Strategic Analysis of Tesla: Internal, External, Competitive Forces

This report provides a comprehensive strategic analysis of Tesla, an American electric vehicle and clean energy company. It begins with an introduction to strategic management and its importance for organizational growth. The report then delves into an analysis of Tesla's internal environment using SWOT and VRIO frameworks, evaluating its strengths, weaknesses, opportunities, and threats, as well as the value, rarity, imitability, and organization of its resources. Furthermore, the external environment is examined through PESTLE analysis, considering political, economic, social, technological, environmental, and legal factors affecting Tesla. Finally, the report analyzes the competitive forces within the industry using Porter's Five Forces model, assessing the competitive intensity and attractiveness of the electric vehicle market. The analysis aims to provide a holistic understanding of Tesla's strategic position and the factors influencing its performance.

Marking Scheme Criteria
Assignment 1

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Analysis of internal environment (600 words) 30%....................................................................1
• Analysis of external environment (500 words) 20%.................................................................3
• Analysis of competitive forces within the industry (600 words) 30%......................................5
• Conclusion (150 words)............................................................................................................7

INTRODUCTION
Strategic management is the field of managing people and planning at the workplace that
used by organization for the purpose of increasing performance. The aim of business industry is
to grow business and attain competitive advantages which support to develop the business
productivity. The HR management and employer is responsible to formulate effective plans and
manage each working that could help to develop business performance (Shvardak, 2021). This is
important for each organization to have strategic planning and formulation of business practices
that used to increase productivity. To understand about enterprises strategy TESLA has been
selected that is American electrical vehicle and clean energy company based in Palo Alto,
California. This is large size organization, follows changing environment and introduce new
invention in their products that can help to develop organizational productivity. The present
report covers analysis of internal, external environment, and analysis of competitive forces in
industry.
MAIN BODY
Analysis of internal environment (600 words) 30%
Internal environment is the analysis of organizational environment and practices that used
by management for the purpose of identifying activities and managing all working. While
running a business and introducing changes it is important to have analysis the internal
capabilities of organization that supports to develop business productivity and performance.
TESLA is dealing in electric automobile sector where it introduces products accordingly that
supports to increase business activities. The SWOT analysis of TESLA is defined below:
Strength Weakness
 TESLA is a leading automobile
company that manufacture different
model of cars by using new technology
and features that can help to develop
business activities.
 In organization top employer and
employees working collectively.
 This organization is having brand
 This faces complexity in
manufacturing the cars.
 Having low production volume.
 Limited presence in market that
reduces profitability.
 The brand value can be affected in
case of demand of people not met.
 There is shortage of batteries
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equity that influence number of
employees.
 The organization brings innovation and
new technology in their industry.
 This dominates electric vehicle sales in
U.S.
 Having small target group in market
that directly affects business industry
(Hietala, Hänninen, Kniivilä, and
Toppinen, 2019).
Opportunities Threats
 The sales of TESLA are expending
globally that helps to increase
profitability.
 It maintains future sustainability by
participating in CSR, reducing wastages
and use of fuel.
 There is strong competition in
automotive sector that develop business
activities.
 Pickup Truck introduction and other
vehicles.
 Increasing market confidence.
 Automated driving technology used by
TESLA that increase organisational
sales.
 There is less expenses in electric cars.
 Product deficits
 Customer adaption (Altin, Akgün,
and Kasimoğlu, 2020)
 Facing strong completion in electric
market
 Changing in environment that
directly affects business industry.
 Product liability allegation that create
challenge for running business .
Value Chain Analysis TESLA
Primary Activities
Inbound Logistics: The activity performed the inbound logistics are receiving, storing
of the product. TESLA has completed the CEVA logistics to design, implemented and shipment
process of aerospace parts.
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Operations: Activities of transforming input raw material into final product. Many
activities covered under this like packaging, assembling etc. With context of TESLA, is focusing
on operation by managing the raw material and distribution channel.
Marketing and Sales: It includes some strategies to raise visibility and target the
customers such as promotional activities, pricing etc. In case of TESLA, recently targeted only
potential customers who requires better design and model of cars with the new features.
Moreover, marketing is uses to attracts the number of people that helps to increase sales
(Kanano, and Wanjira, 2021).
Services: Anything that is required to maintain the quality of the product and after a sale.
TESLA provided the services related to assets management services to maintain their inventory
requirements better. It also offers the new technological progress, driving safety measures etc.
Support activities
Procurement: TESLA provides a fully utilises its resources, process and important
benefits of the customers. It focusses the relationship building skills, supplier management,
inventory management and working capital etc.
Technological Development: Recently TESLA announced to invest the research and
development to make far and independent shipping reality and the benefits of increasing the
digitalisation in the industry. Also, company is looking to create a partnership with other
organizations around the world (Mutiara, and Koesmawan, 2020).
Human Resource Management: It is all about how human resource manages its
employees to ensure the desirable results. Human resource department performs the most
important functions is recruiting. TESLA must be very vital to ensure that the firm gets the right
people for the right jobs (Raj, Beck, and Soliman, 2019).
Firm Infrastructure: The firm infrastructure of the TESLA is attractive. It involves
many employees related to accounting, finance, legal matters handling of the company etc. Apart
from that, TESLA is large size organization that structure is large and attractive that influence
number of customers to buy vehicles. It performs the several functions from HR to finance, legal,
procurement have their own board of directors.
VRIO analysis – This means a framework which is established by management and owners of
organisation for running business and increasing the value of organisation in challenging
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environment. This helps to manage the activities and performance by accepting challenges
and deliver right messages. The VRIO analysis
Resources Valuable Rare Inimitable Organised
Financial service Yes No -No No
Market presence Yes Yes No No
Technology Yes Yes Yes No
Skilled
employees
Yes Yes Yes Yes
Valuable – The business is started with different nature which are managed and operated
by management by creating value of all resources. In TESLA, resources are financial, new
services, distribution channel and skilled workforce are valuable resources which are important
and helps to increase the business performance. Such as financial resources use to perform all
activities, buying raw material and other work which increases sales. New services and features
in cars are other resource that attracts the customers and increase the sale by performing all task
effectively. Distribution channel and skilled workforce are also valuable as they reach the
targeted customers and adopt changes properly (Nyzhnyk, and Hromova, 2020).
Rare – This means products and services which are rare for other to take and run their
business accordingly. In TESLA, new services and feature of cars such as power window front,
anti-lock braking system, driver and other seater airbag are good features by using new
technology that attracts the customers and helps to increase the sales. This make different from
other because it can be seen rarely in other auto maker.
Inimitable – This means products and services which are provided by organisation are
inimitable and cannot be imitate by others. Such as skilled and technical employees are working
in TESLA who brings new technology and innovation in their existing design of cars, features,
services and organisational performance which helps to maintain good performance and increase
the sales in competitive environment (Taylor, Okazaki, and Mueller, 2019).
Organised – All functions, resources and activities of organisation should be properly
organised and managed which can help to maintain high performance and increase the
profitability. In TESLA, marketing and sales manager are organising the distribution channel
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properly by opening stores and providing online channel which can help to improve the brand
image and expand the business (Warren, 2020).
• Analysis of external environment (500 words) 20%
PESTLE Analysis is the analysis of external factor which affect the business
environment. This analysis mainly for large organisation which are affected by the macro
factors. Tesla company is very large company in America which are affected by the macro
factors that cause the business environment. These factor are discussed below in context of
TESLA:
 Political Factor: Political factor is the external factor which are affected by government
policy. This policy includes trade restriction, tax policies, custom duties, etc. In America,
there are many trade policy and tax policies that affect the businesses. Tesla company in
America produce electric vehicles that are environment friendly which attract the buyers
and create a chance of getting a specific tax credit for using the product. For TESLA,
there are some negative impact also like, trade war between US and China cause tariff in
electric car maker imports from China
(Benninghaus, 2019).
 Economical Factor: Economical factor includes various aspect of economy that impact
the business. It includes economic growth rate, interest rate, exchange rate, inflation rate,
etc. In America unemployment rate is approx. 8.33% which shows the condition of
businesses because jobs up and down is directly proportional to business ups and down.
By the high inflation in fuels price TESLA sale will increase because people starts
switching in electric vehicle. Sometime economic factor effect negative also, like, when
foreign exchange rate starts fluctuating the exports of vehicles are also fluctuating.
 Social Factor: Social factor is the socio-cultural factor which are related to the cultural
and democratic trend of society. In this some social factor is considered which are
demographics, career attitude, population growth, etc. In America there are many social
norms which affect the businesses. TESLA car are one of a kind which have different
feature from other and that eco- friendly nature of product attract the consumer. But
Tesla, don't have enough component to complete the customer demand and that will
create impact on customer (Grainger-Brown, and Malekpour, 2019).
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 Technological Factor: Technological factor is the innovative and latest trend that affect
the industry. In Tesla, rate of technology and innovation is high and it is the future of
automotive industry which attract the customer. But sometime for high technology
TESLA are not complete the demand of product by which customer will switch in other
product (Nilsson, Petri, and Westelius, 2020).
 Environmental Factor: Environmental factor is the ecological condition which effect
the business. Like, climate change affects the industry and create big loss. This factor
includes weather condition, climate change, temperature, natural disaster, etc. TESLA
company in America use the eco- friendly vehicle which help the polluted environment to
pollution free environment than cause attraction of buyer in whole world. By this factor
affect negatively also like climatic disaster come in America, the industry is physically
damaged and create big loss.
 Legal Factor: Legal factor is a factor which includes law and regulation that affect the
company. It includes consumer right, industry regulation, license and permit. In TESLA
company, produce electric vehicle in market they need a proper permit for reveal the
product in market (Ahammad, Glaister, and Gomes, 2020).
Mind Map
Mind mapping is defined as continuous process of organising and arranging information
visually or actively. This is hierarchical map showcasing relationship between pieces of whole.
In other words, mind mapping is the way of linking key concept by using images, lines and links
that can help to remember all thing in mind and working accordingly. TESLA uses mind map
activity for the purpose of bringing changes in their products and managing performance
effectively. This can help to maintain higher performance by introducing new products and
services. This uses the concept of “radiant thinking” that means thoughts radiate out from a
single idea, mostly expressed as an image. This is important for individual to focus on mind
mapping activities that uses to creating the learning part in people's lives. If an individual is
unable to retrieve and storing information, then academic as well as other working would be
hampered surely. This create the difficulties for people how to complete their study, get degree
and attain the good performance in their life.
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• Analysis of competitive forces within the industry
Porter’s Five force model
Porter's five force model: It can be determined as simple and powerful tool of business
that uses to take the competitive advantages in changing environment and managing the
organisational performance by increasing profits. This toll involves five force that may affects
the profitability and productivity of a running organisation. The porter's analysis for selected
organisation is underneath:
Competitive rivalry – This forces is connected to the strength and number of
competitors in available market. In this, organisation compare their products with others and
bring changes accordingly which helps to manage the good performance. In context to Rolls
Royce, number of competitors is Bentley, Tesla, Aston Martin etc. that are also dealing in auto
mobile and affected the business. This can be highly threat for selected organisation to attracts
the customers and increase sales. Therefore, organisation attracts customers by reducing the
prices of cars and running marketing campaigns which may be increases sales (Momanyi, 2020).
Supplier power – This states how it may be easy for suppliers to increase prices of their
products and raw material which they sales to manufacturer company. In UK, having more
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suppliers of auto parts and selling them different prices may be lower threat for selected
organisation as it can buy raw material from other suppliers. Therefore, it may be difficult for
organisation to increase their price because they can loss their regular buyer or distributor.
Buyer power – This stating that how it can be easy for buyers to set their prices at the
time of buying products. In UK, there is larger population with different culture and preference
who are demanding different model of cars. The threat of buyer power in context to selected
organisation is low because it provide best quality, design and feature of cars that may attracts
the customers and make buying decision which may increases the organisational performance.
Threat of substitution – This means substitution that make easy and cheap to products
in case of increasing the prices of products then customers goes towards substitution that create
threat of low profitability. In context to, TESLA the substitution are bike, cycle, auto etc. can
uses by organisation that may reduce the sale of organisation as well as profitability (Kosch, and
Szarucki, 2021).
Threat of new entry - The position of business organisation may be affected by entering
of new business and people's ability in market that reduces the production and profit margin. In
context to auto mobile industry, threat of new entry in market is difficult because having existing
competition, needs of more financial resources, higher technology and proper distribution
process cannot be easy for them to arrange. This can be less threat for TESLA to operate their
business properly and in well manner (Almazrouei, and Yassin, 2020).
Game theory – This theory is based on study of environment and competitive forces that
used to develop the business activities and managing higher performance. This is the process of
modelling the strategic interaction between two and more organization that can help to provide
the products and services accordingly. TESLA is the larger automotive sector that conduct
analysis and introduces new products which could help to attain the competitive advantages. This
is interactive decision making process that used to involves all participants and making choice
out of them which supports to develop business productivity.
• Conclusion (150 words)
From the above report it can be concluded that strategic management is the activity of
influencing people and getting work done for the purpose of attaining business goals. While
operating a business and bringing something new in global market there is need to analysis the
internal, and external environment that can help to make right business decision and develop
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business productivity. Porter’s five force is used to analysing competitive forces and introducing
products accordingly.
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