MBA501: Strategic Management Report on Tesla Motors' Strategies

This report provides a comprehensive strategic management analysis of Tesla Motors. It begins with an executive summary highlighting the importance of strategic management for companies like Tesla, focusing on stakeholder engagement and social media marketing. The report then delves into Tesla's mission, vision, recent developments, and challenges, followed by a detailed stakeholder analysis, including employees, consumers, investors, governmental agencies, and community people. It identifies and recommends strategic programs for each stakeholder group, emphasizing programs for community development, governmental agencies, investors/shareholders, consumers, and employees. The report concludes by summarizing the recommended strategic programs and their rationale, providing a thorough examination of Tesla's strategic approach to achieve sustainable energy and transport goals.

Running head- MANAGEMENT
Strategic management of Tesla Motors
Name of the student
Name of the university
Author note

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Executive summary
Strategic management is essential for the companies and organizations in terms of averting
the instabilities. As a matter of specification, strategic approach towards management proves
beneficial in achieving trust, loyalty, dependence and assurance from the clients and the
customers. Like all other companies, customers and community people are the important
stakeholders for Tesla. Adopting social media marketing is an initiative for enhancing the
trafficking of the audience towards the newly launched vehicles. Focus is placed on
developing the standards of living for the community people. This is through charityand
funds for creating a sustainable and environment-friendly environment. Along with this,
employees, governmental agencies and shareholders contribute towards fulfilling the
identified aims and objectives.

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Table of contents
Introduction................................................................................................................................3
Overview of the Tesla Motors....................................................................................................3
Mission and vision statement.....................................................................................................3
Mission...................................................................................................................................3
Vision.....................................................................................................................................3
Recent developments.................................................................................................................4
Challenges..................................................................................................................................4
Stakeholder view of the organization.........................................................................................4
Stakeholder analysis...................................................................................................................6
Identification of strategic programs for the identified stakeholders........................................10
Strategic programs for employees........................................................................................10
Strategic programs for consumers........................................................................................10
Strategic programs for investors and shareholders..............................................................11
Strategic programs for governmental agencies....................................................................11
Strategic programs for community people...........................................................................11
Recommended strategic program for the stakeholders along with their rationale...................12
Strategic programs for the community people.....................................................................12
Strategic programs for governmental agencies....................................................................12
Strategic program for the investors and shareholders..........................................................12
Strategic programs for the consumers..................................................................................13

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Strategic program for the employees...................................................................................13
Conclusion................................................................................................................................13
References................................................................................................................................15
Bibliography.............................................................................................................................17

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Introduction
Management is one of the important parameters in a workplace for ensuring the
smooth functioning of the operations. Strategic approach towards management results in
positive outcomes, assisting the brands to stabilize their position in the competitive ambience
of the market. Within this management, consideration of the stakeholders’ viewpoint acts as
an agent in terms of adding innovation into the operations. This is because they are the ones,
who contribute to the productivity (Noe et al. 2017). Organizing strategic programs for the
stakeholders enhance the customer base for the brands. This report attempts to peek into the
techniques adopted by Tesla Motors exercising strategic management.
Overview of the Tesla Motors
Established in 2003, Tesla Motors has achieved accolades and glory by emerging as
one of America’s well known automotive and energy based company. It is a public company,
operating under Automobile Industry. As a matter of specification, the company deals in
electrical vehicles and its spare parts. According to the annual report of 2018, the annual
revenue was US$21.461 billion (Tesla.com 2019).
Mission and vision statement
Mission
Tesla operates with the mission to accelerate the world’s transition to sustainable
transport. However, later it was revised to the acceleration of the world’s transition to
sustainable energy.
Vision
Tesla envisions the creation of most compelling car companies of 21st century through
the transition into the electrical vehicles (Tesla.com 2019).

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Recent developments
Model S is one of recent developments, which gives class storage capacity with 335
mileages per kilometre.
Challenges
One of the recent challenges, which Tesla encountered, is cutting down the workforce
by 7%. This is due to the incapabilities towards manufacturing cheap conventional cars
amidst the newly created technological innovative environment (Bbc.com 2019). As a result
of this, most of the customers have switched brands. One of the alarming issues is 6% loss in
the shares of sales trade.
Motor vehicle wholesalers and dealers have contributed to the growth of Australian
automobile industry. Preference over local manufacturers has compelled the motor vehicle
manufacturers to look for alternative means for expanding the scope and arena of the
business. The immediate result is a 0.5% decline in the sales revenue in the phase of 2017-18,
which indicates a loss of $165 billion(Bbc.com 2019).
Stakeholder view of the organization
Tesla Inc adopts corporate social responsibility strategy for fulfilling the needs,
demands and requirements of the stakeholders. This is also applicable in terms of making the
energy supplies within the stipulated time. According to Brugha and Varvasovszky (2000),
Archie B. Carroll’s model can be applied in this context for gaining an insight into the role of
stakeholders for enhancing the efficiency within the business operations. This is because it is
the responsibility of the organization personnel to socialize their business. Exercising
stakeholder management helps Tesla Inc to gain an insight into the specific needs, demands
and requirements of the clients and customers. Example can be cited of the requests regarding
alteration of the design of the batteries in the vehicles. Continuous evaluation of the corporate

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strategy is needed in terms of reducing the potential risks. Maintaining consistency in this
assessment is essential for catering to the public interest of the community people. As per the
arguments of Ackermann and Eden (2011), rationality in this approach is assistance towards
enhancing the brand image.
The aim of the corporate social responsibility strategy is the creation of sustainability
and environment friendly energy storage and energy generated products. This focus is
assistance in terms of influencing the power and authority of the manufacturers and
producers. Reference can be cited of General Motors Company, Toyota Motor Corporation,
Honda Motor Company, Volkswagen, Nissan Motor and BMW. Translating the management
theories into practice is accounted as one of the essential aspects of catering to the
stakeholder interests. As per the recent customer trends, Tesla has produced electric
automobiles for reducing the negative impact created by the internal combustion engines
(Tesla.com 2019). Moreover, it also adds to the pollution levels, which necessitates the need
of corporate citizenship. One of the positive points of the strategy is the segmentation of the
stakeholders according to the priorities. These are as follows-
 Communities (highest priority)
 Customers
 Employees
 Investors\shareholders
 Government

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Fig 1- Stakeholders of Tesla Motors Inc
(Source- Tesla.com 2019)
Stakeholder analysis
Stakeholders are the ones, who impact on the profit and loss of the companies and
organizations. They have a particular behaviour, which helps the personnel in detecting their
specific tastes and preferences towards the products and services. Consideration of the values
and beliefs is assistance in terms of detecting the areas, which are different from the
identified aims and objectives. This detection helps in averting the instances of conflicts,
discriminations and harassments. Within this detection, Eskerod and Jepsen (2016) point out
that one of the primary activities is the creation of strategic programs for the stakeholders,
which Tesla exercises for segmenting the target audience. Through this activity, the personnel
achieve an understanding into the aspects of competitive threat, cooperative potential and
actual behaviour needed for fulfilling the needs, demands and requirements of the
stakeholders.

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In case of competitive threat, Tesla identifies the factors, which can hamper the
process of fulfilling the identified goals and objectives. In this assessment, the main activity
is risk assessment for enhancing the awareness about the risks, which can transform the
scenario into a downmarket one. Rationality in this approach is assistance in terms of gaining
satisfaction, trust, assurance and loyalty from the clients and customers (Tantalo and
Priem2016). On the other hand, in case of the cooperative potential, Tesla attempts to gain an
insight into the behaviours, which would be a prospective one in terms of fulfilling the
identified goals. Conducting feedbacks and surveys on the customers is a typical example of
the reaching to the appropriate behaviour, which would enhance the efficiency in the
operations.
Experimenting with the behaviours seems fruitful in terms of reaching to appropriate
behaviour. This is particularly in case of detecting the approach of the stakeholders towards
the manufactured vehicles. According to the arguments of Andriof and Waddock (2017), this
behaviour analysis helps the personnel in detecting the gaps between the activities and the
actual expectations of the stakeholders. This aspect can be projected as follows-
Fig 2- Range of possible behaviour
(Source- Zhao et al. 2017)
Based on the behaviours of the stakeholders, they can be categorized into the
following groups-

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 Swing (high cooperative potential and high competitive threat)
 Defensive (low cooperative potential and high competitive threat)
 Offensive (high cooperative potential and low competitive threat)
 Hold(low cooperative potential and low competitive threat)
Mention can also be made of the non-reactive approach, which offers the Tesla
Motors with the option for either maximizing the cooperative potential or minimizing the
competitive threat. In this, the focus is on stabilizing the market position, therefore, non-
reaction is exposed towards dealing with the stakeholders. In this context, Baumgartner and
Rauter (2017) points out that the focus is on the execution of the lobbying activities for
ensuring development for the community people. The aim of these activities is the
preservation of the ecological diversity through the manufacture of eco-friendly cars.
Conducting greener test drives is also one of the initiatives for achieving community
development.
Customers are important stakeholders, who influence the sales revenue and profit
margin of Tesla. In order to deal with the customers’ demands, the operating costs are
reduced. Typical evidence of this lies in the manufacture of the batteries instead of indulging
in partnership with Panasonic for getting the supplies of the batteries (Tesla.com 2019). This
step has improved the customer experience.
Employees are involved in the process of formulating the strategies. According to the
business of Tesla, employees are central for achieving success. Consideration of the
viewpoints of the employees is crucial in terms of the enhancing the productivity. Mention
can be made of the career enhancement plans, which helps Tesla managers to enhance the
professional skills, abilities and competencies of the employees. Along with this, HR
programs are conducted for polishing the leadership skills. Partnership with the other

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automobile firms is assistance in terms of organizing effective learning programs for the
employees. Bourne (2016) argues that group discussions are an important part in the
workplace activities, which enhances the cultural diversity.
Investors and shareholders are duly valued by Tesla. As a matter of specification, the
investors contribute in increasing the capital. Typical example can be cited of the decision to
allow other firms to use the technology patents. This is in terms of expanding the scope and
area of the automotive and transport market. Sustainability and environment friendly business
practices align with the current socio-cultural trends implemented within the workplace
activities.
Governmental agencies assist Tesla in enhancing their awareness about the latest
versions of the legislative requirements. This assistance is needed in terms of achieving
global expansion. On the other hand, Meixell and Luoma (2015) argue that implementing
obligations like tax adversely affects the business operations. Example can be cited of the
compliance with the government regulations for exercising strategic supply chain
management.
From the aspects referred above, the stakeholders can be placed in the categories as
follows-
 Offensive- employees
 Hold- consumers, shareholders
 Defensive- governmental agencies
 Swing- investors and communities

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Identification of strategic programs for the identified stakeholders
Strategic programs for employees
In case of the employees, strategic programs need to be aimed at convincing the
employees for accepting the offer of changes in the rules and regulations of the workplace. In
case of Tesla, these programs comprise of-
1. Formulation of the changes through governmental intervention and lobbying
lawmakers
2. Conducting open forums and discussions for implementing the changes-
courtroom, round table conferences for enhancing the statistics for the current
strategic condition (Wheelen et al. 2017)
3. Altering the approach towards undertaking the decisions
4. Consulting the federal government for introducing health insurances and
safety
5. Consideration of foreign exchange trading model for negotiating with the
contemporary brands and firms
6. Feedbacks regarding resolving the issues, which they are facing while
executing the allocated duties and responsibilities (Garcia‐Castroand
Francoeur 2016)
Strategic programs for consumers
For deciding the strategic programs for the consumers, Tesla need to be conscious as
they can be of help as well as harm. However, attempts need to be made for revising the
existing strategic programs is effective for convincing the employees who are resistant
towards change. The following examples can be undertaken-