Analysis of Macro and Internal Environment of Tesla

Unit 32 Business
Strategy

INTRODUCTION
Business strategy is an effective process to attract the customers, strengthening
performance, achieve company’s goal or objectives and compete successfully. It is a set of
actions or process to improve the company’s performance and gain company’s objectives. It is a
set of decisions or the course of action which help the organization to achieving business goals.
The business strategy is created by their company to complete the local and international market.
It is great picture of desired image, destination and direction of the company. The business
strategy is developed by the company for various purposes such as: achieving effectiveness,
mobilizing resources, meeting threats and challenges, secure an advanced position in the market,
utilizing and perceiving opportunities, directing behavior and efforts, generating the command
over uncertain situation. It determines the essential activities of business to reach up to the
desired level. Tesla is an energy company and an automotive company that specializes in
manufacturing of electric cars. This report will include the analysis of external environment and
its impact on Tesla and its strategies. It includes the analysis of internal environment and
capabilities of Tesla. This report will also highlight the porter’s five forces model and evaluation
of competitive forces of the market of company.
MAIN BODY
LO1
P1 Analysis the impact and influence of the macro environment on a Tesla
organization and its strategies
A company operates within external boundary. The PESTEL analysis is a great and
strategic tool to identify the impact of macro environment of the company. PESTEL analysis
involves Political, economic, social, technological, environment and legal factor. Changes and
variations in the macro environment factors can largely influence the not only the Tesla company
but also influence the others organization in the market (Johnson., 2016). For identify the
external factors of the company, Tesla requires overcoming challenges that are connected to this.
It is strategic management tool that describes the impact of the organization’s macro
environment or remote on the company.
Tesla includes the macro environment of the automotive industry, energy storage industry
and energy generation industry. These external factors can affect the other determinants of the
company’s business, community, etc. The Tesla’s customer and market share fully dependent on

the various factors such as technology’s cost effectiveness. Tesla Company has a strong brand
image and enhancing profitability can increase its long term success (Thompson, Strickland and
Gamble., 2015). Tesla organization will largely focus on the industry’s external factors such as
PESTEL analysis. If the macro environment or the remote environment changes, the company
will have to alter its strategies accordingly. Tesla has many competitors in the market like Honda
motor, General motor, Volkswagen, BMW, etc. Tesla includes battery, solar panel and electric
automobile sales revenue are enhancing, despite competition with big companies. Tesla’s
PESTEL analysis is diverse because of the several types of organization’s products types and
large target market of the industry. The best solution for manage these varieties is strategic
management.
Political factors of the Tesla’s business
The political factors include the various government impacts on the Tesla’s business and
their operations. It also impacts on the business’s macro environment or their remote
environment (Akter and et.al., 2016). The main force that generates their huge impacts on the
company’s business is government entities. For example, the government trade policies can
reduce the company’s revenue and industry’s performances. There are many significant political
external factors that impact on the Tesla and energy solution and automotive industries such as -
the several agreements of new international trade, government incentives for the industry’s of
electric automobiles and the political stability of the related industry market.
By the government incentives, Tesla organization will gain the opportunity to improve
their financial performance and strength their position in the whole market. All the external
elements of the political factors directly linked with the decreased carbon emissions of the Tesla
products and operations. The government policies of the free trade agreements give as huge
opportunity to the company to expand their functions and operations globally. The political
stability of the industry’s market develops a favorable macro environment for the Tesla’s
intensive growth strategies and its generic competitive that involves market penetration (Higgins,
Omer and Phillips., 2015). The political factors of the automotive industry create a huge
opportunity foe developing the Tesla.
Economic factors
The PESTEL analysis includes the economic factors, that has a large impacts on the
Tesla’s business and its functions. The economic factors involves currencies, market growth and
various others variables that impact on the automotive industry’s business. For example, the
growth rate of the solar energy market describes the opportunities of growth of the organization’s
solar Panel business. There are several economic factors that create their huge impacts on the
automotive market such as – issues of economic stability, reducing battery costs and reducing
costs of renewable energy. Form the lower battery cost, the performances of the Tesla’s business
is increasing. The reducing renewable energy cost makes the company’s products more likable