Business Strategy Analysis: Tesla's PESTLE, SWOT, and VRIO Framework

This report provides a comprehensive analysis of Tesla's business strategy, examining its macro-environment, internal capabilities, and competitive forces. The analysis begins with an introduction to business strategy and the selection of Tesla as the case study. Task 1 employs PESTLE analysis to assess the external factors influencing Tesla, including political, economic, social, technological, environmental, and legal factors, as well as a stakeholder analysis. Task 2 focuses on the internal environment, utilizing SWOT and VRIO models to evaluate Tesla's strengths, weaknesses, opportunities, threats, and its valuable, rare, inimitable, and organized resources. Task 3 applies Porter's Five Forces model to analyze the competitive forces within the automotive industry, and Task 4 discusses the Ansoff matrix. The report concludes with a summary of the key findings and recommendations for Tesla's strategic development, supported by a list of references.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply appropriate model to analyse the impact and influence of macro environment on a
given organisation and its strategies.......................................................................................3
TASK 2............................................................................................................................................5
P2 Analyse the internal capabilities and environment by using appropriate frameworks.....5
TASK 3............................................................................................................................................8
P3 Application of Porter’s Five Force model for examining the competitive forces of
organisation............................................................................................................................8
TASK 4............................................................................................................................................9
P4 Apply various models, theories and concepts in an organisation.....................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is the combination of various decisions taken by higher authorities and
actions performed by them for accomplish the organisational task and objectives effectively. Its
major aim is to catch attention of huge number of customers towards their company for
achieving the goals within the given time period. With the help of effective business strategy,
company can gain competitive advantages at the marketplace. In the present report, Tesla is
chosen as the base company (Brewster, 2017). Tesla was founded in the year 2003 and is an
American automotive company based in California. Company is specialise in manufacturing
electric car. Under this report various topics have been covered, where PESTLE analysis is done
in order to examine external factors which influence the working of company. On the other hand,
SWOT analysis with VRIO model have been discussed to examine the internal abilities of
chosen organization. In addition to this, Porter Five Force model analysis is discussed in order to
measure the competitive analysis. At last, Ansoff matrix is discussed in this present report.
TASK 1
P1 Apply appropriate model to analyse the impact and influence of macro environment on a
given organisation and its strategies
Macro environment plays a crucial and important role in assessing and analysing
competitor's behaviour in local as well as global market. In reference to TESLA, the marketing
manager as well company board of directors emphasis on PESTEL tool for assessment.
PESTEL Analysis
This analysis is a vital analytical tool used for assessing external environment as well
competitor behaviour towards the rapid change in market with reference to sustainability. The
PESTEL is elaborated as political, economical, social, technological, environmental and legal.
The TESLA managers, uses PESTEL analysis for running the successful business in a systematic
manner. These factors are briefly described below:
Political: This factor indicates the direct and indirect influence of ruling government in
the business or company. The ruling bodies of the nations, plays a major role in market share of
the company in national or international boundaries (Cavusgil and et. al., 2014). Some of the
factors of the political factors are anti trust law with reference to manufacturing, trade and tariff,
level of corruption with consumer goods, mandatory employee benefits. The laws is framed by

the authorised group of people, who are controlling the country at national and international
borders which every firm, company or organisation has to follow for running the business in
changing environment. In the context with TESLA, the political government influences major
impact on the businesses . For instance, the policies on trade may plays a key role in the
company performance and also disturbed the revenue estimated by the company. The
applicability of porter's forces allow company boards to shape the marketing strategies with the
new policies and learning the political basis of the country, where they have to expand the
business and sustain in the market. This will result in growth of business stability in market at
global level, as well increase the economic condition of the nation. The wars between US and
China along with Iraq and China is enhancing creating negative impacts upon TESLA and its
imports as well as exports as former is the dominant revenue generating entity for corporation.
Further, BREXIT has led to fall in price of pound, creating difficulties for every business sector,
especially the automotive sector.
Economical: The factors included in macro environment are inflation rate, foreign
exchange rate, interest rate and many more. With the reference to TESLA, the marketing
managers have to focuses on economic conditions of the nation follow the guidelines framed for
the country (Chang, 2016). The managers needs to estimate the budget of expenses in order to
satisfy the internal as well external resources. In terms of business perspective the company has
to research on the economic condition of target country while calculating the expansion industry
in other country.
Social: With rapid change in the society and the culture the society is developing, it is
very difficult task to learn the societal culture of the particular country. In relation to TESLA, the
managers need to focus on demographic, skill level of populations, hierarchy and power
structure, education level, culture, entrepreneurial spirit and broad nature of society, attitude and
understanding level of culture while setting a firm in new target market. This will result in
growth of business.
Technological: The updating of technology in the society plays a major impact on the
business. The transport industry have direct link in this running the business successfully. In
regards to TESLA, e-commerce is the new technology which effect the business productions on
the basis on target market demand (Chen and Jermias, 2014). This result in value chain in

consumer goods sector. For running the business, the managers should focus on online offering
to the customer in order to increase the sales.
Environmental: As the world is becoming more polluted, this actors play an essential
role in maintaining the green and clean environment. The TESLA company is providing ozone-
friendly auto mobiles, as now customers are more cautious about their health. For maintaining
the loyalty toward the firm, the manager needs to produce more product in local and global
market, while estimating the weather conditions, the company manager needs to focus on
reducing air pollution and recycling of waste that could be used in other production process.
Legal: This factor includes all the policies which the legislative body has imposed in the
country which include discrimination law, copyright, patent law, consumer protection and e-
commerce law, health and safety law and data protection law (Goffee and Scase, 2015). In
regards with TESLA, the authority board has to implement and follow, the amendment of
discrimination law in the fruitful function of the production and operations flow in the company
work culture. For instance if the company fails to follow the regulations the government body
has the power and authority to imposed a six years ban on the firm in a nation and more action
would have been taken from other nations at global level.
From the above factors, we conclude that the TESLA company management should focus
on the circumstances which are directly impacting in the external macro environment for a
business. The managers and board members should collaborates for decision-making process for
improving the market value and grow the business successful in international level. The new
policies should be implemented for effective and efficient work flow in the opera and production
department in the work culture of the company.
Stakeholder Analysis
Stakeholders analysis refers to the strategic tool which divides business related person in
specific group so that better decision can be made by the company in effective manner
(Wesseling, and et. al., 2015). With reference to TESLA, the management team of this company
has conducted an effective stakeholder analysis in order to improve their knowledge on key
stakeholders. Stakeholder analysis of TESLA is described as below in detailed manner:
Stakeholders
Group
Influence on TESLA

Consumers Consumers are used as the top most stakeholder of TESLA, therefore
management team focuses on providing better innovative products to them
in order to improve their satisfaction level.
Supplier Suppliers mainly delivers raw materials to business organisation on the
basis of their orders. The main expectation of suppliers from the company
is to pay their amount on timely manner.
Trade Union Trade unions basically wants that TESLA should provides free and fair
wages to workers.
Local
community
Actions undertaken by TESLA have a significant impact upon the
community and thus they desire that TESLA operates in the interest of
environment and society.
Government This stakeholders is concerned about formulating different norms and
policies for TESLA with which they can sustain longer at marketplace.
TASK 2
P2 Analyse the internal capabilities and environment by using appropriate frameworks
In order to examining the internal environment and capabilities of TESLA, management
team of the company perform SWOT along with VRIO analysis (Jeston, 2014). With the aid of
this, organisation will know their strengths and weakness for maintaining their growth at the
competitive marketplace.
SWOT Analysis
Strength Weakness
 Biggest strength of TESLA is that they
have strong policies and marketing
strategies.
 Along with this, TESLA provides
attractive and unique products to their
customers.
 On the other hand, weakness of the
company is that they have very limited
profitability.
 In addition to this, other weakness of
TESLA is that company is handling
various models at the same time.

Opportunities Threat
 TESLA can expand their business
operations at various countries with
their unique products and services.
 One of the main opportunity for
TESLA is that company gain large
number of attention from customers as
they reduce the fuel consumptions
(Jocovic and et. al., 2014).
 Biggest threat for TESLA is that they
have very limited number of suppliers,
as it reduce their profit margin.
 Along with this, there is huge number
of competition in the auto mobile
sector.
VRIO
VRIO model is used by management team of TESLA, in order to identify their
capabilities which are as follows:
Elements Valuable Scarcity Imitable Organized What is the
outcome?
Worldwide
Image
Worldwide
Image
- - - Competitive
Disadvantage
Goods Goods Goods - - Partial
competitive
Technology Technology Technology Technology - Competitive
advantage for
impermanent
basis
Employee Employee Employee Employee Employee Competitive
advantage
There are four resources which are considered by the managers of TESLA for analysing
their capabilities. These resources includes global image, goods, technology, and staff members.

Valuable: These are the elements which aid the managers of TESLA for accomplishingOn the
basis of above made discussion, it has been analysed that the organisational goals in an effective
manner and within the given time period (Klettner, Clarke and Boersma, 2014). These elements
are discussed in detail:
 Worldwide Image: In references to TESLA, worldwide image of the organization within
the international market is very high as they provide products with unique features. With
the aid of this, TESLA will gain competitive advantages effectively.
 Goods: TESLA produce high quality of products with the help of upgraded and latest
technology. With the help of this, company build a strong customer base.
 Technology: In order to manage as well as operate things effectively, management team
of TESLA use various technologies. With the help of these technologies or software,
company will be able to accomplish their goals effectively and within specific period of
time.
 Employee: Staff members of TESLA are well trained, as they provide help to the
management team for achieving organisational objectives in an effective manner.
Rarity: This factor includes all those aspects of an organisation which are scare and have gain
competitive advantage within the marketplace. In context of TESLA, worldwide image of the
organization is not taken as the rare entity as there are various large scale organisations available
at the competitive market (Laudon and Traver, 2016). In reference of TESLA, rare elements of
the company are as follows: Goods: Goods are produced by TESLA includes latest technologies which is not easily
imitable by any company within the industry.
 Technology: In case of TESLA, technologies used by company are very rare in order to
maintain their records. Thus these technologies are not easily accepted by any other
company.
 Employee: Employees of TESLA, have their own skills and capabilities in order to
achieve their goals and objectives in an effective manner.
Imitable: These are the elements and resources of the organization which can not be copied and
duplicated by any other person, company or industry. In context of TESLA, goods and products
does not have this element. Reason behind this is that, trends, technologies and features can
easily be developed or copied by other rival companies present at the market place.

 Technology: In the present case of TESLA, technologies used by the mangers of the
company are updated and latest which is not easily be adopted by any other industry with
the help of this, company can gain competitive advantages at the marketplace.
 Employee: Each and every employees have their won skills and capabilities which are
totally different from other individuals (Lawton, 2017).
Organized: It refers to the resources which need to managed and organised effectively in order
to accomplish the goals and objectives in an effective manner.
 Employee: Employees of the Company need to be very managed and organised while
any kind of changes take place within the company.
On the basis of above made discussion on SWOT and VRIO, it has been analysed that the
company will effectively VRIO as it specifically aware company about their resources and
capabilities with the help of which business performance of TESLA can be improved in effective
manner.
TASK 3
P3 Application of Porter’s Five Force model for examining the competitive forces of
organisation
It is an effective framework with the help of which company could easily understand
competition within the industry. With reference to TESLA, it has been analysed that the
company have chosen porter's five force model in order to go through the competitive condition
within the industry. This frame work owes five forces, which clearly states that all of these forces
are influencing business operations and strategies at the time of their execution. All of these
forces are described below in detailed manner (Peng, 2017).
Threat of new entry- Threat for new entrant in Auto mobile industry is low as the
industry is already having certain key market player who are already leading the market place. In
context of TESLA, it can be said that it would be difficult for new companies to enter into this
industry it require huge investments for establishing business. Therefore, threat of new entrant
for the auto mobile industry is very low because it would be difficult for them to invest huge
amount in less period of time.
Threat of substitutes- In case of TESLA, Threat of substitutes for the company is
relatively high. Because, the industry is having number of companies who are planning to bring

alternative product for gaining competitive edge at market place. In context of TESLA, it is
essential for management team of this organization need to focus on the requirements of
customers for retaining them loyal with the company for long duration. This support of
Customers would result in improvement of sustainability of the company.
Bargaining power of consumers- Bargaining power of customer are high as they are the
one who gives the opportunities to the company for maintaining their sustainability at the
competitive marketplace. But in case of TESLA, customers having low bargaining power as
there are very limited company who provide electric vehicle. Thus, it is essential for TESLA to
supply high quality products to their customers in order to maintain their sustainability for a long
period of time (Scholes, 2015).
Bargaining power of suppliers- Suppliers refers to those person who supply raw
material to the organisation in order to produce final goods and services. With reference to
TESLA, it has been analysed that company is having low bargaining power of suppliers. Reason
behind this is that TESLA having various suppliers who will be able to deliver them best and
effective raw material at very low price. As a result, there are numerous number of option for the
chosen company where they can easily switch to other supplier for getting best material.
Competitive rivalry- According to this force actual competitiveness of TESLA has been
analysed belongs to the same industry. In the present context of TESLA, it has been analysed
that company is highly competitive. Reason behind this is that company manufacture innovative
and creative products which attracts large number of customers. With the aid of this organization
will gain large amount of profits as well as maintain the competition at the market.
As per the above specified model, it can be analysed that leaders and managers of
TESLA formulate effective strategies which will aid them to gain competitive advantages at the
marketplace. Along with this, company can generate huge amount of revenue and can enhance
the sustainability in an effective manner (Spender, 2014). In addition to this, it has been seen
that threat of new entrant in auto mobile industry is low which shows positive influence for the
TESLA. On the other hand, stiff competition within the industry seems to look negative for the
company because excessive competition reduces their market share.

TASK 4
P4 Apply various models, theories and concepts in an organisation
Bowmen's Strategy Clock
Bowman's strategy clock refers to the framework that is basically by marketing team in
order to understand competitive positioning of business over its competitors offering (Yanah,
and et. al., 2018). In context to TESLA, the management team of this company have used this
framework for gaining competitive advantage. Analysis of this framework are described as
below:
TESLA has adopted focus differentiation as its strategy because, the management team of
this company have targeted very short group. They have mainly targeted environment conscious
rich people. This is because, Cars of TESLA are highly stylish but at the same time they are
expensive which can not be afforded by every common man. The company can not go for low
cost or hybrid strategies as for developing an effective product the company requires huge capital
for using latest technology in order to attract maximum number of people from the targeted
group of people. Therefore, with the usage of focus differentiation strategy TESLA can easily gai
competitive advantage.
Ansoff Matrix is considered as the strategical framework that is helpful for business
organisation in understanding their effective strategies with which they can grow effectively. The
model includes four growth strategies that are helpful for the company which leads to their
success in effective manner (Ren, and et. al., 2015). With reference to considered company that
is TESLA, its top management team have conducted an effective Ansoff matrix analysis in order
to identify which growth strategy is helpful for them in attaining their success in quick manner.
All of the respective policies and strategies for this company are stated as below:
Market Penetration: In this growth strategy, businesses are suggested to offer existing
product in the existing market place. With reference to TESLA, this growth strategy could be
seen as profitable for the company as with this the executives of company can easily grow by
identifying untouched customers in current market (Veit and et. al., 2014). Along with this, it is
effective for executives to influence customers towards the product because they know strength
and weakness of project in effective manner.
Market expansion: This strategy strategy states that growth can be attained by the
company easily by proving existing products in new geographical location. The main benefit of