Global Business Environment: A Comprehensive Analysis of Tesla

This report provides a comprehensive analysis of Tesla's global business environment, examining both internal and external factors that influence its operations. It begins with a SWOT analysis, identifying Tesla's strengths, weaknesses, opportunities, and threats, emphasizing its innovative use of renewable energy and strong brand image while also noting challenges like limited promotion and production capacity. The report then delves into a PESTEL analysis, assessing the impact of political, economic, social, technological, legal, and environmental factors on Tesla's business, highlighting the importance of adapting to changing government policies and leveraging technological advancements. Furthermore, Porter's five forces framework is applied to evaluate the competitive intensity within the automotive industry, considering factors such as competition, new entrants, supplier power, customer power, and the threat of substitutes. Finally, a value chain analysis examines Tesla's inbound logistics, operations, outbound logistics, marketing and sales, and service functions, underscoring the company's strategic supplier relationships and commitment to customer experience. The report concludes by emphasizing Tesla's proactive approach to environmental sustainability and its overall strategic positioning in the global market.

Global Business Environment

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT Analysis of TESLA.........................................................................................................3
PESTEL analysis:........................................................................................................................4
Porter's five forces.......................................................................................................................6
Value chain analysis:...................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment include all factors that impact the company and its operation,
global business environment means those factor which impact the business on international level.
This study is based on Tesla, this company is one of the largest and successful auto mobile
company. In this report, internal and external environment will be discuss which include strength
and weakness of company, political and other factor which impact the business and porter five
forces analysing competition in the industry.
MAIN BODY
SWOT Analysis of TESLA
SWOT refers to the strengths, weaknesses, opportunities and threats. The SWOT analysation
helps in knowing the various strengths, weaknesses along with the threats and opportunities
within the company (GURL, 2017). TESLA is one of the biggest Auto-mobile industry with the
large number of consumer base. One of the biggest reason behind the success of company is the
effective understanding of the internal environment. In order to understand this with more
clearance, here is the SWOT Analysis of the TESLA.
Strengths- The company is using the renewable source of energy such as, solar energy. This is
the major reason behind making the TESLA as leading pioneer in the field of making electric
vehicles. The company is extremely innovative and adds innovation in their products. This leads
to sustain the customers and also helps in adding new customers. The brand of the firm is the
biggest strength of the firm. The company has established the effective brand in the market.
Therefore, the investors and customers has a full faith over the activities of the business.
Weaknesses- It has been found from various studies that, the company does not approach the
other known faces for promoting the products (Vlados, 2019). It has also been found that the
organization is not producing the enough products in terms of keeping the demand of the
customers.
Opportunities- The company has adopted the concept of sustainability and this enabling them to
produce the environment-friendly cars. As a result, the company is effectively performing the
responsibilities towards the environment and customers. The firm is often on way to promote the
battery production technology (Aithal, 2017). This element can be proven as a game changer for

the firm. As the customers making high demand in relation of those vehicles that consumes less
fuel.
Threats- Some threats that can impact the company's performance are, there are various kinds of
technologies that has been used by the competitors. This can shift the attention of the customers.
And adopting all those technologies increases the cost of production. The another threat is to
maintain the long-term sustainability (Vlados and Chatzinikolaou, 2019). It is important to
maintain the image in the global market as company has the high brand image. If the company
does not perform their ethics towards the environment. Then, there is the threat of losing the
goodwill in the market.
From the above analysis it has been found out that TESLA is effectively maintaining their
weaknesses and threats with the help of their strengths and the company is effectively grabbing
the opportunities.
PESTEL analysis:
Political factor: political factor means government and its policy which impact the smooth flow
of the company. These political factor include tax policy, rules and regulation, trade restriction,
tariff policy and stability of the political environment of country (Perera, 2017). Tesla always get
impacted with political environment of various countries, for example recently UK have
introduced new trade policy for auto mobile industry which greatly impacted the growth of Tesla
in UK. It is very important for company to analyse political factor and need to keep eye on
government and its every day changing policy. Government thus play vital role in the business
organization.
Economical factor: economical factor means the stability of the economy, there are various
country who are still developing and some are fully developed which means their stability may
be different from each other. Economical factor may include, stability, interest rate, exchange
rate, inflation rate, income level of people and employment and unemployment level. These
factor shows the growth of the economy of the country. Tesla is being facing major impact on
their sales because of economic stability of various country. This company is facing growth issue
because of high inflation rate, price of the car is getting affected in the market.
Social factor: social factor means the lifestyle of customer, social factor is broad term which
include every factor related to customer and their impact on the company. Social factor include
lifestyle of people, culture, taste and preference, liking and disliking and income and education

level. These factors play vital role in the sales of the company, demand of the product get
impacted because oft these factor (Prajogo, 2016). Tesla understands the social factor every
successfully, they know the importance of this factor in growth and demand of the cars in the
market. This company target their audience with the help of social factors in the market.
Technological factor: technological factor means the advancement and betterment in the
technology in whole industry, every business organization need to analyse latest and fastest
technology used by other company operating in the same industry. Technological factor include,
innovation and development in hard and soft ware, using AI technology in assembling line, using
IT in operating and using automation advancement in operation unit. Tesla is one of the most
successful car manufacturing company and their one success factor lies in using advance
technology in their operation. This company already being using high tech technology in their
business process, Tesla have advance technology at every level of the business.
Legal factor: legal factor means legislation and guidelines of the government, every business
organization have to follow these legals and legislation law to fairly trade in the market. Legal
factor may include change in legislation, employment law, trade law, licence and import and
export taxation law. Every business need to be careful while dealing in the market because this
factor is very important and can greatly impact the smooth flow of the business process (Shtal,
et.al., 2018). Tesla have being facing serious issue in the same countries which have laws against
using AI technology in the business process to ensure workers safety. Although tesla have all
legal consideration.
Environmental factor: environmental factor means the nature and its movement, this factor
impact the business in certain ways. At first environmental factor was responsibility of business
but now maintain environment factor is compulsory for every business organization especially
which deal in auto mobile industry. Legal factor include global warming, pollution, use of non
disposable item, plastic and sustainability. Tesla have being manufacturing electric cars which is
best for environment and help to create sustainability in the environment, this company greatly
follow the environmental factor. Tesla is being using sustainable aspects in manufacturing of
cars which can improve the future of the auto mobile industry.

Porter's five forces.
Porter's five forces refers to those five force that helps in knowing the competitive environment
of the firm. TESLA is highly focused on making a keen observation over the competitive
environment. Here is the analysis of the porter's five forces:
Competition in the industry- This element of five forces helps in determining the level of
competition in the industry. The company is one of the leading firm (Majidi Nezhad and et.al.,
2020). Therefore, the competitors of the firm are also taking measures in order to show
themselves different from the TESLA. But, the effective strategy of using different forms of
renewable energy leads to make TESLA superior from their competitors.
Potential of new entrants- There is no fear of any new entrance to the firm. As the company has
a high goodwill in the market. The company already captures the large market share. Any new
firm that comes in the industry cannot affect the performance of the TESLA.
Power of suppliers- It involves increasing the cost of raw materials by the suppliers. The
suppliers increase the cost of raw materials and it directly impacts the cost of production. As a
result, the prices of the products becomes high. In order to solve this issue, the company has
approached the number of suppliers (Bruijl, 2018). The firm has the large number of options in
terms of arranging the raw materials. If the prices has been increased by one supplier then the
company approaches the another supplier. As a result, the cost of the production has been
maintained by the firm.
Power of customers- The customers are the vital element of the business. They have the full
power in terms of shaping the performance of the business. The changing demand of the
customers can impact the performance of the TESLA. Within the changing pace of rime, the
taste and demand of the customers gets change (Rockwell, 2019). The company has adopted the
effective strategy of understanding the consumer behaviour. As a result, the company is
effectively maintaining the satisfaction level of the customers.
Threat of substitute products- The company has no fear over this threat as the company is using
different technologies in terms of producing the products. Along with this, the concept of using
renewable energy enabling the firm to carry on effective production (Cron, 2017). The products
of the company has its own brand value. The firm has gained the faith of their customer. As a
result, there is no threat of substitute product to the firm.

Value chain analysis:
Inbound logistics: inbound logistic means availability of raw material which involve receiving,
managing, warehousing raw material. When business organization tend to perform value chain
analysis then they try to identify the raw material and receipt which need to be analysed in
manufacturing unit (Zamora, 2016). Tesla inbound logistic involve availability of raw material to
build electric cars, these raw material include steel, nickel, copper and many other type raw
material. Tesla tend to avoid highly sophisticated inbound logistic because they practice build to
order basis in manufacturing. This company have great strategic relation with their suppliers and
had long term agreement.
Operation: operation means process of manufacturing raw material into finished product and
service, operation is major part of the company which involve production unit and operation
process. Tesla have being performing two major operation, at first they focus on automotive
which allow company to design, develop and sale electric car. Secondly they focus on energy
generation and storage which allow company to manufacture their own source of energy in the
operation unit of the company.
Outbound logistic: outbound logistic means distribution and warehousing of product after the
manufacturing process, this is a process to outbound final product to the market and fulfil the
demand of the customer. Tesla have their own warehousing system completely solar panel
energy operated to reduce the cost of storing the final product. This company have wide range of
storing and warehousing which allow company to reach customer as soon as possible in the
target market.
Marketing and sales: after the process of operation and final polish, company focus on
marketing and sales. This is one of the most important part in the value chain process because
without marketing business can not able to sale their product in the market (Jones, Demirkaya
and Bethmann, 2019). Tesla have their own marketing and sales strategy which allow them to
sale their product in the market. The CEO of Tesla, Elon Musk state that they do not need any
marketing strategy because their brand is already have its identity in the market.
Service: service means after the sales offer by the company to the customer, in this company try
to improve customer experience by providing service to the customer. Service may include
maintenance, repair, refund and exchange. Tesla have being well-known for providing service to
the customer to enhance customer experience in the market.

CONCLUSION
In this report, global business environment is been discussed. Later this report have
discussed external environment which include PESTLE analysis and understand competition in
the market with porter five force. Later this report have discussed internal environment which
include identification of strength and weakness and provided value chain analysis.

REFERENCES
Books and journals
Aithal, P.S., 2017. An effective method of developing business case studies based on company
analysis. International Journal of Engineering Research and Modern Education
(IJERME), ISSN (Online), pp.2455-4200.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Cron, W.L., 2017. Macro sales force research. Journal of Personal Selling & Sales
Management. 37(3).pp.188-197.
GURL, E., 2017. SWOT analysis: A theoretical review.
Jones, L., Demirkaya, M. and Bethmann, E., 2019. Global value chain analysis: concepts and
approaches. J. Int'l Com. & Econ., p.1.
Majidi Nezhad and et.al., 2020. A SWOT analysis for offshore wind energy assessment using
remote-sensing potential. Applied Sciences. 10(18). p.6398.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics, 171,
pp.241-249.
Rockwell, S., 2019. A resource-based framework for strategically managing identity. Journal of
Organizational Change Management.
Shtal, et.al., 2018. Methods of analysis of the external environment of business activities.
Vlados, C. and Chatzinikolaou, D., 2019. Towards a restructuration of the conventional SWOT
analysis. Business and Management Studies. 5(2). pp.76-84.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Zamora, E.A., 2016. Value chain analysis: A brief review. Asian Journal of Innovation and
Policy, 5(2), pp.116-128.
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