STRATEGIC

MANAGEMENT
09 ACTIVITY 1

Members:
SORIA, MEKHAELA AIRA
FILASOL, DEVIE
GREGORY, BETHANIE
GONZALES, JOANA
SABIJON, KENNY
DONESA, AXEL BONG
TEMBREVILLA, LEIGH ANDREA

JUNE 16,2022
 ACTIVITY

Tesla Drives to Change the Structure of an Industry

Every car manufacturer who sells in the United States does so through a network of locally-owned
dealerships. The car manufacturers have structured their business to deal with the only sales channel
allowed by law in most states. Into this arena comes Tesla. Much to the surprise of many, Tesla was
not founded by Elon Musk, but by Martin Eberhard and Marc Tarpenning in 2003 with the goal of
utilizing an induction motor patented in 1888 by Nikola Tesla to prove that battery-powered cars
could be better than gas-powered cars. Their primary investor was PayPal co-founder Elon Musk who
then served as Chairman until 2008 when he also became the CEO.

While certainly not a mass-market car (the Tesla Roadster started out at US$109,000 or 5.4 million
pesos), the company had no problem selling every car they made. Tesla opened car information
locations at malls in the United States, where customers would learn about the car, its features, and
how to order one. Customers can use a website to select the features they want, pay a deposit, and
wait for Tesla to build their car. Tesla offers financing and accepts third-party loans, but delivers the
cars directly to the customer that ordered it. The organization has been structured around a retail
concept that is more oriented toward providing information rather than selling. Tesla successfully
managed to build its business using this unconventional model by combining their functional units
with their project teams, which encourages more dynamic and open communication in their entir
organization. The price of Tesla vehicle is not negotiated, and every feature is clearly labeled on the
website. There are no teams of employees working with franchisees, no logistics teams negotiating
car allotments, no sales groups crafting the next “big” sale/marketing campaign. The company simply
establish a strong camaraderie and personnel commitment in their small pool of employees. In
addition, Tesla ensures that the activities of their organization are well aligned to their company
strategy, which enables them to successfully match personnel requirements to their overall strategy
that drives optimum growth for the company.

General Motors has almost 4,900 franchise dealers in North America, and the company is prohibited
from selling directly to consumers because of contracts with those dealers and state laws that protect
the dealerships from factory competition. General Motors has invested significant resources in
attempting to prevent Tesla from entering markets. They successfully prevented a move into Michigan
but failed in the courts of Massachusetts. If Tesla is forced to deal through a franchise dealer system, it
will radically affect the structure and design of the organization. Sometimes the reality of the markets
dictates how a company is organized.
Answer the following questions: (3 items x 10 points)

1. What is/are the prerequisite/s of strategy implementation present in the case study?
Soria , Mekhaela Aira
Strategic purpose, vision, and goals, environmental and organizational analysis,
and strategy formulation are the other three phases of the Strategic Management
Process. The strategy implementation process has a major part in the company's
performance. The process begins with a scan of the environment, a SWOT analysis, and
the identification of strategic concerns.
A. Utilized Institutionalized Strategy - First and foremost, the policy must be
institutionalized, in the sense that the person who developed it must be able to
support or defend it in front of the participants. As a firm, they ensured that all of their
planned operations are in line with their goal and vision, allowing them to efficiently
match staffing needs with the broader strategy that propels the company forward.
B. Building an acceptable operational environment - Tesla's small workforce
fosters a strong sense of community and commitment among its employees. There are
no personnel teams meeting with franchisees or logistical teams arranging car
assignments. Because of their small workforce, there is no "big" marketing/sale
strategy in the case of Tesla.
C. Formulation of preparations for service - Operating plans are written in such a
way that they represent the organization's priorities. Tesla is run on a retail strategy
that prioritizes data over sales. The Tesla vehicle's pricing is not negotiable, and any
feature listed on the website is clearly marked.

Sabijon, Kenny
There are two conditions for the method used in the given example. First is the
institutionalization strategy. Policies have been implemented so that they can be
weakened, Tesla guarantees that their firm's operations are perfectly aligned with
their corporate strategy, allowing them to efficiently match employee requirements
with their strategy, which promotes the company's ideal growth. The second step is to
create an appropriate organizational climate. The organizational climate is an element
of the corporate atmosphere that includes collaboration, employee growth, and levels
of autonomy. Dedication and perseverance, efficacy, and other factors that translate
into performance In the case of Tesla, there are no worker teams meeting with
franchisees, no logistics teams negotiating car allotments, and no marketing director
intending a next big marketing sale strategy with their restricted pool of workers;
instead, the company simply fosters a strong sense of solidarity and staff commitment.

Gregory, Bethanie
Based on the given case, the prerequisites of strategy implementation presented
are the institutionalization of strategy, formulation of operating plans, developing
proper organizational structure, and periodic review of strategy, which help the Tesla
Company develop a proper organizational climate. Because the organization is
structured to deal with the single seller channel allowed by law in most locations,
strategy institutionalization has occurred. Tesla also aims to use an induction motor to
illustrate the viability of battery-powered vehicles, which will guide the company's
daily operations. Formulation of Operating Plans, as done by Tesla, ensures that their
company's operations are properly linked to their corporate plan, allowing them to
correctly match human requirements to their overall strategy, resulting in maximum
growth.

Tembrevilla, Leigh Andrea

There are two prerequisites strategy that is being exercise by the company which
are the developing proper organizational climate and formulation of operating plans. In
developing proper organizational climate, Tesla Company was able to successfully
create a healthy working space where each of their employees is committed to
contribute for the growth of the company. They were able to establish strong and
positive organizational climate which becomes there key to thrive in the market. There
is a harmony since collaboration and communication is being practice on their
workforce, therefore it is much easier for the organization to achieve their goals
because everyone are helping one another. Lastly in formulation of operating plans
within the company, it is also stated that they were able to ensure that all of the
activities is well aligned to their company strategy and this will serves as their inner
driver to achieve the growth of the company.

Donesa, Axel Bong

 In the case of Tesla, there are no worker teams meeting with franchisees, no
logistics teams negotiating car allotments, and no marketing director planning the next
big marketing sale strategy with their limited pool of workers. The approach employed
in the example is subject to two criteria. The first is an institutionalization strategy.
Policies have been put in place to undermine them. Tesla ensures that their company's
operations are fully connected with their corporate plan, allowing them to efficiently
match employee needs with their goal, promoting the company's optimal growth. The
next stage is to establish a suitable organizational atmosphere. Collaboration,
employee growth, and levels of autonomy are all aspects of the organizational
environment.

2. What type of offensive tactic is being used by Tesla?

Gonzales, Joana
The most extreme aggressive strategic approach is when organizations actively
seek to buy other companies to boost growth or minimize rivalry. Because they are
more likely to be extensively financed or leveraged, these businesses are also seen as
riskier than defensive businesses. Tesla does not mass-produce automobile models,
which sets it apart from other car manufacturers.

Filaso, Devie
Based on the given case study, Different strategies and methods can be utilized
singly or in combination. However, Tesla doesn't quite mass-produce automobile
models, which distinguishes it from other automakers. The type of tactic that was
being used by Tesla's bypass or leapfrogging attack caught competitors off guard in the
automotive manufacturing and technological battle. It outperforms its competition by
offering novel alternative energy sources that piques purchasers' interest in trying out
the revolutionary automobiles of the future. Bypass assault as a marketing approach
emphasizes innovation and uniqueness in competing by dominating and surpassing the
industry in general of technical and other competitive advantage. The uniqueness of
Tesla's car caused purchasers to be awestruck by the new thoughts that the firm may
initially rule the market opportunity of vehicles with distinguishing characteristics and
capacities.
 The type of offensive attack used by Tesla is encirclement, because they provide a
diverse selection of items, which makes it easier for their large consumer base to keep
up with the competition. After establishing a stronghold in the top class, Tesla shifted
their attention to the upper middle class and then the middle class, where they
introduced new goods to their line up. At this time, a Tesla may be purchased within
the budget of families from the middle class. This technique has proven to be effective
for Tesla in ensuring the company's continued financial sustainability. Tesla maintains
its lead over other businesses thanks in large part to the effective marketing strategy it
employs.

Filasol, Devie
I do believe that the bypass attack is being used by Tesla Company to compete
and thrive in the market. They were able to set apart their business to other
established brand by offering new, innovative, and futuristic type of cars. The business
concept of Tesla is risky since it is different from the existing motorcar in the market
because instead of fuel engine they were able to market battery-powered cars.
Although in the present they are still on the process of cutting fuel engine cars in the
market because many are still preferred to buy the usual motor cars, but the
popularity of Tesla cars are began to be recognized by many.

Gregory , Bethanie
Different techniques and methodologies can be used separately or in
combination based on the case study. Tesla, unlike other automakers, does not mass
produce automotive models. As a marketing strategy, bypass attack stresses
innovation and originality in competing by dominating and outperforming the industry
in general in terms of technological and other competitive advantage. The
distinctiveness of Tesla's automobile awed buyers, who were stunned by the fresh
thoughts that the company may first govern the market opportunity of vehicles with
distinct traits and capacities. In the automotive production and technology fight,
Tesla's bypassing or leapfrogging approach caught opponent’s unaware guard. It
surpasses its competitors by introducing fresh alternative energy sources, which
captures the attention buyers' enthusiasm in testing out the innovative vehicles of
both the future.
3. What is the most appropriate offensive/defensive tactic should Tesla employ to retain
its market share?

Soria, Mekhaela Aira

Tesla entered the market with a defensive approach in mind. This strategy was
different from other vehicle manufacturers' because of the cost and nature of its
products. As a result, rather than reacting to Tesla's performance, the market reacted
in kind. This reaction provided Tesla with an opportunity to carve out other
manufacturing customer bases by providing a more cost-effective and environmentally
benign commodity. Tesla's exploitation of opportunities demonstrates that reading the
market and operating based on the reactions of competitors is a marketable strategy.

Donesa , Axel Bong

Tesla entered their market using a defensive strategy. This approach was
distinct from that of other automotive manufacturers due to the increasing price of its
goods. As a result, rather than reacting courteously, the market responded in kind to
Tesla's success. This reaction created a chance for Tesla to carve out all other industrial
client base by delivering a much more cost-effective alternative. A helpful resource.
Tesla's use of opportunities demonstrates that Tesla's competitive strategy is to
analyze the marketplace and operate based on the responses of its competitors.

Sabijon, Kenny
For me the most appropriate offensive or defensive tactic should Tesla employ
to retain its market share is to use direct assault as an offensive technique. Because
using this strategy will assist the company in ability to overcome the challenges posed
by its most formidable rivals, head on. When it comes to the development of defensive
techniques, Tesla need to place its primary emphasis on the fortification of its
structural barriers. Companies need to be able to block their strongest rivals by
supplying a full product range in each market segment if they want to surpass their
other competitors and achieve more success.

Tembrevilla, Leigh Andrea

In order to retain its market share Tesla can both used offensive and defensive
tactics. On offensive tactics, the company should grab every opportunity in the market
 and as what I have known, although the company was able to expand globally but
there is only few Tesla store that is available in every country especially here in the
Philippines. In this aspect, the company can use encirclement strategy where it covers
more markets. For defensive tactics, in order to retain its value to the customer and to
attract new market they can also strengthen their structural barriers since they already
offered variety of products not just in automobile.

Gonzales, Joana
Tesla entered the market on the defensive. As a result, rather than reacting
courteously to Tesla's accomplishment, the market reacted in kind. Tesla's utilization of
opportunities reveals that Tesla's competitive strategy is to evaluate the marketplace
and operate based on its rivals' responses. Because of the rising cost of its goods, this
strategy was unique from that of other vehicle makers.

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