International Business Report: Tesla's Market Entry into India

This report provides a comprehensive analysis of Tesla's international business expansion strategy, specifically focusing on its potential entry into the Indian market. The executive summary highlights the importance of global marketing in balancing global synergies with local needs. The report delves into a macro-environmental analysis of India, assessing political, economic, social, technological, environmental, and legal factors. A competitive analysis reveals the low competition in the electric vehicle sector in India. The cultural impact of the Indian market is examined using Hofstede's model, influencing the internationalization process. The report also explores potential market entry strategies, including direct exporting and global strategies, and concludes with recommendations for Tesla's approach to the Indian market. The report emphasizes the need for collaborative approaches and local market research for effective global marketing. Desklib provides this and similar reports for students to aid their studies.

International business
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Executive summary
Global marketing can indeed work, drive synergies and economies of scale whilst preserving
specific local needs and cultural considerations. Tesla should have the greater level of
inheritability need to have the development of collaborative approach in order to have the
close level of relationship with local level of marketing teams. Thus, there is stiff competition
in this sector. But on contrary the auto companies operating are not providing electric cars. In
addition to that Tesla is expecting country economic growth will rapidly grow to a great
extent. Auto mobile companies are focusing on producing electric cars as which is
considered to be positive impact.
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Table of Contents
CONCLUSION................................................................................................................................3
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REFERENCES................................................................................................................................4
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INTRODUCTION
In such a competitive business environment it is necessary for companies to expand their
operations in global market. This is because it helps them to increase sales and generate more
revenue from it. However, there are many factors which directly impact on business expansion.
They are political, social, etc which cannot be controlled by business. Also, it requires to develop
a proper internationalisation expansion strategy so that it gives direction to firm that how they
will enter in foreign markets. Moreover, it is required to select entry strategy as well according to
market conditions. Tesla is an American electric car manufacturing and clean energy firm
headquarter in California. It is specialized is producing car, battery, solar panels, etc the
company was founded 1 July 2003 by Elon Musk. In this report it will be described about the
expansion of company in other country. Also, macro environment analysis will be done.
Furthermore, cultural impact of host country will be explained and relevant entry strategy will be
mentioned.
Critical analysis
An organization need to expand into other countries in order to remain survive for Long term.
Globalization has provided an open platform for companies to operate at global level. It has
allowed them to trade with other nations. With this it has become easy for business to identify
need of people and fulfill them. The product and service are offered to them at large scale.
Similarly, Tesla deals in electric car, solar panels, battery, etc they are highly focused on electric
products. So, company is willing to identify emerging economies and enter in it. This is because
electric cars are only available in limited country and models designed are limited. Besides, solar
panels, batteries are not produced by many companies. There is high demand of these products at
global level. Therefore, Tesla products are ready to be internationalized. Hence, they have
decided to enter in Indian market. It is because of high potential growth in future and less
competition in electric car sector. As Indian economy consists of high boom in electric in near
future so it will be support Tesla to grow and expand in this market.
Macro environment analysis
It is essential for Tesla to analyse external environment of host country so that they are able to
identify those factors which can impact on its operations. Besides, it becomes easy for company
to evaluate country business environment. Thus, the macro analysis of India is as follows
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 Political- it is a factor which is related to change in political condition of nation. It leads to
change in trade laws, etc in India its political condition is stable. Here, in every 5 years
government is changed but the trade laws are not impacted much. Along with it,
neighborhood relations with others nation are good as well. Thus, there will be no impact on
Tesla operations.
 Economic Factor: it consists of those factors which are related to economic growth. They
include GDP, inflation rate, currency rate, etc. Any change in these impact on business
operations. Economic factor can impact auto mobile sector organization like Tesla in
many ways. However, India economic condition is far better than other nations. It is
expected that country economic growth will rapidly grow to a great extent. Moreover,
GDP of India is 7.8% which is good indicator.
 Social Factor: they are those factors related to change in taste and preference, Need of
customers, etc. It has been evaluated that there is change in need of people of India as they
are becoming environmental friendly. So, they are buying electric cars and installing solar
panels to conserve energy. It has resulted in bringing change in social life of people. Thus,
more and more people are shifting towards buying of electric cars.
 Technological factor: Advancement in technology has increased opportunities for Tesla, with
the help of this advancement in technology. In recent time, in India there is high
advancement in it due to launch of Jio. It has led to use of smart phones, internet, etc
moreover, government has started installing battery stations at highway. So, it will help Tesla
in offering products to people.
 Environmental factors: Many countries government are focusing on increasing
environmental legislations in order to address environment issues. In India as well
government has imposed strict laws relating to it such as sale of B6 engine in all vehicles.
Now, many auto mobile companies are focusing on producing electric cars. Therefore, any
change in law will impact on positive way in Tesla.
 Legal factor: Various kinds of government legislations and regulations directly impact
overall performance of Tesla. If there is change in any kind of legislation it can impact
business. There are several laws followed by companies in India. However, the legal factor
condition is stable within nation.
National competitive analysis
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By doing the competitive analysis it provides details about level of competition and what type of
product and service are offered to by other companies. Likewise, Tesla need to analyses it. So, it
can be analyzed that in India there is already many auto mobile companies operating. As India is
large economy so there is high demand of car. Thus, there is stiff competition in this sector. But
on contrary the auto companies operating are not providing electric cars. There is only limited
firm who are manufacturing it. Also, design and model offered is not of high quality. Therefore,
in electric car sector the competition is very low at national level. In addition, no firm is
producing battery and solar panels. Hence, there is no competition in this area as well. So, it will
be highly beneficial for Tesla to enter in India. Along with it, model and design of cars of Tesla
are advance than other organizations.
Cultural analysis and its impact on internationalization process
In this analysis it will focus on culture of Indian market. For that hofstede model is used which
provide cultural analysis with help of several elements. In India power distance is 77 which state
that there is top down hierarchal method followed in society. People are highly dependent on
boss for Direction. However, individualism score is 48 which is low. It indicates that there is
mixture of both collectivism and individual in society. The decision are taken at social level.
Moreover, the masculinity score of India is 56 which indicates a male dominate society. In
Indian culture most decision are taken by male and they sre given more freedom as compared to
women. Also, high masculinity shows people strive for success and achievement. The
uncertainty avoidance is 40 that means in India people easily accept imperfection. Generally,
they do not go according to plan. The long-term orientation score is 51 as in India people believe
on the concept of Karma.
So, there is high cultural impact on internationalization process. This is because Indian society is
influenced by any change in religious ethic, value etc there has to be change in Indian culture as
well. The process involves engaging with people of nation which enable in identifying their
needs. Here, Uppsala model is used by Tesla The model suggests an identical step-by-step
process for the internationalization of the firm, which is intended to be repeated for each
country that the firm tries to enter into.
Entry and internationalization strategy
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For Tesla it is necessary to select an appropriate entry strategy so that they are able to form
goals and objectives according. It us because as there are various strategies available so it
depends on company and country that which will be suitable. The company can select direct
exporting as market entry strategy. In this they can find out suitable agent and distributor to
contact with them. So, they will represent Tesla and sell their products and services in the
market. This strategy is suitable because as Tesla is large company and they already have strong
brand image in global market, so it will be easy for them to attract people in India. Alongside,
they will only have to do marketing in it and profit generation will be huge. However, in other
strategy they will have to merge with other companies.
In context of international strategy, Tesla can follow the global strategy. In this focus is on local
market and any change in product or service is made according to market need. But those
changes are minor ones. So, focus of company is on offering similar product and service at
global level. As Tesla is specialized for its electric cars, clean energy this it will be beneficial for
them to offer same product in Indian market. This strategy is suitable as Tesla is already
operating in other nations and offering similar product so any change in Indian market can led to
failure. Through this, it will be easy for them to enter in India.
RECOMMENDATIONS
Global marketing can indeed work, drive synergies and economies of scale whilst preserving
specific local needs and cultural considerations. There rea various level of approach which is
needed to be the part of key success in more manner to have balanced approach.
So, it is more important to have the clarification which is driven globally which is managed in
locally manner
There should be more level of global marketing which should be led on the global or central
level which have the inclusion of branding guidelines along with strategic planning and
budgeting.
Tesla should have the greater level of inheritability need to have the development of
collaborative approach in order to have the close level of relationship with local level of
marketing teams.
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Tesla have the need order to development key relationships, researched local markets, and
defined global marketing plans which can accommodate local needs where required. Tesla need
to analyses it. So, it can be analyzed that in India there is already many auto mobile companies
operating. As India is large economy so there is high demand of car. Thus, there is stiff
competition in this sector. But on contrary the auto companies operating are not providing
electric cars.
In this focus is on local market and any change in product or service is made according to market
need. But those changes are minor ones. So, focus of company is on offering similar product and
service at global level
CONCLUSION
From the above file it can be concluded that there are many factors which directly impact on
business expansion as it requires to develop a proper internationalisation expansion strategy so
that it gives direction to firm that how they will enter in foreign markets. Tesla is an American
electric car manufacturing and clean energy firm headquarter in California has seen Indian
economy consists of high boom in electric for high potential growth in future and less
competition.
There is high cultural impact on internationalization process as Indian society is influenced by
any change in religious ethic, value there has to be change in Indian culture as well. Tesla and
sell their products and services in the market as it is specialized for its electric cars, clean energy
this it will be beneficial for them to offer same product in Indian market.
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REFERENCES
Books and journals
Borda, A., Geleilate, J.M.G.. and Kundu, S.K., 2017. Firm internationalization, business
group diversification and firm performance: The case of Latin American firms. Journal of
Business Research, 72, pp.104-113.
ABBASI, E.H. and Salimi, M., 2019. The Role of Business Knowledge in the Process of
Internationalization of Companies.
Aguilera, R.V. and Pascual-Fuster, B., 2019. Business groups and internationalization:
Effective identification and future agenda. Journal of World Business, p.101050.
Purkayastha, S., Kumar, V. and Lu, J.W., 2017. Business group heterogeneity and the
internationalization-performance relationship: Evidence from Indian business
groups. Asia Pacific Journal of Management, 34(2), pp.247-279.
Mukherjee, D., Makarius, E.E. and Stevens, C.E., 2018. Business group reputation and
affiliates’ internationalization strategies. Journal of World Business, 53(2), pp.93-103.
Sort, J.C. and Turcan, R.V., 2019. De-internationalization: A business model
perspective. Journal of Business Models, 7(4), pp.39-44.
Castaño, M.S., Méndez, M.T. and Galindo, M.Á., 2016. Innovation, internationalization
and business-growth expectations among entrepreneurs in the services sector. Journal
of Business Research, 69(5), pp.1690-1695.
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