Influence of Macro and Micro Environment on Tesla

Unit 32 Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Influence of macro environment on Tesla .................................................................................3
LO2..................................................................................................................................................5
Influence of micro environment on Tesla ..................................................................................5
LO3..................................................................................................................................................8
Porter's five force model ............................................................................................................8
LO4................................................................................................................................................10
Evaluation of different strategic directions .............................................................................10
Recommendation ......................................................................................................................11
Strategic management plan ......................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy refers to the term that defines setting objectives and goals for the
company for taking decision in the organization (Johnson, 2016). There are three different
strategies such as leadership, differentiation and focus that will be used for enhancing business.
Present study will be based on Tesla company. It is an American automative and energy
company that specializes in electric car manufacturing.
Report mainly emphasized on different frameworks that is having an impact on macro
environment as well as micro environment of the organization. It includes porter's five force
model that help in evaluating competitive forces for an organization. Furthermore, it includes
theories, concepts and models that help in interpreting strategic planning in an organization and
also emphasized on strategic management plan that provide tangible and tactical priorities and
objectives.
LO1
Influence of macro environment on Tesla

Macro environment are the external factors that are uncontrollable and having greater
influence on business decision making that also affects performance and strategies. It includes
following factors such as political, economical, social, technological, legal and environmental
factors.
Political factors
Tesla is dealing in automobile sector that may have influence of government taxes and
that affect performance of it in the future. Changing in tax rates affect functioning of Tesla as
selling its automobile into the global market. As Tesla is providing both gas and electric vehicles
to consumers that influence various perspective of company. Policies that will be implemented
by government limit trade and performance of company's revenue of Tesla. In some countries it
is banned to drive automobile that emit gas so it becomes difficult for Tesla to sale its product
into the market (Akter and et. al., 2016). Political instability providing bigger impact on
business operations as create more competition in the future. Due to penetration in the market
that affect sale of automobile in other countries. Further, trade barriers in countries such as India
will impact the auto mobile companies. It include barriers such as impact of Brexit, license on
imports, Testing, anti dumping measures etc.
Economic factors
This include economic condition that includes market growth, change in currency rates
and other variables that impact on automotive business. Decreasing cost of battery is useful for
Tesla as manufacturing car that provide effective use of products into the car and provide low
cost product into the market. Through this performance of company increases and enhance
business operations. Economic stability is the biggest threat for Tesla as changing in currency
rates influence import and export of business from other countries. This will have impact on
financial performance as currency cannot be exchanged so provide slow growth for business. It
is providing consumers luxury vehicle by using the latest technology. This is beneficial for
middle class people in the country. There are various economic factors that impact the strategies
of Tesla such as gross domestic product, rate of unemployment, rate of inflation etc. in the
country etc.