Business Environment Impact on Tesla's Growth and Success Report

This report provides a comprehensive analysis of Tesla's business environment, focusing on the impact of internal and external factors on the company's growth and success. The report begins with an introduction to the concept of the business environment, highlighting the importance of analyzing both internal and external influences. It then delves into an industry analysis using Porter's five forces model, assessing the competitive landscape, the threat of new entrants, the power of suppliers and customers, and the threat of substitute products. The report also examines Tesla's international trade position, discussing its strategies for positioning itself in the global market. Furthermore, the report analyzes the political, economic, social, and environmental factors affecting Tesla, identifying both opportunities and threats. The report concludes with recommendations for Tesla's strategic development and growth, based on the analysis of these various factors. The report emphasizes the need for Tesla to conduct market research, utilize strategic management strategies, and capitalize on external opportunities to ensure long-term success.

Business Environment
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Executive Summary- Main objective of this report is to better understand the impact of
business environment on growth and success of business. It is important to understand the
industrial forces affecting the company in order to make effective decision. Porter five forces
analysis are useful tool which assist in understanding industry of a business firm. Other than this
political, economic, social and environmental factors will provide various opportunities for
business which assist in growth of company.
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Table of Contents
Introduction......................................................................................................................................4
MAIN BODY...................................................................................................................................4
TASK...............................................................................................................................................4
Industry analysis using Porter’s five forces model.................................................................4
Discuss the international trade position of selected company................................................6
Analysis the political & economic factor...............................................................................7
Analysis the social & environmental factor...........................................................................7
Recommendations..................................................................................................................8
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................10
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Introduction
Main objective of this report is to better understand the concept of business environment. It will
include all internal and external factors which are occur at the surrounding of an organisation.
Business have some control over the internal factors while and with the help of effective
strategies they can manage these factors (Aula and Mantere, 2020). While on the other hand
business has no control over the external environmental factor and any change in these factors
will directly influence the growth and success of an organization. In a business wants to achieve
higher growth and effectively run their business for long period of time than they will require to
effectively analysis the influence of these environmental factor on business operations. For this
report Tesla Company is taking into consideration. It is an American electric vehicle & clean
energy company. Which is founded by Martin Eberhard & Marc Tarpenning in 2003 as Tesla
Motors, headquarter is in Palo Alto, California, US. This report will include porter five forces
model for effectively analysing the industry. Other than this it will define the international trade
market position and various political, economic and social, environmental factors.
MAIN BODY
TASK
Industry analysis using Porter’s five forces model
It refers to a framework which is used by an organisation for effectively analysing
the competitive environment of company. It is consider as an important tool which assist in
understanding the forces which influence and shape competition within an industry. This model
is given by Michael E Porter in 1979. Which state that the level of competition is based on five
factors forces which are help an organisation in analysing the level of competition & profitability
in the industry. These forces will also define industry structure & competition level. In context of
Tesla, various factors of this model are discussed below for better industry analysing.
 Competition in the industry (Strong Force) - This factor will define the number of
competitors and their ability to influence the growth of company. It is analysis that
increase in number of competitors along with same products and services as company the
power of company will reduce because of this the suppliers and customers are also
transfer to competitor’s products as they will offer the better deal or product at low price.
While if the competition is low than company have the power to charge high price in
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exchange of their products. In context of Tesla, this factor has a strong force on company
as it operate its business in highly competitive market and for effectively maintain their
position in the market company will use strategic management strategy and innovate new
things (Begg and et. al. 2018).
 Potential of new entrants into industry (Weak force) - This factor will define that the
power of an organisation is also get affected by the force of new entrants into its market.
It will define that if less time and money is require by a competitor to enter into company
market then the power of company will reduce. While on the other hand if there are
strong barriers to entry is ideal for existing company and make the company to charge
higher price. In context of selected company, this factor has weak force on company as
because it will require huge cost for brand management and require a large amount of
investment for doing this type of business (Birru, and et. al. 2019).
 Power of suppliers (Moderate force) - Another important factor of this model will
define how it is easy for suppliers to drive up the cost of inputs. This will be based on the
numbers of suppliers and based on uniqueness of input used by company for their
products. Less numbers of suppliers will reduce the power of company. In relevance of
Tesla, this factor will have moderate force on company as selected company suppliers
have a low level of forward integration. Such as some suppliers will use third party to sell
their material to selected company, while other directly transport to the company.
 Power of customers (Moderate force) - This factor define the ability of customers to
drive the price lower. Influence of this factor is based on the numbers of buyers an
organisation has and how important each customers is for company. In context of Tesla,
this factor has moderate force on company as because the switching cost is low which
reduce the barriers for selected company customers to purchase car from other provider
(Buckle and et. al. 2018).
 Threat of substitute products (Moderate force) - This was the last factor of this model
which focus on substitutes. It refers to those products which can be used in place of
company product or services. It was analysis that if an organisation products has no close
substitute than it will enhance the power of company to charge high price of their
product. In context of selected company, they will experience the impact of substitutes on
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the automotive and energy solutions industry environment. For example- public
transportation will easily attract the customers.
From the above discussion on the porter five forces model it is analysis that selected
company will face a huge amount of competition a because of high competitive market and
moderate forces of suppliers, substitute and customers. For effectively run their business
company require to adopt effective strategic management strategies (Chen, and Nath, 2018).
Discuss the international trade position of selected company
International trade will define the movement of goods & services across different boarder
of countries. It is consider as an economic transaction that are made between countries. The
goods and services are exchanged because there is a need or want of goods and services.
International trade will help an organisation in expanding their market area and build a global
brand image which assist in long term success and growth. It will help in enhancing the sales of
their product which will increase the revenue of company.
In context of selected company, they will effectively position their company in the
international market and became a multination company which sell their products to different
countries. Company will effectively position their products in the international market. And for
this company use various strategies. It will strategically position its product in the international
market of electric vehicle as a high end manufacture. Selected company will effectively gain
competitive advantage in through various strategies such as by providing direct-to-consumer
sales & easily available service centre. Selected company will maintain a good position in the
international market by providing various stores and service centre in the reach of their
customers and also by providing them innovative consumer financing option & technological
innovation (Elkington, Burke and Hailes, 2017).
It is analysis that selected company was a fast growing brand worldwide & the leading
electric vehicle brand. Recently Tesla model 3 has become the world best-selling plug in
electronic vehicle model. From above discussion it is analysis that selected company will
maintain a good position in the international trade market with the help of their innovative
products and services. Their innovative products will assist organisation in positioning their
brand image in the mind of their target customers. Which assist selected company to achieve
long term revenue and success in the international market.
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Analysis the political & economic factor
Political factor- It refers to an external factor which define the degree of government
intervenes in the economy. It will include various policies of government, political party stability
and instability in the overseas market and various trade policies and so on. It I analysis that these
factors has a greater impact on organisation and they will require to adjust their marketing policy
accordingly. In context of selected company, it was analysis that the policies on trades can limit
industry performance and company revenue. It was analysis that this factor will provide various
opportunities to organisation such as governmental incentives for electronic automobiles was an
opportunity for company. Other than this various new global trade agreements and political
stability in the majority of major markets are consider as an opportunity for organisation
(Globocnik, Faullant and Parastuty, 2020).
Economic factor- It refers to an external factor which define the impact of economic on
growth and development of an organisation and its profitability. This factor will include the
economic growth, interest rate and disposal income of organisation customers and so on. In
context of Tesla, it was analysis that this factor will provide various opportunity as well as
threats for selected company. Such as decreasing battery cost is an opportunity for company
along with this the decreasing renewable energy cost is also an opportunity for company which
help company to achieve maximum profit in market. While the economic stability issues will
create threats for company (Iyigun, 2018).
Analysis the social & environmental factor
Social factor- This factor of external environment will also know as socio-cultural
factors. This factor will define the shared beliefs and attitude of the population. It will include the
growth rate of population, age distribution, health consciousness and so on. In context of selected
company, their managers will ensure that they apply strategies which maximise the business
benefits of such external factors. This factor will provide various growth opportunity such as
increasingly popularity of low-carbon lifestyle will provide growth opportunity to company
electric vehicles. Also improving the wealth distribution in developing markets and incising
preference for renewable energy will provide various growth opportunity to company (Rong and
et. al. 2017).
Environmental factor- It refers to an external factor which play an essential role in
organisation because of increasing the scarcity of raw material, pollution targets and because of
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doing business as an ethical and sustainable company. This factor will also include the carbon
footprints which are set by the government. In context of Tesla, it is analysis that ecological
trends will determine the availability of material used in the company production process. This
factor will also provide various growth opportunities to selected company as because of rising
standards on waste disposal or on carbon footprints, this will provide various opportunities for
their electric cars (Tsalis and Nikolaou, 2017).
Recommendations
From the above discussion, various recommendation for selected company which assist
in the development and growth of an organisation are discussed below:
 From above analysis it is recommended to selected company that they will require to
timely conduct effective market research so that they will better analysis the external
factors.so that they will better understand the various opportunities and threats occur
from this external factors (Tseng, Chiu and Liang, 2018).
 It is recommended to selected company that they will effectively analysis their
competitive factors with the help of porter’s five forces model. Which help company in
adopting an effective strategic management strategy.
 After analysing the various external factors such as political, economic, social and
environmental it is analysis that they will provide various growth opportunities to
selected company. From this it is recommended to selected company that they will use
effective strategies and make an appropriate development plan so that they will achieve
the benefit of these available opportunity (Yuan and et. al. 2020).
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Conclusion
From the above discussion on this report it is concluded that an organisation will require
to effectively analysis the business environment factors so that they will make effective
strategies and reduce the impact of these factors on organisation. This report will include porter
five forces model which help in better analysing the impact of main five factors on organisation
and level of competition fr company. Other than this it is analysis that company will position
their products in an international market with the help of effective strategies. Economic, political
and other factors of external environment help in better analysing the opportunity and threats for
company.
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REFERENCES
Books & Journal
Aula, P. and Mantere, S., 2020. Strategic reputation management: Towards a company of good.
Routledge.
Begg, K., and et. al. 2018. The business of climate change: Corporate responses to Kyoto.
Routledge.
Birru, W.T., and et. al. 2019. Explaining organizational export performance by single and
combined international business competencies. Journal of Small Business Management. 57(3).
pp.1172-1192.
Buckley, P.J., and et. al. 2018. International business. Oxford University Press.
Chen, L. and Nath, R., 2018. Business analytics maturity of firms: an examination of the
relationships between managerial perception of IT, business analytics maturity and
success. Information Systems Management. 35(1). pp.62-77.
Elkington, J., Burke, T. and Hailes, J., 2017. Green pages: the business of saving the world.
Routledge.
Globocnik, D., Faullant, R. and Parastuty, Z., 2020. Bridging strategic planning and business
model management–A formal control framework to manage business model portfolios and
dynamics. European Management Journal. 38(2). pp.231-243.
Iyigun, N.O. ed., 2018. Creating Business Value and Competitive Advantage with Social
Entrepreneurship. IGI Global.
Rong, K., and et. al. 2017. Organizing business ecosystems in emerging electric vehicle industry:
Structure, mechanism, and integrated configuration. Energy Policy. 107. pp.234-247.
Tsalis, T.A. and Nikolaou, I.E., 2017. Assessing the effects of climate change regulations on the
business community: a system dynamic approach. Business Strategy and the Environment. 26(6).
pp.826-843.
Tseng, M.L., Chiu, A.S. and Liang, D., 2018. Sustainable consumption and production in
business decision-making models.
Yuan, Y., and et. al. 2020. Business strategy and corporate social responsibility. Journal of
Business Ethics. 162(2). pp.359-377.
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