GLOBAL STRATEGY ANALYSIS OF TESLA ASSIGNMENT SAMPLE
Introduction
In 2003, Tesla was founded by a group of engineers which deals with not only all electric vehicles but also scalable clean energy generation as well as storage products. In this study, the main focus will be on the external as well as internal environment of Tesla and their strategies in the global environment. In the end, the whole assessment will be summarized in the form of a paragraph.
Task 1- External and Internal Environment
Critical analysis of external and internal environment
SWOT Analysis of Tesla
| Strength | Weaknesses |
| ● One of the major strengths of Tesla is their enhancement in efficiency (Abdel-Basset et al. 2018). Their prominent use of renewable energy sources helped them to be one of the leading pioneers in their field.
● Tesla has been able to expand their renewable energy effort by collaborating with big giants like Yes Energy, Southeast APDA and more. ● Being highly innovative is another major strength of Tesla as they put a lot of effort during manufacturing and designing of their electric vehicle. ● Tesla has become a sturdy brand name and gained a lot of fame during a short span of time. |
● Tesla has a very limited global presence due to which they are trying to expand globally and at the same time competing in the hypercompetitive automobile industry.
● Premium product range is also a major drawback of the company (Leiber et al. 2018). Affordability and customer’s trust are the two sectors in which the company is lacking. |
| Opportunities | Threats |
| ● The requirement for more electric vehicles are increasing and at the same time the urgency to diminish fuel-driven cars (Pesce et al. 2018). Therefore, this is providing a great chance to Tesla as the customers are becoming more environmentally attentive.
● Battery production technology is another great opportunity for Tesla. |
● High operational costs and decreased profit margins due to competitive pressure is a big threat for Tesla.
● Big giant companies like BMW and Volkswagen are using renewable energy for manufacturing purposes which is directly increasing Tesla’s competition. |
Table 1: SWOT analysis
(Source: created by the author)
Pestle Analysis
| Political Factors | Economical Factors | Social Factors |
| ● Incentives provided by the government for the electric automobiles industry is an opportunity for Tesla.
● New universal trade agreements. ● In the majority of the market, Tesla has political stability. |
● Reduction in the price of batteries is an opportunity for Tesla.
● Reduction in the costs of renewable energy which is also an opportunity for them. ● Tesla has issues regarding economic stability. |
● Enhancement in the reputation of low-carbon lifestyles.
● Increasing popularity and acclamation of renewable energy. ● Distribution of wealth in developing markets is enhancing. |
| Technological Factors | Ecological Factors | Legal Factors |
| ● The rate of technological change is higher.
● The increasing business of the automatic sector. ● Online mobile system’s demand is also increasing. |
● Promotions of electric cars will be done on the basis of climatic change.
● Environment programs are expanding. ● Waste disposal’s standards are rising. |
● Global patent protection has been expanding.
● Regulations regarding energy consumptions. ● Sales regulation related to dealerships in the United States of America. |
Table 2: PESTLE analysis
(Source: created by the author)
Critical factors emerging from the analysis
From the above analysis, it can be concluded that Tesla is one of the big giants in the automobile sector but at the same time it has a very limited presence in the global market (AKMAN, 2020. Tesla also gets highly affected by all the factors that are included in the Pestle analysis.
Current sources of competitive advantage
Current sources of competitive advantage of Tesla is their battery supply chain, supercharger network, Tesla’s software updates, Tesla’s branding system and Tesla’s artificial intelligence. Tesla has been granted the position of big innovator by their huge investment in the research and development department compared to its competitors. In this way, they have been building and maintaining their competitive advantage.
Task 2- Strategy in the Global Environment
Suitable model how Tesla can enter into the foriegn market
Figure 1: McKinsey’s 7s model
(Source: created by the author)
In the late 1970s, Mckinsey 7-S Model was developed by Tom Peters and Robert Waterman. The model focuses on the seven different internal elements of an organization that needs to collaborate for them to be fruitful (Shaqrah, 2018). These seven internal elements include strategy, structure, systems, shared values, style, staff and skills. This model can help Tesla to enter into the foreign market effectively.
By using this model, Tesla can make a proper plan and gain competitive advantage over its overseas competitors. Expanding in the global market will help Tesla to get differentiated from their other competitors and also facilitate them gain a good amount of revenue in the overseas market. New streams could be gained by Tesla and new talent pools can be accessed by the company. The main motive of Tesla in expanding in the global market is to enhance the new global market perception of their organization.
Tesla is very well-versed with the fact that they would be able to grow at a faster rate with the help of favourable prevailing market conditions (Gökdeniz et al. 2017). Tesla has been positively impacted by overall company strategy as they have been able to gain an approach to new market areas. Diffusion of technologies and scientific knowledge of the company has also been able to foster immensely. The company has successfully helped in improving the overall standard of the customers by leveraging to manufacture advanced products.
Franchising
The first strategy that can be used by Tesla to expand their business globally is franchising. It will help them to create a successful brand name in the overseas market and facilitate opening new branches.The company can easily break into the new markets where they can target the appropriate market according to their business.
Partnering Up
Partnering up is another relevant strategy for expanding a business in the overseas market (Dietz et al. 2018). Tesla can get a partner in the foriegn market which will directly help them in marketing of their business and at the same time will help in reduction of their promotional costs.
Buying a company
The easiest way Tesla could enter into a new market is by simply investing in a company or buying a company in another country. In this way, they can claim market share in the overseas market and can have an existing customer base as well as brand image.
Conclusion
Tesla is one of the innovative companies who has been dealing in electric cars for so many years. The company has started high and eventually worked their way downwards. In this way, Tesla has been able to be a luxury car brand by expanding their business everyday through the help of targeted customers.
References List
Abdel-Basset, M., Mohamed, M. and Smarandache, F., (2018). An extension of neutrosophic AHP–SWOT analysis for strategic planning and decision-making. Symmetry, 10(4), p.116.
AKMAN, M.K., (2020). DEFENCE MANAGEMENT AND PESTLE ANALYSIS. ANTE PORTAS, pp.93-87.
Dietz, T., Börner, J., Förster, J.J. and Von Braun, J., (2018). Governance of the bioeconomy: A global comparative study of national bioeconomy strategies. Sustainability, 10(9), pp.3190-3209.
Gökdeniz, I., Kartal, C. and Kömürcü, K., (2017). Strategic assessment based on the 7S McKinsey model for a business by using analytic network process (ANP). International Journal of Academic Research in Business and Social Sciences, 7(6), pp.342-353.
Leiber, T., Stensaker, B. and Harvey, L.C., (2018). Bridging theory and practice of impact evaluation of quality management in higher education institutions: a SWOT analysis. European Journal of Higher Education, 8(3), pp.351-365.
Pesce, M., Shi, C., Critto, A., Wang, X. and Marcomini, A., (2018). SWOT analysis of the application of international standard ISO 14001 in the Chinese context. A case study of Guangdong Province. Sustainability, 10(9), pp.3196-3209.
Shaqrah, A.A., (2018). Analyzing business intelligence systems based on the 7S model of McKinsey. International Journal of Business Intelligence Research (IJBIR), 9(1), pp.53-63.
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