Business Strategy: Tesla's Environment Analysis & Strategy Plan

This report provides a comprehensive analysis of Tesla's business strategies, examining both the macro and micro environments in which the company operates. It utilizes frameworks such as PESTLE and SWOT to evaluate external factors like political, economic, social, technological, environmental, and legal influences, as well as internal strengths, weaknesses, opportunities, and threats. The report also includes a stakeholder analysis to assess the influence of various parties on Tesla's strategic decisions. Furthermore, Porter's Five Forces model is applied to evaluate the competitive forces within Tesla's market sector, leading to the formulation of strategies aimed at improving the company's competitive edge and market position. The analysis culminates in a strategic management plan with tangible and tactical strategies, priorities, and objectives, offering a critical interpretation of data and insights for informed decision-making.

Business Strategies

Table of Contents
Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Task 1...............................................................................................................................................1
P1. Applying appropriate framework analyse the impact and influence of macro environment
on given organisation and its strategies......................................................................................1
M1. Critically analyse the macro environment to determine and inform strategies management
decision.......................................................................................................................................5
TASK 2............................................................................................................................................5
P2) Analysis of internal environment and capabilities of Tesla ................................................5
M2) Critically evaluate internal environment to asses the strength and weaknesses of Tesla
with internal capabilities ............................................................................................................8
TASK 3............................................................................................................................................8
P3) Applying porter's five forces model to evaluate competitive forces for Tesla in its market
sector...........................................................................................................................................8
M3) formulation of appropriate strategies to improve competitive edge and market position.10
Task 4.............................................................................................................................................10
P4. Illustrate a range of theories, concept and models interpret within devise strategies
planning for given organisation. ..............................................................................................10
.......................................................................................................................................................10
M4. Produce a strategies management plan that has tangible and tactical strategies pirorties
and objectives. ..........................................................................................................................13
D1. Critique and interpret information and data applying environment and competitive
analysis......................................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business is referred to an organisation, firm or entity that is engaged in the commercial,
professional and industrial activities. This is also defined as the organized efforts of an individual
or a group of people to produce and sell the goods and services in order to generate the
maximum profit. In addition to this business strategy is the means by which an organisation set
out the competitive moves and actions which is used by the company to attract customers,
effectively compete and enhancing the performance (Yuan, and. et. al., 2020). It is a course of
actions and set of critical decisions which assist management to achieve the specified objectives
as this outlines how business should carried out to reach at the desired goals. Business strategy
depicts the top management along with an integrated framework as to discover, evaluate and
assort beneficial opportunities which will provides support in the longer sustainability and
success of the company. This report is based on Tesla which is an American based company with
the headquarter in Palo alto, California. The organization specializes in selling electric vehicle
and clean energy and also includes energy storage, solar panels and solar roof tiles. In 2009,
Tesla was ranked as world’s bestselling plug-in and electric passenger car. This report is
consisting of analysis of impact and influence that macro environment has on an organisation
and its business strategy. Evaluation of the internal environment and capabilities, furthermore it
includes analysis of market with the use of models and theories and understanding and
interpretation of strategic directions.
MAIN BODY
Task 1.
P1. Applying appropriate framework analyse the impact and influence of macro environment on
given organisation and its strategies.
Overview of Company:
Tesla is an American based electric vehicle which is situated in Palo, Alto, California.
Tesla's is currently involving products related within electronic cars, battery energy storage from
home to grid scale, solar panel as well as other related products and services. In following there
is elaborated mission, vision and objectives highlight.
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 Mission: “To better accelerate the advent of proper sustainable transport for upbringing
through collaborate mass market of electronic cars that enhance in market as soon as
possible”. Vision: Their vision statement is to form excellent car compelling company in 21st
century by driving in world transition to better electronic vehicle. For this concept, Tesla
is fully focused on utilisation of renewable energy (Cosenz and Noto., 2018).
Specifically, the corporation concentrating on providing better global renewable energy
market.
 Objectives: Tesla's purpose is to “Change the World and Humanity”. It is narrated by
Elon Musk who is owner of Tesla. Furthermore, the motive behind is to highly facilitate
Artificial Intelligence base product and service. According to this segmentation for
implementing segmentation of electronic vehicles that helps to reduce pollution.
Macro Environment: It is framework that emphasis about condition that exists in economy
background which impact on decision making of company (Cullen, 2019). By adding external
factor is having important role as well as strategies that depends on particular firm to undertakes
it or not. Thus, in following there are some external environment factors implies analysed used
Pestle Assessment.
 Political Factor: In this factors, it describes about political related environment rules,
regulation or norms which influence strategies that opted by company. As Tesla venture
is based on United States America but their global presence in which UK is one region
that ensures better growth of this organisation within competitive market. Hence, the
current scenario of UK political condition is stable as their policies are changes in a
particular time period. Policies such as related to land, labour, liberal democrats and
foreign exchange policies. But there is uncertainty implies about Brexit Market that can
causes some barriers to Tesla for not to trade in European Union which creates unstable
laws and regulation. Fo
 Economical factors: As per this factor reflects towards overall performance of particular
nation's economy background. As per the perspective of UK, it is a fifth largest economy
in overall world by calculation of its nominal Gross domestic product. But there is some
uncertain factor where Tesla can face big trouble in terms of recession, inflation and
market product supply and demand slows down (Hacklin, Björkdahl and Wallin., 2018).
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These factors can consists as challenges as raw materials and other form of necessary
resources. For Example: the desire prices that needed to overcome for better
sustainability. Hence, Tesla must transfer with their effective joint for European Union
countries where it helps to excellence sustain in tough market conditions.
 Social: According to this factor, it depicts to approach consumer and market, as United
Kingdom is having big consumer market. As per context of Tesla, UK's market
conditions are quite favourable. There are some reasons which is enhance lifestyle
preferences of people are maturely used low carbon vehicles and batteries. Furthermore,
this is an opportunity for Tesla where they manufacturing new innovative advanced
electronic product in terms of batteries and vehicles that helps to reduce pollution. Thus
this changing concept of not using fuel vehicles by Tesla can create big positive impact in
customer daily life.
 Technological: This aspect is mainly defines about better advancement of technologies
that creating productive impact on organisation as well as nation growth. In background
of United Kingdom is having more opportunities advanced technological and financial
institution. Somehow, business is tends to constantly developing new technologies in
which Tesla can utilise this platform to create their vision of upbringing electronic
vehicles manufacture globally for customer.
 Environmental: It defines about those factors which are associated with environment of
market where Tesla is deals in UK market. There are certain regulation in order to control
environment guidelines. By adding of consisting for holding to improve prominent image
as firm produces product which are electronic form. It majorly reduces fuel better
consumption to work.
 Legal: As per this factor is only introduce overall legislative rules and regulation that
easily govern by policies and procedure towards an organisation is to specific
organisation development (Hemayatkar and et. al., 2019). For Tesla company, there are
certain legislation which majorly govern to protect the intellectual property. This can
generate a wide range opportunities for example: Tesla company where they effectively
protect their innovative strategies and implement into their new product. Therefore,
company has faces various legal challenges in which government shows their
disappointment of Tesla's artificial intelligence vehicles can be threats towards further
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humanity. Hence, it could creates high level of disadvantages towards organisation in
terms of instilling where they trusts in mind of customers.
Evaluation:
The above Pestle for Tesla is majorly commencing that enables towards productivity
where positive factor would be social and technology. As Tesla can target easily different
peoples as per their preferences, age, gender and other aspects to approach their product in
effective manner. But some of negative factor like Political, Economic and legal can creates high
intensity of barriers such as policies, Brexit market, recession, inflation and employment laws to
sustain in competitive market.
Stakeholder Analysis: It is a process of assessing a system and potential changes that is very
easy to involves workforce, shareholder and customers (Maulina and Raharja, 2018). As per this
information it mainly assorts to mapped where interest of those stakeholders must defines in
specific project plan, policy, program or other action plans.
INTEREST LEVEL
POWER LEVEL
HIGH LOW
HIGH Workforce, Shareholders Government
LOW Customers Suppliers
In above table is describes within two important variable aspects which is necessary to
better understand in context of assessing specific stakeholder. For first variable, it represents
power level that assigned to higher authorities. In another words, top level management who
allows to implement their decisions for better organisation concern (Parc and Kawashima, 2018).
As for second variable is reflects about interest level which majorly shows manpower and
shareholder get affected by decisions making on strategies. Thus, some of potential attributes of
stakeholder is highlight in above table that having impact on organisation.
 Workforces: They are one of most important and valuable stakeholder for company. In
context of Tesla, where the employees power is very high because they contributing for
organisation business to effective maintain towards their culture (Shuen, 2018).
Therefore, Tesla is need to assort some sort of strategies which helps to manpower for
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satisfying their personal objectives. Moreover,, the interest of stakeholder group in also
more innovative within Tesla.
 Shareholder: It is factor of shareholder where they are having high power and interest
within company by more investment aspects. For further instance, due to current
economic condition there is downfall for certain drastic issues like lay off employees,
Covid situation etc. The markets such as United Kingdom is having more influence and
having organisation due to gaining higher financial returns from Tesla.
 Customers: They are those who buys product and services which majorly offers from
organisation. Customer are having high interest as they curious to explore innovative
product but the power is low. For examples, Tesla is innovate their new specification that
enhance to develop accordance to better decide strategies by Tesla. Somehow they have
moderate influence in organisation.
M1. Critically analyse the macro environment to determine and inform strategies management
decision.
In macro environment perspective it helps to analyse overall external factor which come
across to bring opportunities and challenges for organisation. For instance, implement Pestle
analysis for Tesla company in which Political and Economical factors bring challenges in terms
of Brexit Market and recession factor in UK. This barrier for Tesla might reduce the growth of
their productivity. But there are some factors like technological and social which can enhance
more opportunities for Tesla in term of Artificial intelligence equipment in UK. Thus macro
environment helps improve decision making for attaining competitive advantages.
TASK 2
Along with the external environment, it is essential for Tesla to also examine internal
environment as well, that will help the company to find out the strength and weakness. along
with this it also determine capabilities which provides support in the decision making process for
the development of strategy.
SWOT analysis: This is defined as strategic planning technique which is used as the
framework in context to evaluate the internal environment of the company that directly influence
on performance and decision making of the company (Maniora, 2018). It includes core internal
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strength, weakness, opportunity and threat. This analysis is performed as under in context to the
Tesla:
STRENGTHS WEAKNESSES
 TESLA is one of the highly innovative
company,which empowers it to
develop competitive and profitable
product.
 Tesla has a strong brand recognition
across the globe and this is a strong
symbol of innovation and renewable
energy solution.
 It is having a strong control over its
production process.
 Tesla is having limited market presence
as it generates most of its revenues in
the United Kingdom
 Tesla is having limited supply chain
which impact its rapid expansion in
developing market.
 Tesla products are comparatively more
expensive then the competing cars that
has negative impact over its customers
base and revenue
OPPORTUNITIES THREATS
 One of the major opportunity for Tesla
is global sales expansion.
 Company has the opportunity in
business diversification such as
acquiring new businesses
 Competition in market can be a biggest
threat for the company as this will
impact on its sales.
 Due to safety hazards, Tesla is still
facing some threats in terms of its self-
driving feature in cars.
VRIO analysis: It is a business analysis framework that is used to assess the situation
inside the organisation (Madhushree, Kumar, and Aithal, 2018). It is associated with the
evaluation of company's resources and its competitive advantage. This analysis is disused below
in relation to the Tesla:
RESOURCES VALUABLE RARE INIMITABLE ORGANISABLE
Human resource Human resources - - -
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Equipment’s and
Technologies
Equipment and
technologies
Equipment and
technologies
- -
Brand image Brand image Brand image Brand image -
Financial
resources
Financial
resources
Financial
resources
Financial
resources
Financial
resources
As per the above table, there are various appropriate and adequate resources of an
organisation, therefore it is important to evaluate that which of these are valuable, rare,
inimitable and organisable, thus in detail it is discussed below:
Valuable:
 Human resources: This refers to the set of individuals who work together towards the
common goal of a company (Suoniemi, and. et. al., 2020). They are responsible for the
development of products, marketing and selling to the right customer and to the potential
market. Hence human resources are quite valuable for Tesla.
 Equipment’s and technologies: it is a valuable aspect for the company as this enhance
capacity of organisation in producing effective products, through using advanced
technologies and essential research and development activities.
 Brand image: This is the most valuable resource of Tesla as this allow it to make strong
presence across the world and ensures easy entry in the potential markets.
 Financial resources: It is the most important resource for any company, and Tesla is
having a strong financial position which is quite valuable for expanding the business
operations
Rare:
 Equipment and technologies: As Tesla is one of the most innovative company, in which
it mainly includes technological inventions and unique methods. for bringing high quality
products. Thus, this makes an equipment and its technologies rare from others.
 Brand image: Tesla's brand image is rare,as they are having their own unique concepts
of using artificial intelligence in products and services. Brand image is one of the core
sources of competitive advantage for Tesla, along with this it main differentiators for
brand which makes it stand apart from world's crowd of auto mobile brands
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 Financial resources: Tesla is big and strong brand along with the adequate financial
position (Acuña-Carvajal, and. et. al., 2019). As their working criteria in financial aspects
and investment is different from others company which that provides them strong ability
to introduce inventions.
Inimitable:
 Brand image: With the more inventions and strong brand recognition, it is acquiring the
image of transformation leader in auto-mobile industry. . Therefore, Tesla is enhancing
inimitableness in its brand image.
 Financial resource: The way of using financial resource of Tesla that provides positive
and favourable outcomes through using various investment techniques and proper
research activities, this makes its financial resource inimitable.
Organisable:
 Financial resource: Tesla has effectively maintain its annual budget as per the business
plan along with this, it effectively monitor its financial position within the specified
period of time (Peng, 2020). Moreover, Tesla also monitor its day to day cost such as rent
and wages and keep accounting records updates to the date so that profit and losses can
be calculating easily. This enhances the scope of organising in Tesla's working within the
company and this assist in developing better sustainability and growth.
M2) Critically evaluate internal environment to assess the strength and weaknesses of Tesla with
internal capabilities
In the above analysis, internal environment has been evaluated through SWOT and VRIO
analysis framework,through which various strength and weaknesses of Tesla has been
identified.Tesla is one of the most innovative company in auto-mobile sector along with the
strong brand recognition. In addition to this, Tesla is consisting of the resources that provides
support in building the competitive edge and stand as a strong capability for a company
(Sánchez-Herrera, and Donate, 2019). Moreover, there are some weakness as well, such as this is
having a limited market presence as its most of the revenue is generated in United Kingdom.
Along with this, it is also consisting of higher prices in relation to the competitors which prevent
the company from increasing its sales and customer base.
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TASK 3
P3) Applying porter's five forces model to evaluate competitive forces for Tesla in its market
sector
For an organisation, it is necessary to assess its industrial attractiveness in order to
determine the several forces prevailing in the industry that have a direct impact on performance
and profitability of the company. Therefore, in relation to this porters five forces model is being
utilized, which is a framework that is used to monitor the various factors within industry. . This
framework is discussed below in context to the Tesla company: Bargaining power of suppliers: This factor addresses that how easily suppliers can drive
up the cost for inputs. This is affected by the number of suppliers of key inputs within the
sector, how unique inputs are and how it will cost to company while switching to another.
In context to Tesla, bargaining power of suppliers is moderate, as there are selected
suppliers who supply the required and key materials to the organisation. And this
enhances supplier's bargaining power (Chen, and. et. al., 2018). Moreover, some
suppliers use third parties for supplying materials to Tesla. Thus this drives a less control
over suppliers. To reduce this power, company will enhance its supply chain to develop a
contact with new suppliers. Bargaining power of buyers: It is refers to the ability of a customer to drive lower prices
for product and services. This factor affected by how many buyer or customers a
company has, how significant a consumer is and how much it cost to a company to find
new customers. With the respect to Tesla, here bargaining power of customers is low, as
firms offers unique products and guaranteed effective benefits which are associated with
the customers. Moreover switching cost of customers towards the others brand is low,
which results in makes reducing bargaining power of customers. Threat from substitute: This is defined as goods or services that can be use in place of
company's product or services and pose as a threat for the company. organisations that
produces goods with no close substitutes have more power to increase it prices and
possess in a favourable term (Oldman, and Tomkins, 2018). Tesla operates in an auto-
mobile industry in which there are less numbers of substitutes available. But one of the
prominent substitute is the fuel car and another can be public transportation. Hence threat
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from substitute is moderate for Tesla, in order to reduces this, the firm could adopt
service orientation as strategy and will also enhance the switching cost of customer. Threat of new entrants: A company's power is also affected by the force of new entrants
within the industry. The less time and money is needed for a competitor to enter into the
market that will stand as an effective competitor and through which well establish
companies position can be weakened. For a sector like auto-mobile, there are always an
inventions and innovations with the use of technologies that requires huge investment.
Hence there is a less threat of new entrance with the respect to tesla.
 Competitive rivalry: This is refers to the number of competitors within the industry and
their ability to undercut a organisations (Cardoni, Kosheleva, and Lombardi, 2020).
Market with the larger number of competitors along with the number equivalent products
and services reflects the lesser power of a company. Tesla is under the direct and
aggressive competition with the others organisations like BMW, Volkswagen etc. that are
working for expanding their operations in electric car and this is a major threat for
company in a long run. Therefore, competitive rivalry is higher for Tesla, in order to
encouraging effectiveness, Tesla is working on the differentiating product strategy and
could also adopt collaboration with the competitors in order to increase the market share.
Evaluation: as per he above industry analysis applied on Tesla, it having a less threat from the
new entrant, barging power of buyers and competitive rivalry as Tesla has build it strong brand
image in terms of innovations and inventions across the globe. Which stands as strong
competitive advantage and eliminates the negative impacts along with threats for the company.
Along with this company should adopt some strategy for increasing its presence in the
developing markets for the more growth and success.
M3) formulation of appropriate strategies to improve competitive edge and market position.
An organisation is need to develop an appropriate and adequate strategies in order to
improve competitive edge and market position within market. So, for this purpose porters five
force model is being used which monitorsand analyse various factors in the industry that has a
direct impact on the company's performance. Tesla is able to enhance its supply chain which
makes rapid expansion and develop contact with new supplier. So, that power of suppliers can be
reduced.In addition to thisTesla will adopt the service oriented and product differentiation
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