to analysis present requirements and bargaining power of
customers in business. This model is the best management technique which is help to identify the
impact of external factor environment of Tesla. Porters five forces are as follows:
Bargaining power of buyers:
The firm and industry conditions are depends on result of customers who are purchase
company products at marketplace. The Tesla customer is direct factor which are help to
determine sales revenues. Income of buyer in this industry is low and product price is high. In
these customers are not attracted towards the firm for purchase products because this has high
price. This makes the buying power of buyer is weaker force in industry. The quality of product
is more important for buyer because this make continuous purchases which means buyers in this
industry is less price delicate (Salavou, 2015). For example: customers income is low then
customers are attracted towards the company. They are move other side towards a lower price
cars then it gives negative impact on company growth because of buying power of customers is
decrease. But this factor is very weak in this sector.
Bargaining power of suppliers:
The level of supply available for the company that is impact to Tesla and this industry
environment. The bargaining has ability of the give and provide various medium forces that
involves different types of external forces such as individual condition provider and others.
Suppliers at the dominant position which is decrease margin to Tesla which is earned in market.
Strong suppliers in this market use negotiation power for extract higher prices of Tesla. This
impact to the overall probability of Tesla. For example: supply have power to influence price and
rate of product because they have power to negotiate people in sector. This can affect to
company in that manager have to take decision to sets rate.

Threat from new entrants:
Organisation is competed with the various companies and new entrants in this industry
which is consumer product. New entrants are come up with the innovation and unique product
and services at marketplace. Innovation is put on pressure on Tesla group. Most of the new
comers are come with the lower price, reducing cost or provide new as well as effective values of
product which is help to attract customers towards company (Scholes, 2015). In this manager of
Tesla have to make new strategies to face those challenges. For example: new entrants in market
always come with innovation. In that case this factor is strong which can give impact. For that
company have to make any contingency plan in order to compete in competitive era.
Threat form substitute products:
New product are similar as per customers needs in other way, in this case, probability of
company will suffer because can purchase this model with another place and company. In that
company have to provide the best quality of product to customers with low price as possible.
That is help to attract customers towards company. For example: in the market place have
Illustration 2: porter five force model
(Source: Porter five force model. 2017)

various substitute car which can influence customers day to day by introducing innovation. In
that case, Tesla manager should provide best quality and lower price rate to their customers.
Competitive rivalry:
Competition is leads high force on the Tesla business situation. It is the highly powerful
part of porters five force model. This will drive low price of product and decrease overall
profitability of Tesla. In this case company have to reduce their price of product which is strong
force help to compete in competition edge. For example: BMW is the competitor of tesla which
is highly attract customers by their model and design.
With the help of porter five force model is effective and valuable for the business and its
growth because by this company is able to know about various forces which are impact to
business and its growth.
LO 4
P4 interpret and devise strategic planning for company.
Business strategy is help to outline the ways of business done at marketplace which is
related to the business within the large company. It is the best way think to focus on business
strategy that can decide the ways of doing business and going to arrange various operations of
company. In order to focus on strategic model and direction, Tesla is select Ansoff's growth
matrix (Thompson, Strickland and Gamble, 2015). That is includes 4 factors like market
penetration, product development, diversification and market development.
Ansoff's Growth Matrix
It is the strategic planning technique which is help to provides proper layout to support
employees, manager and marketers devise strategies for achieve future growths. This is highly
focused on present and possible products. Elements of models are as follows:
Market penetration:
This is the most risky as well as current primary intensive strategy. This intensive growth
is enabled for business growth by increase sales revenue at current market. In increasing market,
keep market share result in growth and can be survived various chances for increasing market
share. This has limited market concept, company can use other strategy is pursued the Tesla want
to continuous grow and develop in marketplace (Wheelen and et.al., 2017). In this, strategic

based objectives which is intensive strategy to develop Tesla by sales revenues by aggressive
marketing.
Product development:
Product development is the second option for growth strategy. In this company can grow
by creating new product and services to customers at marketplace. It is the best way for growth
and build profitability of Tesla at marketplace. The company apply this strategy for develop new
product with minimum environmental impact. This will help to attract more customers towards
business and increases profit of firm. For that, company manager need to invest on research and
development process in order to analysis market needs and wants.
Market development:
Market development is the best ways of grow company. This strategy is highly involves
movement of extra market location. This help to improve new marketplace for good ability to set
market segment. The market development is strategy, is to strategic objectives to grow
multinational business.
Diversification:
It is the effective strategy to growth strategy, here is need both good presentation and
market improvement. It is the external core capabilities of Tesla. This is best and effective for the
business and its growth because it creates great chance which is high rate of return.
Justification and recommendation for develop strategy and platform;
The company can follow market development scheme because it is the best and effective
strategy for get prefect platform. That is supportive for achieve mission, vision and objectives of
firm (Wicker and et.al., 2015). With the help of these customers are highly attracted towards the
business and its growth factor. The mission of company is to accelerate the advent market to
sustainable transport in international market. They are highly focused on new target customers in
order to increase sales and profit of sales. For improve new market by providing best and
effective products to customers.
Strategic management plan
Strategic management plan is the best document which is used for communicate within
organization. This involves organization goals, objectives, tactics, employees, stakeholders,
modify operations, energy and agreement. There are different types of elements are includes

such as background statement, vision, mission, objective, implementation and evaluation are as
follows:
Executive summary
Strategic management plan has covered background of company and strategies. It also
covered by strategic direction with the help of model, tactics by using strategies, action plan and
implementation of the strategic management plan (Zhong and Li, 2018). With the help of this
company able to implemented by plan according to business strategy.
Statement background:
Tesla is the American automotive company. The company is specialized in electric car
manufacturing. It has operation in multiple cities with multiple production, plants. Its products
are involves electric vehicles and Tesla energy. The company has 45000 number of employees in
their company who are give their hard contribution for achieve goals and objectives of company.
Mission ans vision of the company
The vision statement of the Tesla is to create the most compelling car company by
dynamic world transition to electric vehicles. The company is addresses electric vehicle at
marketplace. The company has mission statement is to accelerate the world transition to sustain
the energy of products and services.
Strategies and tactics
The tesla company is the use different strategy of tactics like porter generic strategy for
analysis strategic capabilities of business. This has presented capabilities finally fall in cost
benefits and differentiation. With implementing strength wider which is general strategies like
cost leadership, differentiation and more concerns (Ansoff and et.al., 2018). This strategy is
implemented the business in its competitive edge.
Cost leadership
This strategy presents low level producer in the industry for the given level. In that
company is sells product ta average business price for gaining profits larger challenge and below
in average enterprise prices for earn new market share. By using this Tesla is sets out the low
cost producer in its industry. This include are pursuit of economies of scale, using technology.
This help to Tesla in order are control their cost of product. This provide cost advantage to
company.
Differentiation:

Differentiation is the best strategy presently help to improvement of goods and services
that offers specific concept that is highly related by values of customers. Customers are highly
realized with goods and services at competitive. In that company is follow differentiation
techniques and tools for analysis capabilities. In this company is looks to be the unique in
industry along some dimensions which are widely valued by buyers. This give opportunity to
Tesla for making new product in order to increase customers interest.
Focus:
Focus is the strategy considers with the sections efforts for accomplishing values and
benefits or differentiation. Company is adopt a wide range good development strength. This
includes two factor cost and differentiation. This factor is help to select the best segment in the
industry and market by controlling their price of product and introducing new product.
 Cost focus is help to provides the cost advantage tom company by setting attractive price
of product.
 Differentiation focus is help to innovate new product by setting target.
Action plan
The action plan for Tesla has been used differentiation general strategy to competing with
the benefits. They can focus on differentiation strategy, which is effective and best strategy
compete and importance for create products for firm against competitors. The company is sell
electric car which is already different form other company product. This kind of generic strategy
aligns with mission and vision of the company. This help to highly increase goodwill by the best
quality and invention (David and David, 2016). This help to gain high skilled and innovation
product development team.
Implementation
At here, the company need to determine 5 M's such as machine, material, man, minutes
and money. It is required skilled workers or manpower for apply plans. That is necessary for
various materials which are help to implementing the plan within the business. It is important
define and fixed a timeline for adopt this management plan by the company. Effective and best
implementation of strategic management plan aid to increase and enhanced productivity and
profit of tesla within the industry.

CONCLUSION
This reported had been concluded that company adopt PESTEL and SWOT analysis this
has effective and beneficial for determining internal and external capabilities of company. It has
been concluded that the porters five force model which has effective in order to increase
competitive advantage in industry. It has also covered by the Ansoff growth matrix that has
effective and for identifying capabilities and direction for company. Study has completed
strategic management plan, included by the background of firm like mission, vision, strategic,
action plan and implementation of plan business.

References
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Wicker, P. and et.al., 2015. The effect of Porter’s generic strategies on organisational problems
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Zhong, T. and Li, J., 2018. Business strategy, managerial expectation and cost stickiness:
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ONLINE

PESTEL analysis of Tesla. 2017. [online]. Available through:
<https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis>
Porter five force model. 2017. [online]. Available through:
<https://www.investopedia.com/terms/p/porter.asp>