Business Strategy: Impact of Macro Environment on Firm and Strategies

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Affects and impact of macro environment on firm and their strategies .....................................3
Internal environment and abilities of TESLA..............................................................................7
Porter's five forces model to measure competitive force of industry of TESLA.......................11
TASK 2..........................................................................................................................................12
Strategic plan for company........................................................................................................12
CONCLUSION..............................................................................................................................16
REFERENCES .............................................................................................................................17

INTRODUCTION
Business strategy is considered as set of actions of decisions taken by company for
providing benefits to its business (IGerard, 2018). It helps to define clear roadmap, consist set of
appropriate guiding principles, that define act people in organization take to achieve desired
objective and goals. The current study based on TESLA Motors, it is American automotive firm
based in California and Palo alto. It explain internal capabilities and environment of company by
including PESTLE and SWOT analysis. It justifies porter's five forces framework to measure
competitive force of automotive industry for TESLA. Furthermore, it clarifies strategical plan
that has tactical and touchable strategic priorities and objectives.
TASK 1
Affects and impact of macro environment on firm and their strategies
PESTLE analysis- It is one of the best strategic tool used to analyse impact of external
factors on TESLA company and their business strategies the most.
Political factor-
There are different types of political factors that can affect auto mobile manufacturers.
Trade policies or restriction, tax and government policy is includes in this factor that influence
how TESLA do their business effectively. The overall business performance is affected by
different trade policies. Changing environment cycle and political uncertainty have significant
affects on company operations (Hoelzlhammer, 2018). Various risks associated with global
business activities that leads to increase in operations costs, which finally impacts their ability to
sell its products that is Electric vehicles. After Brexit, changes in trade policies create barriers for
trading services or products to another nation which impact on business productivity and
profitability, it also affects on firm strategy related to trade procedure in which requirement of
changes get arise.
Economic factor-
Economic growth, inflation rates, income of people, exchange rates and unemployment
rates are the economic factors that affects business. TESLA is providing an energy system for
world of electric cars, businesses and home using batteries, that is quite expensive. Due to low
income rate, people cannot be able to buy luxury cars manufacture by company to improve
experience of driving for their consumers (Tesla PESTLE Analysis, 2018). TESLA cars in
developing regions is consider as very expensive products which cannot be purchased by every

one, it directly affects production procedure. Some people wants to buy their cars, but the need
for charging stations they cannot be able to pay extra amount or face many difficulties to do so, it
completely unsatisfied.
Social factor-
Demographic norms, customs, values and characteristics of population within which firm
operates are considered as social factors. In recent time, people are more likely drive towards
environmental safety and well fare, they efforts for making environment healthy and safe from
air and land pollution. TESLA motors produce two seater bullet car with Zero emission, people
love their ideas of electric vehicles, it means consumers preferences positively impact on
business growth and current strategy (Ihidalgo and et.al., 2018). They wants to provide Zero
emission electric generation from its giga battery that is quite beneficial for them as well as
consumer. With the support of population and by considering consumer preferences, TESLA
can grow more and more.
Technological factor-
Level of innovation, research and development activity, automation, technological
changes are the certain technological factors that affects business operations and market
unfavourably or favourably. TESLA relies on technology for its vehicles, this negative and
positive point for them. Rapid technological change is key element that impact company
performance negatively and positively as well. For example, organization effectively used
technology to enhance their product portfolio, in future they will be equipped with fully
driverless technology according to company CEO, which is possible for them while using greater
technology. But with technology the requirement of upgrades it quite essential which is not
possible for business to operate effectively, it impacts on business market position as well as
reputation.
Environmental factor-
It is very essential due to increasing scarcity of carbon footprint, population targets set
and raw materials by government in which firm operates their business successfully.
Contribution in CSR is the main responsibility of businesses according to the local authority, it
impacts TESLA business positively because they product environment friendly products and
used electricity (Kumar, Anand and Nim, 2018). Their vehicles compliance with different
environmental regulations and barely have affects over carbon emissions in comparing to that of