Business Environment and International Trade Position of Tesla Report

This report provides a comprehensive analysis of Tesla's international trade position and its business environment. It begins with an executive summary and an introduction to Tesla, including its background and industry analysis using Porter's Five Forces. The report then delves into Tesla's international trade position, highlighting its growth and market share. Furthermore, it examines the political, economic, social, and environmental factors influencing Tesla's trade, including opportunities and risks. The analysis covers governmental incentives, economic stability, social trends, and environmental programs. The report concludes with recommendations for Tesla to improve its global operations and maintain its market position, such as supply chain optimization and increased marketing efforts. Overall, the report provides a detailed assessment of Tesla's international trade performance and potential for future growth within the automotive and energy industries.

Business environment

Executive summary
Concept of the international trade analysed in present context of the international trade
refer to the company's trade within foreign land in order to explore the demand and become more
profitable, innovative and productive. It has been analysed that there are various scope of the
organisational who trade at global level. Main goals of Tesla is to to produce a high quality and
affordable electric vehicles by being a dominant firm in the electric car industry. Main aim of the
this report is to understand about international trade and to know the international trade position
of the Tesla. Therefore, this report will include various element that help in determining trade
position of Tesla in worldwide.

Table of Contents
Executive summary .........................................................................................................................2
INTRODUCTION...........................................................................................................................2
Background of the Chosen organisation.................................................................................2
Industry Analysis of Tesla ....................................................................................................2
International trade position of Tesla .....................................................................................3
Political and economic factors of trade for growth and expansion........................................4
Social and environmental factors of trade for development...................................................5
Recommendations .................................................................................................................6
CONCLUSION ...............................................................................................................................7
References:.......................................................................................................................................8
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INTRODUCTION
Business environment is defines as forces and institution outside the organisation with
which organisational individuals must deals in order to attain the organisational goals. whereas
forces are described as social, political, technological, economical factors etc. and institutions
are refers as customers, suppliers, competitors and many more (Akhtar and Sushil, 2018).
Company considered in this report is Tesla that stand for Tera electro volt Energy
Superconducting Linear Accelerator. It is an automotive Renewable energy firm founded during
2003. its headquarter is situated within Tesla Road, Austin, Texas, U.S. This report is going to
cover an industry analysis through the porters five forces. This report will also discuss the
international trade market position of the organisation. At last it will explain political, economic,
social and environmental elements of trader to the organisational development along with few
recommendations.
Background of the Chosen organisation
Tesla is an automotive firm founded during 2003 by Martin Eberhard and Marc. This
company recognized Elon Musk, Ian Wright and JB straubel as co- founders. Though Tesla is a
new company, it has contribute in respective industry with a market capitalized of approximately
$28 billion. Current model is the Tesla Model 3. It is ahead of the competitors as it is able to
charge at the supercharger stations across the world.
Industry Analysis of Tesla
For this, porter's five forces framework will be very effective a it is a qualitative business
analysis that evaluate the long term profitability as well competitive advantage for the
organisation (Barr and et.al., 2018). This framework will be helpful for the Tesla in
understanding the areas of strength and identify the lacking areas of the business. Respective
company is probably most innovative and dynamic business automotive industry. Therefore, in
context of the Tesla, this framework is mentioned below:
 Industry rivalry among the competitors- In relation to the Tesla, forces of this factors
is intense as big automotive brans, traditional auto maker and new start-ups are switching
to the electric. Rivals use the pricing and other differentiation strategies that restrict the
Tesla's profitability growth and market penetration (Nudurupati, Garengo and Bititci,
2021)
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 Threat of the new entrants- This force is very low in relation to the Tesla. Various
elements discourage the new entrants from venturing into automotive industry. For
instance auto mobile sector require a fair amount of the money to operate and also highly
skilled employees. Along with this the brand development is also very expansive as it
require latest or innovative technology that occur high cost.
 Supplier's bargaining power- In relation to the Tesla, bargaining power of the suppliers
is very high due to the limited network of the supply chain. Industry of the electric
vehicle is relatively new & in a stage of the development. Nowadays, majority of the
Tesla's vehicle part are supplies from the German suppliers. Therefore, any kind of the
disruption within German economy like energy shortage, pandemic, will adversely
impact the Tesla's production (Betti and Sarens, 2020).
 Buyer's bargaining power- It is analysed that customer's buying power in Tesla is very
low as respective organisation segments its offering or product at a high end market with
the premium pricing. This company compete with luxury market because of an intense
competition in low end market. In high – end market, differentiation is considered as a
critical sources of the sustainable competitive benefit to in order to compete successful as
Tesla offering services and product that no one else can.
 Threat of the substitution- in context of the Tesla, the substitution's threat is very high
as respective company owns around 1.2 % of market share of overall the auto mobile
market and it has 14.55% of the global market related to electric vehicle. Tesla has
customer base. Thus, it has been analysed that brand loyalty is critical source of the
competitive benefit for the Tesla (Contractor and et.al., 2020).
International trade position of Tesla
The Tesla has been founded during 2003 and its headquarter is situated within California.
Respect vie company is ranked as most valuable automotive brand across the world in 2021. it is
one of the leading company among 15 most valuable brand organisation win all industries at
global levels. Tesla is a fastest growing company throughout the world with a growth rate over
157%. Tesla's brand also ranked a leading electric vehicle brand. Its mostly model are electric
passenger cars. Vehicle deliveries of Tesla reaches a record of around 627,350 unit of first three
quarter of 2021, up by over 155 when compared to the sales for full year 2020. At the same time,
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Tesla's more 3 has become world's most and best selling plug in electric vehicle model
(Hamilton and Webster, 2018).
Political and economic factors of trade for growth and expansion
`Political and environmental factors are very useful component of the PETSEL analysis as these
factors enable the businesses to better understand more about the market and environment in
which company is operation and considering entering. Tesla is an international organisation,
therefore these factors are very significant for the respective company need to consider when
entering in new international market. These factors impact the business n term of its profitability
and growth in various way, mentioned below:
Political factor
These factors form a basis of the business environment within a nation. In relation to the
Tesla, if government policies in other nations are better and stable then it would bet impacted in
a positive way. Beside it, polices on the trade can limit performance and revenue of the
respective company that is a major risk (Nikitina and Lapiņa, 2019).
Opportunities for Tesla
 Political stability in majority of the major market
 New global trade agreement
 Governmental incentives for the electric auto mobile.
Tesla has an opportunity to make its financial performance very strong through the incentives
from government. Such external element is directly linked with the reduced carbon emission of
respective company;s operation and products.
Economic factors
It include the trade level, market growth and other variable that impact the automotive
business. Business performance of Tesla benefits from the lower battery cost for instance,
economic element translates to affordability of the organisational electric auto mobile product.
Beside it economics instability is a major risk for the company's financial performance (Huang
and et.al., 2022).
Opportunities for Tesla
 Decreasing cost of the renewable energy
 Decreasing cost of he battery
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This element of the external factor is considers decreeing the renewable energy cost which make
Tesla's product more attractive. However, the economic stability issues threaten Tesla's financial
performance. Above analysis of this factors highlight the major opportunities for the growth,
despite risk of the economic instability in macro or remote environment of automotive industry.
Social and environmental factors of trade for development
Through environmental and social factor, company can assess the major external
elements which impact the business operation to become more competitive in market. In relation
to the Tesla, these two factor provide major opportunities to expand its business sin international
business. Similarly it also create very hurdle over which respective company need to win by
adopting various strategy. Therefore, in relation to the Tesla, these two factors are discussed
below:
Social factors
Social trends and conditions impact the organisational remote or macro environment
through customers, investors and employees. In relation to the Tesla, social factor consider how
the company aligns with various social trends or condition within its target market. Its manager
need to ensure that the strategies are applied to maximise the company's benefit of such kind of
the external elements. By considering the customer's preference and changing lifestyle Tesla can
improve its brand image within market place (Khajeheian, Friedrichsen and Mödinger, 2018).
Opportunities for Tesla
 Improving the wealth distribution within developing marketing reasonably increasing
Preferences for the renewable energy
 Increasingly a popularity of the low carbon lifestyle
These opportunities are helpful for Tesla in growing its multinational automotive business. For
instance, growth opportunities of Tesla is based on rising popularity of the low carbon lifestyle.
Environmental factors
In international business, this factor is subject to impacts of the ecological condition. This
factor is very important for Tesla as it is very beneficial for them. By promoting the electric
vehicles based on a concerns on the climate changes, rising standard on the waste disposal and
expanding the environmental programs respective company can enjoy various competitive
advantages (Kokodey, Gnezdova and Lomachenko, 2018).
Opportunities for Tesla
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 Expanding the environmental programs
 Climate changes
 Rising a standard on the waste disposal
This analysis depict that Tesla has various significant growth opportunities based on product's
nature. Tesla's solar panel and electric vehicles are considered suitable and effective in directly
addressing such external element linked to the environmentally friendly products and business
sustainability.
Recommendations
 As Tesla's profitability is improving over time. It is also in a position where it can
improve its operation within global automotive market, addressing a competitive
landscape determine in competitive forces of Tesla.
 It is recommended to Tesla that it should short its supply chain network through
constructing the Gigafactories across the world wide. Along with this it also need to
leverage technology in order to lower the supplier's demand.
 When it comes about the international trade position, then it should adopt various
strategies so that it become enable to maintain a graphs of the product life within
international market.
 It is also suggested that company should increase its marketing aggressiveness with the
motive to increase the market share within another nation rather than home country. Such
moves could minimize the barked based risk. Considering that respective company has a
limited sales operation within overseas markets.
 As new business trends impact the business within automotive, battery energy storage &
energy generation industries. Hence, Tesla must also taken into account its business
condition related to the other automotive and energy solution providers
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CONCLUSION
From the above report it is concluded that investment of the international business bring
various change sin situation. It is beneficial for the organisation as well as economy of home
country. This report has been analysed that there are various risk and forces that impact
organisation in automotive industry. Customer's bargaining power, threat of rivals, forces of
substitution are major forces that pressurize the organisation like Tesla at low, moderate and high
level. There are different external factors that provide various opportunities for business to
expand their business within international market. But at the same time companies also faces
several risk that restrict them to expand internationally. This report has also discussed about the
international trade position of chosen company in which it has been analysed that Tesla is a
dominant company in automotive industry and operating on a large scale across the world wide.
Along with few recommendations are also given to the organisations so that it can perform
efficiently within international market.
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References:
Books and Journals
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain
business environment: An empirical study of the Indian oil industry. Business Process
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Barr and et.al., 2018. Development of indigenous enterprise in a contemporary business
environment–the Ngāi Tahu Ahikā approach. Journal of Enterprising Communities:
People and Places in the Global Economy.
Betti, N. and Sarens, G., 2020. Understanding the internal audit function in a digitalised business
environment. Journal of Accounting & Organizational Change.
Contractor and et.al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review, 29(2),
p.101640.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Huang and et.al., 2022. Assessing the role of financing in sustainable business
environment. Environmental Science and Pollution Research, 29(5), pp.7889-7906.
Khajeheian, D., Friedrichsen, M. and Mödinger, W., 2018. An introduction to competitiveness in
fast changing business environment. In Competitiveness in emerging markets (pp. 3-11).
Springer, Cham.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Nikitina, T. and Lapiņa, I., 2019. Creating and managing knowledge towards managerial
competence development in contemporary business environment. Knowledge
Management Research & Practice, 17(1), pp.96-107.
Nudurupati, S.S., Garengo, P. and Bititci, U.S., 2021. Impact of the changing business
environment on performance measurement and management practices. International
Journal of Production Economics, 232, p.107942.
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