Impact and Influences of Macro Environment on Tesla

This assignment discusses the impact and influences of macro environment on Tesla's growth and strategic directions. It includes a Pestle analysis of Tesla and explores its internal environment and capabilities. The assignment also covers the application of models and theories to understand the strategic directions available within the firm.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
Lo1 Impact and influences of Macro environment.....................................................................3
Pestle analysis of Tesla ...............................................................................................................3
Lo2 Internal environment and capabilities..................................................................................5
Swot analysis...............................................................................................................................5
Lo3 Porter five forces .................................................................................................................8
Lo4 Apply model as well as theories to understands the strategic directions available within
the firm ......................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION

Every business needs to develop and implement different strategies and tactics in order to
remain sustain for long term. this is because now a days the business environment has become
such competitive ( de Oliveira, Portella and Borba, 2017). It is due to globalisation companies
are entering into new market and developing new products. This has enabled in attracting more
customers. The strategies provide a direction in which business have to move. It consists of short
and long term goals.
This assignment will describe about macro and micro business environment of Tesla. It will
also show impact on factors on its growth. Moreover, it will include a strategic plan that strategy
has to be implemented by tesla to grow and expand.
Lo1 Impact and influences of Macro environment
Within the year 2003 Tesla motors was introduced through five graduates of the
engineering . The objectives of the Tesla motors is to decrease the pollution within the
environment as well as gives fast as well as more fin drive cars to the consumer.
Vision- Tesla's motors vision is to examine that can assist the decreases within the pollution to
the environment. The vision is o creates the cars that are more compelling as well as brings the
world into the electric cars.
Mission- the mission of the Tesla is to accelerate the world's change to the energy regarding
sustainability. Sunlight, tides, planets ,rain as well as Geo thermal heat are considered as the
green energies that the firm wants to uses. The main mission of the firm is to modify the work
into the electric cars and save it from pollution (Lahtinen, Kuusela and Yrjölä, 2018).
Core values
1. They want to their firm to do best though taking the environmental consciousness,
constant learning ,respect risk and many more. The firm want to use the latest
technologies as well as invitations by the responsibility and risk to make the best
product by working hard.
Stakeholder matrix
It analysis against the certain criteria as well as plotted within the graph. Here the decisions are
made on the quadrant within a specified stakeholder falls into.

Pestle analysis of Tesla
Tesla is consider for its sustainable innovation model, besides from the innovative
technological vehicles, firm is also making energy products. Within this way it can attract the
large audiences that like sustainable kind of products. Nowadays Tesla is focusing on the super
charge network of vehicles. Pestle analysis assist the firm to realize about the opportunities and
risk hidden within the global geographical area as well as how they impact the business.
Political- Tesla is majorly known for its electric vehicles as it does not require an abundance
amount of fuel, as it uses gas and electricity both but not as much gas required for the traditional
vehicles. Drivers of the tesla's vehicles utilizes the electric station to refill their vehicles instead
of the electric gas station. The government can took the immediate actions regarding the
development of the electric as well as hybrid engines. Tesla is also expanding its business into
the other nations also but success of these nations depends on the local economy(Chang, Van
Witteloostuijn and Lau, 2018).

Economic- This is a factor that can plays a crucial role within the business world as well as
impact fortunes within the business in different ways. Firm has been rising fast its business
within the several past years. It can be occurred due to different reasons that can affect the
growth. After the recession the economic conditions of the firm is enhanced globally. The level
regarding the employment has also risen globally. Nowadays, more number of people attracted
toward the luxury vehicles as well as demand is increased regarding the SUVs. Tesla model X
have falcon wing doors accompanied by the full sized electricity SUVs. Within he higher
economic activity , the sales regarding the SUVs has enhanced day by day. The middle class
especially more benefit regarding the brand of the vehicles. Thus if Tesla targeted the middle
class audience than they have to release the lower model such as Model3.
Social – Nowadays people loves the ideas of the vehicles that is Eco friendly as electric
vehicle to use the fuel as compare to the traditional cars. At the same time it is better for the
environment ,Also electric cars are cheaper as compare to uses the traditional vehicles. The firm
creates the image within the Tesla to maintain their place within the mind of the people as a
electric car. The firm also done the amazing job by boast power as well as luxury on the market.
Technological- It is considered as the both foe and friend. As a good friend ,technology assist
maintenance competitive edge within the market. Because of this Tesla posses sustainability
for the future and also at the same time it is fuel efficient. The vehicles adopt the new
technology regularly as compare to the traditional options within the automotive industry.
Also, Tesla also implement automation and artificial intelligence into their vehicles. Various cars
aren't built for such kind advancements but tesla also make sure that their vehicles ready to
adopt any kind of advancements ( Nagy, Oláh and Popp, 2018).
Legal factors- Since tesla has focuses their cars on eco- friendliness as they able to promote the
vehicles more energy efficient and assures through the environmental regulations that are
considered as the international regulations. For that they need to maintain international patents
on a regular basis.
Environmental- It is considered as the biggest strength of the Tesla. Nowadays growing
importance within the context of the international business. Within the Terms of influence of
the environment Tesla has a very good image. The vehicles that made by the firm is considered
as the electric vehicles that are more energy saving and at the same time focuses on the

sustainability. So the vehicles of the Tesla obey various environment regulation and also it
barely influences the carbon emissions (Raghunath and Rose, 2017).
Lo2 Internal environment and capabilities
Swot analysis
Tesla has always been associated with such kind of technologies that can be adopted buy the
various firms. Various brands used the innovative technologies of the Tesla such as Daimler
uses the battery of the Tesla , while Mercedes-Benz uses the power of the Tesla. Also, Pioneers
like GE have set up the trackers that can keep the track regarding the innovation of the Tesla.
Strength
Political as well as government support- Ample of support ,Tesla got from the government as
well as firms have obtained a USD around 466 billion's projects regarding the energy
management that falls under the US department of Energy. Organization started their
operations at the same time when the president Obama launched its clean tech initiatives and
resulted within the firm gaining a lot of benefits from the government( Winterhalter, Weiblen
and Gassmann, 2017).
Monopoly- Tesla started to target that is at very niche segment that is alternate energy and
electric cars. The strategy was to move deeper within the current segment. So the firm
operates within monopoly market.
Great leadership as well as team spirit- Elon Musk ,the CEO of the firm operates is extremely
passionate about engineering as well as astute salesman. This form them evenly proficient within
Commercial side and engineering of the business. Elon's musk leadership style is inspiring and
motivating accompanied by the highly self driven team is consider as the highly spirited as
well as ablaze regrading the reason as their leader.
Tesla can create their own distribution channel as they are well-known aware regarding the
critical distribution channel. Capacity expansion plan regarding Tesla has been triggered
through Giga factory.
Weakness
Poor awareness regarding consumers- Firm makes very specialized product that are considered
as crucial for the environment as due the sustainability angel. Apart for this at the same time this
is known as more futuristic and various consumers are not sure regarding invest within this kind
of technologies which are simultaneously expensive as well(Bashir and Verma, 2017).

Capacity issues- cars can be manufactures within the of plant of the Tesco ,as the plant has an
ability of around 500,00 vehicles as well as maximum production of the firm is considered to
be limited that makes challenging for the firm to target the higher production.
Poor liquidity- Within comparison to the competitors such as General motors and Ford or fiat
that becomes the cash rich from the past years regarding operations.
Opportunities
This aspect regarding swot analysis is highlighted on the various external factor that present
potential development and growth for the firm. There are various external factors regarding the
opportunities that can be utilized through Tesla to enhance its business performance such as
strategic growth, management effectiveness as well as strategic growth among various other
aspects. Such as the firm can expand within global automobile markets. Also, vehicle
technology is taken the new steps such as Hybrid vehicles, electric cars ,green cars self driven
cars as well as operated cars. Within the emerging technologies, Tesla has researched as well as
launched various products that impact on the market in positive terms.
Threats
Threats are considered as those factors that can be detrimental for the growth of the firm in
terms of business. Mention below some threats.
Automobile firms are competed against one another. As these types of the factors able to
threaten Tesla about the existing efforts of the various firms within production of the electric
vehicles. Fluctuation came within the material prices are considered as the another threat that
can be described within the swot analysis. The enhanced cost of the lithium is considered as the
product used within storage product of the firm. It also faces the dealership regulation's threat. At
present firm also sells its services and products to the consumers without the involvement of the
dealership that enhances the selling price. Although some states such as Texas and Virginia
disallow direct sales that can be done by the dealership. Depends on this factor of the swot
analysis, Tesla can maintain the benefit to stay profitable as per the competition from various
large automotive organizations(Prajogo, 2016).
VRIO Of TESLA
Value

The consumers of the Tesla can be experiences as well as boosts leaning about the brand called
Tesla as the firm has the co-efficient production process. The external environment of
the firm assist the firm to neutralizes the threats.
Rarity
Tesco is producing the products that are extremely rare and cannot utilizes the dealership from
the outside of the firm.
Imitability
This is considered as the costly factor as it can be done to avoid the duplicate factor of the goods
and services provided by the Tesla Motors. This factor can be imitated but at the same time it can
take very large amount of money and time. Only high cost of the competition network can be
made.
Organization
Tesla vehicles are the only one using the charging networks. The firm uses the environment that
is considered to be low pressured ,used currently to educate costumers as well as gives an
opportunity to the public so that they can get to know more about the firm. Here the data can be
currently collected and also uses so that the advance kind of auto pilot features cars can be
produced within the firm. The firm resources were exploited within the existing process of the
production( Alvarez, Machado and Diza, 2019).
Porter's value chain analysis
Inbound logistics
It involves the storage raw materials for the manufacturing of the vehicles such as energy
storage system, solar panels and electric vehicles for Tesla. Copper, steel, lithium, cobalt,
aluminum and nickel are the scare resources.
Operations
The Tesla can be operated in energy generation and storage sector that can be considered as the
two major factors. It can be made regarding the sales of the electric vehicles ,development of the
manufacturing and design. The firms can produces various models regarding the electric cars
within the year 2017.
Outbound Logistics
The warehouse activities and distribution regarding the electric vehicles ,storage system and
solar panels produced by the firm. Direct sales can be made by the firm for the consumers.

Outbound logistics of the Tesla has two reasons. First was direct sales of the cars that able to
low the cost of the cars for the future sales and second was there is a high demand of the electric
cars.
Marketing and sales
The strategy called '' word of mouth '' can be adopted by the Tesla motors to expand their
business. As firm believes that this strategy can attracts more consumers to the Tesla rather than
digital marketing of the goods of the firm. The firms can also makes themselves to be engaged
regarding sales of the used cars of other brands and their own brand. Firm was making changes
within the used cars, and then they were selling them under their brand name.
Services
The firm has a separate department for the services of the customer services. This is a sector that
can provide the consumers with all the solutions regarding their issues. It is found the consumers
services of the firm was very bad. The costumers have to wait for many days regarding repairing
the services that they had complaint( Hughes, Cox and Akhir, 2016).
Lo3 Porter five forces
Porter five forces were developed within 1979 through Michael E Porter. It is based on a
approach regarding assessing and analysis the strength as well as position of the business
organization. As per this theory it is rely on the five forces that describes the attractiveness and
competitive intensity regarding market. These forces recognize that where the power lies within
a business situation. It can be considered useful for the strength of a firm 's current competitive
position as well as strength regarding the position of the firm. at the same time recognize
strength as well as weakness that can be exploited to strengthen that specified role or position.
These forces also understand the new products as well as services are profitable or not. Through
understanding about where the power lies as per the theory to can used to recognize the areas of
the strength, to enhance the weakness and also avoids the mistakes.
Mention below porter five forces
Threats of the New entrants
As per this force it can describe that how easy or not it to take the entry within a specified
market. If an industry is considered to be profitable and also there are new barriers to enter. Here
when more firms compete regarding same types of markets share than the profit start to be fall. It
is crucial for the current firm to create new barriers. Threats regrading new barriers is high

as when there is a requirement of the low amount of the capital to take entry within a market.
Current firms to do little retaliate.
Regulation regarding government is none
Switching cost of the consumer is low.
Low costumer loyalty
Economies regarding scale is easily achievable.
Bargaining power of the suppliers
It enables suppliers to sell the low quality materials or higher priced raw materials to their
buyers. It also impacts the profit of the buying firm as they have to pay more regarding materials.
Suppliers have the strong bargaining power when.
Availability of fewer suppliers as compare to the many buyers(Iamratanakul, 2018).
Fewer substitutes of raw material exist.
Scarce resources can be hold through suppliers.
Cost especially in terms of switching raw materials is high.
Larger number of the suppliers as well as threaten to the forward integrate.
Bargaining power regarding buyers
They have the powers to demand higher quality goods or lower prices from the producer of the
industry as when the bargaining power is considered to be very strong. The lower prices
consider the lower revenues regarding producer. While at the same time quality goods raise the
cost of the production. By comparing both the scenarios outcomes within lower profits for the
producers. Strong bargaining power exerted by the buyers when
Various substitutes
Buyers are considered as the price sensitive
Goods can be-buy within huge quantities or also control various access to the final consumers.
Existence of the few buyers.
Bargaining power of the Suppliers- The next step to address is that how well suppliers can
drive up the cost regarding inputs. It can be impacted by the number of suppliers such as they
inputs of services or goods as well as how unique these types of the inputs are and also how
cost will take a firm to switch within the another suppliers. As a result more numbers of the firms
depends on the few numbers of the suppliers. As an outcome the suppliers have more power as
well as drive up cost of inputs as well as push for the other advantages within trade. On the other

hand various suppliers of a firm like Tesco and at the same time push regarding the other
benefits within Trade.
Power regarding costumers
The capacity of the customers to drive the prices is one of the five forces as it can be impacted by
the many buyers or consumers are how significant for the firm as well as how could cost a
firm . It will also focus on the firm to identify the new consumers or new market that has more
power client base. Here the small client base means that each and every consumer has power so
that they can negotiate regarding lower prices and at the same time to get the better deals. A firm
like Tesla has various smaller as well as independent consumers have than an easier time to
charge high prices to enhance the profitability(Hernández-Perlines and et.al., 2016).
Threats of substitutes
It is considered as the last of the five forces on the alternative or substitutes. As alternative
products or services that utilized by the firm's products that can be treated as a threat. Firms such
as Tesla produces services or goods that will no have the close alternate so that the power of the
goods can be enhanced within the favorable terms. When the customers have the close
alternative choices' (available) than they pick up the goofs that is cost friendly and have the good
quality of the product ,this can weakened the power of the firm.
Lo4 Apply model as well as theories to understands the strategic directions available within the
firm
Strategies
The strategies followed by the company was
the Ansoff's Matrix. The ansoff's matrix had 4
strategies used by the Tesla and they were as
follows:
 Market Penetration
This strategy is basically used to increase sales
of existing products and services. In order to
increase sales of the car, Tesla will be engaged
in bringing new innovation in the existing
models of car sold by them( Goode and

Negoro, 2018).
 Product Development
This includes bringing some new idea and
innovation in existing product and service so
that they can also grab new market areas. They
are trying to bring innovation in model x and
model S sold by them. This can support in
increasing market share of firm.
 Market Development
In this Tesla will be involved in in searching
new market for existing products and services.
They try to establish their company in new
market area.
 Diversification
In this Tesla will be involved in developing
new product for new market. They will be
involved in bringing alternate fuel vehicles for
new market.
Strategies
It is used to design the long term strategic
planning to assist the growth of the business.
There are four factors in this
Dogs- These are the products with low market
Share.

Problem child- They have the high growth
with share of low market.
Stars- Products that have the high growth as
well as with the high market share.
STactics The Tesla can follow the 4P'S tactics regarding
marketing mix
Product- It involves the batteries, electric
vehicles trains, energy storage automobiles as
well as solar panels.
Place- The target place of the Tesla is official
websites, charging station, firm owned station
and stores and galleries.
Promotion – It can be done by the social media
platform such as Facebook, twitter and
YouTube and sales promotions and direct
marketing.
Price
Pricing strategy can be used by the Tesla is a
market oriented pricing and premium pricing.
Evaluation Tesla motors uses the strategy called
development strategies as it is incensed the
performance of both the existing product and

offered their new vehicles regarding the
current marketing which is innovative vehicles
as it improves branding as well as reputation
of the firm within the international marketing(
Anwar, Shah and Hasnu, 2016).
CONCLUSION
From the above study it had been concluded that Tesla's motors vision creates the cars
that are more compelling accelerate the world's change to do best though taking the
environmental consciousness, Pestle analysis assist the firm to realize about the opportunities
Political factors such as electric vehicles as it does not require an abundance fuel and in
economic factors it can plays a crucial role enhanced globally economic activity ,sales regarding
the SUVs Social factors where vehicles that is Eco friendly as electric fuel as compare to the
traditional cars and various technological factors are used. It also focuses on the Swot analysis
where strength and weakness is described such as Tesla provides electrical vehicles. It also
focuses on the Porter's value chain analysis such as Inbound logistics, Operations, Outbound
Logistics ,Marketing and sales and Porter five forces such as Bargaining power of the Suppliers
and Threats of substitutes and many more.

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