13 Jan STRATEGIC ANALYSIS based on your research using the methods and approaches explained in the course (The questions are designed
I′ve uploaded the assignment FOR REFERENCE. I am asking for help with Part I & Part III of the assignment below: Part I: STRATEGIC ANALYSIS based on your research using the methods and approaches explained in the course (The questions are designed to have you apply a specific course concept(s)) – Length: 4 pages Q1. What factors in the general environment and what factors in the industry in which Tesla Inc. competes are affecting Tesla Inc.’s strategy selection? Q2. What tangible resources, intangible resources, and organizational capabilities does Tesla Inc. possess? Which of these may/should be providing Tesla Inc.: (a) a competitive advantage? (b) a sustainable competitive advantage? Why? Q3. What core competencies does Tesla Inc. possess? How do you know these are core competencies? Q4. What is Tesla Inc.’s overall corporate-level strategy? Q5. Which business level strategy(ies) does Tesla Inc. pursue? PART III: STRATEGIC RECOMMENDATIONS Length: 4 pages Hypothetical situation: You are part of Tesla Inc.’s top management team (TMT). The TMT has agreed, in consultation with the Board of Directors, that Tesla Inc. has an important role to play in helping realize a global vision where every man, woman, and child in the World is empowered by their products to lead a healthy and productive life. You and Elon Musk’s other top advisors have been asked to develop strategic alternatives for expanding Tesla Inc.’s involvement in this quest and have been asked to submit a brief for review. In this brief you will: Q9. Recommend a mission statement for Tesla Inc. that would be in-line with this vision. Q10. Propose three strategic alternatives that are in-line with this mission statement that are based in the business level, corporate level, or international level strategies covered in this course (and the forms these may take). Q11. Analyze each of these alternatives. (What are the strengths and weaknesses of each alternative?) Q12. Recommend one of the alternatives. (Why are you recommending this alternative?)
Tesla Inc. Strategic Analysis
Tesla Inc. Strategic Analysis
Several environmental factors affect Tesla Inc. Most of the environmental factors are in the electric vehicle and transport industry and the global market in general. The capability of tesla Inc. to continue competing effectively in the market depends on certain elements that can affect their operations, such as ecological trends. In the market, there is an inherent competition for resources and raw materials used by the company. The main environmental factors that externally affect the company are ecological.
Given that the climate is a critical factor in the global market, climate change is an external factor that affects Tesla Inc. Tesla can develop their vehicles and engines to keep up with the rising and changing concerns in production and vehicle emissions. The company can take advantage of the need to impose environmentally efficient engines and products. Factors to consider are:
· The rising costs of waste management.
· The development of environmental programs.
· Climate change.
Maximizing these external factors is critical to improving business sustainability.
In different industries, different environmental needs affect the profitability of businesses. Within a domestic market, different environmental and liability laws determine how to deal with different scenarios such as environmental disasters. The environmental factors that affect Tesla are environmental regulations, public support for the use of green, renewable energy, and recycling (Sharma, 2016). Tesla Inc. is also affected by waste management and the changes in climate regulations.
Tesla inc. has also developed intangible strengths that enable it to compete well against the competition. Tesla positioned itself in the market as a top player in the production of exceptional products. The first product to change the face of the market was the Tesla Roadster, which brought a desire to the type of cars people like. Tesla inc. brought about the construction of large cars different from the small cars associated with electric technology. Tesla Inc. also went ahead to develop better cars and products that could compete with non-electric companies. It produced the cheaper Model S sedan, which went ahead to win various auto awards. The performance of the cars was good to the extent that the company solidified its position. This performance changed p[erspectives of many customers who previously did not like electric cars (GS & LS, 2020). Given their reputation, this became a competitive advantage given their prices were affo0rdable with good performance products.
b. Customer service
Tesla has shown over the years how they treat their customers. Their focus is proven to be about ensuring that the customer gets the best service, the best products, and honest dealing with enough profits. The reputation to uphold integrity and morality is not portrayed by many companies in the market, especially the auto industry. Customers find this reservation comforting and attractive. If the company keeps this system continuing, it will increase more brand loyal fans, and no other competitor can manage and achieve (Sharma, 2016). The human aspect of working with customers is a competitive sustainability advantage.
Another important intangible resource is Tesla has shown repeatedly that it cares more about providing the customer with good service, a good product, and honesty than making a little more money off of them. That kind of reputation for integrity and morality is something long lacking in the automobile world, and there’s no doubt that customers have found it to be very refreshing and desirable (GS & LS, 2020). If Tesla keeps it up, it’s going to gain more and more brand loyalists, and I haven’t seen any sign that other automakers have figured out how to adjust their business approaches to compete in this “human” side of the equation.
Unlike other companies that do not own the exclusive rights to the technology they use, Tesla owns all its patents, increasing value. The patents are competitive advantages and sustainability advantages since they will serve in the future.
d. Outstanding Product Development Capabilities
Tesla products, as mentioned before, are famous for their unique designs, environmental safety, great performance, and efficiency. Their main aim has been to balance maintaining quality while enhancing productivity. The company is also able to maintain the quality of its pro0ducts through its automated production process. Many recalls in the automotive industry face challenges of returns on products due to poor quality.
Management Capabilities and Human resources
Tesla Inc. takes advantage of management capabilities and human resources. The management capabilities are essential for motivating and mobilizing the workforce to be effective and efficient. The strength of the management is evident in the hiring and recruitment and training. The employees and the management have to uphold the vision and strategy of the company, work the required hours, and dedication to achieve the company’s goals. The current workforce determines the company's competitive ability, while the recruiting process creates a sustainability advantage. Tesla hires people who also believe in playing a critical role in the shift to sustainable energy (Chen & Perez, 2018). They hire the best people from other companies who have the skills and passion for meeting these objectives in a constantly changing and innovative world.
a. Location and Infrastructure
The company is situated in an area characterized by innovation and rapid technological advancement, which puts it ahead of the competition. The company also has infrastructure critical to meeting the manufacturing demands and locations across the market to sell their commodities. This factor is a competitive advantage.
b. Innovative production process
To limit the cost of production, Tesla focused on automating their production process to improve efficiency and reduce costs. the production process offers
c. Investment Capability
Tesla Inc. focuses on investments that revolutionize its operations. Their ability to raise the capital necessary to meet their production, marketing, innovation, and management needs is a competitive and sustainable advantage that places them ahead of the rest. Tesla also focuses on investment in research and development to be at the forefront with the latest inventions.
Tesla Inc. has core competencies in vehicle engineering which sets them apart from other companies in the market. They also enjoy the advantages of battery pack technology, top-notch technology, a safe design, and distribution most efficiently. These are core competencies since they form the most critical sectors of the company. These advantages allow them to keep producing their products at the rate that keeps them above the competition.
Tesla's broad differentiation strategy is a long-term play, focusing on electric automobile automation, battery technology, and environmentally friendly products such as solar roof tiles.
Tesla's corporate-level strategy is to penetrate the market at the high-end side, where consumers are willing to incur premium costs to push the market lower. The aim is to reduce prices and increase volumes with every model released. Therefore the strategy is to differentiate their products to reach both ends of the market by accessing the low-cost buyers and the high-end buyers (Chen & Perez, 2018). With this strategy, it varies from the other companies by focusing on research and innovation by investing annually to develop the best innovative environment to raise returns on a large scale.
Business Level Strategy
Tesla uses diversification to enable the company to create new ventures and businesses. In case there are new directions the company seeks to pursue but can affect the current financial position, the company uses this strategy to increase the possibilities of success. They acquire other companies, plants and merge with other companies to come up with new products. A tertiary strategy that Tesla uses is market development. This strategy is critical in entry into the market to develop finances to expand the business globally (GS, & LS, 2020). The strategy enables the company to achieve its global expansion mission and vision by developing great products and solutions that attract customers into any market Tesla enters.
Tesla also uses product development as a strategy to compete. They develop new technology and products that generate new revenue for the company. This strategy allows Tesla to maintain its focus on high-end products and technology that meets the exact needs of the target customers. The primary strategy by Tesla is market penetration which allows it to increase sales in any market it enters (Fisher & McCabe, 2019). The company aims to increase its volume and ensure that they meet a wider market base and more customers.
Recommended Mission Statement
To advance as a company into the ultimate market leader by developing products that can revolutionalize energy use to support every woman, man, and child in leaving a sustainable, profitable, and healthy life.
To develop products that are of excellent quality and great designs. The company's ultimate aim must be to develop for the consumers products that will attract the consumers and meet the customers' needs. Maintaining the company policy of making the customer the center of the company operations is key to future success.
Currently, Tesla Inc. is at the forefront of technological innovation in renewable energy and battery technology. Therefore, advancing in this direction is not a challenge since the precedence exists and there is already a framework to implement the strategy. The company also has an automated production process that is efficient in providing high-quality products. Tesla Inc. should identify the needs of high-end customers and develop the necessary products to meet their needs (GS & LS, 2020).
This venture is expensive and requires a high initial investment and additional funds to maintain research and studies. The company will have to incur additional costs to meet this goal. The market portion capable of purchasing high-end products also forms a small part of the global population. Targeting this small group can prove a challenge as it may not be easy to enter the market. The competition in this industry sector also enjoys great designs, speed, and brand loyalty (Kim, 2020). Penetration into the market will also require additional investment and funding.
To reinvest the revenue generated from the sales of high-end and premium products that can serve the high-income demographic and at the same time provide energy and cost-efficient products for low-income populations. Maintaining this differentiation is key to ensuring that the company vision is achieved globally by covering all classes in society.
Middle and low-income people form a large part of the global population. Channeling funds from selling high-end products and using the revenue to develop energy-efficient products affordable to low-income people is the key to reaching the company mission. The goal of supporting every man, woman, and child can be achieved by focusing on changing the lives of the average citizens. This section of the market is widely untapped since Tesla is the only company ahead in electric technology (Chen & Perez, 2018). Selling to high-income consumers is also a sure way to raise the necessary funds to reach the target audience's needs.
The revenue generated from the sale of high-end products and technology can be used to develop products that can meet the average person's needs with low income. many people in the world are poor, and achieving the aims of global requires serving this demographic. The progress can be expensive and, therefore, can be funded by the sale of high-end technology.
The products should be designed and planned to meet every country's specific and distinct legacies and cultures on an international scale and market. Different customer bases react to different products based on their cultures. Meeting the needs of people according to where they live is a sure way of attracting customers globally. Targeting the global market with differentiated products is the best way to reach the global market. The company should release a wider range of products such as solar tiles, batteries for industrial and domestic use, among others (Dyer et al., 2017). Focusing on the global needs is key to global growth and entry into the global market.
Currently, Tesla is the leader in the automotive electronics industry with great advantages over its competitors. Therefore, the company has built a global reputation as the leader in energy-efficient machines and renewable energy and is positioned to take over the international market. Governments and companies aim to achieve global sustainability, and therefore, Tesla has a niche to take advantage of globally (Chen & Perez, 2018). Being the leader in the market it will be easier to penetrate and achieve the global aim of sustainable energy.
Other companies dominate the global automotive market. There are regional and continental leaders who control certain segments of the market. Achieving this fete, therefore, will require intense expansion, investment, and differentiated products. Focusing on the needs of every portion of the globe will require additional research, more personnel, and more resources to meet the global needs. This strategy, therefore, is long-term (Kim, 2020).
The best strategy to apply is the third strategy. Currently, Tesla has tested the products on a specific part of the market. To achieve global goals of servicing everyone worldwide and developing sustainable energy, the company must focus on global and regional needs to attract new customers. There is also a need to research new products that can meet the needs of low-income and high-income people worldwide. This alternative impacts the world at a large scale and has a higher chance of success due to current green and renewable energy discussions and reducing fossil emissions (Sharma, 2016). Providing green technology is the key to overshadowing the fossil based competitors.
Bučko, A. Protecting Reputation in Crisis: Case Study of Strategic Reputational Risk Management at Tesla Inc.
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors. In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2017). Strategic management: Concepts and cases. John Wiley & Sons.
Fisher, M., & McCabe, M. B. (2019). Tesla: Accelerating to Market. Journal of Strategic Management Education, 15.
GS, D., & LS, M. R. (2020). Customer perception towards tesla electric car’s innovative features. Journal of Contemporary Issues in Business and Government, 26(2), 521-527.
Kim, H. (2020). Analysis of how Tesla Creating Core Innovation Capability. International Journal of Business and Management, 15(6).
Sharma, S. (2016). The Tesla Phenomena A Business Strategy Report.
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