BSS050-6 Strategic Management: Analyzing Tesla with Strategic Tools

This report provides a comprehensive strategic analysis of Tesla, a leading automotive and energy company, using various strategic management tools. It begins with a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting Tesla's operations. A SWOT framework identifies Tesla's internal strengths and weaknesses, as well as external opportunities and threats. Porter's Five Forces model assesses the competitive intensity within the automotive industry, considering the threat of new entrants, bargaining power of suppliers and buyers, the threat of substitutes, and rivalry among existing competitors. The report also incorporates a VRIO model to evaluate Tesla's resources and capabilities, a resource-based view strategy, and a value chain model to understand the company's activities and value creation process. The analysis aims to provide a holistic view of Tesla's strategic position and inform future strategic decisions.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION................................................................................................................................3
MAIN BODY.......................................................................................................................................3
Collect information about the company and the industry in which the company evolves.
Construct strategic tools that will lead to the analysis performed in your individual report. ........3
PESTLE ANALYSIS ON TESLA..............................................................................................3
SWOT FRAMEWORK..............................................................................................................4
PORTER 5 FORCES..................................................................................................................5
VRIO MODEL............................................................................................................................6
RESOURCE-BASED VIEW STRATEGY.................................................................................7
VALUE CHAIN MODEL...........................................................................................................7
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8

INTRODUCTION
Strategic management is one of the important method which is being practising by various
business firm in order to attain success in their respective sector. Their are various strategies which
an organisation can adopt for enhancing their working condition. Furthermore, in this report the
chosen organisation is Tesla which is one of the most leading car manufacturing brand present in the
whole world. This company is established by Elon Musk and he is the richest person of the world.
The cars produce by company Tesla has unique features such as auto driving mode, electric cars
which makes their cars different and unique as compare to other brands. Pestle and Swot model are
some kind of analysis which is done by company to identify their internal and external factor which
can effect the business operations. The factors present in this model helps the company to positively
deals with the negative issues which may arise in the organisation. Later on many tools and
strategies will be described in this report in context to Tesla (Barbosa, Castañeda-Ayarza and
Ferreira,2020).
MAIN BODY
Collect information about the company and the industry in which the company evolves.
Construct strategic tools that will lead to the analysis performed in your individual
report.
Tesla is an American auto-mobile and energy protect organisation based in Texas, America.
Tesla has the speciality in designing one of the most innovative and upgraded car which they serves
to the people present in the whole world. The company also design trucks which have the capacity
to run on electric batteries. They deals in various house hold products such as solar panels, solar
roof tiles with the motive of protecting the earth environment. Tesla is one of the most valuable
company across the globe which have the market capital of more than 1 trillion dollar. The
institution Tesla, is one of the leading company present in their respective industry and they have
captured almost 23% of market share regarding the electric battery field in the whole world. They
are one of the largest supplier of product in which energy is generated by battery throughout the
world. The management of Tesla is focusing on developing a very unique car which can fly in the
air , if they are being successful in this innovation then it will definitely change the auto-mobile
industry (Daidj,2018).

PESTLE ANALYSIS ON TESLA
The PESTLE framework is a plan of action used by commercial enterprises to have a finer
knowledge of their external market and business environment which can positively or negatively
effects their business functionality. In the case of Tesla, the PESTLE analysis is discussed further
down.
 Political factors: This aspect has to deal with tariff rates, tax policies, and the stability of
the central government. In context to Tesla, they enjoys full government support due to its
rich historical values and fair trade practises. If the government hikes taxes, the price of
products offers by Tesla will climb even more, resulting in lower sales for the corporation.
Tesla will attain more profit from doing business in the UK since it is politically stable and
offers lower tax rates for businesses (Fitriyah, 2019).
 Economic factors: The UK's growth rate, GDP, interest rate, inflation rate, and people's
purchasing power are various kind of elements includes in this factor. The UK has a high
growth rate, and people have disposable income, allowing them to purchase the Tesla
product and services. The organisation of Tesla could be harmed by the emerging rising
prices as a outcome of the Great Recession of 2018 which arises in the nation United
kingdom.
 Social factors: People's attitudes, opinions, beliefs, and attitudes are multiple types of
elements present in this factor. Thus, all of the previous elements can be affected by various
social aspects. The thought process of population is living in United kingdom is very
modern and progressive. The peoples of UK are very open minded. They like to use fresh
and advanced technologies. In context to Tesla, their sales and profits will enhance if they
provide high quality and valuable product or services to their potential and new customers.
 Technological factors: People living the nation United Kingdom have the high usage of
internet and digital media in their daily lives, due to this is becomes a technologically
advanced country. Tesla is working on a new Technologies Operating Model that will help
the company leverage new technology and adopt industry agile techniques. To maintain
client interest in Tesla products, the corporation must modernise its technology, machinery,
and distribution systems in accordance with market demand. The technical supply base of
Tesla is very simple and consolidated which can easily operate by their customers.
 Legal factors: All legislative rules and regulations imposed by the UK government to
protect the welfare of customers and employees of firms, and vice versa, are included in this
macro factor. So that in case of Tesla, the organisation does not face significant penalties for

disobeying the law, the company's manager must follow all legal procedures. Thy should
follow all the rules and regulation made by the government of UK which can lead them to
run their business operation very fluently and effectively. The firm Tesla has faced various
issues because of the negative comments made by their owner which in result reduce their
brand image (Fuertes and et, al., 2020).
 Environmental factors: These aspects are linked to environmental and ecological
protection from harmful corporate activity. Following environmental standards can help
Tesla to retain a positive image in its markets. As a result, the firm's sales and profits will be
improved as compare to previous year. Concerns about current climate conditions are
frequently propagated on television, in magazines, and in newspapers. The organisation of
Tesla has created their own Green Policy, which they have called "Plan A." The main of the
company is to produce those kind of products which has a very less harmful impact on the
environment as compare to other companies. They always focus on the green environment
product and services with a motive of safeguard the nature.
SWOT FRAMEWORK
SWOT analysis is a strategic tool and method that helps an organisation to identify
their internal strength and weaknesses which have the impact on their business operations.
Various external factor that includes opportunities and strengths which is also been examine
by this strategic plan. After, doing the swot analysis they can make a significant change in
their business which assist them to enhance their overall business operations. In context to
Tesla, the Swot analysis is been performed below:-
Strength
 Well- experienced- Tesla has been in operation for more than 11 years. The name of
company is a tribute to one of the greatest inventor and electrical engineer Mr. Nikola Tesla.
In the United Kingdom, it is a significant car and electric vehicle retailer as compare to other
auto mobile company. The organisation has created a number of key partnerships around the
world over the years. A plenty of experience in the green cars industry is really
advantageous for the organisation. Hence, they have the complete knowledge of their
customer because they conduct proper research of the market where they want to serve their
product and services (Ioannis and Belias,2020).
 Multinational company: - Tesla operates their business operations with help of both kind of
platforms that includes physical as well as online stores throughout Europe, Asia, and the
Middle East. The company has 655 outlets worldwide, and various galleries for their
products across the globe. Hence, both online sites and physical stores have supported the

company's to expand their business functions globally.
Weakness-
Declining sales- Several Tesla stores had experienced a drop in sales at the end of 2019. A
faulty supply chain system and a lack of product availability are major reason behind this
issue. The similar problem occurred during the 2017 Christmas season, when the company
was unable to meet the required demand for food and apparel supplies. In the result of these
2 issues the brand image of company has been effected badly.
 Perception of public- Tesla has created a thought process in the mind of their customers
that states that they will not produce the product such as bicycles and auto-mobile toys for
children . Many people feel that the company caters primarily to the elderly. Despite the fact
that this belief is erroneous, it has cost the organisation a significant amount of money. The
management of Tesla are attempting to make green products of the children's as well
(Keding, 2021).
Opportunities
 Global expansion- Tesla is a American auto-mobile retailer that has stores in Russia,
Brazil, Poland, and various countries of the world. Now is the moment for the corporation to
expand into those countries that have yet to be conquered. It means that the brand must
expand its presence in the remaining nations by opening new locations.
 Online store- Tesla also has an online store. The company's position in the e-commerce
sector is low as compare to the other large online retail e-commerce giants like Amazon or
eBay, however, the company falls behind. Tesla, on the other hand, is well behind its rivals.
Tesla has lately announced that its cars and trucks product lines would be available online.
Despite the fact that the company is well-established, has extensive experience, and a strong
brand identification. E commerce shopping is the way of the future for purchasing because
people are becoming busier and prefer to avoid public and crowded places.
Threats
 High competition- In the United Kingdom and around the world, the automobile sector is
getting increasingly competitive. The main competitors of Tesla are BMW, Audi, Rolls-
Royce, Ferrari, Mercedes, Porsche and many other luxurious car brands. . Because the
competition is so severe, the company will progressively fade away from the market if it
does not change its strategy. The scale company's position in the global market is falling if
the brand graph is going downhill. Tesla has been started to closing their offline outlets

because of the strict rules and regulations generated by the government of that specific
countries (Kombate, Emmanuel and Richard, 2021).
PORTER 5 FORCES
Porter's five forces is a strategy concept that considers future outcomes rather than just
current competition when making strategic decisions. This framework has five aspects, which are
discussed below in relation to Tesla:-
 Threat of new entrants- Because Tesla is a well-known firm with a global presence, the
threat of new entrants is restricted. As a result, newcomers to the market are unable to
compete with Tesla in terms of customer base, market share, and the ability to provide
clients with standardized items.
 Bargaining power of suppliers: The auto-mobile industry includes a large number of
reputated firms, particularly in the cars and trucks industry. As a result, suppliers have a
significant amount of bargaining power. If competitors pay their suppliers well, they may
not be able to supply Tesla with all of the essential supplies and resources, resulting in a
drop in profitability and sales..
 Bargaining power of buyers: Buyers may switch their orientation of things offered by
competitors if a organisation charges extravagant prices to its customers without providing a
satisfactory product. Due to the high degree of competition in the auto-mobile sector market,
Tesla has important buyer negotiating leverage.
 Threat of substitutes: As a result, in the case of Tesla, the risk of exchanging items is
minimised. Customers will be unwilling to purchase the firm's offerings if the things on
offer are of poor quality. Cars and bikes are those kind of products that the customers are not
generally change or substitute.
 Rivalry among existing competitors: In context to Tesla, these competitors pose a
significant danger. Many auto-mobile companies such as Audi, BMW which conduct their
business operations in United Kingdom as well as across the globe.. This is because all of
these companies price their products to be competitive, therefore a small increase in price of
product offer by them lead to the other companies to expand their customer base.
VRIO MODEL

Value, rarity, limitability, and organisation are all abbreviations for VRIO. It is used as a strategic
tool by businesses to identify their available resources and internal capabilities. They will be able to
obtain a major competitive advantage over their competitors as a result of this. The VRIO analysis
is detailed in regard to Tesla is mentioned further down..:
 Valuable: A corporation can make a lot of money if it has valuable resources In order to
deliver intense competition to rivals in a timely manner, the managers and leaders of Tesla
must be able to properly utilise their valuable resources.. Tesla core resources include
employees, distribution, supply chain management and many other elements. Whether or
not limited resources present in the management of Tesla are very beneficial for them
because by this they can enhance their overall business operations. knowledge in finance,
personnel, operations management, and marketing are some kind of valuable resources
which should be present in an organisation (Pogodina, Muzhzhavleva and Udaltsova,2020).
 Rareness: This characteristic assists a business in determining whether or not the product it
prepares is unusual. Tesla's unique items will help them build customer loyalty, resulting in
considerable sales and revenue improvements. Tesla believes in providing clients with
unique and imaginative things because of the company's rarity..
 Imitable: Tesla is required to create products that are not easily duplicated by competitors.
If Tesla's items are replicated, competitors can sell them for less money, and customers will
be less likely to buy them.
 Organisation: The ability of VRIO to compete in the market while making efficient use of
its valuable resources, which are difficult to duplicate, is the focus of this portion of the
VRIO report. The costs of a corporation will rise if its resources and materials are not used
in a methodical manner. As a result of the corporation's judgements about the evolution of
its strategic capitals, the firm's capabilities are polished through time. It's vital for companies
like Tesla to make the best use of their existing resources.. As a result, the company's
revenues will drop, making it more difficult to compete with competitors.
RESOURCE-BASED VIEW STRATEGY
The resource-based view [RBV] is a strategic management tool and framework that
companies and organizations use to identify and utilize strategic resources in order to create a long-
term competitive advantage. All organizations and businesses, according to the RBV, have access

to, possess, and control resources that allow them to build a competitive advantage. In context to
Tesla, they can find a specific positive point present in their organisation with the help of this
method which will make them able to make a competitive advantage as compare with the other
competitors. If they properly examine this method then they can easily build a strong market
position in their respective market field. 2 types of resources are include in this method such as
tangible and intangible. Machinery, employees are some kind of tangible resources where as brand
reputation, trademark are some intangible resources (Rascão, 2020).
VALUE CHAIN MODEL
The value chain analysis forces strategists to think about organisational operations in a new way.
The key activities associated with the creation or delivery of a service or product are inbound
logistics, operations, outbound logistics, marketing, sales, and services.
Inbound logistics-
The processes of receiving, storing, and distributing the inputs that go into the creation of
products and services are referred to as inbound logistics.
Operations
To boost supply chain management, Tesla is investing in IT system changes. There was also
an issue that resulted in the release of 800 online customers' personal information, and in regarding
this the management of Tesla said that no financial information was disclosed.
Outbound logistics
Outbound logistics includes the collection, storage, and delivery of items and services to
customers. In addition to in-store purchases, M&S offers cars,and other electrical vehicles to their
customers.
Marketing and sales
Marketing and sales work together to increase customer awareness of the product and
persuade them to purchase it. In context to Tesla, they have adopted various marketing techniques in
order to capture the new market base.
Services
The service component includes all procedures that increase or preserve the value of a
product. In context to Tesla, they is also planning to expand their business by providing the services
of space rockets and aircraft's (Wehde, 2018).
CONCLUSION
From the above report it has been concluded that, an organization should always adopt some

business strategies that can help them to successfully run their business. Complete swot and pestle
analysis of Tesla is been included in this report. These strategies can help them to improve their
business profitability and sales. Later on, porters five forces and value chain model regarding Tesla
is been explained in this report. By using this different theories and framework the management of
Tesla can implement right strategic planning for themselves.
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