Analysis of Tesla's Global Business Environment and Trade Policies

This report examines the global business environment of Tesla, specifically analyzing the impact of domestic governments' protectionist policies on the company's operations. It explores how tariffs and trade restrictions, particularly those imposed by China, affect Tesla's supply chain, production costs, and market access. The report also discusses the implications of globalization, including increased competition and the need to meet global customer expectations. The conclusion highlights the challenges Tesla faces in navigating international trade and the importance of adapting to a competitive global market. The report uses academic journals and online sources to support its findings.

Global Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
The impact of the domestic governments’ protectionist policies on the operations of Tesla.....1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Global business environment is where different countries come and exchange different
products and services (Tallman, Luo and Buckley, 2018). Present study is based on the company
Tesla that is an American automotive company founded in the year 2003. Report will include the
impact of the domestic governments’ protectionist policies on the operations of Tesla and also
about globalisation (Global business environment, 2019).
The impact of the domestic governments’ protectionist policies on the operations of Tesla
There are different protectionist policies that are set by the government in order to protect
the domestic industries against foreign competition by applying different tariffs and other
restrictions. Such policies have impacted on the operations of Tesla in China (Abutabenjeh,
Gordon and Mengistu, 2017). As company is having its main branch in California, US and is
producing its products in international market, company face many barriers and restriction in its
operations as well as supply chain. As China impose retaliatory tariffs on US goods due to trade
war between US and China. Tesla have to pay 25% tariff in order to sell its product in Chinese
market and that affects its business operations (China Tesla tariff, 2019). The different
protectionist policies also results in high cost of parts and materials in order to make the
respective products of Tesla. This leads to huge investment for business operations and may
reduce the output.
Tesla's operations have also been affected due to different tax imports from China and on
the other hand, government of china impose tariffs to restrict imports or implementing high
tariffs in order to protect their own industries. China works to protect its different businesses and
also jobs of their people (Li, He and Lin, 2018). These tariffs also affects the consumers of Tesla
as they only have few options or choices with respect to products and services offered by Tesla.
There are many resources for which Tesla depends on China and due to tariff policies and taxes
that government of China implement affects the business operations of Tesla as it become more
expensive for them to have those raw material. It also results in high price of the products and
services that company offers to its customers.
Globalisation:-
It is a process with the help of which Tesla develops international influence and develop
its products and services for international market in order to grow its business and its
profitability (Mutalemwa, 2015). Globalisation usually leads to huge competition for business
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with respect to cost of products and services, technological adaptation, production and also
business operations. The customers in global expect high quality and low price for the products
and services offered by Tesla and this affects its business operations as company have to work in
order to meet the expectation of global customers and to have huge market share.
CONCLUSION
From the above study it is been concluded that there are different protectionist policies
that government sets in order to protect the local industries and business that are running in their
own country. In order to reach global market, there are different taxes and tariffs that company
like Tesla have to pay. These tariffs affect the business operations of Tesla and company have to
work for bringing competitive advantage to its firm by producing its respective products in
global market.
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REFERENCES
Books and Journals
Abutabenjeh, S., Gordon, S. B. and Mengistu, B., 2017. International trade protectionist policies
and in-state preferences: A link. Journal of Public Procurement. 17(1). pp.31-52.
Mutalemwa, D.K., 2015. Does globalisation impact SME development in Africa?. African
Journal of Economic and Management Studies. 6(2). pp.164-182.
Tallman, S., Luo, Y. and Buckley, P. J., 2018. Business models in global competition. Global
Strategy Journal. 8(4). pp.517-535.
Li, C., He, C. and Lin, C., 2018. Economic Impacts of the Possible China–US Trade War.
Emerging Markets Finance and Trade. 54(7). pp.1557-1577.
Online
Global business environment. 2019. [Online]. Available.
Through<https://michiganross.umich.edu/courses/global-business-environment-7220>
China Tesla tariff. 2019. [Online]. Available.
Through<https://www.engadget.com/2019/08/30/china-tesla-tariffs-trade-war/>
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