Business Strategy Report: Tesla Motors Macro Environment Analysis

This report provides a comprehensive analysis of Tesla Motors' business strategy. It begins with an introduction to business strategy and its importance, followed by an overview of Tesla Motors, founded in 2003. The report then delves into the macro environment using frameworks like PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors impacting Tesla. A SWOT analysis is conducted to evaluate the company's strengths, weaknesses, opportunities, and threats. Furthermore, the report explores strategic models, including Ansoff's growth vector matrix, to identify growth opportunities through market penetration, product development, market development, and diversification strategies. The report also includes stakeholder analysis, covering the identification, documentation, and management of stakeholders. The report concludes with an assessment of Tesla's strategic planning techniques, offering insights into its current and future business strategies.

Business Strategy

INTRODUCTION
The business strategy refers to an agonistic action which is taken by every business
organization to attract more and more customers, retaining & sustaining in market, for becoming
successfully, enhancing performance as well as to achieve organisational goals. However,
business strategy is an very important role in every organization that helps in attaining their
goals. The current report is conducted on Tesla Motors, which founded in 2003 by some
engineers. Their aim is to prove that electric motor vehicles can also better as well as effective
quick and give more enjoyment to drive as compare to gasoline cars (Adi, 2015). This report
considers appropriate frameworks analyse of macro environment on organisation and its business
strategies. Along with this, companies internal capabilities are considers. In addition to this,
analysis of market sector is done by using Porter’s Five Forces model. At last strategic models,
& concepts, applications and plan is developed fir directing management of business
organization.
TASK-1
P1. Appropriate frameworks impact on macro environment of Tesla company.
The Strategic Context:
The strategy is defined as method, tool or a plan which is developed and chosen for
bringing and achieving desires of future. Like achieving goal, objective or an solution of an
problem. In other words, strategy refers to art as well as science of planning and putting
resources for utilization of them in most efficient and effective manner (Akter and et. al., 2016).
 Vision- To be most creative and best company which provides all satisfied product,
service and self-fulfilment needs to society.
 Mission- To enhance society by creating, developing high-quality products and become
global leader in auto-mobile industry.
 Financial Objective- To increase net profit by 12% within year.
 Customer Objective- To developing an potential customer base by proving best quality
product.
 Values- To introduce best innovation in market.
Different strategic planning techniques.

The strategy plays an important role in every business organization which helps
management in achieving their organizational goals, objective, strategic intent as well as
direction. As role of strategy in attaining objective is that it provides effective framework for
operational planning, it also gives clarity in direction of activities, it increases and enhance
organizational effectiveness and personnel satisfaction. Along with this it helps in taking
strategic decision as well as it integrated reviews and does facilitation (Amran and et. al., 2016).
The strategic planning is defined as an process which focuses on developing a strategy
planning that helps in execution of strategy. There are different various techniques which are
used to make plans for formulating strategy. Such strategies are: Business Models,
Benchmarking, Capability Analysis Budget Planning,, Business Case,, Business Plans,,
Competitive Intelligence, Business Analysis forecasting, market analysis, financial analysis and
many more techniques. Thus, management of Tesla Motors is focuses on adopting different
strategic planning techniques in their operation in effective and efficient manner.
Stakeholder analysis: Stakeholders refers to an individuals that are actively involved in
any project of organization and their interests is affected by result of project completion.
Although, stakeholder analysis refers to an essential and crucial method that helps management
in identifying stakeholder and also aid in analysing their needs. Stakeholder can be shareholders,
heads of all affected business units, Consultants, executive staff, suppliers, customers, alliance
partners etc. Thus, this processes project involves various steps and this is followed by
management of Tesla Motors for identifying their profitable stakeholders (Beard and et. al.,
2016).
1. Identifying the stakeholders
2. Documentation of stakeholders required.
3. Analysing stakeholders interest.
4. Managing the expectations of stakeholders
5. Taking corrective actions
6. Reviewing the status and feedback.
Stakeholder matrix: This matrix is refers to project management tool which is used for
analysing project stakeholder to regulate those actions that are essential to taken and align to
achieve their goals along with their project. There are many variation of the stakeholder matrix
as its simple and very effective tool which helps in analysing stakeholders (Coltman and et. al.,

2015). In context to Tesla motors, the management of company is focusing on formulating and
implementing this effective strategy as it help them in analysing the potential stakeholder in
effective and efficient manner.
Stakeholder mapping:
Stakeholder mapping is a process which finds the key stakeholders that are connected to
project. This process focuses on identifying every individuals who have deeply interest in result
of project. Although, Stakeholder mapping plays an essential role in success of any project.
PESTLE Analysis
Political: Tesla company is automotive company which manufactures electric vehicles.
The traditional vehicles are requires fuel to run but Tesla has used both electricity and gas for
running their vehicle. Along with this, Tesla drivers are using electronic stations to refill their
cars. In context to Tesla, the political significant influence by governmental payment or profit for
electric auto-mobiles, Political stability, New global trade agreements in markets. Thus, it gives
positive impact to company as they can increase their opportunities or strengthen along with their
financial performance (Echchakoui, 2018). But the national authorities make change in its
trading laws then it unfavourably affect the business of the company.
Economical: This factor includes, inflation and deflation rates, interest rates etc. In
context to Tesla company, if bank rates increase, and company has taken loan then the profit of
company will decreases, which will give negative impact on company. But if there are economic
stability in the nation then favourably influence the business of respective firm.
Social: This factor focuses on needs and demands of society. However, management of
Tesla focuses on consumer needs, preferences, taste, demands as they manufactures
environmentally friendly products which are electric cars. In context to present company, the
management can grab help of this, Tesla is focusing on fulling needs of society, as it give
positive impact to company. This firm offer electric cars which are less expensive than those of
traditional cars in terms of maintenance and running cost which influence the consumers and
their needs.
Technological: Nowadays, technology is changing very rapidly. Although, Tesla Motors,
is starring innovator of company in transforming automotive industry. So, current batteries has
their own strength and drawbacks. But its essential for Tesla for adopt an new upgraded
technology in their business operations for effective working. Thus it helps them in staining in

competitive market. In context to current organization, if management uses an upgraded
technology, then it will give the positive impact on their operations as by this they can effective
execute their function and enhance their productivity as well as performance. Rapid change in
technology affect the business of the repective firm.
Legal: There are different laws and legislation which every company has to follow.
Although, management of Tesla is facing very difficulty with their state laws and regulations
about integrate sales of product and service rather than selling through the authorized dealers
(Eskandari and et. al., 2015). In context to Tesla company, the manager is using various
employment laws in their organization by which they can effectively operate and managing their
employees. Along with this, this will leads to the positive impact to Tesla in effective and
efficient manner. This firm operate its business internationally so when the national authorities
make changes in their laws and legislations then it influence the business of the company
negatively.
Environmental: Electric cars is manufactured that response to awareness of
environmental issues like global warming and climate change. Thus, impacts of electric car is
noticed by both governments and consumers that encourages expansion of electric car
application by government policies as well as changing consumer demands. In context to
Tesla’s, the top level managers has focused on manufacturing electric cars which do not produce
any carbon emissions and also don't contribute in carbon footprint, hybrids or in any gasoline
cars. Thus, it is very helpful and leads positive impact on their operation of company. Tesla's
electric cars have zero carbon emissions and do not contribute to the carbon footprint, unlike
other electric, hybrids and gasoline which affect environment negatively as well as business of
the organisation.
From the above analysis, it can be evaluated that the PESTEL helps Tesla in gaining the
accurate position of the external environment (Wu, Ramesh and Howlett, 2015). The UK
market is stable as of now which means that Tesla can make plans of expanding the business or
introduce new products. Furthermore, it is focused on implementing technology by which
emission of harmful gases can be reduced. This makes it a company which is environmental-
friendly. This is going to help it sustain in the competitive industry for a long time.
SWOT analysis of Tesla

Strength: The main strength of Tesla is that company has highly innovative process due
to which they are on a leading position in country. Along with this, the company has strong
brand image and effective goodwill of their company in competitive market, as they customers
are aware about their product. The next strength of Tesla company is strong control on
production process due to this, company focuses on there production process and manufacture
and does production according to the needs as well as after market analysis.
Weakness: The major weakness of Tesla organization is that they have limited market
presence as well as Limited supply chain system. Along with this, main lacking point of
company is that they are lacking in Shortage of resources (Wong, Wong and Boon-Itt, 2015).
Opportunity: The best opportunity for the Tesla company is expanding their business in
untapped Market. The next opportunity for company is global sales expansion as well as
decrease in prices of cars. So, that more and more customers can buy their products.
Threat: The one of the main threat to the management of Tesla company is that they
have aggressive competition in competitive market. The another threat is fluctuations in the
prices of raw material as well as customer adaption.
Ansoff's growth vector matrix:
One of best strategies that can help management of Tesla business organisation in
growing their business is Ansoff’s Growth Vector Matrix which is introduced by H. Igor Ansof
in 1957. This matrix focuses on considering in identifying best opportunities by offering current
& new products within existing as well as new markets with a high level of risk.
Thus, top level management of Tesla Motors has adopted this strategy for finding best
area for growth and expansion of their business (Wang, Kung and Byrd, 2018). However, top
managers has concentrated most on market development, growth strategies, product
diversification strategy and product development. There are are described as below:
 Market penetration is an strategy which focuses on selling more numbers of established
products into current existing markets. In addition to this, by making uses of this strategy,
the Tesla top level management uses this strategy the company can effectively grab the
market at extensive level. As company is sells its Model 3, Model X, Model S electric
vehicles, solar panels, Power pack 2 energy storage products, electrical hardware,
inverters and monitoring devices in different 29 countries.

 Product development focuses on developing new products and placing them in existing
markets for selling. In context to Tesla, the management can make use of this this
strategy infrequently due to it involves high cost for developing new product in power
storage sectors (Jenkins and Williamson, 2015).
 Market development put existing products into new markets for selling them. In regards
to, Tesla, the management is focuses on adopting this strategy as they searches for new
markets to enter as they targeted Indian market for expanding their business operations.
As it will be very helpful as well as beneficial for Tesla company. Diversification strategy focuses on developing new products and sell them into new
markets at same point of time. In context to Tesla company, it is identified that, this
strategy is very risky as well as complex because expanding business in outside area of
their core activities is very complex for targeting a potential audience. Along with this,
Tesla has to invest a lot of money in the process of NPD. (Marin and et. al., 2015).
Conclusion
From the above mentioned information, it has been concluded different frameworks of
macro environment that have direct impact on business performance and growth of Tesla.
Ansoff's growth vector matrix, SWOT analysis of Tesla, PESTLE Analysis are consider more
effective and useful framework for Tesla. SWOT analysis is useful model that helps company to
identify their strength, weakness, theatres and opportunities. PESTLE analysis also support an
organisation in identification of political, environmental, social, economical, technological and
legal situation of country where they expand their business. Ansoff's matrix is also consider best
framework to develop their growth at marketplace.
M1 Critically analyse the macro environment to determine and inform strategic management
decisions.
Macro environment analysis is one of most important attribute for an organisation that
helps to evaluate the environment while expanding or dealing in respective marketplace. In
context of Tesla they deals in the UK marketplace in which Brexit affect the market such as it
reduces the no. of talented personnel in the economy and bring inflation. Due to the rise in the
pricing it is very much hazardous for the organisation to sell the products and services to the
ultimate consumer base. To remain competitive in marketplace it is very important for them to
drive innovation in products and services as per the consumer demand.

TASK 2
P2. Internal environment and capabilities of Tesla.
Organisational internal environment: Internal environment is main and effective
component of business that consist of different factors that are available within organization
which can affect with activities as well as decisions of organization (Mathooko and Ogutu,
2015). There are some factors which can affected by business are discussed below:
Employees are important assets in every organization. As their dedication and motivation
will impact upon their performance. In case they are positively motivated, results will be positive
and vice versa.
Managers are individual who are associated with management of different task
performing in organization. Their good Woking will impact positively and in case bad
performance result be be negative.
McKinsey’s 7S model: McKinsey 7s model is introduced by McKinsey consultants
Julien Philip & Tom Peters, Robert Waterman in 1980s. The main objective of this model is to
how 7 elements of company can be aligned together for achieving effectiveness in business
organization. Such elements are : Staff, shared values, Structure, skills, Strategy, Style and
Systems,
Structure defined division of business units. It construct organizational chart which shows
different level of management. In context to Tesla Motors, the management has focuses on their
structure as they has an effective organizational structure which follows an hierarchy of level of
management.
Strategy refers to implemented plan in an organization which are formulated for specific
purpose for achieving organisation goals and objective. In regards with present company,
management of Tesla Motors has focuses on formulating an effective strategies for gaining
objective of their organisation. As it will aid management in attaining an more competitive
advantage for the competitive market (Ramírez and Selsky, 2016).
Skills refers to abilities, competences and capabilities of organization employees by
which perform very well. In regards to management of Tesla Motors, it has been said that, that
have effectively focused the skills while hiring an effective and skilled candidates for their
business organization which will help them in attaining their objectives.

Staff refers to workforce of an organization, which they need for achieving their goals. In
context to Tesla Motors, the management of company is focusing on their employees effectively
and efficiently as they recruited, trained, motivated as well as rewarded them for gaining more
productive work (Razak and et. al., 2016).
Style defines approach and method of management which helps them in leading their
company, influencing performance & productivity of employees as well as corporate culture. In
context to Tesla Motors, the management had concentrated on adopting an different and unique
style as it is very beneficial approach that helps manager in managing as well as leading their
organisation in effective way (Scholes, 2015).
Systems of company is defined daily workflow, procedures as well as decisions which
makes operations effective within an business organization. In context to management of Tesla
Motors is following effective system and procedure in their company which aid them in
operating their functions in effective and efficient manner.
Shared values is core element of McKinsey 7s model. It refers to norms and standards
which guides employee behaviour as well as action of company actions. In context to Tesla
Motors, the management has focuses on formulating and implementing an effective and proper

values in their organization, as these will help management in building and creating an effective
relation with their employees.
With the use of this model, it has been evaluated that Tesla is required to opt for the
strategies which are going to create results that are favourable for the company. It should make
improvements in existing as well as introduce new ones in order to manage the work effectively.
Furthermore, new candidates should be appointed who have the required knowledge and skills
and can offer innovation to the company. Furthermore, proper training should be provided in
order to enhance their capabilities that can help the company to achieve its targets within the
time. Through this model, it can change its style of working in order to manage everyday
activities. Rest of the elements do not require much modifications and are in fact well co-
ordinated and organised.
Analysis using the VRIO framework: Its an strategic analysis tool which helps
organizations to expose and protect all resources and capabilities that can give organization to
long-term competitive advantage (Thompson and Gamble, 2015).
Value: These are those resources which gives value to organization. In context to Tesla
Motors, the employees, technology and goodwill are resources which provides value to company
in effective manner.

Rarity: In context to Tesla Motors, employees are not rare resources as company has
number of workforce. Where as technology and goodwill are rare resources as Tesla Motors uses
an effective and unique technology in their operation which helps in building their goodwill. In
context to Tesla motors, the management of Tesla is providing quality products to customers and
utilising it's resources in an effective manner.
Imitability: This factor includes those resources which are not be possible to copy.
Employment, goodwill and technology are imitable resources for Tesla Motors, as other
company can not copy these. In context to Tesla motors, the management is focus son using an
effective artificial intelligence in their operation as well as system.
Organization: There factor consider those factor which value, rarity and imitable to
company. In context to Tesla Motors, employees, technology, goodwill are resources which
helps organization to capture value. Furthermore, they provide sustainability in market and in
gaining competitive advantage (Wang and Byrd, 2018).
Human Resources: The workforce within Tesla is effectively trained, by applying
modern age technologies as well as many other essential training equipments. This will improve
the scope of organising the workforce of Tesla within working in the company and helping them
in creating better products and services.
This analysis has made Tesla realise that it should be more concerned about choosing the
right candidates who have the capabilities to fulfil the requirements of producing the cars. The
resources should be protected from any misuse. It should focus on maintaining efficient
workforce so that vacant positions can be filled within the time. Furthermore, there should be
proper organisation of funds and other valuable resources in order to achieve the targets.
Cost-benefit analysis refers to an effective process used for analysing proper decisions.
The business add on the the benefits of situation, after that they subtracts the costs associates
with taking an effective action. In other words, it estimates as well as totals the money value of
benefits & costs earned by company. This helps managers of Tesla Motors in taking proper
decision in relation to organization so that by making proper estimations, suitable decision could
made in relation to Tesla Motors (Wong and Boon-Itt, 2015). From this analysis, it has been
evaluated that Tesla should focus on those areas in which wastage of costs is huge. By reducing
the cost element, it can ultimately minimise the prices of the final product.
Impact of internal environment and capabilities of Tesla