BPP Coursework Cover Sheet

Programme MSc Management with Project Management (with

Professional Development and Planning)
Module name Global Strategy and Sustainability

Schedule Term

Student Reference Number (SRN)

Report/Assignment Title Tesla Case Study

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BPP School of Business and Technology.
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Table of Contents
Introduction................................................................................................................................3

Task 1- The external and internal environment.........................................................................4

PESTLE analysis....................................................................................................................4

SWOT analysis.......................................................................................................................5

VRIO analysis........................................................................................................................6

Task 2- Strategy in global environment.....................................................................................7

Different entry modes............................................................................................................7

Recommendations..................................................................................................................8

Task 3- Corporate strategy.......................................................................................................10

Corporate strategy................................................................................................................10

Utilisation of horizontal integration, outsourcing and vertical integration..........................10

Recommendations................................................................................................................11

Task 4- Strategic purpose- Ethics and CSR.............................................................................13

Tesla's CSR strategy.............................................................................................................13

Tesla's ethical issues.............................................................................................................13

Recommendations................................................................................................................14

Conclusion................................................................................................................................15

References................................................................................................................................16

Appendix..................................................................................................................................18

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Introduction

The competition level has raised in the business environment dur to various factors. The key
factor which has plays role in increasing the competition level is the advancements in
technology. The technological advancements have contributed in enhancing the quality and
competition in the businesses. This report focusses on providing information regarding the
internal and external environmental analysis of Tesla motors business model configuration.
The strategies used by Tesla motors are mentioned in this report. The report helps in
determining the corporate strategy of the company. Some suggestions are mentioned at the
end of the report which can help the company in implementing strategic approaches for its
improvements.

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Task 1- The external and internal environment

The external and internal analyses help in determining the level of competitive advantage of
the company in the market. Below are some tools used for the external and internal
environment analysis of Tesla for evaluating its competitive advantage.

PESTLE analysis

Political Factors: Matthews, et al., (2020), emerging world trade deals and rules have
hampered the productivity and income creation of enterprises and industries. Political
situation in worldwide marketplaces may improve the company's capacity to track user
wants.

Economic Factors: Jencova, et al., (2019), the rapid expansion of the automobile industry's
financial implications has been affected by the steady development of product sales. The
shifting economic perspectives of nations' sectors raises market rivals' attention on
developing cost-effective and dependable batteries. Tesla has become one of the company's
means of gaining a financial edge over its competitors.

Social Factors: The rising market aims on reducing the amount of carbon from the products
which may contributed on affecting people's lifestyles. Electric vehicles and other similar
alternative solutions are becoming more popular as the need for sustainable alternative
solutions grows, influencing the financial perspectives of the organisation.

Technology Factors: Increasing customer desire for new solutions has facilitated the
integration of advanced interactive and technological solutions by businesses (Mangram,
2012). It has improved the company's market relevance in international markets. One of the
causes for reduced net-carbon footprints is the company's adoption of renewable technical
advancements.

Legal Factors: As a result of the growing range of government efforts, several regulations
and amendments promoting the growth of car innovations have been introduced. One of the
controlling variables for product sales authorizations has become the dealership sales
regulation.

Environmental Factors: The company's increased emphasis for finding substitute business

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alternatives which helps the organisation in increasing the capacity to move toward a net-zero
carbon footprint. To stay relevant in the market, the company has developed a brand image
that is environmentally conscious.

SWOT analysis

Strengths Weakness

 The company includes innovation in  The company faces manufacturing

manufacturing its products and problems due the budget and
innovation is included for energy delivery time issues (Yoshida, et al.,
storage, care and digital (Alghalith, 2015).
2018).  The company has high debts to pay
 The company is able to perform which causes its financial
strongly and in maintaining its weaknesses.
growth level as the company is  The battery of the vehicles in Tesla
market leader in electric cars in US. relies on the minerals which are
 The company has powerful brand rapid.
name yet with negligible marketing  The company is yet to achieve
cost. consistent production capacity.
 The company has ecosystem of
partners which offers the company
with strategic alliances (Matthews,
et al., 2020).
 The design of its products and focus
on the customer experience helps the
company in gaining competitive
advantage which becomes the
strength of the company.

Opportunities Threats

 International markets are the greatest
opportunities for the company.
 The company's develop broader
range for mid-market pricing in
order to attract more customers
(Umutlu, et al., 2014).
 The in-house battery production can
help in mitigating the company's
weakness and in securing their own
production.
 The expansion of the ecosystem
through partnering with other
 The high competition in the business
environment is the greatest threat to
Tesla.
 The liability penalties could be
another threat to the company (Von
Károlyi, 2013). The substitute such
as hybrid cars and alternative
solutions to reduce the
environmental pollution can be
helpful.

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 alliances could be helpful to the
company.

On the basis of the SWOT analysis above, the company's increased attention on the study of
internal and external elements can aid in the development of stronger strategic issues as well
as the development of strong reaction mechanisms to combat the firm's threats and
weaknesses.

VRIO analysis

According to Cardeal and Antonio, (2012), a study of present business competences can help
the organization improve its capacity to highlight upcoming company requirements in order
to meet rising competitive environment. Tesla can improve its capacity to sustain and create
competitive advantages by using the insights below.

Competencies Value Rare Imitation Organisation Competitive

Advantage

Product range Yes No Yes Yes Temporarily

competitive
advantage

Giga Factory Yes Yes Yes Partially Potential for

sustained
competitive
advantage

Battery packs Yes Yes Yes Yes Sustained

competitive
advantage

Supercharger Yes Yes Yes Yes Sustained

network competitive
advantage

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Task 2- Strategy in global environment

Different entry modes

As per Lee, et al., (2014), the companies which utilises the expansion strategies such as
mergers and acquisition, joint venture, licensing and entity set-up are tend to have
competitive advantage. Implementation of the different strategies can be helpful in enhancing
the overall capability of the business in global context.

Merger and acquisitions:

Companies that use mergers and acquisitions can improve their capacity to meet the market's
ever-increasing demands. According to Attah‐Boakye, et al., (2021), the use of mergers and
acquisitions might provide greater opportunities to affect the organization's fundamental
requirements. As a result, the process becomes one of the more time-consuming options,
putting cost burden on businesses. Tesla could recruit fresh talent by utilising mergers and
acquisitions to enhance the skills to introduce new inventions into the organisation. Mergers
and acquisitions can have an impact on the brand's capacity to boost the organization's
potential as well as the company's identity's resilience.

Licensing Agreements:

Using distribution deals, an organisation can authorise the usage of intangible capital, which
can increase the business's resilience. The corporation can take use of the exclusive and non-
exclusive characteristics of the arrangements to help the business ideas thrive. Licencing
agreements are one of the most straightforward ways to profit from overseas markets by
using existing supply networks and channels of distribution. This may be used by businesses
in areas like franchising and private labelling. The plan will boost the capacity to harness
licence knowledge and market positioning to raise income and gain more market share by
allowing rapid access to untapped areas.

Joint venture:

Joint venture is the combination of more than two parties which aims to attain and develop a
single enterprise for the purpose of profit and accompanies each other in the sharing risks
which are associated with the company's development. Tesla could gain advantage by
implementing joint venture.

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Entity set-up:

Tesla can improve its capability to provide smooth growth operations by utilising the entity
set-up procedure. As per Jiang and LIU, (2015), entity formation is now one of the greatest
prevalent growth methods for businesses hoping to grow into new areas.

Recommendations

The company is focusing on increasing its presence worldwide thus it requires strategic
alliance which could help it in building robust solutions. The company can focus on
expanding its presence in the Asian markets which could help the company in gaining
financial advantages and in gaining competitive advantage. It is recommended that the
company should focus on product pricing strategy as it would offer the middle-class
customers to by the products from the company. The pricing of the product would be helpful
for the company as it will help in expanding the targeted customer in the market. The
company could focus on promoting diversification in its organisational culture which would
help the company in enhancing brand value and the market presence.

The use of modern technology can be helpful for the company in achieving competitive
advantage and in enhancing its presence in the market. The use of technological tools can be
helpful in strategic management and in enhancing the ability of the company to overcome the
product shortage. The companies can use the option f exporting the products as an alternate
solution for overcome issues linked with the external and internal business problems.
Therefore, implementation of the mentioned recommendations can be helpful in enhancing
the capabilities of the company for overcoming the mentioned threats that contributes in
holding the company back from enhancing its global presence and market value.

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Task 3- Corporate strategy

Corporate strategy

The corporate strategy is a procedure of hierarchically the highest strategic plan for the
organisation, this means that includes the corporate overall goals and directions of the
moment of the activities (Brewster, 2017). The corporate strategy is a long-term strategy
which is used as a hierarchy of strategic plan for the organisation. It helps in defining clear
goals and having clear vision for the direction of the company.

Utilisation of horizontal integration, outsourcing and vertical integration

Horizontal and vertical integration, outsourcing, and strategic alliances are some options for
corporate strategy options. Business acquisition at the same level of the value chain within
the same industry is referred to as horizontal integration. Horizontal integration inside
organisations is a widespread technique. Horizontal integration helps to build an
organization's company with the support of consumers, producing horizontal integration
within marketing rivalry (Guo, 2013). Horizontal integration can be accomplished inside an
organisation by merging or purchasing marketing competitors. This integration helps in
tandem with a business strategy in which a company strives to acquire more consumers in
order to increase their profit margins and establish wider financial levels.

Although the horizontal integration might not be successful always the are other options
which the company can choose in order to implement corporate strategy. Horizontal
integrations are beneficial to an organisation when two or more organisations are working
together to establish complementary ideas and client bases. As a result of the entire research,
it can be concluded that Tesla has to integrate horizontal integration in their business process
in order to thrive in the global market and build a strong customer base for future worldwide
development.

Vertical integration is the practise of simplifying processes in a corporate system in order to

ensure results and increase revenues. Vertical integration on the other hand provides direct
control over business processes by focusing on the company's supply chain (backward
integration) and downstream buyers. The fundamental goal of vertical integration procedures
in an organisation is to guarantee distribution channels and vendors in order to produce

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advertising goods or services at a consistent price. Vertical integration is exemplified by one
huge auto-mobile corporation optimising their business processes in order to provide items at
lower and more reasonable pricing in order to generate positive cash flows.

Vertical integration's synergies, however, are not always successful. According Aniche and
Ukaegbu, (2016), vertically integrated organisations may have disparate requirements,
resulting in a lack of flexibility in fulfilling shifting marketing demands. As a result of the
entire research, it can be concluded that Tesla needs to streamline their company process by
creating an effective marketing flow while also encouraging their operations.

Strategic partnerships are outsourced agreements in which two or more organisations

collaborate to achieve long-term success via the creation of a win-win scenario based on
creativity and innovation. Organizations profit from strategic alliances or outsourcing by
concentrating on innovation and creativity for the organization's long-term success.
Organizations can benefit from strategic alliances or outsourcing to provide a variety of
services, such as business functions, long-term strategic alliances, and strategic business
partnerships.

One huge corporation, for example, is intending to build a decisive victory through
contracting with another company as an example of a strategic partnership. Although
strategic alliances are not always fruitful. Unsatisfactory performance of a strategic
partnership may result in disagreements among partnership participants (Li, et al., 2013).
Moreover, the new collaboration entails a greater purchase price, which has a significant
impact on local enterprises. As a result of the entire research, it can be concluded that Tesla,
as a huge automotive manufacturer, may benefit from strategic alliances by establishing
successful contractual connections.

Recommendations

Tesla's profitability may be boosted by acquiring strategic partnerships such as contractual

partnerships that will assist the firm expand its product line via creativity and innovation. The
ability to compete may be built by reducing additional expenses associated with R&D, staff
recruiting, and supplier costs. Tesla may make the right purchase of the above-described
company tactics to boost profitability and execute worldwide expansion. By making
adjustments to its business, Tesla may be able to boost its profit margin with the purchase of
horizontal integration.

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Tesla's business strategy needs to be applied in such a way that it attracts more consumers,
resulting in increased profitability. Additionally, optimising corporate processes with the
correct acquisition of vertical integration might be helpful to Tesla because it will have a
favourable influence on the company's brand image. Streamlining corporate procedures and
making the right acquisitions will assist to boost profit margins.

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Task 4- Strategic purpose- Ethics and CSR

Tesla's CSR strategy

In order to examine the CSR strategy of the company in this report the factors such as people,
profit, and planet will be considered. In context with planet, in which the environmental
component is primarily concerned with achieving organisational sustainability. Tesla focuses
on promoting innovation in the development of potential and industrial energy plants using
less energy and help in ma form of development (Tesla, 2022). Tesla is always developing
new technology in order to decrease carbon and greenhouse gas emissions.

In line with profit, which is also known as economic sustainability, is a component that
concentrates on the organization's growth through expanding its profit margin. Tesla
maintains its commitment to continual development by placing a strong emphasis on
innovation and creativity. The company launched the Gigafactory and SpaceX initiatives in
recent years to concentrate on the aspect of economic sustainability. These initiatives have
aided Tesla in achieving optimum profit margins by encouraging innovation and creativity.
Tesla is obliged to launch a number of efforts in order to contribute to economic growth
sustainability aspect. Tesla may be able to achieve maximum profitability margins in the
future as a result of technology breakthroughs and the development of corporate governance
initiatives (Tesla, 2022).

The people element, also known as the social sustainability factor, concentrates on the
organization's various stakeholder groups. Tesla begins its efforts with its stakeholders by
equating human rights in terms of personnel management, training, and monitoring, customer
happiness, alliances with business associates, and other civil rights that promote a pleasant
work atmosphere inside the company.

Tesla's ethical issues

Ethical concerns are those that cause disagreements among an organization's moral ideals.
When a choice or event within an institution causes a clash with the organization's standards
of morality, legitimate values arise (Chou, 2020). Interrelation is one of the most important
moral considerations that Tesla has encountered, posing a threat to the company's judgement
abilities and moral beliefs.

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This issue has arisen because Tesla does not have a sufficient rule of behaviour, which has
led to a reduction staff quality as a result of crisis situations. Internal and external
stakeholders are making surprising judgments as a result of Tesla's ethical difficulties.
Stakeholders are having difficulty trusting the company's development path in the foreseeable
future. Furthermore, it has been discovered that Tesla engages in ethical difficulties that lead
to a decrease in profit, resulting in greater service or product rates of interest and loss during
the period.

Ethical issues cause more problems than degrading the quality of work and working
environment of the organisation. It brings down the company’s image and causes loss to the
organisation (Sovacool, et al., 2016). It also reduces the chances for other companies to trust
the company with ethical issues which causes trouble for collaborations. The company should
focus on reducing the ethical issues as they can hamper the organisation’s flow as well as its
productivity. The ethical issues can be harmful for the management of the company and its
reputation thus ethical issues should be taken care of by the organisation.

Recommendations

Some suggestions which can help the company to improve its CSR policies are mentioned in
this section. Tesla can give enough information to workers by alerting them of the
consequences of the ethical difficulties that the firm is experiencing. The release of
knowledge and its impact will aid them in gaining adequate control over the difficulties and,
as a result, keeping commitments for the improvement of the firm. Tesla can conduct staff
surveys in which the corporation will accept solutions for resolving ethical issues such as
organisational intercultural communication and other concerns.

Tesla's different stakeholders can benefit from a proper code of conduct. This code of
conduct will help employees make more informed decisions, which will help them perform
better. The company can enhance its CSR policy and people factor by focusing on the
training period of the employees. In the training period emphasise on the practice and
behaviour of the employees should be focused more on as it helps in the motivation of the
employees to achieve their personal goals as well as in achieving the goals of the company.
The improvement in the skills of employees can be helpful for the company as well as to the
employees as they would provide high quality of work to the organisation which would be
beneficial for the organisation’s growth and development.

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14
Conclusion

The above research investigates on the automobile company that is Tesla and on its
worldwide presence, concluding that Tesla must focus on improving company operations
through the creation of corporate strategy. According to the survey, Tesla needs to expand in
the Asian market since the marketing prospects there would help the company enhance its
profitability. The organisation must establish a cost-effectiveness plan to do this.
Furthermore, it has been determined that horizontal integration, vertical integration, and
strategic partnerships are critical for a company's success, and that Tesla must alter their
business strategy to enhance their client base. Finally, the report emphasises the relevance of
CSR (Corporate Social Responsibility) and ethical concerns inside the company.

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