BSS0506 Strategic Management: Tesla's Strategies for Market Growth

This report provides an analysis of Tesla's strategic management, focusing on strategies for market entry, growth, and sustainability in the automotive industry. It utilizes tools like the Ansoff Matrix to identify market development and product development strategies, and examines the use of differentiation as a generic strategy to address competitive challenges. The report also evaluates internal and external factors using models like the BCG matrix, which aids in making decisions about Tesla's product portfolio. Ultimately, the analysis aims to provide recommendations that will help Tesla navigate the dynamic market and achieve its goals of growth and profitability within the premium consumer segment. This document is available on Desklib, where students can find a variety of solved assignments and past papers.

BSS0506 STRATEGIC
MANAGEMENT

TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
CONCLUSION..............................................................................................................................14
RECOMMENDATIONS...............................................................................................................14
REFERENCES..............................................................................................................................17

EXECUTIVE SUMMARY
with providing the recommendations will help the company in growing and sustaining into
the dynamic future market by resolving all the issues related to market entry, growth and
profitability for attaining premium consumer market. the current study has involved ansoff
matrix which has helped in identified that market development and product developments
strategies are taken into process. there is execution of generic strategy which depicts that for
overcoming challenges the firm uses differentiation strategy.
The report evaluated various internal and external models and tools such as BCG matrix
which analysed various products and need to make decisions about them in order to cope up with
challenges.

INTRODUCTION
Strategic management is mainly defined as the process for establishing gaols, objectives,
processes for achieving the competitive positions while operating in the dynamic
environment. Is is very important for the organization as for setting the goal, mission, vision
by allocating the available resources for achieving the objective. This supports business in
increasing profits and revenues by adopting various strategies as for achieving the
competitive position for sustaining in the dynamic market. This report specifies details about
Tesla, recognized as the automotive company which is distributing various electric, solar
roof cars and trucks to large number of consumers. Strategic management for the company
is mainly established by Tesla, as for entering into the new and highly premium market
which supports in attracting large consumers for purchasing the electric and other
automations, where consumers are willing to pay premium prices. This report provides
details about designing the two coherent strategy with logical reasoning with using the
quantitative and qualitative data. Lastly, evaluating the proposed strategy with using the
framework.
MAIN BODY
Applying the range of tools for addressing challenges
Ansoff Matrix
It is one of the significant strategy that is helpful in having the framework to the
management for gaining the information of the growth initiative (Yaqoob and Omer, 2021). In
order to become successful in the current era, Tesla pay attention on overcoming the challenges
that has impact on its operational practice. There is distinct form of the issues which are basically
faced by the firm such as higher competition, changing demand in market, etc. For having the
successful practicing, it is important for the enterprise to get the effective understanding about
the growth opportunities which can be used for having competitiveness in achieving higher
results. The particular matrix involves following matrix that provide assistance in obtaining
effective information which are as follows:

Market penetration
it is one of the crucial objective that is related with having focus on expanding sales in
exiting market by offering already offered products. Tesla focus son having the market
penetration strategy for its current primary intensive growth strategy. This intensiveness strategy
enables it to incline sales so that higher attention on having the greater market share can be
assessed. Tesla as being the international organization develop competitive advantage so that
higher revenue through aggressive marketing approach can be attained. On the basis of this it can
be interpreted that there is various distinct form of strategy so that better effective approach of
growth by overcoming the prevailing challenges can become possible. This is the primary
strategy that helps in gaining the better insights to attract & retain exiting market as revenue
source by executing appropriate and highly effective marketing strategy.
Product development
In the Ansoff matrix the product development is considered to be one of the crucial
strategy that helps in gaining the competitive edge to operate in market. There are distinct form
of the advantages that are attained by firm through possessing this strategy which basically
comprises having development of new products for having new sales. In this the existing market
is targeted for offering the new products which is found to be little risky procedure. The main
reason behind this is to involve certain level of investment for developing the new products
which are required to be emphasized by organization for having higher position to deal with the
competition. This is considered to be the Tesla second strategy for achieving growth so that

effectual working pattern to overcome the prevailing challenges such as frequent alteration of
taste & preferences, gaining competitiveness, overcoming the prevailing challenges which leads
to result in having the processing of enterprise. On the basis of this, it can be interpreted that
there are various h products which are basically offered by the enterprise in its existing market so
that coordinating with changing demand, higher level of competition can be achieved. .
Market development-
TESLA is one among the top performing organization and notching up great success
form last couple of years, the entire focus of the entity is on its market development which is
prominent to expand its reach and also hiking market domain, making new customers, exploring
new realm etc.
As it has been evaluated in Porter's five forces model that there is high cost to make entry
in the market so the company is having great opportunity to enhance its capabilities and
drastically expanding market growth.
TESLA is practising strategy to explore new market for generating higher sales and
paving way for being a global giant, with this regard TESLA is building its new offices and
offering attractive facilities in order to grab attention of potential customers.
The vision and mission of the entity are living testimony of its policy pertain to market
growth, the vision “to accelerate the world's transition to sustainable transport” which is only
possible if it expands its market grab.
There are a range of generic strategies are being practised by it in attempt to make the
market development plan achievable. To make the path clearer, TESLA is also formulating
collaboration with some other organizations so can take advantage of their stability and deep
understanding of local market (Serohi, 2021)
For instance, to wipe out competition challenges it has formed its collaboration with Sona
Comstar, Sandhar Technologies, Bharat Forge etc. This is essential to mitigate risk to work in
new realm.
The Ansoff matrix is aiding here, to nurture ideas about market development.
Diversification-
As it has been evaluated that the changing social dynamics of the market there is strong
need to meet the demand of customers, with the changing technological environment the
company has need to diversify its products so can give tough fight to the competitors.

Ansoff matrix aids the work on diversification, it addresses the areas where an entity is
having need to go for diversification, over the time as it has been seen that TESLA incorporated
a range of new businesses and even performed better in the market. It uses Intensive growth
strategy in the market.
For instance- Different brands of electric cars, solar power plants, some other tools
photovoltaic solar panels, lithium-ion battery etc. are being produced by the entity which is
significant at this stage where the market is getting globalized and there are number of other
competitors, who are making their fresh entry. It can be concluded that some new products and
some new entities for instance- SolarCity are paving way to be a great innovative organization
(Reshetko, et al. 2020)
Tesla is facing some issues such as pernicious pandemics, global chip shortage, supply
chain crisis etc. these perils affected its productivity and ability to get the business diversified yet
in order to prevent such notions in the future, the only strategy to go with innovation and
diversification.
So from the analysis above it can be concluded that by applying Ansoff matrix, TESLA
plc may explore new in the market and may deal with its both internal and external challenges
which are somehow affecting its productivity and ability to work with full potential (Ackoff,
2019)
Ansoff matrix may assist to guide various options which are available to the organization
and how some or all options can be used in attempt to improve overall performance of the
company in the market, dealing with prevailing circumstances.
Generic Strategy tool
There are different kinds of the challenges which are basically faced by the particular
organization has impact on the overall working of the enterprise. It is important for the firm to
get the proper insights about the prevailing circumstances so that proper action for gaining the
competitiveness can be exerted. Generic strategy is helpful in gaining the general way of
positioning a firm in an industry (Emam, 2019). This particular strategy helps in gaining the
appropriate information regarding the prevailing situation so that effective identification of
profitability & sustainability can be done. This aids in ascertaining the prevailing
competitiveness that can promote the firm's ability to coordinate with prevailing business
environment. Tesla is one of the international organization that is having the great level of

success in the automotive industry which has provided it ability to position in market in highly
effective manner. This involves the gaining the information regarding the strategic advantage
and target so that proper evaluation of its performance can be exerted.
Cost leadership
It is one of the significant strategy of Porter that helps in gaining the information
regarding the cost structure followed by firm. Tesla as being one of the international organization
has the objective o offering the goods to the customer in most quality manner so that effectual
pattern of growth in market can be derived. There are various challenges which are basically that
faced by the enterprise that hampers its ability to pay attention on having the effective processing
by reducing expenditure so that maximum level of benefits in terms of profitability matrix can be
derived. This firm sells its goods on the premium pricing strategy that is due to its good brand
image in the market. In addition to this, having effective ability to achieve & sustain overall cost
leadership so that positioning in industry can become possible. It targeted audience can afford
the premium pricing strategy so that firm pay attention on having the higher revenue generating
by keeping the greater market share. For accomplishing the objective of higher market share the

challenge of facing competition by competitors selling products on lower price firm highlight
higher quality aspects with fair price.
Differentiation
There are distinct form of the products which are basically offer by the company to its
targeted market that is helpful in gaining the approach to coordinate with the changing demand
of market (Greckhamer and Gur, 2021). The competition in the particular industry is inclining
on the large basis which require the firm to pay attention on having the appropriate level of
competitiveness so that higher customers can be attracted. Differentiation generic strategy of
Porters model is basically followed by Tesla that gives it the capability to have proper
technology utilization so that significant action of profitability & sustainability in industry has
been derived. For addressing the distinct challenges such as threatening of the technological
development by rivals the particular organization has given emphasis on having the significant
course of action so that competitiveness to have strategic approach to deliver unique products so
that significant position to get the better approach of growth can be derived. It targets the
audience who have the tendency of adopting the unique products in initial level so that their
objective of having such produces can be full lied. This focuses on having differentiation by
declining cost & inclining the brand image in market so that enabling firm to get greater market
share in automotive sector. This particular strategy of the Tesla is helping it to address the threat
such as higher level of competition & technological issue. On the basis of this it can be
interpreted that it is getting greater level of benefits with help of this strategic approach.
Cost Focus
This is basically related with having the competitive advantage which aids in targeting
the niche market by offering the lowest possible price. The targeted audience offers the ability to
understand the niche market by paying attention on its dynamics of these market so that focus on
less expenditure can be provided in this form of the generic strategy the firm pay attention on
having the cost advantage so that higher level of focus on attaining the customers can become
possible. This helps in possessing the better strategy which can provide assistance in having
higher market share with maintaining good profit margin in turn having effectual pattern of
capability to eliminate those aspects that has irrelevant cost to organization. On the basis of this
it can be interpreted that Tesla pay attention on having the effective strategy so that proper ability

to focus on reducing cost by maintaining the focus on overcoming challenges that are arising due
to higher expenditure can be eliminated.
Differentiation focus
It is related with targeting the niche market on the basis of having g little competition
and focusing on audience. In this type of the strategy the firm focuses on having the higher focus
on having the effective strategy by possessing the differentiation can be derived (Tesla, Inc.’s
Generic Strategy & Intensive Growth Strategies, 2022). This concentrate on having the
awareness about the products to the customers so that customers can be attracted. These all helps
in gaining the competencies which can help in focusing on offering the distinct form of the
products. On the basis of this having the target on the niche market in the precise manner
becomes possible for the purpose of overcoming challenges.
On the basis of this, it can be interpreted that there is different form of the strategy that
can be helpful in accomplishing the organizational objective so that higher profitability &
stability achieving has become possible. There is various form of the challenges which are
basically faced by the enterprise and higher level of focus is provided on having the competitive
approach so that precise manner of ability to have higher position by offering distinct form of
products in automotive industry can be achieved As being an international organization the firm
has given emphasis on having the competitive advantage of overcoming issue of competition by
possessing differentiation approach.
BCG matrix TESLA-
Tesla is one of the fastest growing American organization, with the progress of time the
organization is making great efforts and getting higher success in reciprocation. Yet there are
some challenges existing which are hindering its way and placing some obstacles to eradicate.
With the progress the entity is also having some issues and challenges as it has been seen
earlier while carrying out PESTEL analysis of the organization where a range of challenges were
found, so with this regard there are some tools or strategies which may pave the way to perform
better and wiping out potential trouble makers.

This is the tool which is used by internal management in order to make proper assessment
about prevailing or current circumstances in the organization, its state of value, growth etc. This
tool is helpful to decide which product of the organization must be given higher priority when it
comes to decide its selling, keeping or investing more (Wang, Qin and Zhang, 2021)
As It is known that the market competition is very high for Tesla and it is facing sort of
issues in automotive and energy solution sector. At the same time the bargaining power of
customers is looking in favour so in such circumstances for sorting out challenges of market the
tool is very helpful.
This matrix is being decided to analyse each area where the entity is getting operated,
here a matrix is fabricated which articulates a few types of products- Star Products and Cash
cows, dog and question mark.
Star products are such products which consume a mammoth amount of cash but at the
same time also turn out higher amount of cash flows. As the market matures these products

would be successful so their success lies in the maturity of the market. On the other hands there
are Cash cow products too. Which means the products gives profit even if the market is showing
lower growth.
Both star and cash cow products are internally related since a star product may turn into a
cash cow product, it depends on how the entity is paving way and how it is managing its
production, innovation, marketing etc. with this regard the BCG matrix tool aids a lot. Dog are
such products which are having low market growth rate and low relative market share, and
question marks are the products having high market rate and low market share (Kim, Kang and
Chung, 2020)
There have been a few problems with the organization such as moderate performance of
substitutes which may take drastic turn at any stage, high cost of brand development is pouring
in much burden on new organization so here it offers a challenge to make itself stronger in order
to eradicate any possibility to get competition from others in the market.
As BCG matrix is suggesting about Tesla,
For TESLA their Clear Energy Production is a star product, having high market share
and high market growth rate too. Since the entity is making higher investments to innovations, it
is turning out better performance in the market.
On the other hands Power walls of TESLA can be sited as cash cow product since it is
notching up higher market share and having less market growth rate which indicates that there is
need to work on the product and may be taken to the top.
Question mark products are energy storage, Miscellaneous accessories, solar energy
which has been key attraction of the organization and performing better in the industry, these
products are having their escalated market growth rate but their share in the market is not as high
as it should be, here cash flows are also in negative direction.
Dead-weight or dogs’ products are some manufacturing issues or complications with
models, it is having lower market growth rate and relatively lower market share so this is a
severe matter of contemplation, as the entity is growing there is strong need to work with such
aspects.

The BCG tools can be applied in attempt to suggest something better to the entity and it
may form its strategies to prevent such types of challenges in the market, furthermore, may
strengthen its position (Nedoma, et al. 2019)
As it has been seen while evaluating external factors affecting TESLA by going through
PESTEL analysis, the company is having great opportunities in the market which can be
accomplished by developing well-articulated strategies in order to cope up with all potential
barriers.
Strategy for addressing challenges-
For star products there is need to make more investments since they have good scope in
the market and with extra efforts the entity may grab bigger share.
Furthermore, there is inevitable requirement of paying attention to question mark
products, miscellaneous accessories and solar energy, they are having low earning and negative
cash flows so there is strong need to work on them and by analysing all relevant factors may
fabricate proper policy to raise performance.
Cash cow products of the entity are looking high growth givers and their cash flows are
also increasing, so the Power wall, Model S, Model X and Model Y, which may be given more
attention since such products are having good ability to pour on intensive returns to the
organization.
At the end Dog products for Tesla these are some manufacturing complications with
some of its models so there is rigorous requirement to wipe out these barriers or may fabricate
hyper plans to make it lucrative.
So the discussed BCG matrix above will be helping organization in copping up with its
market challenges and can get better positioning too. The plan would be dealing with economic,
social, technological and so on, issues which are a hindering way to be top and hiking its market
share with maximum capacity.

CONCLUSION
From the above report it can be concluded that strategic management for th business
mainly help in analysing and developing strategies for achieving the competitive position of
the company in dynamic market. Tesla the multinational automotive company mainly
adopting strategies for achieving competitive position in the company. With using the porter
generic strategy help in achieving the competitive position to the company by adopting the
differentiation strategy in business, this mainly helps selling unique products than the
competitors which helps in achieving competitiveness. Also with using the BCG matrix
support in identifying and establishing the product portfolio for expanding the market share
of the company. Further using the Ansoff matrix helps in growing the performance and
revenues for the company.
RECOMMENDATIONS
 The company must improve its manufacturing efficiency by creating low cost products
and using all the available resources for optimising the results obtained.
 Further, for reducing the battery supply impacts the company must provide low voltage
charger for ever-increasing the battery efficiency (Habib, and et.al., 2020). also providing
the DC as of the fast charging the car battery with helps in improving the efficient supply
of batteries in the market.
 For strengthening the company and its growth it must adapt th ethical code of practices
for providing benefits to th employees a by engaging and training employees and
rewarding the ethical behaviour practices for establishing trust and working ethically.
 For improving the multinational presence in the global countries, tesla must expand its
market into international regions by lowering the costs and adding more public transports
(Alomrani, 2022). As by diversifying its product line and introducing the new products
for expanding into th new market and gaining growth and competitiveness. This helps in
earning more revenues and profits by diversifying the market and target market for the
company.
 The company must adapt strategy and approach for minimising the delays of all stock and
the orders, for this it must diversify its range of suppliers for obtaining the raw materials.
Thus by establishing the strong supplier power diversifying potential sources helps in

fulfilling the future delay of all the products and raw materials for manufacturing
automotive.
 Tesla must invest into more research and development practices as by adopting all the
new trends and changing technologies which helps in maintaining the company
competitive position while operating into dynamic market (Zhang and et.al ., 2019). As
for producing latest technologically advances products for earning more revenues by
distributing premium products into market.
 The company must diversify its supply chain by reducing the risks and tesla should also
increase its investments into innovation practices as for providing new range of product
portfolio to th consumers for growing into the dynamic market.
 Tesla must enter into the new and other industries as for growing and achieving the
objectives as for earning more revenues and profits (Eledlebi and et.al., 2022). It must
enter into the video games, toys, the source of entertainment which helps in improving
the company consumer base more strongly and expanding into new industry for
achieving better growth.
 Further the company must establishing the strategy for establishing the electric car
sharing services, this supports the company in advancing its growth and building more
reputation with serving more for social purpose.

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Tesla, Inc.’s Generic Strategy & Intensive Growth Strategies. 2022. [Online]. Available thorugh:
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