Business Strategy Report: Macro and Micro Analysis of Tesla

This report provides a comprehensive analysis of Tesla's business strategy. It begins with an introduction to business strategy and its importance, particularly for Tesla, an American electric vehicle company. The main body of the report is divided into four tasks. Task 1 applies the PESTEL framework to analyze the impact of the macro environment on Tesla's strategies, considering political, economic, social, technological, legal, and environmental factors. Task 2 examines Tesla's micro environment and capabilities using SWOT and VRIO frameworks to identify strengths, weaknesses, opportunities, and threats, as well as valuable, rare, inimitable, and organizable resources. Task 3 utilizes Porter's Five Forces model to evaluate the competitive forces within Tesla's market segment. Finally, Task 4 applies various theories, models, and concepts to interpret and devise strategic planning for the company. The report concludes with a summary of the findings and a list of references.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK1.............................................................................................................................................2
P1 Apply appropriate framework which have impact of macro environment of organisation
and its strategies. ........................................................................................................................2
TASK2.............................................................................................................................................4
P2 Examine micro environment and capabilities of organisation by use of appropriate
frameworks..................................................................................................................................4
TASK3.............................................................................................................................................7
P3 Use Porter's Five Forces model for evaluate competitive forces of market segment............7
TASK4.............................................................................................................................................9
P4 Apply various theories, models and concepts and interpret and devise strategic planning
for company. ..............................................................................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy defined as, the mixture of all decision taken and actions performed
through the business to carry through the enterprise aims and objectives and to secure a
competitive position in the market. It is the spinal cord of the business, it is the road map which
directs to the desired goals. A business strategy through which an organisation sets out to achieve
its desired subjective (Yuan and et. al., 2020). It can be simply elaborate as a long term tactics
for enterprise planning. Typically a business strategy will cover a period around 3 to 5 years. In
the field of administration, business plan of action includes the preparation and execution of any
major goals and initiative taken through an organisation's higher authority on the behalf of
founders, which is depend upon consideration of an resources and an assessment of the internal
and external atmosphere in which the company operates. Business Plan of action gives the
overall direction to an enterprise and include the specifying the organisation's objectives. Which
looking forward building the policies and plans, terms and condition and acquired those
characteristics and then allocating the resources to execute on plans. Business strategy
management is not unchanging in nature.
This reports take the Tesla organisation which is American electric vehicle, which deals
in electric cars, battery energy storage from home to grid scale, solar panels, roof top tiles along
with other related product and the services. It was founded in 1 July 2003 and founder of the
company is Elon musk, ian wright.
This report include the framework analysis impact and the influence of the macro
environment also involve the internal environment and qualities of a given company using actual
frameworks, apply the porter five forces model which evaluate the competitive forces. In last
applying the range of theories, concepts and model, interpret and devise strategic planning.
1

MAIN BODY
TASK1
P1 Apply appropriate framework which have impact of macro environment of organisation and
its strategies.
A macro environment is the condition that exists in the economy as a whole, rather than
in a particular sector or region. In general, the macro environment includes trends in the gross
domestic product (GDP), inflation, employment, spending, and monetary and fiscal policy.
Macro environment of company is basically related to external factors which influences
decision-making or working of organisation. These are elements which have impact on strategies
which a organisation is willing to take. There are many external factors which are analyse and
applied with use of PESTEL analysis: Political Factors: These are factors which basically reflects political environment of
country, which generally influence tactics and strategies which are adopted by
organisation. In terms of Tesla, there is strong presence in UK, which is considered as
effective political environment. This make sure about growth and sustainability of
company in market segment. The current environment of country is stable which is due to
pandemic situation such as Brexit, so this is considered as threat for a company. Due to
this political stability this leads to major disadvantage for organisation for developing
their designs which is in alignment like due to unstable legislations and laws (Suoniemi
and et. al., 2020). For effectiveness, respective organisation have continuously examine
the market segment for anticipating as the design which is sustaining or not in current
political environment. Economical factors: According to this factor this majorly reflects overall performance
and productivity of country on basis of economic grounds. In wide sense, overall growth
which is in terms of electric vehicle market segment which is expected for reach at high
profitability factor. This leads to wide opportunity for Tesla for investing more in
developing electric cars and vehicles. The firm have to hold a quite sustainable share in
market of UK which leads to drastically affect just because of increase in rate of inflation.
This leads drawback for organisation as it face various challenges ion terms of opting raw
materials and other resources which is based on desired prices. So in order to effectively
and appropriately increase scope of sustainability. So by this Tesla fetches effective tie up
2

by their suppliers in EU countries which helps company for sustaining in tough market
situation (Bayo-Moriones, Galdon-Sanchez and Martinez-de-Morentin, 2020). Social factors: These factors which is consider as effective in examining impact as imply
of social aspects in organisation. In terms of Tesla, social condition in various market
involving UK are quite favourable for company. Reason of this is as preferences and
lifestyle of people are drastically and sharply focuses towards batteries and low carbon
vehicles. This leads to opportunity for respective organisation for developing new
products which conclude carbon footprints. There is also threat for company as there is
millennials which are prefer public transport more than private. So this leads to quite
threat for expansion in future and overall strategy which is used by Tesla. So for ensuring
effectiveness, company have to produce their services and products which helps for
developing positive perception in terms of customers. Technological factors: This factor covers innovation, technological advancement and so
on. The environment of UK is effective as it includes advancement in technology. As
industrial sector of nation is investing their resources on adapting and enhancing by better
equipments and techniques (Sangadji, Manullang and Tahirs, 2020). This leads to
opportunity for Tesla this develop for producing more products like Tesla Roadster which
is advanced and innovative in context of technology. There is rapid increase in field of
advancement as technology which is used by company is become obsolete quickly which
leads to high chance and short life in context of sustainability in market segment. Legal factors: This factor involves legal aspects which involves regulation and lwas
which is basically govern procedures and policies of company. In context of Tesla, there
are such legislations which provide protection of intellectual property which leads to
opportunity for Tesla for protecting the intellectual property of development of new
product. The company is facing various several lawsuits in terms of various crashing
issues by its autopilot which become violation of legislations by firm like National
Highway Traffic Safety Administration and Transport Safety Board. So this leads to
drawback for company as reduction of trust in mind of customers. For ensuring
effectiveness, the organisation have to use appropriately all laws and legislations which
are used in process of product development.
3

 Environmental factors: These are factors which includes element which are associated
with market in which company is operating. In terms of Tesla, as this is dealing in UK
market segment where various regulations are made in basis of environment. In addition,
company have brand image as it produces products like electric which are leads as
reduction in consumption of fuel at work. This leads to opportunity for firm as managers
can adopt strategy in terms for increase the benefit to environment by better innovation
technology.
TASK2
P2 Examine micro environment and capabilities of organisation by use of appropriate
frameworks.
The micro environment include force and elements such as the organisational vision,
mission statement, goals and objectives, strategy and structures, management and employees.
The various components and features of the micro (internal) business environment. Apart from
macro environment, it is very important as Tesla have to examine its micro environment which
helps company for identify its strengths and weaknesses by their capabilities which is develop by
their strategy (Utama, Abdullah and Widodo, 2020).
In terms of internal environment, company can use SWOT analysis which is consider as
effective framework for effectively examine internal strengths and weaknesses of company. So,
this analysis is discuss below:
STRENGTH WEAKNESSES
 Major strength of Tesla as there is
innovative capacity.
 There is also strength of firm as it
offers quality of products which are in
terms of effective as which is due to
their design, durability and
performance.
 Weakness in company as there is
inappropriate department of
manufacturing which is due to
continuous launch so by this there is
delay in production ramp and this leads
to ineffective time management
(Vázquez, 2019).
 There is also weak section of
production in context of quantity.
OPPORTUNITIES THREATS
4

 There is wide opportunity for Tesla
which is related to untapped market
segment in automobile industry.
 There is also opportunity for company
and battery products as for targeting
wide customer segment like households
(Nam and Hwang, 2019).
 As there id fierce competition in market
segment in terms of electric car market
with other organisation like Mercedes,
BMW, Volkswagen and so on this
leads to prominent threat in market of
UK.
 As there in cars safety hazards is
considered but due to earlier years this
leads to major threat for Tesla in
context of their self driving vehicles.
As according to analysis, as company takes stands in terms of product portfolio and
innovation which effectively increase scope of improving in their vehicle safety and production
capacity. There are also various several capabilities which is considered by VRIO framework, as
this is a tool which is used for analyse capabilities and capacity of company. This model is
discussed below:
RESOURCES VALUABLE RARE INIMITABLE ORGANISABLE COMPETITIVE
ADVANTAGE
Human
resources
Human
resources
Human
resourc
es
Human
resources
Human resources Potential
competitive
advantage
Brand
image
Brand image _ _ _ Temporary
competitive
advantage
Innovation
capabilities
Innovation
capability
Innova
tion
capabil
ity
Innovation
capability
_ Sustainable
competitive
advantage
5

Manufacturin
g capacity
Manufacturin
g capacity
Manuf
acturin
g
capacit
y
_ _ Temporary
competitive
advantage
As according to analysis, there are various resources which is related to company. This
analysis is very important for analyse which of factors are valuable, rare, inimitable and
organisable. This analysis is discussed below:
Valuable: Human resources: These are resources which are responsible for developing offerings &
marketing them and sell products of firm in its potential and niche market, by this they
become themselves as quite valuable for organisation (Kamesh, 2019). Brand image: As Tesla's brand image is consider as quite valuable by this it allows
company for increase their presence globally in effective manner and also ensures entry
in new market segments. Innovation capabilities: It is considered as innovation capabilities are valuable as it
allows organisation for increase its competitive edge by repeating additions and
enhancements in product portfolio of organisation (Aydiner and et. al., 2019). Manufacturing capacity: In Tesla, manufacturing capabilities is valuable as
organisation is producing effective products by their essential R&D activities which are
done accordingly by filling market gap.
Rare: Human resources: It is considered as there is difficulty for find out set of team members
who have same dedication, skills and intellect as which are present in Tesla, so that's why
human resources of organisation are quite rare. Innovation capabilities: For introducing or developing new offerings there must be
proper skills, technological inputs and mindset are required which is present in other
organisation of this type of nature (Boone, Kurtz and Berston, 2019). Manufacturing capacity: The department of manufacturing of organisation have their
ties with exclusive suppliers which make sure as there is appropriate supply of rare
equipments which provide increase in effectiveness, hence this makes it as rare.
6

Inimitable: Human resources: Team member of Tesla have talents, skills and competence that
cannot be imitated by employees of any firm, which is quite inimitable. Innovative capabilities: There is patented so there must be proper innovation which is
increase inimitableness in all new features introduced in product of organisation.
Organisable:
 Human resources: Team member in terms of Tesla which is in effectively trained, as
they are using modern age technologies and important equipment . This increase scope of
organising staff members of respective organisation in company and also assist them for
developing & producing better services and products (De Giacomo and Bleischwitz,
2020).
TASK3
P3 Use Porter's Five Forces model for evaluate competitive forces of market segment.
For every company, it is very important as their must be industrial attractiveness which is
assessed by firm which helps in determining various forces which is prevailing in sector by
having their impact on company. For this, Porter's five forces analysis is used which is define as
framework for monitoring various forces in sector which allows organisation for determining
their position in industry. These forces are discussed below: Bargaining power of suppliers: These are organisation or individual which have
responsibilities for supply raw materials to company with motive of developing their
offering. In term of Tesla, majority of organisation is highly depends on reliability of
various suppliers as which company has in distinct market like UK. In this size of
suppliers are quite moderate as in this organisation there is selected number of suppliers
who provide required material for company (Brennan, Canning and McDowell, 2020).
This will increase their bargaining power. But many of suppliers are considered third
party in terms for supplying the materials to Tesla. So they have limited control on these
supply which makes bargaining power of suppliers as moderate in terms of company. For
reducing this power there is more effective chain management of supply which is
developed in appropriate manner by company which make sure the easy path for
organisation for acquiring the raw materials.
7

 Bargaining power of buyers: For existence of company, buyers are define as individuals
who purchase and use product and services of firm. In terms of Tesla, as organisation
offers unique services and products & also they provide guarantees for effective benefits
which is associated for customers which helps in driving off for other organisation and
also reduces bargaining power of customers. Switching cost which is consider as quite
low. So by this it will increase the bargaining power which is against company.
Furthermore, customers are becoming weak for Tesla batteries and car as there is lower
volume of purchase of company (Mohammadi, Moharrer and Babakhanifard, 2019). So
from above analysis, it is consider as bargaining power of customer is weak in terms of
Tesla. For make sure as their which is influencing on company and their products are get
low, so for this company have to adopt innovation in their products which is consider as
core strategy. So by this there is development of demand in market for customers which
helps in enhancing the products at lower cost. Threat of substitutes: Substitutes are define as commodities which is used in place of
products which is dealt by company. As respective organisation is operate their business
in automotive industry, in which there is very low substitutes which are available in
market segment which is consume by customers. As Tesla operated in electric cars so
there is various substitutes for car as work on fuel not on battery. There is another
substitute for car of Tesla is public transportation system which is being currently
preferred by company. So in terms of Tesla, threat of substitute id quite moderate. So for
make sure for lower down threats, firm have to adopt strategy as service orientation.
Company can also increase switching cost for market and customer which is appropriate
for developing their appeal in market segment and lower the influence of customers. Threat of new entrants: In automotive sector there basically new innovations and
inventions which are done by company for entering in appropriate manner. In relation to
Tesla, managers are deciding for expanding in electric market segment in which there id
use of new techniques, technologies and framework which can be consider as supporting
the design and also make sure about better development of products which accordance as
changes in market conditions. In this sector, for doing business, cost is very high which is
because of effective technologies and dominance of suppliers. In addition, for enter
market there is a requirement for huge investment which leads as very risk and also
8

consider as dominance of existing organisation in market segment. There id high
economies of scale which is prevalent in organisation by this makes threat of substitutes
which is quite low in terms of company (Hanelt and et. al., 2020).
 Competitive rivalry: This is consider as one of most important force in automotive sector
which is basically associated with organisation which are operating in same products in
industry. Firm is under aggressive and direct competition with other organisation likw
BMW, Volkswagen and so on, which are work in effective manner for expand
themselves in terms of market of electric car which is consider as threat for Tesla in long
time period. So for make sure for effectiveness, Tesla have to work on different their
products in continuous terms in future for make sure separate place in market and also
effective competitive advantage. The firm have to work for collaborating with other
competitors for make sure higher market share and also better economies of scale.
TASK4
P4 Apply various theories, models and concepts and interpret and devise strategic planning for
company.
By considering the above situational analysis, Tesla have to adopt strategic direction for
which firm will further function in such manner which helps in gaining better competitive edge
by having high market share. So for this, Ansoff Growth Matrix is adopted by company in
appropriate framework which is show as various several ways by which firm can face in future
time period. This matrix is discussed below: Market Penetration: In this matrix, this is define as selling their offerings in existing
market segment. For ensuring effectiveness, the company have to adopt various extensive
marketing methods like social media and digital marketing. This allow organisation for
attracting potential customers which may be influenced by marketing of firms and
products which are offered by them (Morgan and et. al., 2019). Product Development: In this strategy, organisation have need for developing new deals
and offering in their niche market. The major disadvantage of this strategy which is
frequent for development of products as very much which is ineffective for organisation
such as Tesla, which are seeing as marketing expenses and high cost. There is advantage
of this strategy as company have ability for differentiate itself from other firms which
9

make sure for higher and also in more effective base of customer in future (Piterou and
Coles, 2020). Market Development: In this strategy which is inclusive of analyse new and potentials
market segment and also deals in their existing product. This provide as an opportunity
for company for increase their global presence in their vehicles, customer groups and new
market for experience luxury of Tesla vehicles in their home countries. There are various
aspect in this approach which is very difficult for company to accurately and
appropriately examine foreign market in which preferences and trends of customers
which are getting alignment with product and services of organisation and their existing
strategies. This will reduce effectiveness of company for those marketplace which will be
consider as disadvantage in future terms.
 Diversification: In this matrix, company have to appropriately sells and produces new
products in new and undiscovered market which is around globe. This is refers as firm
which is more accurately by searching new markets as there is trend which is prevailing
in them in terms of customer preferences which helps in identify market gap on base of
organisation which is developed as new product and services (Han, Yu and Kim, 2019).
The benefit of this strategy in terms of Tesla as there is have been tested of this strategy
by company in terms of past.
From above all strategies which are considered above, Tesla in uses diversification
strategy as this is growth strategy for forward. This leads as helpful strategy for organisation in
increase its market in terms of more effectively from other strategies.
Strategic Plan of Tesla: Objective: The main goal of company is to increase their market presence in various
unexplored and distinct market place by existing and new products which show as
efficient utilisation of electric power and environmental sustainability. Mission: Mission of Tesla ids to indicate effective acceleration of global transition which
is basically have effective and sustainable transport. Vision: The vision of Tesla is for developing most compelling the car company of 21st
Century by driving world as transition in electric car vehicles.
10