BUSI-1271 Global Strategy: Tesla's Market Analysis and Reflection

This report provides a detailed analysis of Tesla's global strategy, examining the factors influencing its business development through frameworks like PESTEL, Porter's five forces, and SWOT. It delves into Tesla's differentiation focus strategy, highlighting its emphasis on environmental problem-solving through electric vehicle technology. The report includes a macro-environmental analysis, an industrial environmental analysis, and an assessment of Tesla's internal resources and competencies. A value chain analysis and SWOT analysis are presented to evaluate the viability of Tesla's strategy. The report concludes with a personal reflection using the Gibbs model, sharing insights gained from the experience and emphasizing the importance of teamwork and critical thinking in understanding business strategies and market dynamics.

Name - Harsh Kumar
Student id- 001303878
 Introduction
This report will provide a high-level summary of Tesla's strategy for dealing with the market.
The factors that influence the development of the business will be examined. In this process,
2023
BUSI-1271Global Strategy: Analysis and practice
Individual reflection report

PESTEL, Porter's five forces, and SWOT analysis will be used. In addition, a value chain
analysis and Tesla's available resources will be presented. After gathering this information, the
viability of the strategy chosen will be assessed. Finally, I will employ the Gibbs model to reflect
on my experience and share what I have learned.
 Tesla strategy
Based on Porter’s generic strategy, cost leadership, cost focus, differentiation focus, and
differentiation leadership (Tanwar, 2013). Tesla's business strategy may be categorized as a
differentiation focus caused by its emphasis in solving environmental problems by developing
electric vehicle technology that does not produce greenhouse gases. Since 2003, they have been
investing heavily in R&D to bring their vision of an electrified, eco-friendly future to life
(Grimpe et al., 2017). Customers were given the impression that vehicular pollution is inevitable
and would kill everyone. As a result, buyers' perceptions were skewed in favor of the Tesla way
of thinking. They were a breakthrough invention that altered people's perspectives on
sustainability throughout the globe. Sustainability is a forward-looking, never-ending notion that
should be prioritized (Wesseling et al., 2015).
 Macro-environmental Analysis
The demographic, social, economic, technical, legal, and political aspects that are outside the
control of any one firm are what make up the macro-environment. These are not beyond our
control; therefore, we must learn to live with them.
PESTLE
Table 1: Tesla's PESTLE Analysis
Political Regulation on Emission and Safety
Standards, Energy Policy and Conservation Acts.
Economic In the next years, electric automobiles will be the primary source of
income for car manufacturers (Patyal et al., 2021).
Funding for eco-friendly vehicle advances has increased thanks to EV.
Social The widespread use of electric cars signified a new standard of life and
set a trend among young people.
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Comparison of a High-End and Low-Cost Car
Technological Tesla employs the cutting edge of power train technology, namely the
level 4 CAV (Connected Anthony vehicles) system. Automotive uses of
ethanol and biodiesel as alternative fuels (Costa et al., 2021)
Legal The right to a patent on an international scale is retained.
Limits placed on daily energy use.
Rules governing the selling of supplies must be upheld.
Environmenta
l
Environmental concerns are a typical basis for regulating the sale of
products by dealers (Patil, 2020).
 Industrial environmental Analysis
According to Porter (1979), the level of competition may be measured using five forces. Those
forces are shown in Fig. 1:
Figure 1: Porter's Five Forces
Table 2: Tesla's Porter's five forces
Bargaining power of buyers:
Low
The pricing has already been determined after careful evaluation
of all relevant aspects.
Bargaining power of Vital components like Engine, Transmission produced inhouse
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suppliers: Low Multiple suppliers
The majority are produced by Tesla, while the remainder are
purchased in bulk at affordable costs (Hutchinson et al., 2019).
Threat of new entry: High The rising popularity of electric cars may be attributed to the
scarcity of fossil fuels and the introduction of zero emission
regulations at the state and municipal levels.
Threat of substitute: Low When compared to other electric cars, the battery range is
superior (Naor et al., 2021).
Intense rivalry: Moderate Numerous well-known brands such as Volkswagen, BMW,
Mercedes-Benz, Audi, etc.
 Micro Environmental Analysis
Internal resources and competencies
Tesla spent much on innovation-related research and planning to ensure that their products would
be available in sufficient quantities. Table 3 shows Tesla's unique and necessary resources.
Threshold resources Distinctive resources
Around 100,000 people are employed here
(Mangram, 2012). There are 655 art galleries
and specialty shops in the retail industry.
Their patented battery technology is
employed in their own line of automobiles.
Six large factories are now in use, while a
further eight are currently under construction.
The firm has never had more positive
publicity.
62.1 billion in assets and $1 trillion in revenue
(Putranti, 2022)
Excellent recent R&D efforts by the firm.
Tesla’s Competencies
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Figure 2: Tesla's Core competencies
Value chain analysis of Tesla
Value Chain Analysis may be used to think about the strategies used and the competitive
advantage. Figure 3 below depicts the Value Stream Mapping.
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Tesla excels in developing novel production methods that are environmentally
friendly and have a long battery life thanks to the incorporation of solar power
into their vehicles' design. The development and implementation of fail-safes for
battery packs.
The primary strength of Tesla is the creation of a fully autonomous, networked
automobile. The company's success is based on its innovative power train
technology. Solar power is the most eco-friendly option, and they are keeping it
that way
Expertise in research and development

Figure 3: Value chain analysis of Tesla
Swot Analysis of Tesla
To develop the most effective plans and to use strategic management methods, it is necessary to
conduct an in-depth analysis of the many facets of a firm. The company's strengths, weaknesses,
opportunities, and threats (SWOT) may be evaluated in relation to its surrounding environment.
In the following table, we can see Tesla's SWOT analysis:
Table 3: SWOT Analysis of Tesla
Strengths Weaknesses
Strong brand name:
The company is known for its innovation,
cutting-edge technology, and commitment to
sustainability, which gives it a competitive
advantage in the market (Han, 2021).
Limited presence:
Despite its efforts to grow internationally,
Tesla's presence is limited inside the already
crowded and more competitive luxury
automotive industry.
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Product Line:
Tesla offers a diverse product line, including
electric cars (Model S, Model 3, Model X,
Model Y), energy storage systems
(Powerwall, Powerpack), and solar energy
products (Solar Roof, Solar Panels)
(Mangram, 2012).
Strong Sales and Delivery Channels:
Tesla utilizes a direct to-consumer sales
model, bypassing traditional dealership
networks. This approach enables the company
to maintain better control over pricing,
customer experience, and brand consistency
Premium product range:
Tesla is a well-known luxury renewable
energy brand, and their products reflect that.
Cost and lack of customer confidence in
electric cars are two potential obstacles.
Succession strategy:
Elon Musk is already universally recognized
as Tesla's face and CEO; therefore, the
company needs a plan for when he eventually
steps down. Despite the fact that Elon Musk
has a full schedule.
Opportunities Threats
Autopilot and full-self-driving capability
Autopilot is a set of driver assistance systems
that are either included in the price of a new
Tesla or may be bought separately to upgrade
the vehicle and make driving easier and safer
(Nordhoff et al., 2023). To help customers
arrive to the destination faster, Autopilot's
navigation feature will propose and make lane
changes, handle highway interchanges, and
take exits on customer’s behalf.
This feature brings innovation to the company
product line.
Expanding into untapped markets:
Despite a meteoric surge in sales, electric cars
are still much outnumbered by those powered
by fossil fuels in many areas of the globe.
Increased Competition from Other Top
Automakers
Tesla wasn't the first to invest in electric
vehicles. Still, it's the first to get public
notice. Tesla's unique brand position and
technical advantages over other electric car
manufacturers have helped it outsell its
nearest rivals for years.
Ford, Chevrolet, Hyundai, and Kia have
entered the market, eroding Tesla's market
share. The corporation still outsells other
electric car makers. Still, it's unclear how long
it can keep this edge in the face of expanding
competition, consumer unhappiness, and
cheaper alternatives.
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New electric car sales in the United States are
shockingly modest compared to Europe and
China, where seals have been the primary
drivers of this development.
By extensively advertising the sale of electric
automobiles in the United States and other
places like Asia and Africa, the corporation
may considerably increase its client base.
In-house battery production:
Tesla automobiles, as with many other things,
are not created from scratch in the warehouse,
contrary to popular belief. Many essential
parts used in Tesla devices are manufactured
by third-party tech businesses. One of the
most important parts of any Tesla product is
the battery, and this is included.
The firm has a history of supply chain
interruptions and delays, and by outsourcing
key parts of the process, they are increasing
their exposure to these risks. Therefore, Tesla
will have more command over the critical
aspects of production if they bring batter
manufacture in-house.
Keeping Its Spotless Record as the
Inventions Champion:
Tesla has a long history of pioneering
technological advancements. Its reputation as
the leader in its industry is a key part of its
brand's appeal. Because of this, the firm's
leadership, financial resources, and wide pool
of skilled employees must all continue
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working hard to guarantee the company
maintains its current position.
Advocating for a Change to Renewable
Energy:
In an attempt to reduce their impact on the
environment, a growing number of well-
known corporations are changing how they
operate. It is well knowledge that Tesla, a
radio manufacturer, supports this movement.
However, there is room for improvement in
how it promotes a greener future by
capitalizing on its strong brand identity and
USP.
 Appropriateness of strategy
Differentiation is the cornerstone of Tesla's approach to the marketplace. By creating items that
set it apart from other automakers, this generic approach gains a competitive edge. While many
rival vehicles still rely on outdated internal combustion engines, Tesla's products stand out
because to their innovative integration of cutting-edge environmentally friendly technologies.
This generic competitive approach appeals to a wide range of consumers at the same time as
satisfying the growing need for environmentally friendly goods. For a while, Tesla's basic
approach for competitive advantage was a focus on differentiating the company from the
competition. In its use of the differentiation focus approach, the business zeroed in on early
adopters in the luxury segment of the electric car industry. Early adopters are wealthy consumers
who have a propensity to buy innovative things. However, as Tesla's brand recognition has
grown and manufacturing costs have decreased, the business has switched its generic approach to
one of wide differentiation. Due to the decreasing manufacturing costs and rising brand appeal,
the corporation may now target a wider segment of the vehicle industry.
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 Individual reflection
Gibb’s Reflective cycle consists of six parts, the completion of which strengthens the subsequent
steps (Adeani et al., 2020). Using this framework, a clinician may build on their prior knowledge
and experience to achieve greater clinical proficiency.
Table 4: Application of Gibbs reflective model in my learning
Description In groups, we were tasked with examining the market strategy and plans of a
firm of our choosing to determine how well they met the challenges posed by
the company's rivals.
Feelings I am grateful that I had the opportunity to organize a group and collaborate. to
encourage others and develop together. I had the confidence to give it my all.
Evaluation There was harmony in the completion of all chores, and everyone did their
absolute best.
Analysis We analyzed Tesla's major strategy for staying in business, expanding the
company's customer base, and making its cars eco-friendlier.
Conclusion This community helped me recognize my abilities and conquer my limitations.
I am eager to get started with them as a team.
Action plan From the company's inception through its launch into the marketplace, we
aimed to provide careful attention to every detail.
Learning experience with group
When working on a collaborative project, nothing beats the welcoming atmosphere in my
group. They pushed me to study and instructed me in critical thinking skills. I like their
respectful attitude toward one another. Everyone in my group has learned to appreciate
and support one another. Working with my colleagues is rewarding, and I'm glad I have
the opportunity to do so.
Topic Preferred Most & Increased Group Learning
I learned from our group discussion that every business needs its own unique approach,
since what works for one firm may not for another. After participating in the group's
efforts, I feel more prepared to operate in a team and have a better grasp of SWOT and
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PESTAL analysis. The way businesses operate and the elements we need to take into
account have opened my eyes to the potential dangers and rewards of the business world.
Topic would like to learn more about:
One of the things I want to learn is how to do a macroenvironmental study. I am
interested in learning more about the variables that contribute to a company's expansion
so that I may better anticipate and prepare for any challenges and assess the resources at
my disposal.
Recommendations for more team members:
My coworkers and I have come up with several novel approaches to assessing the state of
the business, which I have encouraged them to use. My group members are great to work
with, and I look forward to continuing our collaboration in the future.
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 References
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Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis.
Journal of Strategic Marketing, 20(4), 289-312.
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Nordhoff, S., Lee, J. D., Calvert, S. C., Berge, S., Hagenzieker, M., & Happee, R. (2023). (Mis-)
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Advancements, Market Trends, and Environmental Impacts. Journal of Artificial
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Patyal, V. S., Kumar, R., & Kushwah, S. (2021). Modeling barriers to the adoption of electric
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