Strategic Management Report: Analysis of Tesla Motors' Strategy

This report provides a comprehensive strategic analysis of Tesla Motors, examining its operations, business model, and market position. It begins with a summary of the organization, highlighting its focus on electric vehicles and solar panels. The report then conducts a SWOT analysis, identifying Tesla's strengths (strong brand, innovative processes), weaknesses (limited market presence, high prices), opportunities (global expansion, diversification), and threats (competition, material price fluctuations). A PESTEL analysis explores the political, economic, social, technological, legal, and environmental factors impacting Tesla. The report also discusses stakeholders, organizational structure (functional/U-form), and employee motivation (Maslow's hierarchy). Finally, it offers recommendations for Tesla's future growth, particularly focusing on expanding its operations globally. The report references key sources to support its analysis.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Summary of the organization.........................................................................................2
SWOT analysis...............................................................................................................2
Strengths.....................................................................................................................2
Weaknesses................................................................................................................3
Opportunities..............................................................................................................3
Threats........................................................................................................................3
Environmental constraints (PESTEL analysis)..............................................................4
Stakeholders...................................................................................................................5
Organizational structure and design...............................................................................5
Motivation to employees................................................................................................5
Recommendations..........................................................................................................6
References......................................................................................................................7

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Summary of the organization
Tesla Motors is an automobile based organization which has its origin in the United
States of America and the operations are related to the energy and automotive products. The
organization has its headquarter in Paulo Alto, California. Tesla Motors mainly specialises in
the manufacture of electric cars and solar panels. The assembly plants and factories of Tesla
are located in Fremont California. The different models which are sold by Tesla in the
automobile based industry include, Model S, Model X, Model 3. The organization was
established in the year 2003 by the two engineers named Marc Tarpenning and Martin
Eberhard (Tesla.com., 2018).
The operations of Tesla in the automobile industry were further joined by J.B
Straubel, Ian Wright and Elon Musk and they became the co-founders of Tesla. The core
values which have been developed and are followed by Tesla are based on using the best
available technologies in order to offer the products. Encouragement and respect needs to be
provided to the employees in order to increase the revenue levels. Learning based activities
need to be continued and the environment needs to be respected as well. The industry in
which Tesla Motors has its operations is highly competitive in nature and changes in the
environment are able to affect the levels of profitability in a huge manner (Tesla.com., 2018).
Tesla has responded to the changes in needs of the consumers with the help of its products.
SWOT analysis
Strengths
The strengths of Tesla are based on improvement and growth of the organization in
the automobile based industry. The organization is empowered by the business strengths
which is helpful in competing with the others in the industry. Strong brand name of Tesla has
been a major support to the operations of Tesla. The processes which have been implemented

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by the organization are innovative and the production based processes are also managed
effectively. The energy based solutions which are provided by Tesla are based on business
based goals which have been set by Elon Musk (Moutinho & Phillips, 2018).
Weaknesses
The organizational performance is affected by some major weaknesses of the
organization in the automobile industry. The presence of Tesla in the automobile based
industry is limited and the supply chain is also not effective. Most of the revenues of Tesla
are generated from the US and the presence in China is also low. The products which are
offered by Tesla are expensive as compared to the products which are offered by the
competitors. The high prices are able to prevent the levels of growth in market share and the
customer base as well. The needs based on reforming the strategies based on global
expansion are related to the weaknesses of Tesla (Sminia, 2017).
Opportunities
The external opportunities which are provided to Tesla are based on development and
growth of the organization in the automobile industry. The performance levels of the business
can be improved and growth can be increased with the help of different opportunities which
are offered by Tesla. Different opportunities which are provided to Tesla mainly include,
expansion of global supply chain, diversification of the business and expansion of global
sales. The growth of Tesla is thereby compared to a large organization like General Motors
(Wheelen et al., 2017).
Threats
The aggressive levels of competition which are faced by Tesla are considered to be
major levels of threats. The organization is also facing a major threat based on the
fluctuations which have taken place in the prices of different materials. The dealership based

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regulations are also considered to be major levels of threats which are able to affect the
growth of Tesla (Moutinho & Phillips, 2018).
Environmental constraints (PESTEL analysis)
Political factors – The government incentives offered to the automobile organizations
are considered to be a major opportunity. The global trade based agreements which are made
in the automobile industry are political factors which affect the operations of Tesla. Political
stability is considered to be a factor which is able to affect the levels of profitability
(Annarelli & Nonino, 2016).
Economic factors – The economic conditions which prevail in different countries are
major factors which are able to affect the operations and profitability levels of Tesla.
Different economic factors which have a significant effect on Tesla mainly include, decrease
in battery costs, decreasing the renewable energy based costs and issues based on economic
stability. The lower battery costs are able to affect the business performance which is
depicted by Tesla (Blackwell & Eppler, 2014).
Social factors – The social conditions which trend in the industry that affect the
products offered by Tesla include, increase in the popularity of low-carbon based lifestyles,
increase in the preference based on renewable energy and improvement in levels of wealth
distribution (Elmes & Barry, 2017).
Technological factors – The rates of technological changes in the automobile
industry are quite high. The automation based activities have increased and have been able to
affect the effective operations of Tesla. The popularity based levels of the online mobile
related systems have started increasing in current business environment. This has been able to
bring changes in the facilities which are offered by the cars (Engert, Rauter & Baumgartner,
2016).

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Legal factors – The protection of international patents have been increased in the
latest times which has been able to affect the policies which are developed by Tesla in the
industry. The regulations based on energy consumption keep changing and further the
products of Tesla have been developed accordingly.
Environmental factors – Changes which have recently taken place in the climate and
expansion of different environmental programs have been taken into consideration by
production activities performed by Tesla (Hanson et al. 2016).
Stakeholders
The customers can be considered to be the major stakeholders of Tesla Motors in the
automobile industry. The products which are developed by the organization are thereby able
to affect the choice of the customers. The need of current environment is fulfilled by Tesla
with the help of different products that are offered to the customers (Hill, Jones & Schilling,
2014).
Organizational structure and design
The organizational structure which has been developed by Tesla Motors is functional
or U-form in nature. The unitary form of structure is thereby based on the organizational
functions which are performed by the employees. The structure can be considered to be
function based and centralized in nature. The different departments of the organization which
are able to represent the global hierarchy include, chief executive officer and chairman,
technology, finance, global sales and service, legal and engineering. These departments are
able to play a key role in the effective operations of the organization in the automobile
industry (Moutinho & Phillips, 2018).

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Motivation to employees
Maslow’s hierarchy of needs can be implemented in an effective manner in order to
analyse the needs of employees at all levels of operations and fulfilling them accordingly.
Different stages of needs described in the model include, physiological needs, safety needs,
social needs, esteem needs and self-actualization needs (Sminia, 2017).
Recommendations
Tesla Motors can aim at expanding its operations to different countries other than its
largest markets China and US. The organization will be able to increase the levels of
revenues and profitability with the help of proper expansion and entry into the new markets.
This will also play a key role in the ways by which the organization is able to increase its
presence in the automobile market.

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References
Annarelli, A., & Nonino, F. (2016). Strategic and operational management of organizational
resilience: Current state of research and future directions. Omega, 62, 1-18.
Blackwell, R., & Eppler, D. (2014). An approach to strategic situation analysis: Using models
as analytical tools. Journal of Global Business Management, 10(1), 80.
Elmes, M., & Barry, D. (2017). Strategy retold: Toward a narrative view of strategic
discourse. In The Aesthetic Turn in Management (pp. 39-62). Routledge.
Engert, S., Rauter, R., & Baumgartner, R. J. (2016). Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, 2833-2850.
Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management:
Competitiveness and globalisation. Cengage AU.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Moutinho, L., & Phillips, P. (2018). Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Sminia, H. (2017). Strategic management basics. In The Strategic Manager (pp. 13-29).
Routledge.
Tesla.com. (2018). Electric Cars, Solar Panels & Clean Energy Storage | Tesla. Retrieved
from https://www.tesla.com/

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Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic
management and business policy. pearson.