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 Contents
Introduction..............................................................................................................................3

External and Internal Environment of Tesla.............................................................................3

Strategy in the Global Environment..........................................................................................8

Corporate Strategy.................................................................................................................10

Strategic Purpose – Ethics and CSR.........................................................................................11

Conclusion..............................................................................................................................12

References..............................................................................................................................13
Introduction
With the help of strategic business analysis, it becomes easier to stress the

outcome-focused thinking that will make it easier to manage the challenges and the

business contexts along with the complexities of the external and the internal environment

of the company thereby assisting in the transformation process (Ogbari et al. 2018). The

main purpose of strategic business analysis is to help the company in carrying out the

delivery related to the factual aspects supporting the decision-making process. There should

be careful attempts made in checking the supply of the essential components that is vital for

carrying out the decisions.

Tesla is US-based energy and electric-based company that is specialized in the

manufacture of solar panels, electric cars along with roof tiles. Tesla can also be regarded as

one of the most valuable automakers in the world (Tesla, 2021). The company is one of the

largest suppliers in the provision of global battery energy thereby playing a vital role in

managing different controversies that arises from different types of problems linked to the

accounting process (Tesla, 2021)). This study will discuss the internal as well as the external

environmental analysis of TESLA considering the SWOT and the PESTLE analysis, the varied

competitive advantage that is to be discussed considering the strategic purpose and the

VRIO, and the corporate strategy involving CSR and ethics.

External and Internal Environment of Tesla

In the table below, there has been a systematic analysis of the TESLA’s external

environment with the help of PESTLE.

Political  It has become easier for Tesla to carry out Opportunity

further market penetration considering the

generic competitive strategy and intensive

growth.
  There are chances for Tesla to enhance its

financial performance with the help of

incentives that are raised by the

government to lower the emission of Tesla’s

products and operations.

 The free trade agreement is also likely to

assist in the operation of Tesla.

Economical  The products of Tesla can be considered to Opportunity

be more attractive considering the lower

renewable energy cost

 The business performance of Tesla is

impacted due to the low battery cost (Tesla,

2021).

 An important threat to Tesla involves the

economic stability issue affecting the

financial operation of the company.

Social  The wealth distribution is to be enhanced Opportunity

considering the financial performance of

Tesla.

 There are chances for enhanced

opportunities for Tesla to improve its low

carbon lifestyle as well as the growth of

renewable energy enhancing the

opportunity for Tesla (Tesla, 2021).

 The international business of Tesla is also

likely to be enhanced depending on the

 socio-cultural opportunities.

Technological  There has been an enhanced level of Opportunity

popularity of the online mobile system

thereby improving further chances of

growth of Tesla (Tesla, 2021).

 The higher rate of technological change is

important for the growth of Tesla.

 There are chances for improved growth and

opportunities considering the automation of

the business process fulfilling the business

needs of Tesla.

Legal  Patent protection is safe for Tesla to Opportunity

expand in the overseas market

 The labor laws and the actions made abided

by Tesla

 There should be a careful eye kept on the

energy regulation assisting in the growth of

direct sales (Shao et al. 2021)

Environmental  Electric vehicles, solar panels as well as Opportunity

batteries are crucial for managing external

factors (Sieklucki, 2018).

 The important environment program along

with the varied standards of waste disposal

is essential for the growth opportunity

Table: PESTLE analysis

SWOT Analysis
 With the help of the SWOT analysis, it will be easier to get an overview of the

external environment that is stated below:

Strengths Weaknesses

 Tesla has occupied the top three  The company has imposed a penalty

ranks in terms of range thereby on the development of the tent

proving as the best car managing a production line without carrying out

wider distance (Tesla, 2021). a proper safety inspection

 The company also possesses a  There are chances for the company

greater chance of innovation to tackle the market share along

thereby improving the trust within with the management of the

the market financial capabilities (Tesla, 2021).

 There have been careful attempts  Because of the experimental and

made in boosting the sales pushing complicated procedure, the

up the rate of capitalization along company has also witnessed

with the enhanced delivery improper demand and supply

balance to meet the production.

Opportunities Threats

 Tesla has tried its best to expand  The company has also witnessed a

the global market taking care of the higher level of competition due to

market presence and financial the use of alternative fuel vehicles as

stability (Tesla, 2021). well as self-driving technology (Tesla,

 The company has also tried its best 2021).

to manufacture new battery cells  The complex engineering process

that are considered to play an that is linked with the innovative

effective role in reducing production vehicle has also stated varied flaws

costs. thereby considering it to be one of

  The launch of Tesla’s new model i.e. the major weaknesses affecting the

Model 3 can be regarded as a vital brand image of Tesla

opportunity for the expansion of  There should be a proper eye kept

Tesla (Tesla, 2021) on the business that operates within

the line of acceptance of the

customers thereby benefiting it to a

great extent.

Fig: SWOT analysis

The three vital factors that are essential for conducting the internal and the external

analysis of Tesla are discussed as follows:

a. Enhanced competition: Tesla has been found to witness a higher level of

competition in plug-in hybrid cars, the hybrid and electric cars. There has been fierce

competition between Tesla with other brands such as BMW, Mercedes, Audi,

General Motors, Toyota, and Volvo (Dixit et al. 2019). To check the launch of other

vehicles, it is important to keep an eye on the proper planning which is one of its

weaknesses of Tesla (Tesla, 2021). This can be considered to pose the most unique

value to the company.

b. Increased production of eco-friendly cars: It has been found that Tesla has been

trying its best to produce a large range of eco-friendly cars through the development

of new technology and improved competition in the market. The company has also

tried its best to take initiatives that are vital for the smooth functioning of the

automobile industry.

c. Sales expansion in the untapped market: Tesla has tried its best to capture the Asian

market that is much unsaturated within the automobile industry. Tesla must try its

best to expand its financial stability through its stronger presence.

 It has been found that the battery supply chain is associated with the growth

of the competitive advantage within the company. This enhancement of the battery supply

chain can be considered to be a crucial part of Tesla’s business where the role of the battery

is to play a crucial role in the operation of large grid applications and homes. With the help

of the proprietary supercharging network, it has been found that Tesla is famous for the

enhancement of improved recharging opportunities. There have been careful attempts

made to manage the adaptation of software of Tesla for the operation of electric vehicles.

This has assisted Tesla to grow its internal level of reputation among the manufacturer of its

products. An example can be cited as the Roadster of Tesla which has assisted in the

management of varied electric vehicles. Further, there have been careful attempts made to

enhance the software of Tesla to manage the traffic signals, the management of varied

related aspects, and the enhancement the camera. Tesla is successful in the improvement of

the software features and the driving capacity in tackling the varied types of hardware

features.

Strategy in the Global Environment

With the help of the global strategy, Tesla has been trying to capture the high-end

market where most of the customers are involved in purchasing premium quality cars. The

adoption of a superior technology by Tesla cannot be compared with other competitors.

Moreover, the varied motor parts of Tesla are witnessed to have modern magnets which are

crucial for Tesla. For keeping an eye on the energy storage, the ion batteries of Tesla are to

be arranged in series. The company also has improved the level of access to the

manufacturing capacity across the world (Team, 2018). Further, Panasonic also has a close

association with Tesla. In the case of both companies, there has been close growth and

development of partnership with the manufacturing of batteries of Tesla at the Gigafactory.

This is possible only through the management of efficiency along with the lower level of

manufacturing price and the availability of economy vehicles. There has been improved
pressure witnessed in Tesla due to the reduction of cost.

For carrying out the production of Tesla’s vehicle, there has been proper assistance

in the delivery process smoothly and effectively. Due to the increased level of pressure in the

automobile industry, Tesla has been trying its best to grow its value. This value-added

service has made it easier for Tesla to choose the chances that are important to carry out

the development within the service centers, the global stores as well as the superchargers

that are involved in supporting the customers to carry out the purchase decision. On the

other hand, there has to be a careful eye kept on the company’s size thereby checking that

there are valid plans linked to the competitor for the growth of production. The export

strategy of Tesla will make it easier for the company to manufacture the cars thereby

enhancing its global expansion. The product standardization through focusing on the

customer switching cost must also be kept a proper eye on along with the enhanced level of

R&D through cost savings.

Enhancement of the supply chain can be tackled through the presence of the

internet. The different product strategy of Tesla is the same compared to the other

technological companies. Moreover, the product strategy can be considered to be similar to

the transnational process where the company is to be benefited through the assistance of

the global structure along with the sales mode. Tesla has been trying its best to grow its

innovation process quickly with the help of a vertical integration strategy.

The cultural management of Tesla is also crucial for Tesla to assist the employees to

grow their innovative and creative habits. This form of management can be regarded to b

much more effective for Tesla thereby being technologically innovative. Tesla must also try

to check that the different types of innovative methods that it utilizes to carry out the

development of the improved solutions have been found only within this automobile sector.

Moreover, it can be said that with the help of this cultural management, the employees are

also motivated to be creative thereby trying their best to develop innovative habits (Perkins
and Murmann, 2018). The structure of Tesla uses the centralization process along with the

provision of managerial control across different functional groups in the local and global

operational process. There has been the development of an enhanced innovative strategy to

manage the global expansion accordingly.

Corporate Strategy

The horizontal integration process has assisted Tesla to improve the production

process involving the goods and the services within the same part of the supply chain. Tesla

can do this only with the help of internal expansion which is possible through mergers,

acquisitions as well as enhanced expansion. It is the responsibility of Tesla to keep an eye on

the monopoly process thereby tackling the major market share in the producing goods and

services. There have been careful attempts made in strengthening the market position

through the growth of the production and distribution aspect. On the other hand, the

horizontal integration process is likely to help Tesla to grow from its economies of scale.

There are chances to tackle the margin level along with the enhancement of the supply

elasticity accordingly. There has been an improved level of margin to check the supply

elasticity accordingly. Further, it can be said that the vertical integration process made it

much easier for Tesla to impose a higher level of control within the production process

within the entire supply chain. The different types of outsourcing aspects linked with Tesla

are likely to reduce the equipment price, overhead charges, and personal costs accordingly.

The input prices must also be checked so that it does not fall through a much higher amount

compared to the cost and the production margin. Tesla can also be considered to be

vertically integrated thereby keeping an eye on the competitors along with the advanced

and improved technological parts transferring the risk to the suppliers (Thomas and Maine,

2019). Tesla is regarded to be integrated vertically by considering the outsourcing aspects

thereby focusing or keeping an eye on the different processes.

 The vertical integration model will also make it easier for the company to enhance

its operational process by taking control of the direct ownership involved in varied

production zones. Tesla can find it easier to carry out the operational process independently

only with the help of vertical integration. The company must also try to carry out the vertical

integration strategy thereby driving down the cost along with the increase in demand. This is

likely to increase the delivery of Tesla by around $500k indicating a 30-40% increase since

2019. The company must try to manage vertical integration by including the lithium battery

and the recycling process along with the improvement in the output.

Strategic Purpose – Ethics and CSR

The varied aspects of the stakeholders within the energy and automobile industry

must be managed accordingly. This is possible only with the help of the stakeholder analysis

that has been highlighted by Caroll stating that the company must keep an eye on the

enhancement of the social aspects. The legal responsibility, the ethical responsibility, and

the philanthropic responsibility are to be considered by the company thereby keeping a

check on the level of benefit that is to be carried out among the stakeholders (Debord,

2020). The different types of improved opportunities make it mandatory to keep an eye on

the work carried out by the citizens of the global community.

The efforts carried out by the CSR of Tesla will help in the enhancement of the

position of the company considering the role of the automakers such as Toyota, Honda, and

General Motors. The responsibilities that are to be taken by Tesla make it easier to grow

brand value along with CSR. The business sector within the automobile industry must ensure

that there are careful attempts made in the fulfillment of the business responsibilities

through the development of the brand image. Further, the role of the stakeholders is to be

dependent on different funding series considering the role of the investors involved in the

capitalization process (Thomas and Maine, 2019). Thus, the varied aspects of Tesla can be
managed through governmental action assisting in legal compliance and the business

contribution acting as a crucial source of business enhancement.

Conclusion
Thus, the different processes and the aspects that are linked with strategic decisions

are essential for business growth. It is important to keep an eye on the investigation and the

analysis of different aspects of Tesla that is crucial for the growth of the business. With the

help of these PESTLE and SWOT analyses, the internal and external environmental analysis

can be managed accordingly. It is important to take careful attempts for managing the

business process that is important for carrying out the research. Tesla has been trying its

best to capture the profit margin when there exist no such middlemen within the

distribution network. This is also likely to assist Tesla that it does not have any control over

the traditional purchasing process of the car and thereby prefers to carry out online selling.

The company has been trying its best to lower costs as well as enhance efficiency

considering it to be a part of the manufacturing process. Tesla has been considered to be

one of the leading automakers carrying out the production of the Model 3 within the

premium mid-sized market. Thus, Tesla must check that there is no miss of the delivery

deadlines making the share price tumble accordingly.

References
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