MSc Management Global Strategy and Sustainability Assignment Sample
Introduction
In this present world, the role of strategic management is getting influential and white impactful for the business purpose. Here, the report will evaluate the overall strategic review of the innovative brand or organisation Tesla.
While doing the valuation related to the strategies of Tesla, the report will initially identify the external and internal environmental factors associated with the organisational benefits and future practices through the help of different relevant analysis techniques or models.
Then the evaluation will go on and identify the competitive nature of the organisation in this present global business scenario, along with identifying the different strategies to adopt in the present market adequate for Tesla a0.nd gain greater efficiencies.
After completing the evaluation, the report will identify the corporate strategies adopted by Tesla and the eventual findings or opportunities coming with those. By properly identifying all these opportunities, the report will provide identical recommendations to Tesla for its future market adaptability and a more significant increase in profitability.
Even the report will also go on to identify the CSR strategies of Tesla and its coefficient ethical issues associated with the company. After evaluation of the ethical concern report will signify or identify the possible methods through which all the CSR policies can be adopted by Tesla to increase its profitability and support the community. At the tail end of the report, a self-evaluation will be given to identify my critical learnings and possibilities of becoming a strategic evaluator.
The External and Internal Environment
To identify the strategic opportunities and threats associated with Tesla, an external and internal analysis of the company through the help of a Porter’s five forces anlysis technique and VRIO analysis technique is completed below.
Apart from the used models or theories like PESTLE model, Industry life cycle model and strategic group identification for external analysis. On the other hand, for doing internal anlysis resource based view model, value chain model and Gap anlysis can also be used.
External environmental analysis
The Porter’s five forces anlysis technique is one of the most significant ways of evaluating the company’s external environmental conditions or propositions, and here the evaluation is going to take place over Tesla.
Porters five forces anlysis
The threat of new entrants (High)
Tesla is one of the most influential and capable electric vehicle developers around the globe. But with the environmental aspect getting developed every day by leaps and bounds, possibilities are getting generated where the new entrance coming into the market is getting increased too (Gatto, 2019).http://MSc Management Global Strategy and Sustainability Assignment Sample One of the most significant states of new entrance associated with Tesla is the startup companies developing four-wheelers with very cheap costing and eventual pricing methods. Stop the influence of new entrance Tesla as a more critical requirement of expanding technology innovation to differentiate products and offer different setup possibilities to the customers.
Bargaining power of suppliers (High)
The bargaining part of the suppliers associated with Tesla is very high due to the resource shortage associated with the global electric vehicle industry associated with chips and semiconductors.
Another essential factor that needs to be enhanced or articulated here is the number of suppliers deficiency in the market, which also increases the supplier’s bargaining power and improves the size of product bargaining associations.
Bargaining power of buyers (Low)
Bargaining power of the buyers associated with the electric vehicle industry of the premium style electric segment is significantly less due to the premium quality segment generated by Tesla and very seldom amount of competitors associated with the company in this range. Along with this, in the industry, the organisation has a strong reputation for itself in the market due to the issue of product services and many aspects.
The brand’s reputation has reduced the efficiency of bargaining power associated with the customers (Sha et al., 2019).http://MSc Management Global Strategy and Sustainability Assignment Sample This is one of the most influential reasons for which Tesla used to gain more significant amounts of market efficiency and market leverage over other competitive brands. An official margin has also reduced even the bargaining power of the customers due to the only technical aspect of the privilege associated with Tesla.
Figure 1: Poretrs five forces
(Source: Kunz, May and Schmidt, 2020)
The threat of substitute (High)
The threat of substitutes entered in the market is high. One of the most significant reasons for having such a high amount of substitute based thread is the efficiency of the startup companies coming through in the market and the global big industries or technology like BMW, Audi Mercedes coming into the electric vehicle market (Kunz, May and Schmidt, 2020).http://MSc Management Global Strategy and Sustainability Assignment Sample
To reduce the set of substitutes, Tesla has a significant role to play, but it needs to market its product which it doesn’t use to do. Another very considerable step which Tesla can take is to complete in the competitive pricing range rather than using the premium pricing range.
Industry rivalry among competitors (Intense)
The industry rivalry among computers can be stated as intense from the startups to the big organisations operating in the present tenure.
Multiple computers are coming into the path of Tesla using differentiation strategies or competitive pricing strategies to evolve their market and enhance its reasonable future possibilities.
Tesla has a vital requirement for innovative new products and integrated services and sticking to word of mouth to restrict these factors.
Internal environment analysis
To evaluate the internal factors associated with the strategic operation of Tesla, the VRIO analysis method is used.
VRIO analysis
VRIO is used to evaluate the organization’s internal aspects and the sustained competitive advantage associated with Tesla over other brands operating in the present global automotive market scenario.
Valuable
The most valuable resources associated with the organisation Tesla are as follows.
- The most valuable resource of Tesla is accounted to be the organisation’s financial resources, which help the organisation invest in external opportunities that arise in its path and helps the organisation reduce the external threats (Gafarov, 2019).http://MSc Management Global Strategy and Sustainability Assignment Sample
- Another important, valuable resource of the organisation is its trained workforce which brings productivity to its outputs. Even the organisation’s employees and the rate of retention associated with employee policies have helped the organisation reach new measures.
- Another valuable resource associated with Tesla is all the innovative patents named over the firm. Tesla uses all these patents as international strategies to generate massive revenue regarding licensing activities from different manufacturers to the company.
Rare
The rare resources associated with Tesla are as follows
- The financial resources associated with Tesla are very rare for different other organisations operating in the competitive automobile market.
- The amount of trained workforce associated with the company Tesla is very rare for other organisations or other key competitors of Tesla in the present global market.
- Accroding to the evaluation of Kunz, May and Schmidt (2020), the local food products associated with the present market as its own set of efficiency accumulate greater prospects for the organisation in future.
Figure 2: VRIO Analysis
(Source: Mohamed, Halim and Zakaria, 2021)
Inimitable
The imitable resources associated with the organisation are as follows
- The first and the most important immutable resource associated with the organisation Tesla is the employee policies and the ways through which employees are trained within the organisation.
- The amount of initiative taken by the organisation to enhance the employee’s abilities and influentially impose a greater amount of concern over research and development operations is quite less than the other competitors of the company (Mohamed, Halim and Zakaria, 2021).http://MSc Management Global Strategy and Sustainability Assignment Sample
- The distribution network associated with Tesla motors is very costly to its competitors, and it is accounted to be one of the most influential resources for Tesla to have.
Organisation
The organisation based resources accurate or adopted by the organisation Tesla are as follows.
- The most important aspect of identification clearly states that all the patents of the organisation are not opportunistically used, which creates a huge loss of revenue for the organisation.
- This strategic decision of imposing the organisation’s financial resources in proper or adequate places is also one of the most efficient and fact-based opportunities.
Strategy in the Global Environment
Tesla is one of the most identical and innovative organisations operating in the present global scenario. In the present form of opportunity building or making an international operation, the organisation uses the transitional strategy (Xiao, Chu and Wang, 2020).http://MSc Management Global Strategy and Sustainability Assignment Sample
Present strategy
According to the organisation strategy of the global environment, it is present in different countries and willing to benefit from the organisations on global stature and has the potential to adopt the product and sales approach to the local requirements. The present international strategies adopted by the organisation are as follows.
Direct selling
Tesla used to sell its cards in the global market through its stores and selling those through the Tesla website. According to Ellen Musk, the key reason for not selling cars through the help of dealers is “the fundamental conflict of interest by dealers between selling gasoline cards which constitute the first majority of the business and feeling the new technology of electric cars”.
The most influential benefits of direct selling accrued by Tesla during this operating tenure are the greatest adaptability of customer preferences and reducing the cost of operations by an influential amount (Sha et al., 2019).http://MSc Management Global Strategy and Sustainability Assignment Sample
Certified pre-owned program
Another very significant and opportunistic program run by the organisation by Tesla is regarding the buyback of certified pre-owned cars in countries like France, Sweden, Norway, Canada and Germany.
With proper absorption of this model, possibilities are coming in where the organisation gets an opportunity to provide its consumers with the right return value after three years of reimbursement.
One of the most efficient identifications associated with this type of issue is regarding the Tesla Model S, where the organisation provided its consumers with a return value of around 43 to 50% over the period of use.
Local responsiveness
One of the most identical strategies adopted by the organisation for its internationalisation attracts customers in foreign markets by meeting their local needs and satisfying their taste preferences.
According to the market survey and consumer requirements, Tesla used to bring modifications in its cards and produce those to the customers that require these types of products.
Yip’s model
Through the help of the Yips model, Tesla’s evaluation of the strategic benefits associated with the International strategies will be evaluated (Nguyen et al., 2022). http://MSc Management Global Strategy and Sustainability Assignment SampleEven the evaluation can also provide some identical considerations are strategic direction to the company, which can be adopted by Tesla.
Market drivers
Coming into the consideration of market drivers, Tesla is quite relevant and abstract. With modifications done by the company according to customer requirements, almost all the necessary adoptions to the global market have been done by Tesla.
But to adapt to the greatest set of opportunities, the organisation can also produce the product pricing according to the market requirements.
Cost drivers
According to Krishnamurthy et al. (2019), the major cost driver influencing the organisation is its premium pricing strategy. With all these features, if the organisation can adopt the competitive pricing strategy or value-based pricing strategy, then there will be opportunities coming in its path to compete with the limited market players operating in the electric car market. Another necessity which comes in the path of Tesla regarding its cost drivers is to bring in or buy products from local suppliers like Audi, and Mercedes does.
Figure 3: Yip’s Model
(Source: Gatto, 2019)
Competitive drivers
According to the competitive driver-based evaluations, it can be identified that Tesla is one of the most prolific innovators among the key competitors of the organization in this present automotive market.
But coming into consideration of global sales and revenue generation, Tesla can adopt the franchising method of internationalization and make sure that it is gaining a greater number of customers or reaching out to a greater number of buyers in the international market. The franchising method of internationalization can be one of the most influential ones for the organization to procure or start operations in the countries where the company has not started its business till now.
Government drivers
The major government drivers associated with the organisation are technical standards and automatic policies. According to the environmental factors and technical drivers’ point of view, Tesla has reached all the necessities (Gatto, 2019). http://MSc Management Global Strategy and Sustainability Assignment SampleThe only opportunity left with the organisation is to enhance its trade policies and involve the local suppliers in the definite countries.
Corporate Strategy
In the present form of operation, there are multiple types of Corporate strategies involved in a business procedure.
Considering Tesla, there are a certain number of Corporate strategies associated with international business, and these are going to be evaluated with the help of horizontal and vertical integration methods or the outsourcing or strategic alliances abilities of the organisation.
Horizontal and vertical integration
According to the findings, it is found that Tesla has adopted the vertical integration policy for its profit enhancement and production of operations and outsourcing of the business or products in the global market (Ramírez-Hurtado and Quattrociocchi, 2018). http://MSc Management Global Strategy and Sustainability Assignment SampleThe key benefits associated with the adoption of vertical integration for Tesla within its international procedure of operation and corporate development are as follows
- The organization has made an efficient amount of investment in its code demographics.
- Tesla has been able to control product quality at an efficient trade and can produce products according to customer requirements.
- The shipping cost associated with its products of Tesla has been reduced at an efficient rate.
- One of the most prolific examples of vertical integration for Tesla is the development of the Giga factory which reduces its dependency on suppliers like Panasonic.
- Even the organization has also been able to better align the products and ensure that it reaches customers according to their requirements rather than companies’ benefits and procurement procedures.
Recommendations for the firm’s competitive strategy
To enhance the competitive strategy of Tesla at an efficient trade, the ends of the matrix is used and make sure that all the strategic announcement associated with the organization are demonstrated.
Market penetration strategy
As opined by Naor, Coman, and Wiznizer (2021), there are multiple market penetration strategies available in the present market. Among these, it is recommended that Tesla focuses on improving its distribution channels for raw materials like graphite, aluminum, magnesium, and others.
Product development strategy
There is a higher amount of dependency coming over automation for Tesla to develop its products and make it efficient. To ensure all these factors, the organisation has a requirement to focus on AI-based operations at an efficient rate.
Market development strategy
The market development strategy that Tesla can add in the present form is through the help of digital marketing, which the organisation is completing through the help of word of mouth marketing method (Perkins and Murmann, 2018).http://MSc Management Global Strategy and Sustainability Assignment Sample
Diversification strategy
One of the most relevant and important diversification strategies which Tesla can adopt for its future benefits is the concentric diversification strategy by which the organisation can bring in produce the greatest set of results with the same set of products and eventual additions.
Strategic Purpose – Ethics and CSR
Every organisation operating in this global scenario needs to have an influential set of strategic purposes. By ensuring ethical and CSR based progressions, the adaptability or the efficiency of acceptance for these organisations is enhanced.
The ethical issues faced by Tesla
Coming into the ethical purposes of Tesla, the most influential challenges faced by the organisation are defined below.
- The most influential set of ethical issues the organisation faces is regarding the fraud allegations coming over it.
- Another setup issue related to ethical considerations coming over Tesla is regarding misuse of taxpayers’ money (Reshetko et al., 2020).http://MSc Management Global Strategy and Sustainability Assignment Sample
- Even in recent times, the organization has been questioned about environmental policies or corporate social responsibility-related concerns.
- Another prominent and influential ethical issue that comes into the path of Tesla is its unfulfilled promises of delivery cars at a time.
The process of overcoming all the ethical issues of Tesla
The process through which Tesla can overcome all its ethical issues is demonstrated below through the help of Carroll’s model of ethical integrity development and CSR initiative adoption.
Carroll’s model
Carol’s model consists of four significant parts, and all are relevant and important to ethical consequences and CSR based opportunities for the organisation. The model-based evaluation is completed to mitigate all the issues mentioned above coming into the path of Tesla related to ethical considerations.
Philanthropic
Among the identified ethical issues, one of the most identical and influential philanthropic issues which need to be addressed by Tesla within a very limited time frame is to ensure better workplace safety (Baró‐Solé et al., 2018). http://MSc Management Global Strategy and Sustainability Assignment SampleT
his is one of the philanthropic, ethical considerations the organisation can develop for its future benefits. Apart from this, the organisation can also resolve philanthropic issues like Tesla fan base related concerns.
Ethical
Coming into consideration of ethical issues to resolve within the operations of Tesla, the organisation needs to make sure that all the environmental practices are in its place and sustainable in operation. Even it is white relevant and important for the organisation to implement its promises made by individual stakeholders.
Figure 4: Carroll’s Model
(Source: Tsai and Tan, 2021)
Legal
In context to legal considerations, the organisation needs to remove all the fraud allegations within a very small time frame and also make sure that the organisation doesn’t comply with the allegation of misuse of taxpayers’ money (Tsai and Tan, 2021).http://MSc Management Global Strategy and Sustainability Assignment Sample By efficiently ensuring all these operations, the possible chance of deploying a greater ethical measure for Tesla gets enhanced.
Economic
Coming into the economic considerations, the organisation needs to maintain a clear balance between its inbound economic wealth and the outbound economic wealth to ensure clarity and thought to its stakeholders and the global customers.
Conclusion
The evaluation has identified different aspects of strategic measures associated with the organization Tesla. In the initial part of the report, a brief overview of the organization’s external and internal aspects is produced. It makes sure all the integral opportunities coming into the path of Tesla are demonstrated in brief.
Then the report goes on to identify the global environmental strategies adopted by Tesla and the future opportunities coming within the organization to add up new changes and bring in new opportunities for the organization.
After accomplishing all these considerations, then comes the requirement of analyzing the corporate strategies of Tesla and finding out the critical issues associated with it. After critically evaluating the issues within the corporate strategies of Tesla, the process of mitigating it through the help of proper strategies has been demonstrated through the help of the Ansoff matrix.
At the tail end of the report, a brief demonstration related to strategic purposes, ethics and CSR policies of Tesla is identified and critically observed. After evaluating the issues faced by Tesla in the present times, the study or report has adapted the carrols model to find out the best future opportunities or processes.
References
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