Business Strategy and Technology Impact on CIOs

The assignment provided is focused on understanding how business strategy and changes in business strategy affect the role and tasks of Chief Information Officers (CIOs). It refers to a study titled 'How Business Strategy and Changes to Business Strategy Impact the Role and the Tasks of CIOs: An Evolutionary Model' which was presented at the 2016 Hawaii International Conference on System Sciences. The assignment aims to provide insights into how business strategy and technology impact the role and tasks of CIOs, highlighting key points from various studies and sources.

UNIT 32
BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Impact of Macro and Micro Factor on Organization...................................................................1
Porter Five Force Model..............................................................................................................6
TASK 2............................................................................................................................................7
Strategic Directions Available to Organization...........................................................................7
Recommended Policy for organization........................................................................................9
Strategic Management Plan.........................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is set of various competitive moves and actions to attract the customers
and improve the business of organization. These strategies of organization are also known as the
master plan that is used by companies to secure a high competitive position in market place
(Thompson, Strickland and Gamble, 2015). These strategies help the organization to reach to
required and desired goals. Tesla motors is an automotive industry that is in business of electrical
vehicle manufacturer. The company was founded in year 2003 by Martin Eberhard, Marc
Tarpenning, Elon Musk and j. B. Wright. Headquarter of Tesla motors in Palo Alto, California ,
United States. Tesla is a multinational organization that is performing business around world.
The impact of internal and external factors are analysed for the business of Tesla Motors. The
marketing strategy and market positioning is also covered in report. Different competitive
strategies and business directions are explained for Tesla Motors. Various strategies and plans
are also provided for the growth of company. A strategic management plan is created to manage
the plans of organization.
TASK 1
Impact of Macro and Micro Factor on Organization
There are different factors that are exist inside of outside of the organization which can
affect or influence the business of company. Tesla motors is considered as fastest growing
automobile company that is considered as younger organization. There are different factors that
are not in control of organization and they can affect the business of organization. This factors
are Political, Economic, Social, Technological, Environmental and Legal Factors.
PESTEL Analysis
Political Factors
The political factors are known as different policies and decisions of government that are
somehow related to the business organizations. Government makes different policies to maintain
stability in country. The strategies that are related to economy, foreign trades, foreign policies
and taxation policies (Higgins, Omer and Phillips, 2015). The decision of government on these
policies can affect the business of Tesla motors. The taxation policy of government affect the
business of organization in different ways. If the government rise the tax on product which are
imported by company will affect the manufacturing cost of product. The foreign trades policies
will affect the exportation of company product. The foreign policies of government can also
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affect the business of Tesla motors in other countries. This is how organization function are
affected by political factors.
Economic Factors
The economic factors are mainly the changes in the economy on national or international
level. The taxation and import and export taxes are also kind of economic factors. Taxation on
the product of company affect the price policy of organization and it can reduce the marginal
profit of Tesla motors. On the international level the import tax in country can also influence the
business policies and procedures of organization. The other economical factors like recession
and economic crisis are the disaster condition for the business. This can cause huge damage to
the economy and capital of company.
Social Factors
The social factors that are more related to human beings and their different attributes. The
social factors are also considered as the socio-cultural factors (Chang, 2016). Population of
locality, cultural values of people, education level of people average income of people are
considered as socio-cultural factors. Tesla is an advance technological company and for optimum
performance organization need highly skills and education to meet requirement. That's how the
education level of employees affect the business of organization. If the average income level of
locality and other location is then they will not be able to buy the premium product of company
so this also can affect the business of organization. The population of locality will are affect
business of organization cause less availability of employees. This is how the social factors
affect the business of organization.
Technological Factors
Tesla motors is using most advance technology for the manufacturing and the technology
that is used in product is also high. The technological factors are related to the technological
advancement in market. The technological difference between Tesla and other market
competitor also can create a huge difference of profit to the organization. This difference can
cause large damage to the profit of Tesla motors. The productivity and performance of the
automotive industry is based on the technology used by company. This is how technological
factors affect the business of organization.
Environmental Factors
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The external environmental factors for the organization are location of business, weather
conditions of locality, geographical limitation of manufacturing plant and accessibility. This
factors also influence the business growth and success of organization. It is all about the
suitability of business place. The location of business is important to conduct different business
operations. The suitability of technology with the local weather condition is also important for
Tesla motors because in extreme weather condition some technology shows failure. The
accessibility of location affect the transportation and product movement of organization. This is
how the business of Tesla is affected and influenced by environmental factors.
Legal Factors
The legal factors for the organization are the factors that cause difficulties to company in
terms of legislation. The laws and regulations decided by legal body of country can affect the
business policies of company. There are some rules and regulations are decided by the legal body
of nation and it is compulsory to follow them otherwise company may face legal action. The
legislation related to employee rights, environmental laws and business laws can force the Tesla
to make change in company policy. This is how the external factors of organization affects the
business policy and procedure of Tesla Motors.
This all external factors are not in control of organization. To improve the business
company have to make different changes in organization policies. This effective change in
organization policy can help the organization to keep surviving.
SWOT Analysis
The internal factors of the organization can be evaluated by the Swot analysis. The
analysis of strength, weaknesses, opportunity and threats can provide brief of internal factors of
organization that can help to perform study of organization.
Strengths
Tesla is the company that is in younger stage and was established in 2003 and leader of
the organization is highly skilled and educated. Leadership of Tesla belies in the innovation and
high technology (Schaltegger, Hansen and Lüdeke-Freund, 2016). This help the organization to
grow at high speed. Different opportunities and platforms are provided to employees to suggest
innovation for the organization. The company is fully focused on the electrical cars and the
electrical cars are the current trends in market. The relation of Tesla motors with suppliers is too
good and this is helping the organization to conduct the business with high efficiency. Brand
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value of Tesla is too high and customer easily get attracted towards the product of Tesla. The
people are getting aware of environmental sustainability so that is helping the business to grow
more.
Weaknesses
Because of the limited market possibilities are availability for the electrical vehicle are
providing less opportunity to company. Other things for Tesla Motors is the physical and
geographical limitations and developments are difficult for company. The company is in younger
phase that's why limited infrastructure is available to Tesla. The company is using the best
technology so it is difficult for the company to introduce innovation in company procedures.
Tesla requires highly skilled staff on the production line for better production.
Opportunities
The high sustainability of electrical technology is creating better chances for Tesla in the
market place. Many countries are encouraging use of sustainable fuel and that is a great
opportunity for business of company. The electricity is cost efficient then fossil fuel so the
people are interested in this technology. There are more chances of development in electrical
vehicles so it can be also considered as possibility to company (Hart, Sharma and Halme, 2016).
To increase the reach of business the company can use partnership method for local production.
Many countries are developing new market for electrical vehicles in different cities to save the
environment. This is providing good platform to Tesla to launch e vehicles in different countries.
The company is providing world class luxurious services to consumer so this is positive sign for
Tesla Motors.
Threats
Apart from Tesla many other companies are trying to introduce new product in market of
electrical vehicles. This will be a tough competition for the company. The substitute product can
reduce the market share of company. The people are still confuse about the efficiency of
electrical vehicles and this reduces the sales of company products. The negative publicity about
the company product is also causing damage to the image of electrical product in the global
market. The suppliers of company are not providing better services cause they are not sure about
the profit from selling of electrical vehicles.
These all are different internal factors of organization that can influence the business of
organization. Strengths and opportunities of the organization are providing the factors that can
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help the organization in the positive way. Weaknesses and threats are the factors, on which
company have to work more to solve these issues.
Ansoff Matrix
This strategy provides different growth strategies to the organization to improve the
business capabilities. This four strategies are market penetration, market development, product
development and diversification.
Market Penetration
in this strategy the company look to improve the business of organization by increasing
sales of existing product in the existing market by using different methods.
Market Development
This strategy is about entering in new market with existing product (Strategy, 2017). For
this company can use different strategies of marketing to development new market.
Product development
In product development strategy the company think of introducing new product in
existing market to increase the profit of organization. For this company can use marketing for
this.
Diversification
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Illustration 1: Ansoff Matrix
(Source: Ansoff Matrix, 2010)

According to this strategy of Ansoff matrix company tries to introduce new product in
very new market. This most difficult kind of strategy because there is huge risk of rejection and
failure (Linder and Williander, 2017). This also can create opportunity for the company bu
targeting new crowd.
Porter Five Force Model
Porter five force model is one of the best tool to analysis the marketing position of the
company to the competitor. The focus of the organization is to keep the power in hand of Tesla
to dominate the whole market to gain higher profit. The five forces in porter five force model
are-
Power Of Supplier
The power of supplier is considered as the threat of supplier to the customer to switch the
company. If there are limited suppliers of raw material are available for the organization then the
power of the supplier will be high. In this condition they can threat the Tesla Motor to pay higher
price. Cause there are limited suppliers and this can force the company to do as the supplier
want. This is not good for the profit of company (Buckley and Ghauri, 2015). The power can be
move to organization by increasing the number of supplier of the organization. This will reduce
the power of supplier and help the organisation to stay in dominating position.
Power of Consumer
Meaning of the customer power is the ability of customer to force the company to reduce
the cost of product. If there are high number of choice available to consumer then they can force
the organization to reduce the price of product (Dahlberg, Hokkanen and Newman, 2016). In this
situation the customers possessing high power. It is not easy for the organization to shift this
power back in hand of company. For this company can improve the quality of product and
reduce the supply of product to increase the demand of product in market. If the quality of
product is high and supply is low then the demand of product will be high. This can provide
power to Tesla that can improve the market positioning of company in market place.
Threats of New Entries
As the Tesla is a new company and market of company is limited. So, for the each new
market Tesla is new entry. It is difficult to make a place in new market along with the other
preoccupied company (Dahlberg, Hokkanen and Newman, 2016). The other companies are
dominating in the global level. So it is really tough for Tesla to gain market share in presence of
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other companies. So here the power of the organization is low. In this situation company can
improve the market share by providing better product at less pricing. This will help the
organization to increase market share in new location.
Threats of Substitute Product
Tesla motors is providing electrical product to the customers. If any other company
provides same product to the customer at low price then this will be a threat to the company to
keep surviving in the market. The substitute will provide more option to the consumer to buy a
product. This can reduce the efficiency of Tesla motors in market. This force can be managed by
improving the quality of product and positive marketing competition. That will reduce the
pressure of the organization.
Rivalry With Competitor
In the market place there are many businesses in the market who are selling the same
product with different qualities. This called the rivalry and in this rivalry different business
organization try to improve the market share (Fontana, Sastre-Merino and Baca, 2017). For the
purpose of improve the business they prefer negative competition and this negative competition
is not good for organization. These situations can be avoided by focusing on the particular
benchmark and keep performing good in the market. This can help the Tesla motors to occupy
high market share.
This is how the market position of Tesla is affected by these different forces and how can
organization stay in power and position of domination in market place.
TASK 2
Strategic Directions Available to Organization
Bowman's strategic Clock
There are eight directions or strategy are provided by bowman to gain copmpetitive
advantage in the marketplace. This eight strategies suggested in model are-
Low Price Low Added Value
In this strategy is used by the organization who used to produce the product in the large
number and quality of product is not the concern of company (Bentley-Goode, Newton and
Thompson, 2017). The whole target of the company is to sell the product on low price to large
number of customer. This is not the best strategy to earn huge profit and consumer trust. Only an
organization can earn high profit by selling the product in huge number to create a marginal
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difference between manufacturing cost and pure profit. This is not a good strategy for
organization like Tesla.
Low Price
In this strategy the organization sell the product on low price with optimum quality. In
this strategy the products are sold on low price and this lead to low marginal profit. By this
strategy it is not possible to generate high profit. This strategy is used by the company that are
selling fast and cheaper product.
Hybrid
In this type of business strategy organization tries to generate a high class mixture and
that is possess good quality with minimum price (Oldman and Tomkins, 2018). Organization try
to develop a product of high quality at less manufacturing cost. By this policy or strategy
company can gain trust of consumer and generate good profit.
Differentiation
Differentiation strategy company offer the best quality product to the consumer and high
perceived value. The consumer satisfaction is most important. Along with high class product
company also focuses on the marketing and promotion to improve the sell to generate maximum
profit from selling product. This type of strategy is good to enter a new market.
Focused Differentiations
In the focused differentiation company focuses on the high quality product manufacturing
and high marketing of producing for a specific segment of customer (Priem, Wenzel and Koch,
2018). Organization focuses on this particular group of people in marketing.
Risky high Margins
This type of strategy organization provide best product to the consumer to meet there
requirements. For this best quality of product and services are provided with high prices. This
strategy can be used for short term goals but this can't be used for longer period. Because
consumer will switch the company which is providing same product at low price.
Monopoly Pricing
The monopoly strategy is used by the organization which are holding service or product
that is only provided by particular organization. In this case company have huge advantage cause
no other company is selling same product this monopoly provide them facility to decide the cost
of product and customer have to buy this product any how to full fill their needs.
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Loss of Market share
This strategy is used by the companies are selling the product which id not inn the
requirement of the customer and they can rise the price of product as much they can cause no
customer get affected by this.
Recommended Policy for organization
Tesla motors is providing electrical car to the consumer and it is need of future. The class
of product and services provided by Tesla is of luxury category (Wieland, Hartmann and Vargo,
2017). So the best suitable policy for the Tesla motors is Differentiation where company can sell
product on high price and maximise efforts of promotion and marketing to improve the sells.
Strategic Management Plan
Mission- To improve the Sales of Tesla Motors in Different market places.
Vision- Providing the best product and services to consumer for their satisfaction.
Objective- To implement the best business strategy to gain maximum market share.
Strategies- Tesla motors is providing the world class and luxurious products to the consumers
at optimum price to gain high marginal profit. To improve the sales number company can use
different marketing strategies to attract more consumer towards company product.
Tactics-
1. Use digital marketing to improve the visibility of company.
2. Online promotion of company product.
3. Use promotions and campaigns to gain market attention.
CONCLUSION
This report is concluding the business strategies of Tesla Motors. The different internal
and external factors are analysed to improve the business strategies of Tesla company. The
market positioning analysis is performed to track the performance of Tesla motors in Market
place. Different market strategies of marketing are suggested for business improvement of
organization. The strategy development plan is explained to increasing market share of
Company.
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REFERENCES
Books and Journals
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control over financial reporting, and audit reporting quality. Auditing: A Journal of
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Buckley, P.J. and Ghauri, P. eds., 2015. International business strategy: theory and practice.
Routledge.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Dahlberg, T., Hokkanen, P. and Newman, M., 2016, January. How Business Strategy and
Changes to Business Strategy Impact the Role and the Tasks of CIOs: An Evolutionary
Model. In 2016 49th Hawaii International Conference on System Sciences (HICSS) (pp.
4910-4919). IEEE.
Dahlberg, T., Hokkanen, P. and Newman, M., 2016. How business strategy and technology
impact the role and the tasks of CIOs: An evolutionary model. International Journal of
IT/Business Alignment and Governance (IJITBAG). 7(1). pp.1-19.
Fontana, A., Sastre-Merino, S. and Baca, M., 2017. The territorial dimension: The component of
business strategy that prevents the generation of social conflicts. Journal of business
ethics. 141(2). pp.367-380.
Hart, S., Sharma, S. and Halme, M., 2016. Poverty, business strategy, and sustainable
development.
Higgins, D., Omer, T.C. and Phillips, J.D., 2015. The influence of a firm's business strategy on
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Linder, M. and Williander, M., 2017. Circular business model innovation: inherent
uncertainties. Business strategy and the environment. 26(2). pp.182-196.
Oldman, A. and Tomkins, C., 2018. Cost management and its interplay with business strategy
and context. Routledge.
Priem, R.L., Wenzel, M. and Koch, J., 2018. Demand-side strategy and business models: Putting
value creation for consumers center stage. Long range planning. 51(1). pp.22-31.
Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Strategy, B., 2017. Business Strategy. MARKETING. 1(2). p.3.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Wieland, H., Hartmann, N.N. and Vargo, S.L., 2017. Business models as service
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Online
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Ansoff Matrix, 2010. [Online]. Available through :
<http://www.quickmba.com/strategy/matrix/ansoff/>.
[Online]. Available through : <>.
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