Tesla's Success: International Business Environment and Key Factors

This report provides a comprehensive analysis of Tesla's international business environment, focusing on cultural risks, comparative and competitive advantages, and the influence of industrial policies. It highlights the cultural risks Tesla faces when expanding into new markets, such as failing to adjust business models, misunderstanding sub-cultures, and neglecting local business practices. Recommendations are provided to overcome these risks, including embracing cultural differences and promoting open communication. The report also examines Tesla's comparative advantages, such as low production costs and high profitability, and competitive advantages, including branding, AI technology, and battery supply chain management. Finally, it discusses how a nation's industrial policy, factor conditions, and related industries contribute to Tesla's success. Desklib offers a range of similar solved assignments and study resources for students.

International Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
higher level of cultural risk that the firm is facing and ways to overcome these risks................1
Comparative and competitive advantages ensures the success-..................................................3
How does the rivalry industries,factor conditions, industrial policies, related and supporting
industries contributes to the success of the firm..........................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The international business environment have to be characterized as the situation in
different self-governing countries, with the factors exonic to the national environment of firm,
directly affecting the conclusion-making on resource use and abilities (Kumar and Sharma,
2018). This report will discuss the certain aspects of the American auto mobile company like
TESLA, which is owned by Elon Musk it deals in the electric vehicle, the major cultural risk
along with the ways to deal with them. Apart from this, the study will discuss the role of
competitive and comparative advantages of the firms to achieve success. Along with this it will
also highlight the ways in which the nation's industrial policy, supporting industries and internal
industry, factor conditions and competition will contribute towards firm's success.
MAIN BODY
higher level of cultural risk that the firm is facing and ways to overcome these risks
Cultural risk of TESLA refers to the capacity of the organization operations in the new
nation to clash because of difference in customer preferences, language, norms and customs
(Bašić, 2022). customer purchasing attitude and behaviour is directly influenced by culture.
Some of the high influencing cultural risks are as follows :-
Failing to adjust international business models in the public market: This is regarded as the
one of the difficult cultural risk which was facing by the organizations. Therefore, when the
TESLA goes into a latest trendy market, the models of firms must have to be modified to think
about the public preferences, habits and customs. Example — hangs must have to be build to
product and service offerings, marketing and pricing. The “one-size-fits-all” theory to global
business is inaccurate. Global success requires a big mind-set. Glocalisation refers to the
growing of economy, job, trade, information and technology all over the world regardless of the
geographical boundaries.
Failure in knowing the difference between regional and sub-culture: zonal or racial
differences are the part of Subcultures, but the sub-culture is not limited to them. Such as ,
considering the alter customer identities of females and males in the United States of America.
Still, the account of females for 88 % of market purchases, promotion campaigns mostly
overlook differences in females and males customer behaviour and thoughts (Buccieri, 2020).
also, female customer habits and preferences differ across occupational, ethnic and generational
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groups. Firms that fail to know the diversity in the culture of their market, risk missing mostly
important segments of customers.
Failure in understanding the practises of local business: Cultural barrier not only happens at
the consumer interface. Global success in the business also needs an in-depth knowledge of the
public economic activity customs. Without a full appreciation of how business is done in a
global market –including political, regulatory, economical and cultural influences- It will
become easier for the new entrants to enter and survive in the market.
Business may miss the opportunities : This mostly happens due to cultural barrier failure in
identifying new opportunities. There are some examples of companies like TESLA that have
highly looked upon the potential of some developing markets, lead to failure in establishing a
presence in the market earlier some of the cultural event in a coutry are said to be the entry gate
to the new market and without even having full understanding about the country's culture the
firm can miss the opportunity (Helmová and Hrivíková, 2018).
Failure in adapting the management of human resource in the public markets: ignorance in
culture may affect the firm's ability to attract ,retain and hold its pool of the international talent.
When TESLA employ it's public staff, the policies regarding the human resources have to be
obtained to influence the profile of cultural public staff. Main Factors that affect staff job
satisfaction, motivation, and firm's commitment ranges mostly across the cultures.
Failing in adapting the practices of management across cultures. Without even knowing the
culture of particular nation an organization can never use the management practises efficiently.
None of the firm's theory can be used in every nation, the assumptions regarding the cultural
factor situated under the management practices are mostly existed but have not taken place.
plans are being shifted to other environments related to cultural without considering the
variations of cultural factor. But whenever the practices are translated behind cultures without
any of the adjustment for the differences in culture they may fail and may cause the loss to the
firm. (Torkkeli and et.al., 2021).
Recommendation regarding overcoming the risk of cultural factor
 TESLA should hold differences and make room for cultural differences.
 The firm must have to promote open communication among the staff to defeat the
sequences causing cultural hurdles. communication among the employees openly is the
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only way that culturally differentiated groups can work through and defeat the
differences between them to make them work well together.
 The firm must have to lead open discussions about team rules and shared firm's culture.
Whenever the team members differ on a level of culture, firm should unite them by
establishing a latest same culture: (Rossier and Bühlmann, 2018).
 The firm should unite the group or teams around a shared goal or common goal. Which
helps in bringing the people together around a same vision or common goal, this can be
a diamond like thing in a coal mine to unite the efforts team and have all members
pulling together in the same direction towards the achievement of goals of the firm.
Comparative and competitive advantages ensures the success-
Comparative advantage is the economic ability of the company for the production of the
specific goods and services at minimum opportunity cost as compared to the trading partners
(Jaud, Kukenova and Strieborny, 2018). These are used to evaluate why the companies,
countries and the individuals can have the advantages from the trade. Tesla company have many
comparative advantages which helps them in leading the success in the auto-mobile market as
they produce with advanced technology as well as electric cars for the environment protection.
Low cost- The comparative advantage of producing the goods at low prices as compared to the
customers leads to the company's success. Tesla company is having this advantage because it
uses effective strategies which helps them to set better prices with the minimum cost this makes
the company to stay ahead in the competitive market and helps in the success of the company
(Enders and et.al., 2019).
Higher profitability- Increasing the sales of the product leads to increase in the profit of the
overall organization. The Tesla company has created a big brand image in the minds of the
people which helps them to attract more customers to the company. The company offers better
quality electric cars of which the demand is increasing very rapidly. This advantage has lead to
the success as the profitability of the company.
Competitive advantage is must which must be ensured by the companies as they help the
companies in growth. This is the ability of the company to offer the product and services to the
customers with the better deals as compared to the competitors in the market (Nicholas, 2018).
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Tesla company can evaluate by knowing the knowing that how the companies can increase the
efficiency and the productivity level which will provide advantage over the competitors.
Branding of Tesla- The Tesla company has developed the reputation of the effective products.
The model S sedan of the Tesla company has won nearly every award of the automotive sector.
This company provides extremely exceptional and innovative products to the customers because
of this, the company has created strong brand image in the world. This creates a competitive
edge for the company which helps in the success of the company.
AI of Tesla- Tesla has come up with the innovative idea of full self driving technology. The
company is adding more and more features to it and making better product rapidly. Tesla AI
analyses helps in understanding the driver to use the features of the car. The company has
effectively used the advanced technology in its products which makes it very attractive for the
customers. This provides the competitive advantage to the company as there is no other
company who is using highly advanced technology (Fisher and McCabe, 2019).
Battery supply chain- Tesla company produces more batteries in the terms of the kWh as
compared to the other carmakers. The supply chain of the Tesla company is its biggest part of
the competitive advantage because its batteries are considered as much better than others.
How does the rivalry industries,factor conditions, industrial policies, related and supporting
industries contributes to the success of the firm
The nation's industrial policy is explained as the planned attempt by the nation body to cheer up
the transformation in economics, The policy of industries stimulate renovation for growing the
factory output and efficiency. this clears up the way for high output at lower cost of production.
These policies plays a big role in coordinating development in TESLA. (Smallbone and Do,
2020). This company can be established as collectively supportive to competitors as well as to
others because of the rules of industrial policy. The industrial policy regulate the zone of
functioning under TESLA or other companies related to automobile sector. genuine way must
have to be shown to the firm through the nation's particular industrial policy. The foremost aim
of the industrial policy is to build up industrial efficiency of the nation. It also ease balanced
growth of firm in the economy.
Conditions regarding factors are defined as the distinct types of assets that might or might not be
available in a country. assets include things such as capital resource, H R, natural resources, and
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knowledge resources and infrastructure.(Yrjölä and et.al., 2021). Better conditions of these
factors assist in giving triumph of the company.
Supporting industries which are related to each other refer to competitor and weaker industries
that ease changes by exchanging ideas. These can stimulate changes, which are depending
mostly on terms of clarity and skill transfer. Relatable and industries in the support are the main
code for a nation, which can be said as the development drives for its success.
Leadership in an automobile industry sector is said to be as an important internal factor. firm's
leadership and other management styles can impact firm's culture. mostly, organizations provide
a fixed framework with its statements regarding goal and vision. Some of the cultural
interference which may happens due to some of the leadership theories are worth of employees;
Mainly the Internal factors of the firm affect how an organisation meets its goals. (Kumar and
Sharma, 2018).
Some of the examples of the areas which are mostly known as the internal factors of the
organisation are: resources related to finance like – income source, investment opportunities and
funding; resources related to assets like facilities, equipments, building etc. ; resource related to
hr like human, employees, volunteers and targeted audience; and some common resources like
copyright, patent, trade marks etc.
CONCLUSION
This study report has discussed about the international business and international business
environment both of these are elaborated significantly in every part of this report mainly this
report has shown the risk of cultural factors during the expansion of business in another nation
and it has also recommended some ways to overcome the risk of these factors, this report have
told that all these risk can be eliminated by using the preferred ways, by the example of TESLA
the report has shown the comparative and competitive in the firm which mainly ensure the
success of the firm. Also at the end the report has shown the contribution of another factors in
the success of the firm.
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REFERENCES
Books and Journals
Bašić, M., 2022. How Does Open Business Model Transform Elements of Innovation Culture
into Open Innovation Practices of High and Low Internationalisation Firms?. Journal
of the Knowledge Economy. pp.1-27.
Buccieri, D., 2020. International entrepreneurial culture, innovation differentiation strategy and
early internationalisation: evidence from Indian born globals. International Journal
of Services, Economics and Management. 11(3). pp.274-301.
Helmová, M. and Hrivíková, T., 2018. Internationalisation of Companies and its Reflection in
Economic Relations. edamBa@ eUBa 2018.
Kumar, N. and Sharma, D.D., 2018. The role of organisational culture in the internationalisation
of new ventures. International Marketing Review.
Leonavičienė, E. and Burinskienė, A., 2022. Accelerating Cultural Dimensions at International
Companies in the Evidence of Internationalisation. Sustainability. 14(3). p.1524.
Rossier, T. and Bühlmann, F., 2018. The internationalisation of economics and business studies:
import of excellence, cosmopolitan capital, or American dominance?. Historical
Social Research/Historische Sozialforschung, 43(3 (165), pp.189-215.
Silva, I.M. and et.al., 2018. Antecedents of cost innovation: the combined impact of strategy and
organisational culture. International Journal of Innovation and Learning. 24(3).
pp.327-344.
Smallbone, D. and Do, H., 2020. Policies to support internationalisation: who needs them and
what do they need?. In A Research Agenda for Entrepreneurship Policy. Edward
Elgar Publishing.
Torkkeli, L. and et.al., 2021. Internationalisation of family enterprises: the role of entrepreneurial
orientation and international growth orientation. International Journal of Business
and Globalisation. 29(3). pp.354-375.
Torkkeli, L. and et.al., 2021. Internationalisation of family enterprises: the role of entrepreneurial
orientation and international growth orientation. International Journal of Business
and Globalisation. 29(3). pp.354-375.
Yrjölä, M. and et.al., 2021. Digital Platforms as Disrupting Business Models for
Internationalisation. In Business Models and Firm Internationalisation (pp. 114-133).
Routledge.
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