Tesla Company Strategic Management (Research Paper Sample)

Tesla Company Strategic Management
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Executive summary
This is an analytical report that gives the analysis of Tesla Company over the best corporate and business strategies to embrace in order to be successful in the market. Evidently, market development corporate strategy forms the best strategy that the organization will use to take advantage of the growing trend of people shifting towards environmentally friendly practices and renewable sources of energy.
Additionally, the organization seems to be comfortable with the application of hybrid business strategy in which cost leadership and product focus strategies are best applicable. Hybrid business strategy especially with the combination of the major three generic strategies of cost leadership, customer focus and differentiation form the newest and best strategy for competitive advantage.
The evaluation of the strategies using the SAFe matrix reveals that they have high suitability, acceptability and feasibility revealing that the organization will be successful in applying them. Therefore, this report comprehensively covers the aspects as provided.
Contents TOC \o "1-3" \h \z \u Executive summary PAGEREF _Toc514807373 \h 2Introduction PAGEREF _Toc514807374 \h 4Choice of Corporate Strategy PAGEREF _Toc514807375 \h 5Choice of Business Strategy PAGEREF _Toc514807376 \h 8Evaluation of the strategies PAGEREF _Toc514807377 \h 11Suitability PAGEREF _Toc514807378 \h 12Acceptability PAGEREF _Toc514807379 \h 12Feasibility PAGEREF _Toc514807380 \h 13Recommendations criteria PAGEREF _Toc514807381 \h 14References PAGEREF _Toc514807382 \h 17Appendices PAGEREF _Toc514807383 \h 18
Introduction
This report is a comprehensive coverage of the strategic options available for the Tesla Company in the operations process. The report aims at identification and choice of the best corporate and business strategies for Tesla Company and give comprehensive analysis of the chosen strategies regarding how they will be applicable in the organization to bring about organizational effectiveness.
The objectives of this report is to ensure that the best corporate and business options are chosen for the company, which will drive great performance and advancement into the future with the capability of offering a great competitive advantage. There are alternative and variety of organizational strategies but choice on the best strategy that is supportive to the organizational activities (Baroto et al., 2012). A clear differentiation of the strategies emerges from the discussion to determine the best strategy and build on it for the better of the organization. This report therefore puts into consideration the internal and external analysis of Tesla organization, which are key in determining the ability of the organization to pursue into particular strategic objectives and be successful in the motor industry.
Focusing on organizational strategies has become an important practice in organizations as they guide production and other operations processes (Frynas and Mellahi, 2015). This report therefore gives the analysis of the best corporate and business strategy that Tesla organization can apply in their operations process. Previous literature is analyzed ad supportive theories from great scholars in the field of strategic management to support the strategies chosen. The proposed strategies are then evaluated to determine their effectiveness in application for running the organization. Recommendation is then made regarding the implementation and running of the strategy to ensure the best results are achieved. The rationale for this is to ensure effective strategic management and coverage of the basics required for better strategic management. Completeness of the task is also achieved with the comprehensive coverage of the topic of strategic management inclined to a particular organization; Tesla.
Choice of Corporate Strategy
The best corporate strategy for an organization is chosen after looking at the available corporate strategies and determining the best of them. Therefore, the analysis of the strategies is done to determine which strategy can best fit Tesla organization. The best analysis has been given by Ansoff matrix adapted from Hussain et al., (2013) which gives combines the products and markets to determine where an organization can fit with its array of products offering. The matrix is as shown below
Analyzing the above provided matrix, it is evident that the best strategic option that fits Tesla Company is Market Development strategy. This is because the analysis of the product offering of the company in very new across the globe and has only featured in limited areas all over the world. The company itself is new with 15 years of operation in the industry and has only been existing as a publicly listed company over the past 8 years. This implies that its market of operation is limited since it has not spread over to numerous areas to offer its services.
It is also strategically known that a new organization seeking to grow and capture a great market share, the best corporate strategic option to pursue is the market development strategy (Hill et al., 2014). Organizational scholars have revealed that the market development strategic option greatly promotes corporate growth making it to expand and becoming a potentially high earning organization in its sector of operation thus choice of the market development strategy. The strategy involves offering the organizational existing products and services to other new markets (Johnson, 2016). This is because the region of operation has probably been fully served for the past 15 years the organization has been in operation. The organization can therefore comfortably move to other new users of its products such the electric cars, move to new geographies to become international and extend its operations across the continents. The organization also meets the critical success factors such as offering a unique product and well its new strategic capabilities of production and marketing. The market development corporate strategy is therefore important as the organization desires to move to newer and newer markets with its existing array of products.
In strategic management, it is also for the advantage of the organization to take advantage of an existing situation so that it can soar high in its operations using its corporate strategy. The organization is also likely to take advantage of the current situation using the market development strategic option (Frynas and Mellahi, 2015). The current situation trend describes the car industry. The present trend has positively influenced the industry has there have been massive campaign on various platforms from governments as well as environmental protection agencies to promote the use of electric cars instead of petrol or diesel cars. It has been evident that more than 183 governments across the globe have signed the agreement to protect the environment by restricting smoke and carbon emissions, which are the major causes of global warming. Governments are therefore promoting the use of green or renewable sources of energy such as electricity thus electric cars on a higher position of becoming a global solution for reducing smoke emissions from vehicles. With these restrictions, the electric cars are becoming the best option for people for driving to their workplaces. Therefore, with the strategic option of market development, Tesla will seize the opportunity and spread across the globe supplying their major product, which is the electric cars.
The implementation of a corporate strategic option requires that an organization possesses core competencies, which will help it in driving to the required results (Hill et al., 2014). From the internal analysis of the organization, it is evident that Tesla has the required resources that can boost its operations. The physical, financial, brand, organizational and human resources available for the organization are enough to support the strategic option. Among the physical resources is that the organization is able to produce 2000 cars every week, which approximates to 100,000 cars annually. This can serve a considerable market to which the organization can develop. The human capital in the organization is also a great competency as the CEO is full of great experience in car production and a great expert in the production of goods produced by Tesla. The organization also as qualified employees who are over 30,000 in number thus can engage in massive production to serve the market that the organization can develop. The organization also has enough assets that can fully support production and cash to support current operations (Kelty et al., 2010). Their brand is also greatly working in the world, which gives them all the reasons to pursue the market development strategic option.
Additionally, the organization despite having the major product as the electric car, they have other products thus they characterize with significant diversification. The supportive aspect of market development strategy is when an organization has diversified products. This gives the organization an advantage such that in case they fail to effectively sale a particular product in a particular market, they can have another product, which they can effectively sale in the same market to cover up for the costs incurred in operating in the particular market. The evidence of this is that the organization can fail to effectively sale their major product, which is electric cars in certain regions due to the topographies of that region, but in place of the cars, the organ...