Global Strategy and Sustainability Assignment Sample
Introduction
Global sustainability is the most emerging area of concern. Most of the companies across all industries are now focusing on their sustainability strategy. Tesla, which is the US based automobile company, significantly contributes to global sustainability by manufacturing electric cars where the consumption of non-renewable resources is zero (Aphagia and Sorin, 2020). The present report describes the internal and external environment analysis of Tesla along with its market entry strategy while providing recommendations on best suited entry mode.
Task one: The external and internal environment analysis of Tesla
Tesla who manufactures electric vehicles (EV) in order to accelerate the transition of the world through sustainable energy utilization. At the same time, people across the world are now considering the sustainability factor and show their interest in EVs (Hidalgo et. al. 2018). However, there are many opportunities and challenges in the external and internal environment which need to be identified. For that purpose, PESTLE and SWOT method will be used.
PESTLE analysis – Detailed description of this model is given below:
Figure 1: PESTLE analysis
Political– The mentioned, company manufactures EVs which significantly save natural resources and reduce pollution; thus, they get government subsidies. Moreover, other countries also make agreements with the company. Hence, the company gets political support.
Economic– The company gets government subsidies which contribute to increasing their profit. Further, they use batteries to reduce their manufacturing cost. However, they face economic instability in Asian and European countries.
Social– As above mentioned, that the people across the world showing their interest in EVs. Most of the companies also want to invest in the companies because there are many growth opportunities for EVs in the near future (Ahmadov, 2021). Hence, the company receives social support.
Technological– The company uses advanced technology as Tesla cars are able to read road signals, and instructions. They are able to track GPS locations. However, technologies are frequently changing which create financial burden on the company.
Environmental– Tesla is famous for environmental sustainability as they save natural resources and decrease noise and air pollution. However, they extensively use electricity to charge batteries.
Legal– The company patent their EV cars manufacturing mechanism hence; they are in a strong position in terms of legal (Qin et. al. 2021). However, they face legal challenges to direct sale their cars in other regions.
The above analysis shows that most of the external factors are in the fervor of the company except economical, technological, and legal factors which have potential to create threat on the company in near future.
SWOT analysis- Detailed description are given below:
Figure 2: SWOT analysis
Strength– One of the most popular and successful EV car manufacturers, and most unique concepts in cars which give them competitive advantages. Government and public support also increase their strengths.
Weakness– Use immense electricity to charge batteries. Technologies are frequently changed which increase their operating cost to make themselves updated. Further, product lines are very less as they deal in only EVs.
Opportunity– Increasing awareness about global sustainability, other countries’ support, availability and accessibility of latest technology (Shaw, 2017). High brand equity and large market share especially in the US.
Threats– High competition from other automobile companies, restrictions on marketing and direct selling outside the US.
The internal analysis of Tesla shows that the company has many advantages and opportunities which can be leveraged to reduce weaknesses and overcome potential threats.
Critical factor of analysis
From internal and external analysis, some critical factors are found which needs to acknowledge:
Increase product line– As above mentioned, that the company deals only in EVs while other competitors often launch new variants in cars along with advanced technology and latest designs (Mohamed et. al. 2021). However, they have a niche in their offerings but in order to remain market leader they should often introduce new design cars at affordable prices so even middle-class people can afford them.
Expand market– The company mainly operates in the US. Therefore, the company should explore other potential markets to expand their operations and capture market share.
Highly dependent on electricity– The company reduces pollution and saves natural resources but on the other hand, they extensively use electricity to charge batteries. Hence, they should develop fast charging batteries who consume less electricity.
Source of competitive advantages
Tesla manufactures very unique cars which are not available before by any other giant automobile companies (Matthews et. al. 2020). They further focus on saving natural resources, less pollution, and advanced technology enabled cars which provide the most unique and amazing experiences. Moreover, there are too many charging stations in the US and their operating market which solve people’s hesitation of being stuck in mid-way of their journey. These characteristics provide competitive advantages over their rivals. However, Tesla’s cars are very expensive and middle-class people cannot afford them. Therefore, the company plans to increase their product reach by developing low-cost cars.
Task two: Strategy in the Global environment
Tesla mainly operates in the US market but the popularity of the company is increasing as they expand their business in the global market. There are several entry modes to expand in foreign markets, for example, licensing, franchising, direct export, joint ventures, strategic alliances, and many more (Golovnia, 2019). From all of these options, Tesla selected a direct export medium. They started from European sales where they opened showrooms all over Europe. The main motive of Tesla to enter in foreign market is to introduce new offerings that target a broad range of customers and to remain competitive in the niche market.
However, the foreign entry mode strategy impacts overall company strategy. The company wants to expand their market share at international level but they used the same marketing and sales approach which they used in the US market. Hence, they need to change their approach as per the local requirement (Li et. al. 2021). Therefore, they need to change their strategy at each level in order to enter in foreign market.
Justified recommendations
Tesla uses a direct selling medium to enter in foreign market. Other than that, they should also accept online orders and deliver their car even outside the US. Thus, they can expand their market reach by using emerging sales mediums (Ponders, 2021). It is one of the best mediums to compete in the global environment because people are now habitual to order all their necessary things through online medium.
Conclusion
The present report concluded that Tesla, an electric vehicle manufacturer company, brought revolution through their energy saving cars. The report analysed internal and external environmental factors and found three critical factors that need to be addressed. Further, Tesla’s foreign entry mode is also presented in the report along with justified recommendations to compete in the global environment.
References
Aghagoli, A. and Sorin, M., (2020). CFD modelling and exergy analysis of a heat pump cycle with Tesla turbine using CO2 as a working fluid. Applied Thermal Engineering, 178, p.115587.
Golovnia, A.V., (2019). TEXT IMPLEMENTATION OF THE CONCEPT SUCCESS IN THE NOVEL “ELON MUSK. TESLA, SPACEX, AND THE QUEST FOR A FANTASTIC FUTURE” BY ASHLEE VANCE. НАУКОВИЙ ВІСНИК МІЖНАРОДНОГО ГУМАНІТАРНОГО УНІВЕРСИТЕТУ, p.169.
Hidalgo, E.H., Solà, R.R., Ivanova, M., Rozeva, A. and Durcheva, M., (2018), April. Internal Quality Assurance Procedures Applicable to eAssessment: Use Case of the TeSLA project. In 2018 17th International Conference on Information Technology Based Higher Education and Training (ITHET) (pp. 1-6). IEEE.
Li, Y., Lin, J. and Xu, S., (2021), September. Analysis of Tesla’s Business Model: A Comparison with Toyota. In 2021 International Conference on Financial Management and Economic Transition (FMET 2021) (pp. 30-39). Atlantis Press.
Mohamed, A.R.N., Halim, M.H.A. and Zakaria, M.H., (2021). Well to Wheel Comparison Study between the Electric Vehicle (Tesla Model S 100D) and Internal Combustion Engine Vehicle (Hyundai Sonata 2.4 L). Politeknik & Kolej Komuniti Journal of Engineering and Technology, 6(1), pp.80-89.
Qin, Y., Xiao, Y. and Yuan, J., (2021), September. The Comprehensive Competitiveness of Tesla Based on Financial Analysis: A Case Study. In 2021 International Conference on Financial Management and Economic Transition (FMET 2021) (pp. 462-469). Atlantis Press.
Ahmadov, A., (2021). Marketing Mistaken: PESTLE. [Online] [Available Through]: <https://www.linkedin.com/pulse/marketing-mistaken-pestle-ayaz-ahmadov/>
Ponders, G., (2021). How Did Tesla Go International? [Online] [Available Through]: <https://medium.com/@gunt_er/how-did-tesla-go-international-2ac33e2c61df>
Shaw, J., (2017). How to Complete a Personal SWOT Analysis. [Online] [Available Through]: <https://medium.com/thrive-global/how-to-complete-a-personal-swot-analysis-2f8769aebd5e>
Appendix
Self-evaluation
| Task one: The internal and external environment | I critically discuss key emerging factors from internal and external environment analysis. I critically provide the sources of competitive advantages and suggest to maintain it in sustainable manner. Hence, I expect merit for this task. |
| Task two: Strategy in global environment | I provide critical analysis of foreign entry modes of the company and give suitable recommendations to remain competitive in the global market. I fulfil all requirement of this task hence, I expect distinction. |
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