Business Strategies and Macro Environment Analysis: Tesla Inc. Report

This report provides a comprehensive analysis of Tesla Inc.'s business strategies, examining its external and internal environments. The report begins with an introduction to business strategy and then applies various frameworks to assess Tesla's operations. Task 1 employs PESTLE and stakeholder analyses to evaluate the impact of the macro environment. Task 2 delves into the internal environment, utilizing the resource-based view, McKinsey's 7S model, and VRIO framework. Task 3 applies Porter's Five Forces to assess the competitive landscape of the electric vehicle market. Finally, Task 4 interprets and devises strategic planning for Tesla using a range of theories and models including the Ansoff Matrix and Bowman's Strategic Clock. The report concludes with a summary of findings and a list of references.

BUSINESS
STRATEGIES
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Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK 1............................................................................................................................................3
P1. Applying appropriate framework analyse the impact and influence of macro environment
on given organisation and its strategies..................................................................................3
TASK 2............................................................................................................................................9
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................9
TASK 3.........................................................................................................................................12
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.
..............................................................................................................................................12
TASK 4.........................................................................................................................................14
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation........................................................................................................14
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
INTRODUCTION
Business strategy is a concept which is a bundle of various schemes and selections for
action performed that helps business firm in achieving organizational objectives and targets. It is
a plan which allows firm to have competitive advantage over rivalries in industry. Business
strategy comprises of several components such as factors of external and internal environment,
various theories and models for strategic planning, etc. which presents a picture of company's
potential and brand image in market (Anderson, 2019). The present report discusses elements of
business strategy such comprising of PESTLE analysis (Political, Economical, Social,
Technological, Legal and Environmental factors), Stakeholders analysis (investors, management
board, suppliers, wholesalers, customers, etc.) and Ansoff matrix under the category of external
environment, resources based view strategy, McKinsey's 7s model and VRIO framework in
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internal environment. Further in the report Porter's five force model and Porter's generic strategy
is being applied with Bowman's strategic clock. Tesla Inc. is a global electric vehicle
manufacturing company which is being taken into analysis for understanding its business
strategies and performance in market.
TASK 1
P1. Applying appropriate framework analyse the impact and influence of macro environment on
given organisation and its strategies.
Company's Overview:
Tesla is a multinational electric vehicle manufacturing and clean energy organisation
based on Palp Alto, California having its headquarter there. The famous global company was
established in year 2003 and being owned by Elon Musk who is its CEO. Tesla deals in
manufacturing and selling of electric vehicles which are pollution free and is made with latest
techniques emerging in market. It operates across the globe comprising regions of United States
of America, China, Germany, United Kingdom, and recently entered into Indian market. At
present company is having more than 438 stores under his own name and also more than 100
service centres across globe. The company has a wide range of products in various different
product line such as electric vehicles, storage products, clean energy generation items, etc.
producing with less or no carbon emission technology.
Mission:
Tesla Motors has a mission of accelerating the advancement of sustainable transportation
by launching compelling mass market through its electric cars as soon as possible into trade.
Vision:
Tesla Motors posses a vision of creating the lion's share compelling electric car
manufacturing company of current time that if in 21st century by bringing global transitions into
their electric cars.
Strategic Planning Techniques:
Strategic Planning refers to designing a framework which company makes with a aim to
attain its objectives and goals in set time (Arbatani and et.al.., 2019). This is done because to
have huge profit and big brand image of firm in industry as well as in market.
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The various techniques for strategic planning that are applied in every organisation to
have better performance is discussed below:
 Business Analysis: It refers to an analysis of a business firm about its activities and
performance. This assists businesses in having better strategics and finest decisions for
company's growth (Bayo-Moriones, Galdon-Sanchez and Martinez-de-Morentin, 2020).
This helps Tesla Motors to know and analyse their strengths and weaknesses in order to
have adequate decisions in organisation for its development and growth. Business
Analsyis also assists Tesla Motors to communicate the necessary requirement in bringing
changes in respect of company's work culture and structure. Tesla Motors is able to find
various solutions in order to maximising their values added in its cars which is being
delivered to potential buyers.
 Benchmarking: It refers to making a comparison of a firm with similar in industry or
with rival firm to know its standing (Chen and Keung, 2019). Tesla Motors by using this
will gets to know their position in market with the help of comparison between its
organisation and other big giants of market. This takes Tesla Motors to have better
strategies in its firm so that can enjoy high power in the market. Through benchmarking
Tesla Motors finds a way to discover better performance with greater efficiency in their
products.
Macro Environment:
Macro environment refers to a domain which prevails outside the business organisation
but creates an hindrance on the internal performance of businesses. Such factors are not in hands
of management who can control their forces, in fact management has to modify their plans and
directions according to the effect of such environment (Chereau and Meschi, 2018). It is also
called as external environment which not only but also effects industry as a whole. The factors
sometimes supports positively or sometimes creates a negative impact on businesses. These
includes PESTLE and Stakeholders analysis, in its shed.
PESTLE Analysis:
PESTLE is an acronym stands for Political, Economical, Social, Technological, Legal
and Environmental factors which creates a large impact on business firms and also disturbs
internal management of organisation. The analysis in respect of Tesla Motors is done below:
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 Political Factor: This factor relates to various issues related to government of a nation
which comprises of taxation policy, various regulations, trade and commerce restrictions,
etc. frequent changing government impacts negatively on business as mostly when
government changes policies or guidelines also gets change which forces companies to
modify their policies according to them (Desai, 2019).
Tesla Motors being a multinational electric vehicle manufacturing brand posses an
opportunity to boost up its performance via availing governmental incentives. Zero carbon
emission cars by Tesla assists company in enjoying free trade agreements while going globally.
Other than this, stability of political party in major countries proves favourable for Tesla motors
in order to experience smooth operations and growth. This political factor opens lots of doors for
Tesla knocking opportunities in auto mobile business.
 Economical factor: This factor of external environment relates with country's condition.
This talks about capital availability, rate of inflation, purchasing power of consumers,
demand and supply, balance of payment, etc.
Tesla Motors has received a positive revert from the forces of economic factor. Company
enjoys benefit by manufacturing low battery cost cars. Less renewable energy cost vehicles
attracts external factors to favour Tesla Motors. There is a presence of economic instability threat
for Tesla but then also this factor brings scope of great opportunities for company. Countries
experiencing less development opens a door for Tesla to start its operation in their nation. The
manufacturing of electric vehicles are affordable and meets high sales in global economy which
acts as a favourable force to company.
PESTLE Analysis
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 Social Factor: The factor discuses forces related to society in which both consumers and
organisation survives. This includes various demographics of customers, their preference
and acceptance, ethics and morals, sentiments, etc.
Tesla Motors received a positive force from society as it offers its cars by indulging zero
carbon emission technique in it which is more preferable by people in society along with having
preference in renewable energy. Under this factor society creates high demand for company's
electric cars and other associated products which increases supply ultimately leads to high profits
for the company. Company has an option for experiencing growth according to its socio-cultural
freedom. Tesla has gained competitive advantage over other auto-mobile firms in market by
offering renewable energy products and electric cars which has won hearts of society people.
 Technological factor: This factor of external environment relates to technological
changes in environment such as improvement in existing technology or emergence of
new innovation in market (Dina and Cahyandito, 2018).
Tesla Motors enjoys technological enhancement as well as faces threat for the same inn
his business operations. This is an favourable condition as adoption of updated technology
allows Tesla to manufacture better car with latest technology which is preferred by customers.
On the other hand it is a threat in a sense that frequent technological change takes old technology
into its obsolescence which has involved huge cost at the time of installing it. Obsolete
technology are not accepted by buyers hence wastes company's money and resource after some
time which is very short term. Another adoption of technology by Tesla in respect of reducing
carbon impression into its cars proves favourable for the company and acts as an opportunity for
it.
 Legal factor: The force of macro environment which deals with legally comprises of
rules and regulations prescribed by court of law. Such rules and regulations are forced
mandatory to apply in business and to comply with (Ibrahim and Harrison, 2020). It
includes laws such as minimum wage law,employee protection, safety and security, etc.
Tesla Motors has an option to diversify its operations by following adequate legal rules
by keeping global patent regulation in concern. Many countries has modified certain regulations
in relation to auto-mobile standards which is mandatory required by Tesla to follow.
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 Environmental Factor: The last factor in PESTLE analysis concentrates on weather,
climate, pollution, carbon emission, and other issues related to external environment.
Tesla Motors pays its concentration towards environmental safety as it manufactures
electric cars which are zero carbon emission. This environmental concern proves favourable for
Tesla in order to strong in market.
Stake holder's Analysis:
Companies stakeholders are those who are related in some manner with the course of
business whether at a large level or at low. Business gets very much affect from the behaviour of
its stake holders because they are the one who contributes to company success and creates an
impact on its performance in market as well as in industry (Irawanto, 2017). Companies
stakeholders includes its promoters, management board, customers, government, suppliers,
employee, and all those who are directly or indirectly related with business.
There are few stages which presents a guideline in performing stakeholders analysis for a
company. These stages are listed below:
Step 1: This step involves determination of various stakeholders of company by making
a index of all persons who can be firms stakeholders.
For Tesla Motors its stakeholders includes banks, government, management board,
managers, shareholders, company's employees, suppliers, investors, customers, inventors, etc.
Step 2: At this stage manager makes a priority list as which stakeholders are at priority of
company based upon various elements such as their participation level, influences, interest, etc.
The step categorises its stakeholders by below mentioned forms:
 High Interest, high power: Stakeholders who contributes much to the organisation or
has a high interest in business will posses high power or will be categorised as priority for
Tesla Motors.
 Low Interest, high power: Such stakeholders has a great influence on business but does
not take much interest in companies activities of Tesla Motors.
 High Interest, low power: Stakeholders under this category are highly interested in
knowing business activities and do not concentrates on power. Tesla Motors informs its
stakeholders who are interested so company do not get any interruptions form them.
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 Low interest, low power: These stakeholders do not takes much interest in business as
well as do not caries much power in company.
Step 3: This step involves communication of stakeholders list according to their priority
in order to have their support in achieving set project timely and flawlessly. Tesla Motors
communicates with its stakeholders in this step.
Ansoff Matrix:
Ansoff is a matrix which analysis companies growth strategy and its market performance.
It is a strategic tool used for planning policies and directions so that growth can be achieved in
proper manner. The matrix comprises of four different components that is Product Development,
market development, Market penetration and Diversification (Jasni and et.al., 2019). Each
component is discussed below:
 Product Development: This component suggests to have new product in existing market
where business is already operating and selling its product or services. This helps
businesses to launch their new product which will be loved by existing customers in
market (Köseoglu and et.al, 2019).
Applying this component by Tesla Motors introduces enhanced technology into its cars
manufacturing process and features that impacts less harmful for environment. Company serves
solar panels and Tesla Roadster in a form of its first electronic sports car at international level.
 Market Development: In this strategy companies offers its existing products in new
markets or to new customers (Lavery, 2019).
Tesla Motors adopts market development strategy with a aim of spreading its operations in the
market of China, Germany and recently in India. Tesla also aims at expanding its business
throughout globe by its electronic vehicles and environmental concerned products.
 Market Penetration: This involves increasing companies market share from existing
product and current operating market.
Tesla Motors includes aggressive marketing in his business which posses a mission of selling
more and more electric cars in US market which allows company to increase its revenue from
current operating markets.
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 Diversification: This strategy of growth says presenting a new product into new
marketplace (Leischnig and et.al., 2017).
Tesla Motors has launched its battery products in a form of diversification in line of non auto-
mobile segment. The reason behind this diversification is to enhance its Research &
Developmental investments in order to analyse new opportunities for business growth.
TASK 2
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
Strategic Capability and its components:
Strategic capability is a process of shaping and putting of various strategies into real
action by a firm to have competitive advantage in market. It includes goals, purpose, analysis
tools, planned actions, vision and values (Martí, 2017). These six components helps firm to have
proper strategy and action.
Resource Based View Strategy:
The strategy is a managerial framework used by various businesses in order to know its
strategic resources that can be utilised by firm to have competitive edge and sustainability
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Ansoff Matrix

(Nayak, Bhattacharyya and Krishnamoorthy, 2019). It includes two types of resources that is
tangible or physical and intangible also knows as untouchable. Tangible comprises of building,
plant and machinery, equipments, land and capital, etc. and intangible comprises of trademarks,
intellectual property, brand image, etc.
VRIO framework:
VRIO stands for Valuable, Rare, Inimitable and organisation which is used for internal
analysis of its resources. The VRIO framework for Tesla Motors is done below:
Resource Value Rare Inimitable Organisation Advantage
Innovation √ √ √ √ Competitive
Brand
Recognition
√ √ √ √ Competitive
Market share √ √ √ √ Competitive
Human
resource
√ x x √ Competitive
Range of
Products
√ x √ √ Temporary
 Valuable: This means how much companies resources are valuable in order to provide
some value in their products which are being offered to customers.
For Tesla Motors all its resources such as innovation, brand, market position, human resource
and product range are valuable which provides an competitive advantage to firm.
 Rare: This means how much company's resources are rare or how easily they are
available for other firms in industry.
For Tesla Motors its innovation, brand, market share are rare which cannot be found in other
company easily, whereas company's human resource and product range is not rare.
 Inimitable: This aspect of framework talks about cost involvement in copying resources
of one firm by another in market. The concept says that how easy it is for rival firms to
copy your resources.
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Tesla Motors posses inimitable feature in its resources such as innovation, brand, market share
and product range. On the other hand company's human resource is imitable in nature.
 Organisation: The last aspect in VRIO framework discusses about proper arrangement
of all resources in well organized manner within company which bring more efficiency in
outcomes or results.
Tesla Motors organises all its resources in well manner that creates an advantage for firm
through its innovation, brand name, market share, human resource and via range of its products.
McKinsey's 7's model:
McKinsey's 7's model refers to an company's internal analysis which businesses does in
order to have better efficiency in their performance (Novikov, 2018). It involves seven
components which are entirely internal to business which are mentioned below:
 Strategy: It refers to formulation of company's working strategy so that it can
have competitive advantage over its rivals.
Tesla Motors makes its strategy in well planned manner which helps company to give their best
in its products and to achieve competitive advantage in market.
 Structure: It comprises of company's organisational structure as how the
departments are divided and how each activity is done.
Tesla Motors has a clear structure of its organisation which defines department in each of its
activities clearly, so that every employee of company gets a fair understanding of their individual
task that needs to be achieved to attian organisational goal.
 Systems: It includes a proper system for performing activities and having
decision making of a business firm.
Tesla Motors manages its system very effectively which helps company to have competitive
advantage over rivals.
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McKinsey's 7's framework
 Skills: This comprises of employees and management skills which the uses in
bring their product very efficient and best in comparison with competitors
product.
Tesla Motors being a multinational electronic car manufacturer has a skilled labour who brings a
differentiated products and services for their customer with a great touch of innovation in cars.
 Style: This includes some leadership style which companies leaders uses in order
to bring more productivity in their employees so that to have better efficiency in
products and services.
Tesla Motors uses transformational style of leadership in their company. Which encourages
company's employees to bring new ideas or innovation into products.
 Shared Value: This involves company's values and standards which they follows
in their operations.
Tesla Motors shares its values with its employees and all stakeholders so that there is a presence
of healthy and positive relations in organisation.
TASK 3
P3 Implement porter's five forces to evaluate competitive forces of a market sector for a firm.
Porter's Five Force is a framework which is used by companies for making some strategic
decisions by having certain future assumptions of industry performance. It refers to an industry
analysis as how an industry and market will behave in near future and what impact it will create
on business (Wang, 2019).
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