Business Strategy for Evaluation of TESLA

Learning Outcomes

LO1 – Explain the impact and influence which the macro environment has on an organization.

LO2 – Identify an organization’s internal environment and capabilities.

LO3 – Explain and use the outcomes of an analysis using Porter’s Five Forces model to a   given market sector.

LO4 -Highlight the models, theories and concepts to assist with the understanding and interpretation of strategic directions available to an organization.

Scenario: Tesla Motors: the future is electric!

Tesla was established in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, easier  and more fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products.

The Tesla Roadster is a enormously quick car with a difference. There’s no wheel spin, no traction control stutter, etc. The Tesla Roadstar is the essential product of Tesla Motors. Its mesmerizing chairman and main founder is PayPal co-founder, and SpaceX CEO Elon Musk. Barely a decade old, Tesla Motors is already gigantic, $33Bn (£20bn) market capitalization. It’s been called ‘the world’s most important automotive company’ and the Tesla S, ‘the most loved vehicle in America’. Out selling Mercedes S class and BMW 7 series. And yet the last successful American car start-up was Ford, founded 111 years ago. How can Tesla Motors be so successful?

Tesla’s  main strategy was:

To enter at the high end of the market, where customers are ready to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each succession model. When someone buys the Tesla Roadster sports car, they are actually helping pay for development of the low cost family car.

Tesla aimed to produce zero emission electric power generation from their ‘giga’ battery factory in line with their ‘overarching purpose to help expedite the move from a mine’-and-burn hydrocarbon economy towards a solar electric company. In 2015, Tesla energy was launched selling batteries for home and business use.

Edison didn’t invent the lightbulb, but he made it affordable and accessible through his electric system. Tesla is also aimed to offer an energy system for a world of electric vehicles, homes and businesses, using batteries.

You are suggested to use this case study. Alternatively, you could use your own place of work or the company you would like to work for or any other company of your choice.

You have been selected  as a Junior Strategy Manager and you have been asked by your line manager to produce an environmental analysis and strategic growth management plan, based on the use of recognized internal and external analytical tools.

TASK 1: ( LO1, LO2,LO3) 

Prepared an internal and external analysis that provides a basis for strategic planning.

1. Prepare PESTLE and SWOT of the organisation and an analysis of the organisation’s internal environment and capabilities.
2. Also produce an analysis of the competitive environment of the organization using Porter’s Five Forces Model.

TASK 2: (LO4)

Create a strategic plan based on the environmental analysis and findings in task 1:

3. To include an evaluation of the different types of strategic directions available to the organisation.
4. A justification and recommendation of the most appropriate growth platform and strategies.
5. And produce a strategic management plan with strategies, objectives and tactics.