Strategic Management Plan: Tesla's Internal and External Analysis

This report presents a strategic management plan for Tesla, analyzing its internal and external environments. The report begins with an introduction to Tesla's business model and its role in the electric vehicle market. Part A provides a PESTLE and SWOT analysis, evaluating the political, economic, social, technological, legal, and environmental factors, as well as Tesla's strengths, weaknesses, opportunities, and threats. A competitive environment analysis using Porter's Five Forces model is also included. Part B critically evaluates strategic options, including growth platforms and monitoring strategies. The report recommends the most appropriate growth platform based on the analysis, providing a comprehensive overview of Tesla's strategic position and potential future directions. The report also examines the VRIO analysis of Tesla resources. Finally, the report provides a conclusion and references.

Strategic
Management Plan
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Table of Contents
Introduction...........................................................................................................................................2
Part A: An internal and external analysis.....................................................................................2
PESTLE and SWOT of the company...........................................................................................2
Competitive environment analysis using Porter’s Five Forces model.....................................6
Identification and justification of the organisation’s existing and/or potential competitive
advantage........................................................................................................................................8
Valid strategies and tactical objectives to achieve overall strategic objectives......................8
Part B: On the basis of this analysis critically evaluate and justify strategic options for the
business:..........................................................................................................................................9
Critical evaluation of the different types of strategic directions.................................................9
Justification and recommendation of the most appropriate growth platform/s.....................11
Evaluate ways and means by which the chosen strategy/ies can be monitored.................11
Conclusions..........................................................................................................................................12
References...........................................................................................................................................14
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Introduction
In the company strategy formulation plays an effective role it helps in effective
decision making in the business so that effective functioning of the company can
take place in the economy. Various strategy formulations helps in increasing the
growth chances of the business in the marketplace. if the company will not plan its
activities affectively its strategies properly then it can affect the performance and
productivity of the business in the marketplace. if the business wants to enhance its
profit in the market then it is important for the business to increase it productivity in
the marketplace. there are various internal and external factors that can affect the
profit of the business in the economy. It is important for the business to plan its
strategies accordingly so that changes of loss can be reduced in the company.
Tesla is the best electric generation and automobile company in the world it provide
the best unique services to the customers so that its demand in the market can be
increased and more profit can be earned. It was founded in 2003 and based in
California. Tesla does not pay the huge amount for promoting their product they
believe in advertising the products through maintaining the proper relation with the
customers in the market. Tesla focus on the young generation so that they can earn
more profit in the business. In this report it will be observed that how business
strategy helps in increasing the profit of the organisation in the economy (Luedke,
2020).
Part A: An internal and external analysis
PESTLE and SWOT of the company
Internal and external factors can affect the overall performance of the business in the
market there are various macro environment factors like political, economical, social,
technological, legal, and environmental and internal factors like strength, weakness,
opportunities, threat these factors can affect the performance of the business due to
which organisation has to plan its strategies accordingly. Business has to plan its
strategies accordingly so that goals of the company can be achieved effectively in
the economy.
Pestle analysis
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Tesla can analyse the external environment with the helps of the pestle
analysis. It helps in determining the need and requirement of the customers on the
basis of which services of the business can be developed in the marketplace.
Political factors: If the government will implement the trade policies then it can
affect the performance of the business in the market. free tarde expansion can
provide various opportunities to tesla to perform effectively in the marketplace. if the
government will increase tax rate then it can affect the revenue generating power of
the business in the market (Wardhaningrum, 2020). Government is providing
incentives for automobile industries which will helps in enhancing the financial
performance of the company due to which company can achieve more profit in the
marketplace. Free trade agreements will help the business
Economical environment: These factors involves market growth, currencies, trade
level etc. If the cost of batteries will be reduced in the market then it will helps in
increasing the revenue of the company. because tesla deals in solar energy
products, if renewable energy cost will be decrease then tesla can provide different
variety of goods and services to the customers. If the inflate rate in the economy will
rise then it can create various issues for the business to survive in the market
because charges of every resources will be increased automatically which can affect
the financial stability of the company. Reduction in the battery cost and renewable
energy cost is the opportunity for tesla which will helps the in achieving the mission
of the business properly in the marketplace. If the economic environment will not be
stable then it can create issues for Tesla.
Social environment: This environment deals with the changes needs and
requirement of the customers so that they can provide the best variety of goods and
services to the customers. Tesla develops its services as per the need of the
customers so that best variety can be given to them so that revenue of the company
can be developed. Providing the electric vehicle services to the customers helps in
developing the growth of the economy by providing the innovative services to the
customers. If the business will not develop its services as per the requirement of the
customers then it can affect the productivity of the firm. Preferences for renewable
energy is increasing which will helps the business in increasing its revenue
generating power of the company in the marketplace. Tesla helps in reducing carbon
pollution which helps in increasing its demand in the marketplace. Tesla helps in
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providing the innovative products which helps in providing the new variety of product
to the customers also it helps in achieving its mission effectively.
Technological environment: Technological plays an vital role in Tesla for
manufacturing its product without the helps of technologies Tesla can not function
properly as Tesla deals in electric vehicles products due to which use of advance
technological is very important which is present in the economy. With the helps of
technologies Tesla has developed an automated feature in its product with is self
drive due to which attention of the customers has been attracted towards the
business. advance technologies in the business helps in providing the innovation in
nthe business so that profit of the company can be increased more in the business.
Developing automation with the help of the technology is the opportunity for tesla
which helps in accomplishing the mission and vision of the company Online mobile
system is also an opportunity of the company to develop its market (Ramaci, 2020).
Legal environment: There are different types of law which is given by the
government like consumer law, labour law, safety standard. It is important for the
business to follow theses law so that smooth functioning of the business can take
place in the marketplace. if the organisation will not follow this law then it can affect
the functioning of the company in the marketplace. With the helps of international
patient protection company can easily develop its business. energy consumption
regulation will helps in developing the services of the company in the marketplace.
Environmental factors: There are various elements which can affect the
environment due to which Tesla is planning to eliminate green house gas from the
company so that best quality can be provided to the customers without affecting the
environmental conditions. Tesla can promote it services on the basis of the climate
change. Electric vehicle helps in reducing the pollution from the environment which
further helps in achieving the assign target of the business by increasing its demand
and profit in the economy.
Swot analysis
Strength weakness
Tesla is considered as best in terms to
providing the healthy working
environment to the employees because
employees are the one who generate
Different mechanical issue can affect the
brand image in the market. In electric
product chances of issues are there due
to which services of the business can get
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income for the business. If the tesla will
not maintain the good relation with the
employees then it can affect the growth
of the company in the market.
affect the in the market. if tesla will not
resolve this issues then various
complication can take place in the
business (Bonhomme, 2020) .
Opportunities Threats
As per the research demand of electric
vehicles are expected to increase which
can give a growth option for tesla
because tesla can plan various strategies
to innovate its services in the market so
that growth of the business can take
place effectively. If the services of the
business will get developed then it can
create various opportunities of the
business due to which market share of
the business will also get increased in
the economy.
Unstable manufacturing condition can
create various issues for the business as
it affect the services of the company in
the economy. Customers satisfaction is
also very important if the customer will
not satisfy with the services of the
company then it can affect the goodwill of
the business. it is very important for the
business to develop its services so that
interest of the customers can be
maintained in the changing world
demand of the customers are also
changing which can affect the growth of
the business.
VRIO ANALYSIS
Resources Value rare Imitation Competitive
advantage
 Appropriation
and Logistics
Costs
Competitiveness
 Promoting
Expertise inside
the Car Tesla
It is
valuable as
it helps in
conveying
lower costs
firms are
contending
dependent
No
It is not rare
because
most of the
competitors
have decent
Can be
imitated by
contenders
however it is
troublesome
Evaluating
methodologies
are regularly
Yes
Indeed, firm
is utilizing its
inhouse skill
Passing by
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 Client
Community
on
separation
in the
business
yes it is
valuable as
clients are
co-making
items
marketing.
It is rare as
company
has
maintained
its strong
relationship
with the
customers.
coordinated by
contenders
It is hard to
impersonate
the way of life
and local area
commitment
the
information,
there is still a
great deal of
potential gain
Competitive environment analysis using Porter’s Five Forces model
Internal and external threat can be risky for the business because of which company
has to identify these risk factors so that company cannot face any loss in the future
because if the company will through the loss in the coming years then it can destroy
the image of the company in the marketplace. Porter five forces model helps the
business in taking proper decision by identify these challenges so that long term
survival of the business can take place.
 Threat of new entries: In the automobile industry there are different barrier of
entry for the new customers. Due to which tesla services will also be
maintained in the economy by in the coming years the demand of electric
vehicles will increase which can create issue of the tesla because chances of
new entrants will increase which can reduce the demand of the existing
company in the market. Tesla's business is hard to rival, particularly due to
the significant expense of brand advancement, alongside the prominence of
Elon Musk (Start, 2020).
Strength: If threat of new entrant will be low it will helps in making the existing
companies more in demand by the customers. Because they can be able to
earn more profit.
Weakness: If threat of new entrant will be high it will affect the growth and
profit of the existing company because new companies will come with new
product and services.
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 Bargaining power of the suppliers: It is basically the power of the suppliers to
fix the price of the services which they are providing tesla uses different
variety of components in its products which cannot be available with every
customers due to which the bargaining power of the supplier may increase. It
is important for the tesla to maintain the healthy bond with the suppliers
because with the helps of the suppliers only company is able to manufacture
its product in the market. if the suppliers will charge the high prices then it can
affect the financial stability of the company in the economy. Suppliers have
the affect the whole productivity of the company (Xue, 2020). For example,
public transportation isn't just about as adaptable as a private vehicle. This
condition further restricts substitutes' power against Tesla
Strength: High bargaining of the suppliers cannot affect the company if they
have healthy relations with the other suppliers.
Weakness: If there are limited suppliers in the market for the product which
the company is manufacturing then it can affect profit of the company
because they have to buy the goods on the prices which are demanded by
the suppliers.
 Bargaining power of the buyers: Tesla is not having any major competitors in
the markets due to which bargaining power of the buyer in low because
customer don’t have any option of substitute in the market. due to which they
have to be agree with the prices of tesla. clients have just a moderate and set
number of substitute alternatives In the marketplace. For example, public
transportation isn't just about as adaptable as a private vehicle. This condition
further restricts substitutes' power against Tesla
Strength: If the company is producing a good quality of services in the
marketplace then customers cannot bargain with the sellers in high ratio
because they will not substitute of the goods which the company is providing.
Weakness: If there are many seller in the market which are providing the
same quality of goods and services then bargaining power of the customers
which can affect the profit margin of the company.
 Threat of substitute: If Tesla will fail to provide the effective services to the
customers. Then it will force the customers to switch in the gas car which will
become the substitute of the tesla. It can further affect the growth of the
business in the economy. Tesla try to innovate its features so that every time
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customers can get new variety of goods and services in the market. For
example, public transportation isn't just about as adaptable as a private
vehicle. This condition further restricts substitutes' power against Tesla.
Strength: If the company will provide the innovative products to the customer
as compared to other business then customers the goods from the same
company without getting influence by the other.
Weakness: If there are various companies in the market which is providing the
same of quality of goods to the customers then it can affect the affect the
demand of the company in the marketplace.
 Rivalry among the existing competitors: there are many competitors of tesla
like Lamborghini, Toyota etc which is top automobile industries in the world
demand of tesla is high in the market because of the services which it provide
to the customers. If tesla will not develop its services then in future its demand
can be reduced. For example, public transportation isn't just about as
adaptable as a private vehicle. This condition further restricts substitutes'
power against Tesla.
Strength: Demand of the existing company can be maintained as compared to
the other companies if the services of the company will attract the attention of
the customers.
Weakness: If the company will fail to satisfy the customers with the services
which they are providing then it can affect the profit and demand of the
company (Das, 2020).
Identification and justification of the organisation’s existing and/or
potential competitive advantage
Tesla is the biggest electric vehicle company due to which it has various competitive
advantages in the market.
Brand image: Tesla has an effective brand image in the market due to the advance
services which it provides to the customers. Tesla has launched the product which
will helps in reducing the petrol cost of the economy by providing them the electric
vehicle in the economy. Electric vehicle helps in providing the advance features to
the customers in the marketplace. so that they can develop there goodwill in the
market. customers are the one who develop the image of the business in the
marketplace (Chowdhury, 2020).
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Super charging station: Tesla supercharging station helps in charging the vehicle of
the tesla so that customers cannot face any issue while experiencing the services of
the business. these type of advance services helps tesla in increasing its goodwill in
the economy so that revenue of the business can be increased more.
Innovative features: In the coming years if tesla will continue to innovate its services
then it can provide various competitive advantages to tesla in future which can also
help in the long term survival of the company. Adding the feature to the product
attract the attention of the customers due to which customer loyalty towards he
business get improved.
Valid strategies and tactical objectives to achieve overall strategic
objectives
To achieve the objectives of the business tesla has planned various strategies so
that they can earn more profit in the market. It has decided to innovate its services
by reducing the pollution from the economy so that environmental condition can also
be maintained. Tesla has identified the demand of the customer by providing them
the services on the basis of which they are innovating there services in the market. if
the business will not develop its services then growth chances will not be enhanced
in the business tesla does not have huge competitors in the market but in the coming
years there will be chances of competitors in the economy. Due to which services of
the company needs to be developed more because of which they are adding some
more features in the product to provide more comfort to the employees in the
business. If the business wants to increase its profitability then they have to plan
different strategies so that different variety of product can get manufactured and
more income can be generated. Tesla is training its employees according to the
advance technology they are using so that performance of the business can be
improved. Tesla is hiring the well skilled employees with the technical knowledge so
that they can understand the work more effectively and can helps in increasing the
overall growth of the organisation so that goals can be achieved in the short period
of time. Employees are the main sources of generating income in the business if the
employees will not have the proper knowledge then it will not be able to give their
best in the business which can further affect performance of the company.
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Part B: On the basis of this analysis critically evaluate and justify
strategic options for the business:
Critical evaluation of the different types of strategic directions
Tesla wants to increase its wants market share with the services which they are
providing to the customers so that they can earn more profit in the market to
increase its profit in the market there are various strategies which is used by the
company.
Competitive strategy: Tesla is planning to develop different quality of electric car so
that it can become the biggest car manufacturing company in the world. Tesla is
investing a huge amount in the research and development part so that research
regarding the services which the customers will prefer in the coming years.
Tesla follows generic strategy and intensive growth strategy:
Generic growth strategy
 Differentiation focus: As a generic strategy tesla is more differentiation focus
as it wants to develop its services by adding more unique quality in the
services so that competitive advantage can be gained in the market. they try
to develop the new services in the economy so that demand of the company
can be raised they are using various new tools and techniques to innovate
their product while manufacture so that customers can experience some
unique features which will force the other buyers to experience the services of
the company. Adding value to the services of the company helps in increasing
the customer choices among the different product which they providing in the
economy. If the employees will get the choices in the services then it will
helps in improving the image of the organisation. Tesla is dealing in solar
energy product which will save the electricity cost of the consumer in the
economy. As charges of the petrol is getting high in the market it has become
difficult for the people to manage transportation but with the helps of tesla
economy can experience the best transportation services in the market
without affecting their financial stability (Nath, 2020).
Intensive strategy
 Market penetration: It basically deals in developing the demand of the
business in the existing market by promoting the product with the helps of
providing various unique advantages to the customers. If the customers will
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get some unique feature in the product then only they will buy the services of
the company in the market.
 Product development: It means developing the new product in the existing
market. Tesla is developing the high quality of products in the marketplace it
helps in developing the demand of the company in the economy. Use of solar
energy the product helps in inventing the product in the marketplace.
 Market development: Tesla is developing is marketing share by developing
new offices in the countries so that more people can get aware about the
services of the company so that more profit can be earned in the business.
developing the marketshare is the main motive of every organisation because
if the marketshare of the company will get developed then it will helps in
increasing the productivity of the company in the economy.
 Diversification: In the new market tesla is planning to develop new battery
products so that its people of the country can get attracted towards the
services of the business. if the customers will not satisfied with the services of
the business then it can put the company in big loss due to which whole
revenue generating structure of the company can get affected. Choices of
people in other countries are different due to which company has to develop
the services of the company effective in the marketplace (Galetsi, 2020).
Justification and recommendation of the most appropriate growth
platform/s
If the organisation wants to increase its profit in the market then it focus on the
differentiation strategy so that it can increase its demand in the market because
differentiation in the product will helps in developing the marketshare of the business
on the basis of which profit and sustainability of the business will be maintained.
Tesla should identify the needs of the customers by taking feedback from them so
that demand of the customers can be identified properly in the marketplace. if the
services will be developed as per the needs of the customers then more people will
get attracted towards the business due to which company will able to achieve its
goals properly. competitive advantage can be gained in the business by identifying
the keeping the demand of the customer on the priority. If the proper will be different
can unique from the other businesses then it will automatically provide the other
advantages to the business due to which demand of the existing company will fall in
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