Analysis of Tesla Motors Business Strategies (Essay Sample)

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Analysis of Tesla Motors Business Strategies
Introduction
Currently, the car assembling and trading business sector is extremely aggressive and highly competitive, particularly in the field dealing in alternative fuel automobiles that has ended up being more prevalent with the ascent of natural and green environmental concerns. In order to understand the aspects present in the industry, this research paper will depict the electric vehicle assembling organization known as Tesla Motors, and how it can deal with the compelling rivalry from well-established and premium vehicle manufacturers.
The report begins from presentation of the actual Tesla Motors' organization and how it operates. The next element to be examined is the organization’s vital position which will be examined through primary system models, including PESTEL and Porter's five major forces structures, Value Chain as well as SWOT analysis. Subsequently, in view of the discoveries from the models the conclusion and a concrete recommendation will be given.
Company Background and history
Tesla Motors is company that was created in 2003 under Martin Eberhard and Marc Tarpenning (Tesla, 2). The two were Silicon Valley engineers, and they created the company as an electric automobile manufacturer through various production strategies. In addition, in 2006 the organization decided to launch the generation of the first electric sports vehicles which included the Roadster, that in the end sold 2,250 cars. These days, Tesla Motors gives force train segments to automobile manufacturers such as Daimler and Toyota, plans and produces Model S (Tesla.com), the first world's premium zero-emanation car that turned into the third top rated all-electric automobiles in the U.Sand Europe (Tesla, 12) The organization is currently worth over $25 billion, a value that is roughly half of the value of General Motors (GM). Besides, the company is one of the highest contributors of growth rate in the United States. The Success of the company has been credited to its product Engineer and CEO Elon Musk who has very robust strategies for the company who has an extremely solid vision of organization's future.
PESTEL Analysis
The PESTEL analysisdirectly and comprehensively evaluates the industry’s external environment elementsin order to identify theoverallavailable opportunities and dangers of specific procedures, on the grounds that progressions in these elements can prompt the huge change of businesses, particularly as time goes on. Specifically, PESTEL mainly highlights Political, Economic, Social, Technological, Environmental as well as Legal variables.
Political
With offering autos in 17 nations of North America, Western Europe and Asia (Tesla, 24), Tesla Motors needs to manage unique political examples affecting its business operations. One of the major political components influencing the business is natural assurance laws to impel creation of more natural automobiles to meet strict discharge levels. The second imperative component is US government vitality advance programs for innovative work of new vehicle innovations. For this situation, numerous automobile producers will be occupied with entering the business.
Economic
Financial elements incorporate monetary development in the option vitality commercial enterprises and increment in the expense of utilizing the automobiles fundamentally because of the ascent in fuel costs in the brief time. In this manner, the interest for more-proficient automobiles is higher than in the recent past. Consequently, recuperation of GDP and the rising rate in the majority of the slowly developing nations from the recessionary period that happened in 2008/2009 has a huge effect on the client buying power.
Social environment
Social components are identified with expansion natural concerns, mentality and stress on items, which are eco-friendly. In addition, without a doubt the current society judges individuals focused around the sort of the automobile they buy and the thought of having electric vehicles enhances the societal position of a single person. An alternate social change is increment in maturing number of people with most riches and funds, who would prone to use more cash on premium electrical automobiles (Schilling, 20).
Technological environment
Engineering headway, quick globalization and Internet effect have an enormous impact on the automobile business. Throughout the most recent years, much engineering progression has taken place inside the business, including the presentation of completely electrical automobiles and computerization of autos that permitted car driving and keep drivers from mishaps. This prompts more mixed bag and more changes in wellbeing and accommodation of various cars later on.
Environmental factors
Currently, numerous carassemblers have confronted the aggressive weight to produce eco-accommodating or fuel-saving vehicles. Natural components, for example, expanding attention to environmental change lead to changes in operations and organizations' items and administrations, in light of the fact that clients are getting more mindful of ecological impacts of generation.
Legal
Numerous regulations emanate from governments presenting vitality credit projects and putting weight on creation eco-accommodating automobiles, for example, licensing companies to join the new techniques for green business and working towards reducing the effects of wastes from vehicles on the environment.
From the PESTLE analysis above, it is imperative to acknowledge the fact that Tesla Motors has to cope with all the external environmental factors in order to achieve most of its objectives. From the case 14, it is evident that the company has worked its way towards success by following the PESTLE strategies and by ensuring that its activities go in line with the government demands.
The Porters Five Forces
Porters Fiver Competitive forces are some of the most essential tools that Tesla Motors has to use in ensuring that it achieves competitive advantage in the car manufacturing sector. The company needs to identify some of the most desirable strategies and use them towards achieving the best part of the market share.
Threat of new entrants
Currently, the electric vehicle industry has the highest risk from the threat of new entrants. Having entered the industry in 2003, Tesla also faced the difficulties of being a new entrant in a market that needed high capital and had increased problems that rose from building a brand name to indifferent distributors. However, Tesla managed to pass through this and is still on the verge to become the highest market holder in the industry.
Buyers’ Bargaining Power
The general bargaining power vested on the buyers is uncertain and Tesla had to rely on their closeness with Daimler and Toyota in order to please the buyers. These companies are some of the buyers of Tesla hence making it achieve competitive advantage in the market. The government has also increased the directive of selling electric cars hence being some of the buyers of Tesla.
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