Political and Economic Environment
The Political and Economic Environment in the US and Canada, Tesla Corporation has experienced significant success in recent years. In 2017, the company reported $11 billion in revenue for its Model S sedan, despite being criticized for high-priced cars. However, with an increasing importance of renewable energy solutions coming from governments across Europe and Asia, Tesla is struggling to maintain its position on the market.
Tesla is a manufacturer of electric cars and energy storage products for consumers. The company provides its products through direct sales, through an online store, and through company-operated stores. The company designs and manufactures its vehicles in the United States at Tesla Factory, Fremont, in California. Tesla also designs and manufactures its powertrain components in Palo Alto, California using plants in California, Belgium and China. In addition to electric cars, the company also sells renewable energy systems such as solar panels. Tesla has delivered more than 2,250 of its vehicles worldwide. The company offers two luxury electric cars and one all-wheel drive crossover (Liu, 2021). Tesla’s first offering, the Model S sedan, was launched in 2012 and was followed by the smaller sedan Model X in 2015, and the SUV Model X crossover in 2017. Other models include the Model 3 mid-size sedan, and a high-performance sports car called the Roadster. The company also produces stationary battery storage products known as Power packs for commercial use by businesses.
In 2016, Tesla produced 84,062 vehicles, delivered less than 80% of them, and had $7.3 billion in revenue. The company has never turned a profit in its 15 years of existence and has reported only two profitable quarters since its initial public offering in 2010. The company lost $669 million in the first quarter of 2017 and $619 million in the second quarter. In the third quarter (July to September) of 2017 alone, Tesla lost $619.4 million on revenues of $2.
How Tesla dealt with New Entrance threat and Purchasing powers of consumers
Tesla have been able to deal with direct competition through the use of their branding power to create an ideal user experience in terms of upgrading batteries and solar panels. This allows them to control the idea that they are a brand with the best products in the industry and what users can expect from them – with the exception that they don’t need to actually build anything themselves.
The second way they’ve addressed the threat is through direct competition with the likes of Bolt and Nissan. They’ve been able to do so in a way that allows them to control how sure buyers are of their cars with regards to performance, reliability, range, and safety (Cao et al., 2020). This way they’re able to deceive people into thinking that what they want is actually possible when it’s not. While they’ve done well to address the threat of direct competition, Tesla still doesn’t have that many competitors if you consider electric cars in general.
On the other hand, their existing customers might have a hard time purchasing new cars that are above 100 miles – with Nissan’s upcoming LEAF as an alternative. If this is the case, then Tesla may have to look toward their next product line: solar roofs. Their solar roof material could very well be the future of renewable energy, and there’s no telling how far-reaching that market could be.
Fortunately, there’s an easy solution to the problems that Tesla is facing in the industry: make everything that they do better than their competition. As we’ve seen in this post, they’ve done this quite well by creating a more ideal user experience with their solar panels and batteries, as well as through direct competition between cars on the market.
How Tesla can solve threats in future
Tesla Company can meet the threats of new entrance by generating a positive propaganda through information sent to the public. Gaining public trust and approval can be done through events such as a well-known pop star dropping by in Tesla’s latest vehicle or the release of a movie character who is a proud owner of Tesla’s latest car. From the company, incentives can be offered to people who are willing to assist in spreading positive publicity about Tesla Company and its products (About Tesla. Tesla.com. 2022). Another way to gain public trust and approval is through social media platforms such as Facebook and Instagram. By encouraging users to like and share Tesla’s posts, more interest can be drawn by potential customers who will witness numerous positive feedback of the products sold. Another strategy to counter the threats of new entrance is to turn capital into political influence. The business model of Tesla Company requires a large amount of money in order to produce cars at low-cost prices. To be effective in making this business model successful, Tesla needs the help of influential politicians who can influence the Government to open up company tax-breaks.
Tesla Company can prevent threats posed by buyers’ bargaining power by ensuring that Tesla has enough supply of cars on the market, prices can be kept at a low level and technology will not become outdated. By supply of cars on the market, Tesla Company eliminates the bargaining power and price of car buyers. The only way for Tesla to keep prices low is by keeping the number of cars in stock constant. In order to increase this number, more options need to be introduced by Tesla Company such as manufacturing more new models in more colors and changing existing models with improved designs.
About Tesla. Tesla.com. (2022). Retrieved 22 April 2022, from https://www.tesla.com/about.
Cao, J., Chen, X., Qiu, R., & Hou, S. (2021). Electric vehicle industry sustainable development with a stakeholder engagement system. Technology In Society, 67, 101771. https://doi.org/10.1016/j.techsoc.2021.101771
Liu, S. (2021). Competition and Valuation: A Case Study of Tesla Motors. IOP Conference Series: Earth And Environmental Science, 692(2), 022103. https://doi.org/10.1088/1755-1315/692/2/022103
Week 3 Assignment 1
Student’s Full Name
BUS499 Business Administration Capstone
Week 3 Assignment 1
Tesla, Inc., previously Tesla Motors, is an American producer of electric automobiles, photovoltaic panels, and automotive and residential energy storage batteries. Martin Eberhard and Marc Tarpenning, American entrepreneurs, formed it in 2003 (Liu, 2021). It was founded to develop an electric sports automobile. Today, Tesla is the largest growing brand worldwide in 2021 with its core product, electric cars, leading the electric car sector globally. Tesla’s strategy for adapting to changing circumstances is to create new services and commodities that appeal to a broader range of buyers (Liu, 2021). Tesla Motors has branched out its activities overseas, inclusive of the various sites within the US and China; their objective is to remain competitive in the specialized sector. The company’s long-term aims remain unknown based on the data obtained.
Globalization is a phenomena that affects the social, cultural, political, and legal spheres. Globalization, according to Lui (2021), is the process through which commodities, innovation, data, and employment expand across international borders and cultures. From an economic standpoint, it signifies to the global interaction of countries encouraged by free commerce regulations. Globalization provides various organizations and corporations with numerous advantages improving their competitive potential (Liu, 2021). They can reduce expenditure in operating resources by exploiting international variations in cost of resources labor and more critically, taxes and tariffs. The overall outcome is increasedget access to millions of new consumers with reduced operation costs.
Nevertheless, when addressing the reasons for Tesla going global, they are numerous, but the core factors included market accessibility, efficiency in production, and fulfilling the company’s objective. The objective of Tesla, Inc., according to its website, is to create and market a product that enables a far more self-sustaining use of the environment (Liu, 2021). Environmental problems are critical in the transportation business; according to Akakpo et al. (2018), the transportation sector accounts lasted for approximately 70% of worldwide oil consumption and over 55% of greenhouse gas emissions that damage the environment (Akakpo et al., 2018). As environmental issues are global in scope, it is critical to encourage the use of electric cars globally, not only in the United States. As a result, one of the reasons Tesla Motors is expanding abroad is to accomplish its objective.
From a market availability perspective, Lui (2021) reported a significant net loss for the quarter ended March 2011; total sales were stated as approximately $50 million, but net losses totaled almost $49 million . It indicated that expanding into the worldwide market was important for the firm to raise prospective sales and earn profits (Liu, 2021). Tesla Motors was able to receive a variety of privileges from the Norwegian and various US state governments, which aided the firm in becoming the country’s best-selling brand (Liu, 2021).
Further, the Chinese government gives various benefits to Tesla Motors that enable the firm to sell its cars more profitably in the Asian market. Moreover, there are strong cultural and technological settings in China that present a significant chance for the organization to develop (Liu, 2021). Due to government rules in some nations, selling automobiles in specific foreign countries allow the firm to earn a higher profit per vehicle sold, making its approach to growth more appealing to the business.
Tesla faces stiff competition from a slew of established automotive brands. Coupled with the amassed fanbase or community throughout their lengthy existence, Tesla faced immense competition as a new startup company. The Tesla brand’s most precious asset was its reputation and prestige. Through the current CEO, Elon Musk, the company’s competitive edge stems from his active and personal involvement in social media. Tesla keeps the public informed about its goods and innovative services throughout its research and manufacturing processes. While most businesses utilize social media posts as marketing platforms, Tesla uses frequent and consistent updates to communicate their company’s narrative or operations (Cao et al., 2021). Thus, it exploits social media to gain a positive rapport with the public in the form of transparency. Tesla also prospers as a result of its good sentiments. The business advocates for ecologically sustainable technologies and shares its enthusiasm with the social media community (Cao et al., 2021). It establishes a visceral connection with the business.
Moreover, it should be noted that though, Tesla is an automotive company, it can also be regarded as a Tech. company due to the immense exploitation of computer software and hardware in their products. Tesla’s innovative entertainment platform, customer experience, and self-driving technologies are all powered by software (Teece, 2018). Tesla has been using over-the-air upgrades for years, but other automakers are only now beginning to experiment with the technology. Tesla vehicles are equipped with operating systems that have been created and are continually being enhanced by Tesla employees and technicians. Tesla also manufactures a variety of other sorts of technology, including photovoltaic arrays, solar rooftop tiles, several varieties of energy storage devices, electric charging infrastructure, computers, and important computer components for automobiles (Teece, 2018).
Industrial Organization Model
Market structure is critical for adaptable company strategies to succeed in a competitive climate. Competitive strategies should be successful and well-designed in the business’s environment. Market structures also provide information about the competitive market in which the business or corporation competes. The market structure’s features influence the competitive strategies in a marketplace. Nevertheless, Tesla’s primary goal is to accelerate the transition from relying on the hydrocarbon energy source to a sustainable, solar-electric economy. Currently, the electric vehicle-manufacturing sector is classified as an ’emerging industry.’ Typically, an emerging sector comprises a few businesses and is dependent on breakthrough technology. Thus, based on the appreciation of Tesla’s marketplace, it can be argued that it is oligopolistic. The reasoning is founded on the fact that it has few dealers of the same product, and currently Tesla is the leading retailer and manufacturer in the US. The company has the determining control over the value of input resources. The notion primarily addresses battery cells that enable the company to create luxury electric vehicles whilst selling them in the price range of a midsize vehicles.
RBV (resource-based model) is a strategic instrument and system used by businesses and institutions to explore and exploit strategic resources to create a long-term competitive advantage. The RBV categorizes corporate resources as tangible or intangible; thus, according to Arbelo et al. (2020) among the tangible resources, Tesla, Inc’s property covers all places declared and leased by the company for manufacturing and warehouse operations. In addition, any packing facilities declared or leased are considered physical resources beneath the land. Additionally, the equipment used by the company is regarded as a tangible resource that comprehends of all manufacture, bundling, and other running equipment (Arbelo et al., 2020). It is noteworthy that the company’s tools are considered as an addition of its product range and integrates economies of scale.
Also, materials comprise all raw resources and bundling materials used by Tesla Motors to assemble and pack its goods. The materials are tangible and easily reachable by competitors for industrial operations among other applications. Tesla Motors suppliers include all materials and items utilized to support the company’s packaging and production processes. Finally, supplies also comprise all items and materials required by other Tesla Motors operations to achieve corporate goals and targets.
The intangible resources include the company’s brand; Tesla Motors’ brand name is instituted on years of offering high-quality commodities and warranting consumer confidence. Competitors are unable to imitate the company’s brand status, which is founded on its organizational culture and exceptional customer relationship. Other intangible resources include intellectual property rights that protect Tesla Motors’ production techniques and product originality, preventing competitors from duplicating or accessing its exclusive product blend, components, and inputs. It ensures Tesla Motors’ uniqueness and renders its products competitive. The combination of both tangible and intangible resources has allowed the company to augment its revenue generation, allowing for increased diversity and efficacy.
Tesla’s mission statement is “to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles (“About Tesla”, 2022). The statement acknowledges that the world has advanced to a state where sustainble energy should take priority. Tesla’s emphasis is on utilizing renewable energy to drive all forms of automobiles. The vision statements include “most compelling automobile company” and “migration to electric vehicles,” both of which are important for the firm to accomplish its mission statement.
Tesla’s original mission statement stated, “to accelerate the world’s transition to sustainable transport” (“About Tesla”, 2022) Nevertheless, in 2016, under Elon Musk’s management, the company’s mission was altered to “to accelerate the world’s transition to sustainable energy.” The new proclamation reflects a understated but fundamental move in the company’s business strategy to exploit sustainable energy investment opportunities. In some ways, the new goal acknowledges the company’s other activities such as battery cells’ development and related energy storage technologies’.
Tesla’s significant stakeholders include stockholders, government and financial firms, and the general public. The company’s vision, objectives, targets, milestones, significant challenges, and big successes are communicated to various organizations (Cao et al., 2021). Tesla Motors Inc. has kept in touch with its stakeholders through social media, as previously mentioned, and the corporate website. The corporation announces its yearly audit of operations on its website; it typically includes financial statistics, assets and assessments, risk factors, commodities, amenities, networks, and structures (Cao et al., 2021). The firm also interacts with its stakeholders by holding yearly shareholder conferences with webcasts for those unable to attend in person. They also hold quarterly “Q&A” conference calls, and factory tours for those captivated in their production process and processes.
1. Hitt, Ireland, & Hoskisson. 2020. Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning
2. About Tesla. Tesla.com. (2022). Retrieved 22 April 2022, from https://www.tesla.com/about.
3. Akakpo, A., Gyasi, E., Oduro, B., & Akpabot, S. (2018). Foresight, Organization Policies and Management Strategies in Electric Vehicle Technology Advances at Tesla. Futures Thinking And Organizational Policy, 57-69. https://doi.org/10.1007/978-3-319-94923-9_3
4. Arbelo, A., Arbelo-Pérez, M., & Pérez-Gómez, P. (2020). Profit Efficiency as a Measure of Performance and Frontier Models: A Resource-Based View. BRQ Business Research Quarterly, 24(2), 143-159. https://doi.org/10.1177/2340944420924336
5. Cao, J., Chen, X., Qiu, R., & Hou, S. (2021). Electric vehicle industry sustainable development with a stakeholder engagement system. Technology In Society, 67, 101771. https://doi.org/10.1016/j.techsoc.2021.101771
6. Liu, S. (2021). Competition and Valuation: A Case Study of Tesla Motors. IOP Conference Series: Earth And Environmental Science, 692(2), 022103. https://doi.org/10.1088/1755-1315/692/2/022103
7. Teece, D. (2018). Tesla and the Reshaping of the Auto Industry. Management And Organization Review, 14(3), 501-522. https://doi.org/10.1017/mor.2018.33
Figures title: 7
Week 8 Business-Level and Corporate-Level Strategies Assignment
Student’s Full Name
BUS499 Business Administration Capstone
Template Instructions (delete this page before submitting)
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Week 8 Business-Level and Corporate-Level Strategies Assignment
Write your introduction to this 6 page paper here. Include one paragraph (not more than 6 lines of text) that explains what your paper will discuss. Much of your introduction may be taken from the assignment instructions (in your own words). Read all assignment resources to understand what should be included in your paper. Be sure to review the assignment instructions in Blackboard, the grading rubric, and relevant course announcements to understand the requirements. Do not exceed 6 lines of text in this introduction. There should be no direct quotes in this section. After reading these instructions, replace this blue text with your introduction and change the font color to black.
Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm. You will also need to determine whether or not you judge this to be a good choice (Note: in this step you need to choose and write about only one business-level strategy from the text book (not Google). Hint: See Figure 4.1 in the textbook. Include a thorough justification for your choice that is backed by facts and sound judgement. For background, be sure to research and explain the industry in which your selected corporation operates. You could also briefly (1 – 2 sentences) define the business-level strategy (cite your sources) you are writing about using the textbook/Learn, as an introduction to your analysis. Read Chapter 4 in the course textbook. Review the Week 4 Learn Reading for supporting content. Your response here should demonstrate that you understand the key concepts regarding the selected business-level strategy and can apply them to a real-world corporation. Keep in mind that this is a 6 page paper and as such your analysis should thoroughly address the concepts discussed in the course. Avoid unsubstantiated statements, extended introductory commentary, direct quotes, and unrelated content. Strive for about 1 ½ to 2 pages of well-constructed, in-depth analysis in this section.
In this section, you could research and identify the core competencies your chosen firm uses to implement its business-level strategies and discuss their effectiveness. You could also demonstrate from your research how the firm uses its core competencies to create and sell its products in the marketplace. Consider the actions & choices your firm has made to compete in individual product markets. Review Chapters 4-9 for specifics on the business-level strategies. Your response should clearly identify the one business-level strategy from the textbook that you think is most important to the long-term success of the corporation. Your response must also include a clearly stated and justified judgement on whether that strategy is a good choice. Include enough content and depth to demonstrate a thorough analysis of your selected corporation’s business-level strategy. Remember that this is a 6 page paper and as such, you will need to dig deep. After reading these instructions, replace this blue text with your analysis and change the font color to black.
Analyze the corporate-level strategies for the corporation you chose to determine the corporate-level strategy you think is most important to the long-term success of the firm. You will also need to determine whether or not you judge this to be a good choice. (Note: in this step you need to choose and write about only one corporate-level strategy from the text book (not Google). Hint: See chapter 6 in the textbook. Include a thorough justification for your choice that is backed by facts and sound judgement. You could also briefly (1 – 2 sentences) define the corporate-level strategy (cite your sources) you are writing about using the textbook/Learn, as an introduction to your analysis. Read Chapter 6 in the course textbook. Review the Week 6 Learn Reading for supporting content. Your response here should demonstrate that you understand the key concepts regarding the selected corporate-level strategy and can apply them to a real-world corporation. Keep in mind that this is a 6-page paper and as such your analysis should thoroughly address the concepts discussed in the course. Avoid unsubstantiated statements, extended introductory commentary, direct quotes, and unrelated content. Strive for about 1 ½ to 2 pages of well-constructed, in-depth analysis in this section.
Your response should clearly identify the one corporate-level strategy from the textbook that you think is most important to the long-term success of the corporation. Your response must also include a clearly stated and justified judgement on whether that strategy is a good choice. Include enough content and depth to demonstrate a thorough analysis of your selected corporation’s corporate-level strategy. Remember that this is a 6 page paper and as such, you will need to dig deep. After reading these instructions, replace this blue text with your analysis and change the font color to black.
Analyze the competitive environment to determine the corporation’s most significant competitor (this will require research outside of the course material). Compare their strategies at each level and evaluate which company you think is most likely to be successful in the long term. Justify your choice. Hint: read chapters 1 through 10 in the course textbook as they provide a solid background for this section. Review the Week 1 through 8 Learn readings for supporting content. Remember that this is a 6 page paper and requires a thorough competitive analysis. Strive for about a 1 ½ to 2 pages of well-constructed, in-depth analysis in this section. Cite your sources and avoid the use of direct quotes. After reading these instructions, replace this blue text with your analysis and change the font color to black.
Determine whether your choice from Question 3 (Competitive Environment section above) would differ in slow-cycle and fast-cycle markets. It would be a good idea to briefly explain what the slow-cycle and fast-cycle markets are from the textbook (cite your sources) as a short introduction to your determination. Hint: read Chapter 5 in the course textbook. Remember that this is a 6-page paper and therefore each section requires a thorough response that demonstrates your understanding of key concepts covered in the course and your ability to apply them to a real-world corporation. Cite your sources and avoid the use of direct quotes. After reading these instructions, replace this blue text with your response and change the font color to black.
1. Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization 13th ed. Cengage Learning.
2. Author. Publication Date. Title. Page # (written as p. #). How to Find (e.g. web address)
3. Author. Publication Date. Title. Page # (written as p. #). How to Find (e.g. web address)
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