Global Strategy and Sustainability Assignment Sample
Part A: Business Report
Introduction
The significance of global sustainability helps in developing quality of life activities and protects the ecosystem through preserved natural resources. Implementation of global strategies, businesses can improve their existing business decision making processes through holistic approaches. It can allow businesses to incorporate strategic changes in business performance and improve significant factors of sustainable outcomes without any issues. The purpose of this study is to improve the manufacturing processes of Tesla with logistics and customer services that can lead Tesla to control global sustainability. This study highlighted external and internal environments to understand significant strategies for the global environment in the context of Tesla. This study also discussed corporate strategies and strategic purposes to improve ethics and CSR operations according to expected requirements.
Task 1: External and Internal Environment
Critical Analysis of Tesla’s External Environment
| Areas | Aspects | Impact |
| Political | ● International political alliance of UK has assisted this country in maintaining international treaties.
● Growth rate of UK fall down by 3.8% because of BREXIT back in 2019. |
Positive |
| Economic | ● UK has witnessed a growth of 17.6% in their GDP rate (TRADINGECONOMICS, 2022).
● UK has registered a growth of 75% in employment rate (STATISTA, 2022). |
Negative |
| Social | ● UK has witnessed a rise of 0.33% in terms of population in 2021 (MACROTRENDS, 2022).
● Across 83% of adults in UK aged between 19-64 are educated under National Qualification Standards (SERVICE, 2021). |
Positive |
| Technological | ● 81% of UK has harnessed the importance of technology.
● A gross investment around £181 million registered in 2019 (TECHNATION, 2020). |
Positive |
| Legal | ● Companies in UK following “ Employment Act 1996”.
● Avoidance of legal complexities are greater in UK (LEGISLATION, 2022). |
Positive |
| Environmental | ● Sustainable development rate of UK has expected to be 83% in 2021 (ONS, 2021).
● UK has witness a carbon emission rate of 341.5 million tons in 2021. |
Positive |
Table 1: PESTLE Analysis
(Source: Created by Author)
Analysis
Domestic political stability and international political treaty has provided UK with an upper hand in commencing business. Particularly with a stable political connection of 70 years with US has been encouraging them in developing joint businesses (GEOSTRATEGY, 2021). On the other hand, Increased GDP rate in UK can assist this country in strengthening economic and financial conditions of residents and opening scope for businesses. Moreover, the increased rate of population and education can assist UK business market in obtaining growth and sustainability by increasing rate of sales.
The UK is considered as the fastest growing technological hub across Europe that can assist companies in commencing sustainable operation in market by enhancing growth and value successfully. Besides, Under the section of “c. 18”, wage management of employees and resolving their issues gets commenced accordingly increasing satisfaction rate. Sustainable environmental development has assisted UK in reducing carbon emission. Hence, companies commencing businesses can bring in innovation by adopting sustainable approaches by enhancing organizational progress.
Critical Analysis of Tesla’s Internal Environment
| Strengths | Weaknesses |
| ● Commercial vehicles provided by Tesla have “solar roofs” integrated with battery storage.
● Expansion of “EV Production Line” has assisted this company in generating significant value in benchmarking market needs. ● Commercial vehicles developed by Tesla have “self-driving” capabilities that are 10 times safer than manual driving processes (TESLA, 2022). |
● Basic price of Tesla’s “Model 3” is almost $35,000 which is not pocket friendly for customers.
● Increased market competition of EV in international market can create a major challenge towards this company. ● Long time market exposure can reduce product price drastically generating loss towards this company. |
| Opportunities | Threats |
| ● Battery provided by Tesla in its commercial vehicles are of “high capacity” and have a homing charging spot.
● Tesla group has developed a concept of building “SolarCity” with a budget of $2.6 billion. |
● Internationally usage of Lithium batteries is down with a registered rate of 22% since 2016.
● Similar products at convenient prices can snatch market position of Tesla in an effective manner. |
Table 2: SWOT Analysis
(Source: TESLA, 2022)
Analysis
Tesla has developed innovative products having smart roofs and battery driven vehicles that has provided this company with obtrude success in market. Hence, identifying it as organisational strength it can be stated that it has obtained potentiality of opportunities in the market. Furthermore, it has also emphasised on developing solar cities that can also provide assistance to this company in enhancing growth and value. However, owing to the high price of products in market, it is creating weakness towards this company, enhancing potential threats from other companies. Similar and substitute products can affect organisational success in a negative manner affecting its progress.
Three Critical Identified Factors
“Tesla has developed smart-vehicles with self-driving capabilities”
Unique product development assists companies in obtaining growth and success creating greater value. As per observation of Fatorachian and Kazemi (2021), unique product development assists a company in visualising its capital growth and sustainable development. It has been identified that emphasising on “technological factors” this company has developed smart-vehicles, this company has increased its value in external market by establishing its uniqueness.
“Tesla is developing SolarCity to bring in eco-friendly social-cultural development”
Highlighting on “environmental factors”, Tesla has invested an amount of $2.6 billion to develop “Solar City” in order to move beyond commercial vehicles. Kim (2020) opined that installing solar panels in place of rooftops can generate greater power. Thus, with this critical factor, this company can bring in innovation and sustainability in the market.
“Tesla has developed a partnership with leading companies in international market”
Assistance from “political factors”, companies like “Tencent, Panasonic and Grohman” have partnered Tesla to increase its sales and sustainability. Hence, increasing sales and market value, Tesla can enhance sustainability and success.
Tesla’s Current Source of Competitive Advantage
Tesla’s “Model 3” has obtained a greater value in market because of its uniqueness and design. Despite being an EV, it has a capability of auto-piloting that makes it unique from other similar vehicles. Thus, providing this company with competitive advantage, it has witnessed a registration of 500,000 pre-orders.
Strategies of Maintaining Competitive Advantage
Tesla has developed a unique product that itself is providing them with competitive advantage by enhancing organisational sales and value. As per the views of Han (2021), Tesla has obtained competitive advantage by addressing problems and solving them successfully. Hence, from the case study it has been identified that witnessing demand for its products has expanded product lines by segmenting them based on sectors. Owing to this aspect, demand and supply management is getting distributed equally. Thus, in spite of developing costly products, Tesla has obtained a huge market base and obtained significant competitive advantage.
Task 2: Strategy in Global Environment
International Market Entry Model Organizational Expansion
International business assists companies in obtaining greater opportunity by enhancing success and sustainability. In the views of Watson et al. (2018), assisting companies in obtaining “macro development” models of market entry influences growth of companies successfully. Thus, it can be stated that assisting companies generating greater sales and value companies increases success. It has been identified that there are five models using which companies can enter the international market successfully. “Direct exporting”, “Indirect exporting”, “Joint venture”, “Strategic alliance” and “Direct foreign investment” are the ways which companies can penetrate in international market. Making use of these models, companies can make decisions using which they can understand the needs and necessities of customers in international market. Thus, enhancing sales and success, companies can bring in innovation within their products successfully. For instance, in case of Tesla, making use of a relevant expansion model, it has been commencing business in international market. Making use of both “direct and indirect” exporting models this company enters in a new market commencing operations strategically. As per the observation of Verbeke et al. (2019), exporting in foreign market assists companies in harnessing a major market while commencing external sales. Thus, enhancing success and progress, this company has been enhancing growth and value successfully.
Critical Evaluation about Motive of Tesla’s International Expansion
International expansion assists companies in harnessing new and innovative resources for enhancing organisational growth and success. According to an analysis of Verbeke and Hutzschenreuter (2021), most of the companies enhancing economic progress expands internationally creating a major impact on organisational growth. In case of Tesla, the motivational factor that has been influencing it is “increase of transactional demand”. Owing to this aspect this company can enhance demand of EV in market by improving sales rate. In the Asian market, lack of diversified vehicles are creating problems towards the commercial market of vehicles. Thus, with international expansion and its motive, Tesla can enhance a huge opportunity creating a major impact towards successful progress.
Impact of International Expansion on Organisational Strategy
Tesla is an automobile company that develops commercial vehicles using cutting edge technologies. Aim of this company is to develop vehicles that can bring sustainability in the environment creating a positive impact towards socio-cultural development. Reducing use of gasoline in commercial vehicles, this company aims in developing battery driven vehicles (TESLA, 2022). It has been identified that in order to do so, this company has developed strategies to commence strategic business. Entering the “high end market” has been the prime strategy of this company by attracting customers in purchasing products at a premium price (TESLA, 2022). However, as there are mixed types of customers in international market, it can impact organisational progress of Tesla affecting its rate of sales.
Justified Strategies for Tesla’s Global Expansion
Tesla for successfully expanding in international market can make use of a “merger and acquisition” strategy that can assist this company in enhancing success. As per the observation of Zhang et al. (2019), merger and acquisition strategy is a low cost expansion strategy that can assist companies in expanding internationally successfully. Reducing risks of loss and developing progress, companies can harness international value. Thus, in case of Tesla, utilisation of merger and acquisition strategy can enhance success and sustainability creating a major impact towards progress. Attracting customers successfully, it can also assist this company in creating greater value by enhancing sales in an effective manner.
Task 3: Corporate strategy
3.1 Critically analyzing the use of horizontal, vertical and strategic alliances integration to maintain corporate strategy in Tesla
Horizontal integration
Horizontal integration helps in controlling offered business services and efficient products with the help of value chain analysis. Controlling monopoly of businesses can create advantages for businesses to manage business acquisition processes through which synchronised patterns of business performance can be developed properly. As followed by Pérez-Lara et al. (2020), this integration mainly depends on short term benefits from which an organisation can boost their service patterns and production activities to sustain and stabilise their global environmental strategies. Through this strategy, businesses can easily make creative decisions to improve their decision making processes according to expected requirements.
Vertical integration
Vertical integration provides opportunities for businesses to follow external situations and marketing operations to develop production and service delivery activities. Streamline functions and other strategic options can guide businesses to develop corporate strategies and different business choices. According to Bulturbayevich (2021), it can lead businesses to introduce new creative changes within business performance to develop business operations and organise stability in operational choices. In this way, quality innovation and performance development processes can create development changes and organise stable opportunities without any issues.
Strategic alliances
Strategic alliance is one of the flexible options for managing corporate strategy for businesses through which quality processes and performance can be maintained successfully. In the case of Tesla, Elon Musk has used strategic alliance strategy with Tencent, Panasonic and Grohman to boost the presence of Tesla by 5%. In 2017, Tesla has formed an alliance with Tencent to develop their AI technologies for driverless cars through which Tesla can easily avoid 25% of import tax from China (Bloomberg, 2017). It can help this business to improve their strong bond with the Chinese government and expand their businesses by increasing the market share of the global EV market. It can maintain quality in production rates and improve the energy resource management processes without concerning any challenges. This strategy can also give the opportunity for Tesla to bring a simpler design of their driverless automatic cars from which customers can get attracted to the design and buy their cars at an affordable price.
3.2 Providing recommendations to increase profitable outcomes within Tesla
In the case of Tesla, Elon Musk is required to set a perfect and affordable value for their driverless automatic cars to attract more customers. This strategy can help this business to increase their customer growth and increase profitable outcomes depending on requirements. As proposed by Mbungu et al. (2020), with the usage of electronic components and other energy resources, this business can also maintain sustainability by not harming any natural resources. It can help in securing global environments and improve flexibility within their business functional choices according to expectations.
Apart from these, utilisation of Lithium-ion batteries, energy control and performance of autodrive automatic cars can be developed according to requirements without any challenges. These strategies can easily attract more consumers towards Tesla by developing quality procedures of care performance and also maintain global sustainability. These options can guide this business to increase their production rates and control the connection between value added services and performance requirements.
Task 4: Strategic Purpose of Ethics and CSR
Theoretical Approach to Evaluate Tesla’s CSR Strategy
Figure 1: Stakeholder Theories
(Source: Influenced by Jones et al. 2018)
“Stakeholder Theories” is a model that assists companies in developing a positive relationship with its stakeholders successfully. Obtaining help from this theoretical framework creates organisational value enhancing success and progress. As per the views of Jones et al. (2018), stakeholders theory assists companies in enhancing their performance by sharing organisational information with their stakeholders. Developing an effective transparency company obtains growth and value in market. In case of Tesla, this company by developing EV has maintained a successful CSR strategy. Hence, with assistance from this theoretical aspect, this company can obtain growth and progress creating a major value in market enhancing success and sustainability. Thus, by increasing the rate of innovation and value of treatment, companies can improve operation management creating greater value and integrated services successfully.
Identification of Tesla’s Ethical Issues
Tesla, despite developing innovative and eco-friendly products, has been facing ethical challenges in the international market. Countries like “U.S. and Germany” has addressed failing in maintaining eco-friendly services, this company has created a major impact towards sustainability management. German authorities have fined almost € 12 million because of violence ethical issues effectively in 2021 (CNBC, 2021). As these vehicles run using batteries, hence often amidst malfunctioning emission of harmful gases gets increased affecting air quality. That has been detected by authorities based on which charges of ethical intolerance have been registered. It has been witnessed that failing in maintaining compliance with federal emission standards, harmful emission of gases has been witnessed from vehicles of this company. Thus, it can be stated that owing to this aspect, it has reduced its market value and integrity affecting its success and sustainability. Hence, development of strategies can be reduced successfully creating a major impact towards operation management.
Recommendations to Mitigate Issues
Tesla has been facing major issues because of lack of compliance with ethical considerations reducing goodwill and value in market. In an overall aspect, it can be stated that developing and initiating operations using “internal combustion engines” can assist this company in reducing the rate of pollution by bringing in success and sustainability. Furthermore, “regenerative braking” can also assist this company in enhancing success and sustainability creating a major impact towards strategic operation management. Thus, maintaining CSR strategies and generating greater value Tesla can obtain successful growth in market enhancing its sales rate. In addition, it has also been identified that product prices of Tesla are high and this company only targets premium customers. Hence, reducing product prices and developing vehicles for general people can assist this company in enhancing sales and sustainability in market. Therefore targeting and attracting more new customers can increase this company successfully.
Conclusion
From the above study, it has been found that global strategies and sustainability are interrelated to each other for different businesses. Using global strategies, Tesla can improve their functional capacities and improve their market share values by delivering quality automatic driverless cars. It can allow this business to control development processes and avoid complications according to requirements and specifications. External and internal environments can help in guiding Tesla to incorporate specific corporate strategies to enhance their business performance. The main goal of Tesla is to operate and execute global and corporate strategy to improve sustainability by using energy resources and Lithium-ion batteries instead of fuel or any other resources that can harm nature. Through these innovation strategies, Tesla has organised their business operational tasks and control synchronised patterns in avoiding complications regarding global strategies and sustainability.
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