Assessment 2

A study of contemporary issues raised in the global

business environment for Tesla, Inc.

Student Name:
Student ID:
Table of Contents
Introduction to Tesla, Inc...........................................................................................................1

Applicability of concepts and theories.......................................................................................2

Problem-Solving & Decision-Making Strategies at Tesla, Inc..................................................4

Critical Analysis of Concepts at Tesla, Inc.: Navigating the Global Business Landscape........6

Recommendations......................................................................................................................7

Conclusion..................................................................................................................................8

References..................................................................................................................................9
Introduction to Tesla, Inc.
Tesla, Inc.

With its continuous innovations Tesla is at the forefront of advancements in the automotive
and renewable energy industries. Founded in 2003 by Elon Musk and a group of individuals
Tesla is a leader, in technology energy storage solutions and electric vehicle technology with
an employee base over 100k employees in the company (Tesla, 2023). Its main headquarters
are located in Palo Alto, California. It operates both domestically and internationally.

Background:

In the automotive industry, Tesla disrupted traditional combustion engines with its
commitment to electric mobility. The introduction of the Tesla Roadster, in 2008 laid the
foundation for the company to develop end electric sports cars (Abdou, 2019). In response to
its growing popularity Tesla has expanded its line-up with electric vehicles like the Model S,
Model 3 and Model X.

Mission and Vision:

Using a variety of electric transportation and energy solutions, Tesla aims to reduce the
world's dependence on fossil fuels (Tesla, 2023). Sustainable energy is Tesla's central goal.
The company's products play a crucial role in achieving it.

Global Presence:

A significant market presence and extensive network of operations characterize Tesla's global
presence. It is not uncommon for Tesla to have facilities, sales centers, and service centers
located outside of the United States. Localizing production for efficiency and regional
responsiveness is one of Tesla's priorities in Shanghai and Berlin. The international
operations of Tesla are integral to its success with a growing footprint in Europe, Asia, and
elsewhere.

Electric vehicles such as Tesla's are recognized as trailblazers in sustainable transportation in

today's global market (Mangram, 2012). Additionally, the company influences the
automobile industry to embrace electric mobility. Additionally, Tesla's energy products
contribute to the global transition toward a cleaner and more sustainable energy system. This
includes solar panels and energy storage devices.
Due to Tesla's exponential growth, its role in shaping the global business environment
becomes even more prominent. As the 21st-century landscape continues to evolve, the
company leads both technological advancements and environmentally responsible practices.

Applicability of concepts and theories

Globalization: Navigating Challenges and Opportunities

With globalization driving challenges and opportunities for Tesla, a pioneer in electric
vehicles and sustainable energy solutions, the global marketplace poses many challenges and
opportunities. Proactive initiatives are used by the company to leverage the benefits of
operating globally and address the intricacies that come along with it.

Challenges in Globalization:

1. Increased Competition: Tesla faces heightened competition worldwide as it expands

its global footprint. For instance, established automakers are transitioning to electric
vehicles, and Tesla faces competition from them (Liu, 2021). As evidenced by the
company's continuous refinement of Autopilot and Full Self-Driving capabilities, the
company's response focuses on maintaining its innovation edge.

2. Cultural Differences: Being able to operate in diverse markets requires a deep

understanding of cultural nuances. During traditional Chinese festivals, Tesla has
cultivated a deeper relationship with local consumers and reduced cultural disparities
by taking part in events.

3. Complex Regulatory Environments: Navigating complex regulatory environments

is part of Tesla's global expansion strategy. A good example of the company's
adaptability is the Gigafactory Berlin being constructed in Germany (Cooke, 2020).
With its proactive approach to compliance and cooperation, Tesla demonstrates a
strategic approach to local authorities and the environment.

Opportunities in Globalization:

1. Market Expansion: Tesla is demonstrating the strategic use of globalization to

expand into the Chinese market (Jiangmin & Lee., 2023). Furthermore, Tesla will be
able to reduce production costs and streamline its operations in the Chinese electric
vehicle market as a result of the construction of Gigafactory Shanghai.
 2. Talent and Resources: Acquiring a global presence will allow the organization to
access a wider range of talent and resources. In acquiring Grohmann Engineering,
Tesla has demonstrated its commitment to leveraging global talent (Tesla, Inc., 2020).
Tesla's ability to automate and manufacture technology is enhanced by this strategic
move.

3. Economies of Scale and Scope: Tesla is pursuing economies of scale and scope via
the construction of Gigafactories on different continents. With the huge Gigafactory
in Nevada, USA, as well as its counterparts in Shanghai and Berlin, Tesla is able to
reduce costs, increase production efficiency, and meet the demands of a wide range of
markets.

International Business Theories: Comparative Advantage

Leveraging Innovation and Manufacturing Efficiency: The Tesla company's international

strategy is based on the principle of comparative advantage. By leveraging its capabilities in
innovation and manufacturing efficiency, the company gains a competitive edge. It is
exemplified by Tesla's launch of the Cybertruck, which is a unique electric vehicle design
that sets it apart from its competitors (Furr & Dyer, 2020).

International Business Theories: Porter's Diamond Model

Factors Contributing to Competitiveness: According to Porter's Diamond, Tesla's

competitiveness is influenced by several factors (Eickelpasch et.al, 2010). There is a high
demand for electric vehicles in Norway, where Tesla holds a significant market share. The
combination of a well-developed charging infrastructure and government incentives makes it
ideal for Tesla to thrive.

Cultural Intelligence: Managing Cultural Diversity

The following examples illustrate Tesla's commitment to cultural intelligence:

1. Training in Cultural Awareness: Tesla's marketing strategy illustrates the

company's cultural awareness initiative. As part of its marketing strategy in the
Middle East, Tesla tailors advertising campaigns to appeal to local audiences based on
cultural preferences.

2. Global Company Culture: Tesla's commitment to workplace diversity is evident in

its global company culture. During the hiring process, the company makes an effort to
 hire a diverse workforce, demonstrating its commitment to diversity (Tesla Inc.,
2020). Tesla's commitment to a global and inclusive corporate culture is strengthened
by the appointment of diverse leadership, including Jerome Guillen.

3. Localization of Products and Services: Tesla acknowledges the importance of

localization in its adaptation of vehicle features. With "Preconditioning," Tesla
vehicles in markets with extreme weather conditions, such as Norway, optimize their
battery and interior temperature based on the local weather (Steinstraeter et.al, 2021).

Problem-Solving & Decision-Making Strategies at Tesla, Inc.

Identification of Issues:

 Multifaceted challenges confront Tesla as it navigates the complex global business

landscape. Adaptable decision-making and problem solving are necessary to succeed
in this environment (Bhardwaj et.al, 2020). Geopolitical tensions and disruptions,
such as the semiconductor chip shortage, affect the global supply chain and pose a
pivotal challenge. Tesla vehicles must be produced and delivered seamlessly, and
strategic decision-making is essential.
 A significant challenge is also the diversity of regulatory regimes across markets. In
order to comply with varying safety regulations and electric vehicle incentives as well
as uphold Tesla's commitment to innovation, the company must adopt a proactive
approach to compliance.
 Tesla's energy division is also challenged by fluctuations in energy policy and market
demand. The renewable energy industry must adapt to evolving regulations and
market dynamics in order to sustain growth.

Strategies:

These challenges are addressed by Tesla using a variety of problem-solving and decision-
making methodologies:

1. Risk Management Frameworks:

o Through diversified supplier relationships and long-term contracts with key

suppliers, Tesla proactively managed risks during trade tensions affecting the
global supply chain. With this strategic move, Tesla demonstrated its
commitment to proactive risk management by mitigating the impact of supply
chain disruptions.
 2. Scenario Planning:

o With market conditions being unpredictable, Tesla plans scenarios to prepare

for them. A company anticipates potential outcomes when faced with
regulatory uncertainties in various markets and develops strategies to cope
with them. With this type of foresight, Tesla can pivot quickly and sustain
operations in spite of changing conditions.

3. Innovation and Technological Solutions:

o Over-the-air software updates by Tesla demonstrate the company's

commitment to technological innovation as a tool for solving problems. Tesla
can deploy software updates remotely when technical challenges arise or
improvements are needed, eliminating the need for physical recalls. Besides
highlighting technological prowess, this approach promotes customer loyalty
and satisfaction.

Case Examples:

1. Global Chip Shortage Response:

o By reorganizing production priorities, Tesla demonstrated its problem-solving

agility amid the global semiconductor chip shortage. A collaboration with
alternative chip suppliers and optimization of production schedules helped
Tesla mitigate delays (Paar, 2022). Despite external challenges, Tesla
demonstrated a strong commitment to meeting customers' demands.

2. Energy Storage Solutions:

o Tesla is addressing challenges related to intermittent renewable energy sources

with its strategic decisions to invest in storage solutions, such as the
Powerwall and Powerpack. In addition to enhancing grid stability, the
Powerwall also promotes a reliable renewable energy ecosystem by storing
excess solar energy.

3. Negotiation with Chinese Authorities:

o The proactive engagement of Tesla with Chinese authorities in regards to the

Shanghai Gigafactory is an example of strategic planning. In the world's
largest market for electric vehicles, Tesla has successfully navigated complex
 regulatory environments by collaborating closely with the Chinese
government (Cooke, 2020).

Critical Analysis of Concepts at Tesla, Inc.: Navigating the Global Business

Landscape
The automotive and renewable energies sectors are among Tesla's key focus areas, which it
strategically applies to address organizational challenges in the global business environment.
In an industry that is rapidly evolving, Tesla is aligned with globalization trends with its
emphasis on sustainable energy and electric vehicles.

Comparative Advantage and Porter's Diamond Model:

Economics, particularly comparative advantage theory, played a significant role in Tesla's

success. In comparison to traditional automakers, Tesla has a distinct technological advantage
in electric vehicles. The Porter's Diamond Model can provide a comprehensive perspective
on Tesla's achievements, emphasizing factors like infrastructure and innovation. Although
well-applied theories can sometimes fail in the real world, problems such as supply chain
disruptions provide a good illustration of the complexity of such theories.

In addition, Tesla's supply chain is vulnerable due to the global shortage of semiconductor
chips. It is clear that despite the swift and adaptable response, supply chain management
needs to continually improve and diversify, acknowledging that disruption is a fact of global
operations.

Cultural Intelligence:

Although Tesla is capable of adapting to cultures around the world, the effectiveness of this
adaptability varies from country to country. Product design and marketing strategies can be
adapted to a variety of cultural contexts, which shows that the company has a commendable
level of cultural intelligence (Khan, 2021). Consumer behaviour, especially in areas such as
compliance with regulatory requirements, remains challenging.

It is imperative to maintain regulatory compliance in diverse cultural contexts and to apply

nuanced approaches. It is Tesla's commitment to continuously adapting its strategies to meet
these challenges that reflects its recognition that cultural intelligence is more than just a one-
time step.
Successes and Failures:

Despite Tesla's success, its disruptive impact on the automotive sector cannot be understated.
A company's market value and unwavering customer loyalty confirm its international
business strategy's effectiveness. Tesla's success has been largely attributed to its strategic
decisions, such as its investment in Gigafactories worldwide, notably in Shanghai.

The challenges also reveal where strategies faced obstacles. It was revealed that Tesla's
supply chain was vulnerable because of a chip shortage. Diversifying suppliers and
strengthening supply chain resilience were emphasized in the company's response, which
showed agility and adaptability.

In some markets, regulatory challenges represent failures that deserve attention. Regulatory
investigations were conducted regarding issues related to autopilot technology. To avoid
setbacks, it is crucial to align innovation expectations with regulatory expectations.

Adaptability:

A quick response to challenges and opportunities demonstrates Tesla's ability to adapt to an

ever-changing global business environment. A vehicle's ability to receive software updates
over-the-air reflects its adaptability to address technical issues without physically recalling it.
By implementing this technological innovation, Tesla is demonstrating its commitment to
continual improvement and enhancing customer satisfaction at the same time.

As Tesla's Gigafactories expand globally, it underscores its ability to adapt to changing

manufacturing needs. As trade dynamics change and geopolitical concerns emerge, localized
production aligns with them (Cooke, 2020). In spite of this, challenges such as disruptions in
supply chains highlight areas where organizational adaptability can be improved. By
diversifying and strengthening its supply chain, and by implementing advanced risk
management strategies, Tesla can ensure ongoing success in an environment that is rapidly
evolving.

Recommendations
Taking on the dynamic currents of the global business landscape, Tesla, Inc. is a leader in the
automotive and renewable energy sectors. Strategic recommendations are being developed to
increase Tesla's resilience and propel the company to greater heights as it expands globally.
The recommendations Tesla provides aim to ensure sustained success despite the complex
challenges of international business, whether it is supply chain dynamics, regulatory
engagement, talent development, or risk management.

1. Diversification of Supply Chain: Tesla should diversify its supply chain even further
to mitigate disruptions. The ability to collaborate with multiple suppliers for critical
components can enhance resilience and ensure consistency in production flow,
especially in the face of global uncertainties.

2. Enhanced Regulatory Engagement: To address compliance challenges, Tesla

should engage proactive with regulatory bodies around the world due to the diverse
regulatory environments. It will be easier to integrate innovative technologies while
ensuring compliance with evolving standards through stronger partnerships with
regulatory authorities.

3. Investment in Local Talent Development: Tesla can invest in local talent pools in
key markets to boost cultural intelligence and local adaptability (Kim, 2020). As a
result of this strategic approach, the company is able to gain a deeper understanding
of regional dynamics and to demonstrate its commitment to sustainable development.

4. Continuous Innovation in Risk Management: Reliable risk management requires

constant innovation, especially when identifying and eliminating new risks. A
proactive and agile response to potential challenges can be enabled with predictive
analytics and scenario planning.

Conclusion
In summary, Tesla, Inc. is an internationally recognized innovator that exemplifies a
persistent dedication to the advancement of sustainable materials and electric automobiles. A
detailed understanding of the company's success and failure may be obtained by analyzing its
methods in light of globalization, international business theories, cultural intelligence, and
globalization. Without a question, Tesla's strategic investments in Gigafactories and
technology advancements like over-the-air upgrades have allowed it to successfully disrupt
its sector. Its disruptive effect on the industry is proof of this. However, a deeper examination
of legislative barriers and supply chain weaknesses highlights several issues that require
attention. To further strengthen Tesla's resilience and flexibility going forward, it is advised
that the company expand its supply chain, bolster its regulatory engagement, invest in local
expertise, and develop innovative risk management techniques. As it navigates the constantly
changing global business landscape, the company's strategic considerations are positioned to
continue its success and further solidify its position as a pioneer in sustainable innovation and
a revolutionary force in the transportation and energy sectors.

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