Tesla Global Strategy AND Sustainability PDF

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GLOBAL STRATEGY & SUSTAINABILITY REPORTTESLA

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CONTENTS

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INTRODUCTION.......................................................................................................................................................................9

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External Analysis.........................................................................................................................................................................9 3.1

PESTEL Analysis................................................................................................................................................................9

3.1.1

Political Factors...........................................................................................................................................................9

3.1.2

Economic Factors......................................................................................................................................................10

3.1.3

Social Factors............................................................................................................................................................11

3.1.4

Technological Factors................................................................................................................................................11

3.1.5

Environmental Factors...............................................................................................................................................11

3.1.6

Legal Factors.............................................................................................................................................................11

3.2

4

Analysis of TESLA’s Five Forces.....................................................................................................................................11

3.2.1

Bargaining power of suppliers:..................................................................................................................................12

3.2.2

Bargaining power of buyers:......................................................................................................................................12

3.2.3

Threat of substitutes:..................................................................................................................................................12

3.2.4

Threat of New Entrants:.............................................................................................................................................12

Internal Analysis........................................................................................................................................................................13 4.1

Strategic Capability Analysis: swot...................................................................................................................................13

4.1.1

Tesla's strengths.........................................................................................................................................................13

4.1.2

Tesla's weaknesses.....................................................................................................................................................13

4.1.3

Tesla's Opportunities..................................................................................................................................................14

4.1.4

Tesla’s Threats...........................................................................................................................................................15

4.2

Evaluation of Corporate Level Strategy.............................................................................................................................17

4.2.1 4.3

VRIO Analysis of Tesla Motors:................................................................................................................................17

Competitive advantage......................................................................................................................................................19

4.3.1 5

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So how is Tesla going to reach a long-term sustainable position?..............................................................................19

International Strategies Tesla employed in the foreign market:.................................................................................................20 5.1

Direct selling.....................................................................................................................................................................20

5.2

Strategic Positioning of Stores...........................................................................................................................................20

5.3

recommendations to compete in the global environment...................................................................................................20

5.3.1

Upcoming challenge by Volkswagen.........................................................................................................................20

5.3.2

Managerial Implications:...........................................................................................................................................21

Corporate Level Strategy and Business-Level Strategy.............................................................................................................21 6.1

Recommendations.............................................................................................................................................................21

6.1.1

Enhanced market involvement...................................................................................................................................21 1

6.1.2 7

Target Customer Examination....................................................................................................................................22

Tesla – Ethics, CSR Programs and Initiatives............................................................................................................................22 7.1

Employee Health and Safety at Tesla.................................................................................................................................22

7.2

Tesla Ending Discrimination.............................................................................................................................................22

7.3

CARBON EMISSIONS BY TESLA.................................................................................................................................23

7.4

Tesla other CSR Initiatives................................................................................................................................................24

7.5

Recommendation...............................................................................................................................................................24

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Conclusion.................................................................................................................................................................................24

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References.................................................................................................................................................................................25

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Appendix...............................................................................................................................................................................26

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Self Evaluation.........................................................................................................................................................................8

11.1

PART A – Business Report....................................................................................................................................................8

11.2

PART B – PowerPoint Presentation....................................................................................................................................13

List of figures Figure 1Tesla Lobbying details (Tesla Motors Lobbying Profile, 2021)................................................................................10 Figure 2(Infographic: The Electric Cars That Will Get You the Furthest, 2021)..................................................................................13 Figure 3(Infographic: Why Tesla's Cybertruck Makes Sense, 2021)...................................................................................................14 Figure 4(Infographic: Self-Driving Cars Still Cause for Concern for Pedestrains, 2021)......................................................................15 Figure 5 Underrepresented communities representation at Tesla US.................................................................................................23 Figure 6 Underrepresented communities in leadership positions at Tesla US....................................................................................23 Figure 7Average lifecycle CO2 emissions by Tesla vehicles.............................................................................................................24

List of Tables Table Tesla Motors VRIO Table…………………………………………………………………………………………………………………………………………………………………………….13

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INTRODUCTION Because of its unique ideas and the breath of fresh air it has brought into the automotive sector, Tesla Motors has gained a lot of attention in recent years in an era when disruption is one of the most used words in the company. The approach taken by Testla as part of its worldwide business strategy will be examined in this report to assess how well-aligned it is and how likely it is to succeed in the current market and competitive environment. An extensive external and internal analysis will be conducted followed by CSR and ethical strategies and recommendation for improving the corporate overall strategies to build a firm market place globally.

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3.1

EXTERNAL ANALYSIS

PESTEL ANALYSIS

3.1.1 Political Factors Since the US government demonstrated interest in energy sources and electric vehicles, Tesla received $465million loans from the Department of Energy for low interest rates. Tesla paid down the loan, but could not attract as many investors without it. Tesla participates in lobbying in a way that favours his firm in the external political environment. On the other hand, Electric car makers only employed 24 lobbyists in 2020, spending a little more than USD 360,000.00 on lobbying.

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Figure 1Tesla Lobbying details (Tesla Motors Lobbying Profile, 2021)1

Tesla intends to distribute vehicles directly from the manufacturer to the user in order to cut out the middleman, the private dealership. According to a Justice Department analysis from 2009, buyers would save roughly $2200 (3) if they bought cars directly from manufacturers. So, what's holding them back? 3.1.2 Economic Factors While growth in the United States is modest, consumers have not ceased buying cars on loans with 'deals' such as 0 percent funding. The gimmick that most people do not know about is that when the car is sold, there is already a greater interest in the MSRP and the base price is increased while at the same time the consumer gets a fair deal over the long term. (Source: Paul Fisher, Spring 2013). Intermediate Accounting). With progressively climbing stock prices, Tesla has risen from the slump. Although it was a little corporation, the public was highly hopeful about the future of the company. 1 OpenSecrets. 2021. Tesla Motors Lobbying Profile. [online] Available at: [Accessed 5 September 2021].

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3.1.3 Social Factors The idea of using sustainable resources to spend our tax on sustainable fuels and products, is encouraged by many residents. Even after a large number of public loans have been offered to Americans, they have not succeeded in supporting attempts to build a sustainable economy. Greening is a popular term nowadays Organizational management must ensure that tactics serve to optimise these external effects' commercial advantages. 3.1.4 Technological Factors Tesla's business is based on technology. As previously said, it all started in Silicon Valley, California. They are a pioneer in automotive innovation, and they continue to improve and influence battery technology and electric car efficiency. The Roadster 3.0 prototype's battery, aerodynamic, and rolling resistance improvements resulted in efficiency gains of 40-5 percent, giving it the first vehicle with a predicted range of 400 miles. Tesla's automotive and energy solutions development is reliant on the technology available. Materials engineering technologies, for example, are judged on their efficiency and cost-effectiveness. 3.1.5 Environmental Factors Fuel-free automobiles are excellent, but the use of power generated by coal-fired facilities negates the objective. Tesla develops battery packs that are used in conjunction with solar panels to make Tesla eco-friendly with abundant energy from the sun. 3.1.6 Legal Factors Michigan is the latest in at least 5 nations and Tesla has barred sales, commitment or testing applications. Every consumer can view the cars and place an online order in a gallery. HB 5606, forced by all manufacturers to hold third party distributors, was just enacted by Michigan. The difficulty is that car sales make dealers and repairs only as much money. The human resources and business partnerships of the organisation are also subject to legislative restrictions. 3.2

ANALYSIS OF TESLA’S FIVE FORCES Let us see how these forces function and how Tesla can compete best in the car industry.

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3.2.1 Bargaining power of suppliers: Tesla's case differs slightly from that of other automobile producers who need to produce thousands of vehicles from various suppliers. In comparison to the 200 moving components for an internal combustion engine in the typical train, the company reports that its train has only 17 moving components. Traditional cars are not only complex with their motors but need a large number of pieces to be mounted. The ability to integrate retroactively also helped to reduce the company's reliance on its suppliers. In partnership with Panasonic, the company manufactures batteries at Nevada Giga fabric. The company sources out battery providers to fully focus on car construction. However, one of Tesla's most important components can be a lack of batteries. This is the reason why the overall negotiation leverage for Tesla suppliers is moderate. 3.2.2

Bargaining power of buyers: In the Tesla scenario, for numerous reasons, the buyer's leverage for negotiation is small. Firstly, when the number of suppliers and multiple substitutes are available on the market the negotiation capacity of the buyer will be enhanced. However, Tesla is also fairly small, whereas competition is weak, for a number of vendors employing totally electric automobiles like Tesla. The components of Tesla are highly diverse and make a significant leverage for the Company in negotiations. Its cars are better to competitive electric vehicles on the market as far as the performance is concerned. These cars make driving pleasure more attractive than competitors.

3.2.3

Threat of substitutes: The menace of substitutes is moderate in the case of Tesla, since there are few companies that can compete with cars from Tesla. Tesla's cars are also in each category, where technological innovation is at stake, in order to guarantee superior power cars in the maret. Polestar from Volvo was the only vehicle to emerge as a credible contender to Tesla's model 3. The Tesla 3 model still has little room for other items due of its great popularity. The market share of Tesla in the US is at least 60%. It leads on EV brands in China as well.

3.2.4

Threat of New Entrants: In addition to the large capital they require for entry into the car industry, companies need to invest in technological knowledge and human resources. Marketing and brand awareness also require a major investment. Although a new player invests significant capital in the infrastructure and marketing necessary, it cannot gain market share overnight. The regulatory barriers that prevent new players from entering the market are also very high.

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3.2.5 Intensity of rivalry for current players Extensive rivalry exists between established firms in the car sector. In addition to the vast number of world players in the business, increasing demand for automobiles has altered the level of competition in the sector. Tesla produces exclusively electric vehicles, but also competes on the market with premium brands. Different Premium car models are made from Hybrid products that are competitive with Tesla cars. The company has released Polestar, which is a strong competitor in the EV segment, in some areas in line with Tesla's performance. 4

INTERNAL ANALYSIS

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4.1

STRATEGIC CAPABILITY ANALYSIS: SWOT This SWOT analysis of the company itself provides an overview of every factor in Tesla's business model.

4.1.1 Tesla's strengths In the race of the greatest electric cars, Tesla left every other manufacturer behind. In comparison with their range, Tesla's electric cars have proved best. The recent comparison shows that Tesla is classified in three positions. Tesla Model S will get you as far as possible - up to 600 kilometres with a single battery charge. The 520 kilometre long Opel Ampera is the brand closest to it.

Figure 2(Infographic: The Electric Cars That Will Get You the Furthest, 2021) 2

4.1.2 Tesla's weaknesses In the SWOT analysis, weaknesses are identified by all internal factors of an enterprise causing damage or limitations.

2 Statista Infographics. 2021. Infographic: The Electric Cars That Will Get You the Furthest. [online] Available at: [Accessed 5 September 2021].

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4.1.2.1 If the demand is not met, it might affect the brand value The Tesla supply and demand could be uneven and unable to meet the production requirements due to highly experimental and sophisticated processes. Indeed, its delivery rate is somewhat frightening in the first quarter of 2019. In the first quarter of 2019, the company delivered 63 000 cars, down 31% from the past quarter. 4.1.3 Tesla's Opportunities The company's emerging growth opportunities are highlighted in the opportunity section of this SWOT Analysis. Tesla intends to manufacture its own battery cells in order to bring battery manufacturing technology in-house. The move could aid the company in increasing production rates while lowering costs. 4.1.3.1 Pick-up truck introduction Pickup trucks accounts for 17,6% of the US automobile industry, which provides a great chance for growth in electric vehicles, according to the National Automotive Dealser Association's Market share dat...