ANALYSIS OF TESLA’S BUSINESS STRATEGY
The newly implemented regulations on environmental safety as well as the
restrictions on the vehicle emissions have ushered in the growing market of the fully
electric vehicles. Moreover, the shifting needs and concerns of the customer, coupled
with the technological advancements have brought in a vast change and a competitive
market in the automotive Industry. Tesla is among one of the leading companies in this
sector that took a unique initiative of focusing on the creation of the compelling cars
rather than putting much endeavour on the mass production and marke1t. The paper will
discuss in details the effectiveness and impact of this business strategy through the
parameters of PEST analysis, Porter’s five forces, value chain and Diamond of nation.
PEST analysis of Tesla:
1. Political: Tesla Company operates in various countries where the regulations and
laws are different. The Company has the compulsion of meeting up the requirements of
environmental laws and customer or trade laws in each of their operational area.
Impact on the Company: the political factors that influence the company have
created some of the positive impacts on it. The company can aim at the economic
strengthening by utilising the incentives offered by the government. Since the main
operational area of the company is in developed countries, there is also a more or less
political stability. Thus the environment is favourable for the intensive growth strategy.
, 2. Economic: the increased cost of fuel has been an opportunity for Tesla, being the
electronic car manufacturer. Other economic factors that can affect the business are-
the cost of fuel, the decreasing cost of battery, the economic condition of the population
and others.
1
Stobbe Jr, J.J., 2019
Impact on Tesla: the popularity of electric cars is intensely related with the global
economic growth. Again the decrease in the cost of battery is a boon for the company
as battery is an essential economic factor. This will help Tesla to effectively produce
more EVs.
3. Social: the main social factors that affect the Tesla company are the rising concern of
the customer regarding the environment and regarding the possession of E cars as a
status symbol. This has helped Tesla to a great extent.
4. Technological: the company has made quite a good use of tthe recent technologies
and innovations. Apart from creating the fully electronic vehicle, the company also
invests in the manufacturing of solar panels, electric storages and others. The advanced
functionality of batteries also gives it an added advantage.
The newly implemented regulations on environmental safety as well as the
restrictions on the vehicle emissions have ushered in the growing market of the fully
electric vehicles. Moreover, the shifting needs and concerns of the customer, coupled
with the technological advancements have brought in a vast change and a competitive
market in the automotive Industry. Tesla is among one of the leading companies in this
sector that took a unique initiative of focusing on the creation of the compelling cars
rather than putting much endeavour on the mass production and marke1t. The paper will
discuss in details the effectiveness and impact of this business strategy through the
parameters of PEST analysis, Porter’s five forces, value chain and Diamond of nation.
PEST analysis of Tesla:
1. Political: Tesla Company operates in various countries where the regulations and
laws are different. The Company has the compulsion of meeting up the requirements of
environmental laws and customer or trade laws in each of their operational area.
Impact on the Company: the political factors that influence the company have
created some of the positive impacts on it. The company can aim at the economic
strengthening by utilising the incentives offered by the government. Since the main
operational area of the company is in developed countries, there is also a more or less
political stability. Thus the environment is favourable for the intensive growth strategy.
, 2. Economic: the increased cost of fuel has been an opportunity for Tesla, being the
electronic car manufacturer. Other economic factors that can affect the business are-
the cost of fuel, the decreasing cost of battery, the economic condition of the population
and others.
1
Stobbe Jr, J.J., 2019
Impact on Tesla: the popularity of electric cars is intensely related with the global
economic growth. Again the decrease in the cost of battery is a boon for the company
as battery is an essential economic factor. This will help Tesla to effectively produce
more EVs.
3. Social: the main social factors that affect the Tesla company are the rising concern of
the customer regarding the environment and regarding the possession of E cars as a
status symbol. This has helped Tesla to a great extent.
4. Technological: the company has made quite a good use of tthe recent technologies
and innovations. Apart from creating the fully electronic vehicle, the company also
invests in the manufacturing of solar panels, electric storages and others. The advanced
functionality of batteries also gives it an added advantage.
