An Evaluation of Tesla's Digital Business Strategy: Report Analysis

This report provides a comprehensive analysis of Tesla's digital business strategy. It begins with an overview of digital business, defining its key trends and advantages, and then delves into the application of these concepts within Tesla's operations. The report examines emerging digital business models, such as freemium and subscription models, and discusses their relevance to Tesla while addressing crucial issues like cyber security and ethical considerations. Furthermore, it evaluates the influence of collaborative relationships and strategic alliances facilitated by digital technology on Tesla's business performance. Finally, the report explores the application of e-commerce principles within Tesla's framework, providing a holistic view of its digital business approach.

Individual report

Executive Summary
Digital business signifies use of technology in order to provide better experience and
values to customers by meeting with their requirements in timely manner. It provides feasibility
and flexibility to customers and also helps in enhancing profit margin. There are different trends
have been introduced in the field of digital business along with emerging digital business
models. Strategic alliance and collaborative relationship is also done by company for making
optimum use of resources and gaining positive outcomes. Ecommerce principles are also applied
so that users get a better experience and exposure of technology.

Table of Contents
INTRODUCTION........................................................................................................... 4
Overview of key trends and advantages.................................................................................4
Definition of virtual/digital business................................................................................. 4
Advantages of virtual/ digital business................................................................................ 5
Trends in virtual/ digital business...................................................................................... 5
Application of digital business along with advantages and key trends in context of selected
organization................................................................................................................ 6
Emerging business models................................................................................................. 6
Emerging digital business models:..................................................................................... 6
Discuss new emerging digital business models in reference of key issues like cyber security and ethics
................................................................................................................................ 7
Apply the way in which selected company is using emerging digital business models.....................8
Evaluate influence of new collaborative relationship & strategic alliance by digital technology for
selected organization........................................................................................................ 8
Collaborative relationship and strategic alliance....................................................................8
Advantages and disadvantages of collaborative relationship and strategic alliance by digital technology
................................................................................................................................ 9
Discuss how the chosen company uses collaborative relationship and strategic alliance through digital
technology.................................................................................................................. 9
Discuss the way in which ecommerce principles can be used by selected organization......................10
Ecommerce............................................................................................................... 10
Principles of ecommerce............................................................................................... 10
Apply ecommerce principles on selected organization..........................................................11
CONCLUSION............................................................................................................. 12
REFRENCES............................................................................................................... 13

INTRODUCTION
In contemporary time, use of digital techniques in business is increasing rapidly. Digital
and ecommerce platforms play a crucial role in meeting with requirements of customers in time
and cost effective manner. Main aim of evolving new and advance techniques is to provide ease
to customers so that they can perform their daily operations in an efficient manner. Now, trend of
digital business is also gaining popularity as people do not have time to go and purchase product
and services physically. Digital business offers great feasibility and flexibility due to which
customers can select product & services from their own place. For this purpose, there are ample
of digital business models applied in significant manner (Davidovski, 2018). Apart from this,
digital technology has also minimized the gaps and facilitates strategic alliance & collaborative
relationship between two companies which is crucial for growth and success. The present report
is based on TESLA which is a prestigious company of electric vehicles, headquartered in
California, US. It was founded by Martin Eberhard & Marc Tarpenning. Elon Musk who has
been associates with TESLA since 2008 has significantly contributed in growth and success of
organization. The present report includes overview of virtual trends and digital business along
with benefits and drawbacks and its application in context of company. Further, emerging digital
business models with reference is issues related to cyber security & ethics and impact of
collaborative alliance by digital technology has also been covered in the report. Lastly, it
comprises the use of ecommerce principles in organization.
Overview of key trends and advantages
Definition of virtual/digital business
Digital business focuses over digital capabilities to enhance its sales and revenue in
significant manner. In contrast of physical business, here customers can not interact with
business entity face to face. In digital business majority of activities are performed with the use
of internet at online methods. It provides ease to customers to make and receive orders at their
own convenient place (Balkan, 2017). In some cases, digital business has some sort of physical
presence in terms of warehouse but it do not have any physical outlets from where customer can
purchase goods physically. In this, digital technologies are applied with intend to provide value

to customers and support the internal capabilities of company. Digital business is a complete
transformation of traditional business where customers have opportunity to select the best
suitable product after going through with the reviews and feedbacks provided by previous
buyers.
Advantages of virtual/ digital business
Great flexibility: Digital business offers tremendous flexibility where customers can purchase
the product 24* 7 as per their requirement. In present time, customers want to get feasibility
while purchasing any product and service. Unlike physical market place, there is no particular
time period is defined for digital business (Inigo, Albareda and Ritala, 2017). It also helps to get
more number of customers which eventually enhance sales and profit margin of organization.
Better customer experience: Digital business provides better experience to customers as
they can select products and services which are suitable for them. And, also go through with the
reviews, feedbacks provided by previous buyers (Esposito De Falco and et. al., 2017). In
addition to this, virtual platforms also provide great transparency in terms of reviews and
feedbacks of product. Better customer experience eventually increase customer base of
organization which is important for earning substantial amount of sales & profit margin.
Driven customer insights: Through digital business, it is easy to get the data and
information of customers which further help in meeting with their requirements in an effective
manner (Cosenz, 2017). With the help of data, organization can prepare customize strategies for
fulfilling the needs & requirements of buyers in an appropriate way.
Trends in virtual/ digital business
Artificial intelligence: It is an emerging technique which is applied in digital business for
performing daily operations with due diligence and effectiveness (Helfat and Raubitschek,
2018). In this, machines & tools are used for performing tasks which also facilitates effective
decision making in business. Apart from digital business, AI is being used in different areas such
as hospitals, medical and more for getting positive outcomes.
Edge computing: It is a trend which is used for the purpose of data storage and
processing (Chaffey and Ellis-Chadwick, 2019). Edge computing has been evolved in order to

meet with the shortfalls of cloud computing system. In present time, digital business often use
edge computing for getting better results.
Application of digital business along with advantages and key trends in context of selected
organization
It is analyzed that TESLA applied highly efficient technologies and digital approaches for
bringing innovative product at market place. Company is known for the digital transformation
which it has brought by introducing electric vehicles first time across the world. TESLA applied
techniques of digital business to enable customers to get better experience while purchasing
product using online platform. Effective use of digital business makes company enable to earn
higher amount of sales and profit margin (Beynon-Davies, 2020). In addition to this, it also
provides an edge to organization over rival firms present in market place.
Emerging business models
Emerging digital business models:
There are a lot of business models are use in digital business for getting attention of
customers in significant manner (Anthony Jnr, 2020). Certain emerging digital business models
are mentioned as under:
Freemium model: It is widely used business model under which customers get product &
services at free of cost. In this, company provides some basic functions to free users and
generally charge additional amount for premium features (Gimpel and et. al., 2018). It is an
effective way to attract more number of customers and then generate significant income by
converting free users in paid customers. Some examples of this model are LinkedIn, Spotify and
more.
Subscription model: Here, products & services are provided as subscription for which
amount need to pay once or the subscription can be renewed according to demand of customer.
Main aim of this model is to build long term relationship with subscribers (Kittelberger and
Allramseder, 2019). Generally, customer gets benefit on extension and renewal of subscription in
contrast to one time buyer. Amazon prime and Netflix are some of the example of this model.

Free offering: Under this model, all services are provided without any cost where
customer does not need to pay any amount for using services. It is a crucial way to reach out to
the large number of audience by providing free services (Saunila, Rantala and Ukko, 2017). In
addition to this, it also helps in brand and trust building. Here, some examples of free offering
model are Face Book, Google and more.
User experience premium: It is a model which is applied by prestigious companies
which has been made their significant presence in market place (Güler and Büyüközkan, 2019).
They ensure to offer value, experience to customers which eventually make them enable to
charge premium price. Some examples of this model are Apple and TESLA.
Discuss new emerging digital business models in reference of key issues like cyber security and
ethics
In present time, there are ample of digital business models are emerging but it is also
stimulating to digital scandals, crime and other such practices. It is analyzed that digital business
is creating threat in terms of privacy and security so users (Dowling, 2016). Due to digital
transformation, there is higher probability to get the access of personal credential of users to
unauthorized parties. By this way, personal information of users can be misused for conducting
any cyber crime.
Cyber Security: Cyber security has become crucial due to emerging number of cyber
crimes. While availing services of digital business, it is required to provide personal data such as
name, mail id, number and more. In this, payment is also done through online medium. Here, this
information can further use for cyber crimes (Chaffey, Edmundson-Bird and Hemphill, 2019).
There are several digital business models such as freemium, subscription, free offering and more.
These all models require personal data which can further use hack by unauthorized users for
conducting cyber crimes. For instance, Google and Face book which are based on free offering
model has faced the allegations of sharing data to other parties. Therefore, it is imperative to
imply appropriate rules and regulations of cyber security in use of digital business model.
Ethics: There are some ethics in use of digital business model which are related to protect the
privacy, protect personal information of users and more. Due to emerging digital business model,
ethical issues in the digital world are also increasing (Osmundsen, Iden and Bygstad, 2018). It is

harming the personal space and privacy of people. Sometimes, personal credentials of users are
also misused for illegal deeds. Hence, it is important to apply ethical practices while using digital
business models.
Apply the way in which selected company is using emerging digital business models
There are ample of models on which digital business are being operated. TESLE is one
the highly innovative companies which has introduced digital transformation by electric vehicles.
In context of TESLA, they can use the digital business model in an effective way which is given
below:
It is analyzed that TESLA applies a direct distribution model where it offers product directly
through ecommerce platform and physical stores at global level. In addition to this, organization
also has significant positioning at digital platforms. Here, customers have great faith and trust
over company so it is easy to get bookings through online mediums. TESLA does not depend
over any franchise dealers to sale the car rather they believe on selling the cars directly to
customers (Weigl, 2016). It is stated that TESLA is working in user experience digital
business model under which they charge premium price from customers for their product and
service. Here, they offer value and experience to customers which allow them to charge premium
price from customers.
Evaluate influence of new collaborative relationship & strategic alliance by digital
technology for selected organization
Collaborative relationship and strategic alliance
Collaborative relationship: It is the relationship between two parties or more parties who
come together and share their resources together in order to attain common goals within stipulate
period of time. Here, resources such as finance, knowledge are share so that predefined goals can
be attain in an efficient manner (Remane and et. al., 2017). It is stated that collaborative
relationship can provide positive results in terms of development of creative and innovative
products for upliftment of society. In collaborative relationship, it is vital for all the involved
parties to trust each other so that partnership stays for longer period of time.

Strategic Alliance: It is an agreement under which two organizations combine their
resources to accomplish a specific project for mutual benefit. It allows two companies to work
together towards attaining similar goals within a predefined period of time (Ismagilova and et.
al., 2017). Strategic alliance develops synergy by combining resources of two and more
organizations together. In addition to this, strategic alliance is helpful in terms of achieving goals
and objectives in significant manner. With this, company can target more number of audience
which increases present level of sales and profit margin. Apart from this, strategic alliance also
enhances the resources which eventually increase the potential of company significantly.
Advantages and disadvantages of collaborative relationship and strategic alliance by digital
technology
Digital collaboration is related with implying technology for the purpose of collaboration.
It allows companies to work in an effective way in contrast of traditional approaches. Through
digital collaboration and alliance individuals get connected with each other via softwares for
performing task in an effective way.
Advantages:
 It allows company to enhance the presence at digital platforms which further drives more
sales and revenue (Singh, Gaur and Agarwal, 2017).
 Strategic alliance increases the resources such as finance, knowledge and people which
further make the company enable to execute digital business in successful manner.
Disadvantages:
 Sometimes, companies got enter into collaborative relationship but over the period of
time, they find it difficult to work collectively (Kong and et. al., 2020).
 It is also stated that conflicts take place between the partners which might hamper
existing business practices.
Discuss how the chosen company uses collaborative relationship and strategic alliance through
digital technology
It is analyzed that TESLA has established strategic alliance and relationship with two
well known leaders of automotive industry. Company has been done partnership with Toyota and

Daimler AG for getting success and growth in business. After getting associates with Toyota, it
provided access to company of world class automobile manufacturing facility (Ballard, 2017). In
addition to this, alliance with Daimler helped the company with its engineering expertise. Apart
from this, TESLA also has partnered with digital companies in order to make efficient use of
digital platforms for promoting the product at wide level. Strategic alliance with other companies
significantly helps TESLA to grow and enlarge business in digital manner which will drive
higher sales and profitability.
Discuss the way in which ecommerce principles can be used by selected organization
Ecommerce
Ecommerce refers to buys and sale products with the use of internet. There are a lot of
products and services are offered by ecommerce platforms from where customers can purchase
goods and avail services as per their requirement. Ecommerce provides great flexibility to people
to search and choose best suitable product for meeting with needs of buyers. This platform offers
feasibility to make online booking and also allows buyers to go through with reviews, feedbacks
provided by previous customers (Farani, Karimi and Motaghed, 2017). Apart from this,
ecommerce websites also provide option of easy payment so that customers do not face any
difficulty. With enhancement of ecommerce, it is easy for buyers to search and purchase
products which are suitable for them. However, in ecommerce platforms there is no physical
outlet but these platforms maintains warehouse for meeting with needs of buyers in timely
manner. Through ecommerce, it is possible to place and receive order at convenient place.
Amazon is the well known ecommerce website which offers variety of products at a single
platform. In addition to this, it also make sure to provide timely delivery to customers. Apart
from Amazon, EBay, Alibaba and more are some well known ecommerce platforms which are
used by a lot of individuals at global level.
Principles of ecommerce
Ecommerce platforms are gaining popularity in present time as it is better for both
customers as well as sellers. Customers get flexibility while purchasing through ecommerce
website. On other side, it allows sellers to earn substantial amount of profit margin which is

crucial in order to grow and succeed in an efficient manner. Here, some principles of ecommerce
platform are mentioned below:
User friendliness: It is one of the most essential principles as per which website needs to
be user friendly so it is easy for users to find necessary sections in website (Strandhagen and et.
al., 2017). There is requirement to lest adequate space for search so that customers can easily
search for the product and services. Interface of website needs to be clear in order to drive more
traffic.
Emphasized on security: Now, security has become the main concern for the users of
online platforms as there is higher threat of cyber crime. So, it is important for ecommerce
platforms to use efficient and strong encryptions so that unauthorized users and hackers cannot
hack the data of buyers (Makris, Patikas and Stamatiou, 2016). It is the crucial principle which
needs to be follow by each and every ecommerce website for ensuring long term sustainability of
business.
Responsive technology: Instead of using strong HTML, coding and images, company
needs to focus to make the website page highly responsive. People not tend to wait of loading the
web page as they want to get instant results (Heinze and et. al., 2016). If, ecommerce web page
takes a lot of time to get load there is higher probability that people will leave the page. Hence,
this principle needs to be follow by developers while preparing ecommerce website.
Apply ecommerce principles on selected organization
It is analyzed that TESLA is known for digital transformation and highly emphasis over
technology. Here, some ecommerce principles followed by company are mentioned as under:
User friendly: Ecommerce website of TESLA is highly user friendly as company focuses
on interface of website. They make sure that customers can use their website efficiently in order
to get appropriate amount of information.
Empahsis on security: It is stated that TESLA ensures that the data of users remain
completely safe for which they also use strong encryption and softwares for protecting the
company from any sort of allegations (Tripathy and Pavlidis, 2020)..