Strategic Management Project: Tesla's Industry and Firm Analysis

This project offers a comprehensive strategic analysis of Tesla, an American international organization in the automobile and clean energy industries. The analysis begins with a PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors impacting Tesla's operations, including its manufacturing in China, economic recession impacts, and the adaptation of digital technology. Porter's Five Forces are then applied, assessing the bargaining power of suppliers and buyers, the threat of new entrants, the intensity of rivalry, and the threat of substitute products. The VRIO framework evaluates Tesla's resources in terms of value, rarity, imitability, and organization, highlighting its financial resources, strong leadership, and goodwill. A value chain analysis examines primary activities like inbound and outbound logistics, operations, marketing and sales, and service, as well as support activities such as infrastructure and technology. Finally, a SWOT analysis synthesizes Tesla's strengths, weaknesses, opportunities, and threats to provide a holistic view of its strategic position. The project underscores Tesla's ability to navigate industry challenges and maintain a competitive edge through innovation and sustainable business models.

Project 1 written
analysis of an industry
and a firm

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
PESTEL analysis.........................................................................................................................3
Porter’s five forces.......................................................................................................................4
VRIO............................................................................................................................................5
Value Chain.................................................................................................................................6
SWOT analysis............................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management can be considered as the regular method which is linked to observing,
planning, evaluating as well as assessing several requirements of the commercial business in
order to accomplish the long term goals as well as objectives. In addition to it there are several
kinds of the alteration which can happen in the different environment of the organization and this
is also crucial for the leader or the managers of the business in order to observe these
modification in accordance to make sure the growth as well as development of the business
(Zachosova, and Koval, 2022). Moreover to this the following report is based on the
organization Tesla which is known to be the American International organization that works in
automobile industry as well as clean energy organization. Also the respective organization is
having its headquarters in Austin Texas. Moreover to this the respective organization is offering
there services and products in their physical stores. Also the following report will cover about the
brief description of strategic management plan.
TASK
PESTEL analysis
Functioning in the global atmosphere can be complex for the organization that function in the
automobile industry which is extremely regulated (Stoianova, Lezina, and Ivanova, 2022). In
addition to it there are several elements as well as problems that are encountered by the
respective organization and that makes the complex situation for the commercial business.
 Political factor –In relation to the respective organization Tesla management has created
facility of manufacturing in China in order to support the organization in minimising the
cost and increasing the margin of profits. It provide assistance to the organization on
order to increase its profitability but there are also several kind of the rules as well as
regulation which are imposed by the legal authorities of China on the global business
which are very strict for the foreign organization. Also the commercial business requires
to abide all the different guidelines positively in order to prevent any type of legal
consequences in that particular market area.
 Economic factor – In countries like China there is the lower rates of wages that is
increasing the favourable condition for the commercial businesses as this permits the
businesses to minimise the entire cost of the production and also permits them to enhance

its margin of profit of the organization. In addition to this the influence of the economic
recession which has been broadly affected to the breakdown in the sales of automobile
industry But recession comes at the time when the global economy is trying to be
improved but it gives the outcome in the minimization of the sales revenue of several
industry and it majorly affected the automobile sector (Schmidt, and Van de Walle,
2022).
 Social factor – Social and cultural factors is known to be one of the most important in
relation to the global trade. In relation to the organization Tesla the enhancement of the
adaptation of digital tech has extremely influenced the sales revenue of the specific
services or products. As management of Tesla is offering new version of electric vehicles
to their consumer base that basically gives the organization potential opportunity in order
to sustain and success in the market area because the electric vehicle currently are in
highly in demand because it has a lower impact on the environment and it doesn’t require
any other resource.
 Technological factor – Currently latest tech is broadly moving the different sectors
towards their growth and development internationally. In the current situation several of
the growth and development in different sectors were accomplished by the utilization of
the latest tech in the innovation. In context to the respective organization Tesla
management is focused in introducing their electric cars as well as products for the
energy storage.
 Environmental factor –.Because of the arrangement in the people that are more
conscious regarding the betterment of the environment and negative impact of the
automobile towards the environment. So in order to overcome this management of Tesla
have taken several different steps and measures in order to address these problems. So in
accordance to the test management of Tesla is known to be few of the organization in the
automobile sector that have the more suitable as well as sustainable model of the business
(Roozitalab, 2022).
 Legal factor – Due to the current existence of several different regulations as well as
imposed laws that are link to to the industry of automobile this has now become very
problematic for the commercial businesses in order to function internationally. In case of
the Tesla management has been more conveniently capable to regularly concentrate on

the sustainability as well as innovation which has been assisted them to making them
more capable to overcome several different legal problems.
Porter’s five forces
 Bargaining Power of Suppliers - The collective power of bargaining of the suppliers of
automobile industry is known to be the moderate. It is merely because of the enhanced
number of the commercial businesses in this sector. Apart from that the buyers basically
rely on the suppliers that also impacts the bargaining powers of supplier (Ramaru, Garg,
and Chakraborty, 2022).
 Bargaining Power of Buyers - Bargaining powers of the buyer of the respective
organization Tesla is moderate because of the low of substitute of the products like Tesla.
In addition to this another reason because of the moderate powers of the buyer of the
respective organization Tesla is because the organization is having their products in a
extremely differentiated manner which gives them edge over their competitors in the
market area.
 Threat to New Entrants - For the organization like a the threat of new entrants in the
sector of automobile is low. Now the major barrier in order to enter into the automobile
sector is that it requires large amount of investment in order to start a business in this
industry. This involves major infrastructure as well as workforce so even if a new
organization can tap into this market area still it will be hard for from them in order to
gain the market share immediately.
 Intensity of Rivalry - Enhanced level of competition is in the sector of automobile which
is known to be the major threat to the respective organization but in order to avoid from
this management of Tesla has gained the loyalty of their consumer waste because of their
unique selling product as the organization still encounters enhanced level of numbers in
the segment of electronic vehicles as well. (Gökçeka, and Karakayab, 2022)
 The threat of substitute product - This threat of substitute is very low for the respective
organization Tesla since there are only few organizations that are working on electric
vehicle in the entire world. The relation to the of the Tesla is to offer top quality electric
vehicles with having immense level of performance as well as range to their consumer
base. In addition to this there are several of electronic vehicles as well as hybrid vehicles
in the market area but none of those vehicles can be as effective as Tesla.

VRIO
Here VRIO dimensions are -
 VALUE - It means a required resource that basically defend against any type of the
thread and also increases the value to the commercial business. Resources are known to
be the crucial element for the commercial business in order to enhance the level of their
consumer base or increasing their sales revenue as well. In relation to the respective
organization Tesla financial resources of the organization are known to be the valuable as
the organization have enhanced level of sales revenue that assist them to gaining more
profitability in the books of the commercial business (Ghorbani, and et.al., 2022).
 RARE - Resources that are possessed by only few commercial businesses and few
resources that are having unique nature are known to be the rare resource. In context to
the respective organization Tesla strong leadership as well as decision making of 3rd
upper level management is known to be the rare source of the organization which assist
them in giving the edge over their competitors as well as it also leads to their long term
sustainability and success in the market area as well.
 IMITATE - Resources that basically are very expensive and difficult to substitute
belongs to this type of criteria. This can also be done in 2 ways through substituting it or
by duplicating the actual resource. In case of the Tesla most common element which is
not imitable by the other organization is the goodwill of the Tesla that is very strong in
the global market area. (Fauzi, and et.al., 2022)
 ORGANISED - This means to the organization need to suitably coordinate as well as
make a plan in order to set up its in sources. In relation to the Tesla organization is
having flexible supply chain network that basically make sure that the product and
services of the organization is reaching out to their consumers more conveniently in the
outlets.
From the above evaluation this has been concluded that the goodwill as well as financial
resources of the organization can effectively and efficiently give the edge to the organization
over their competitors in the market area. However appropriate supply chain management as well
as strong leadership of the organization can also support them in increasing the sales revenue
which will lead to there enhanced profitability for the long period of time (Zaigham, and et.al.,
2022).

Value Chain
Primary Activities -
 Inbound Logistics - Warehouses of the Tesla are majorly and primary utilised for
transporting as well as storing the products of the respective organization. In addition to
this these warehouses are basically least and these are situated in the different part of
United States and also in the different region of the world as well. (Egas, and et.al., 2022)
 Operations - The respective organization Tesla was basically founded in the year 2003
and by the year 2007 the respective organization introduced its first and initial
merchandise or product which is named as roadster.
 Outbound Logistics - In context to the organization Tesla management is having one of
the largest manufacturing facility in gigafactory which is located in Nevada United
States. This largest manufacturing facility of the Tesla is basically situated outside the
Reno and this facility of manufacturing is basically utilised for assembling of different
equipments of the vehicles which are belong to model 3. (Cruz-Ruiz, and et.al., 2022)
 Marketing and Sales -On the other hand Tesla utilizes its different digital media
platforms as well as website in order to promote its brand name as well as its product and
services in the different parts of the world in a very low cost. In addition to this
management of the Tesla utilizes several different channels of social media in order to
reach out various consumers across the globe.
 Product and Services - The first product of the respective organization Tesla is the
roadster which was launched in the year 2008 how currently the organization is focus
them selling different types of the cars to their consumer base.
Support Activities -
 Infrastructure - Tesla basically has the 2 main departments which is the energy product
and other one is automobile sector. The CEO of the respective organization Tesla is Elon
Musk which is known to be one of the main decision maker of the organization. In
addition to this the respective organization focus in following the several different type of
structure in the organization. (Caneppele, and et.al., 2022)
 Technology - Because of the enhanced level of the rivalry in the industry of automobiles
several different organization have also focused in manufacturing the fully electronic
cars. In in context to the respective organization Tesla management launched model

South which is the electric vehicle and the management or Tesla is basically known to be
for their regular investment in the sector of research and development so in the year 2080
the organization basically spend almost more than one billion dollar on its research and
development department that be enhanced by around 100 million from the last year as
well.
 Human Resources Management - The respective organization Tesla has more than
50,000 employees that are working in a full time in the year 2019 and the organization
also supports its talented workers in order to manage as well as maintain the extreme
operational effectiveness and efficiency which assess the organization in developing its
business around the market area. Management of human resources of the respective
organization Tesla is known to be the department of concentration of most of the take
organization in order to retain as well as attract top talent of the company.
 Procurement - Vehicles of Tesla basically depend on the various of different tools and
parts which can acquired from various of suppliers from the international market as well.
So in order to do that the organization have built a suitable relationship with its major
suppliers that involves various vital system elements. (Bromiley, and Rau, 2022)
SWOT analysis
 Strength –
1. Energy Efficiency - Tesla is a creator in the ground of rechargeable cars due to its
important usage of lunar energy.
2. Highly Innovative – Tesla’s strategy is very respectable. They study numerous aspects
when it arises to emerging their electrical automobile
 Weaknesses –
1. Experimental and complex procedures - Tesla might encounter the problem of inadequate
supply and demand, that can't address the business's manufacture necessities. This can
also disturb its price and supply management.
2. Premium Product Range - Tesla is a clean energy product which encounters several
challenges in rising and distributing electric automobiles.
 Opportunities –

1. Asian Market Development - Tesla is still not drenched in the Asiatic market. This is
since the business requirements to enlarge its worldwide influence to progress its
financial stability (Biswas, and Akroyd, 2022)
2. Environmental Friendly Vehicles - Due to the growing amount of power-driven vehicles
on the street, the demand for petroleum- effectual models is also on the growth.
 Threats –
1. Product Quality Problem - The business is fronting numerous merchandise obligation
rights, which it doubts will have a important fiscal influence.
2. Long Term Sustainability - The future of clean energy automobile businesses depends on
their capability to endure themselves over the growth of innovative technologies and
business circumstances.
CONCLUSION
From the above report it has been concluded that strategy management is one of the most crucial
element in the betterment as well as growth of the organization in the market area. In addition to
this it is very essential in accordance to enhance the effectiveness as well as efficiency of the
commercial business which leads to the enhanced level of performance and productivity of the
company. There are several kinds of strategies which can be opted by the respective organization
at different stages and departments which can assist them in increasing their goodwill and
increasing their efficiency in the business as it will support the organization in sustaining and
possessing success in the market area for the long period of time which will lead to their long
term profitability in the market area.

REFERENCES
Books and Journals
Biswas, S.S.N. and Akroyd, C., 2022. Management control systems and the strategic
management of innovation. Qualitative Research in Accounting & Management.
Bromiley, P. and Rau, D., 2022. Some problems in using prospect theory to explain strategic
management issues. Academy of Management Perspectives, 36(1), pp.125-141.
Caneppele, N.R., and et.al., 2022. Potential and challenges for using neuroscientific tools in
strategic management studies. RAUSP Management Journal.
Cruz-Ruiz, E., and et.al., 2022. Strategic Management of the Malaga Brand through Open
Innovation: Tourists and Residents’ Perception. Journal of Open Innovation:
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(IJCAC), 12(1), pp.1-18.
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customer's loyalty: Exploring the mediation effect of perceived brand quality and brand
communication: A study of Samsung electronics company in Tehran branch. SMART
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Zaigham, N.A., and et.al., 2022. Strategic management of flood water can ensure food security in
desertic east-region of Medina, Saudi Arabia. Arabian Journal of Geosciences, 15(14),
pp.1-10.