Introduction
Tesla is among the leading players within the scope of the automotive industry. Through the years, it has been demonstrating a great extent of competitiveness, innovativeness, and success. This is reflected in its profit margins and stable market performance, which is essential under the conditions of severe rivalry. The below discussion will explore Tesla’s strategic foundation, as well as external and internal factors affecting the company, to define the basics of its competitiveness.
Globalization
The Tesla Motors corporation decided to enter the foreign market for a variety of reasons. First, it is important to note that the company’s website states that its purpose is to produce and market a product that would enable more sustainable use of the environment. Environmental issues are quite important when it comes to the transportation business; according to certain data, this industry is responsible for about 70% of the world’s oil consumption as well as for around 57% of greenhouse gas emissions that are harmful to the environment (Liu, 2021). Furthermore, it is crucial that several nations pay attention to ecological issues on a global scale. Governments are prompted by environmental consciousness to offer certain unique benefits to businesses that support the development of environmentally friendly technology.
It should be noted that although Tesla Motors has only just started growing globally, the company has already had a lot of successes there, sometimes even overtaking the competition as the top brand. Because environmental concerns are a developing global concern, using cutting-edge, environmentally friendly technologies was the primary element in its success (Liu, 2021). If the company continues to place a strong focus on the ongoing use of cutting-edge technology, it could be able to predict the company’s future success.
Technology
Technologies now in use will determine how far Tesla’s automobile and energy solutions businesses progress. For instance, the company’s batteries’ performance and cost-effectiveness are determined by materials engineering technology. The rapid advancement of technology is both a potential and a risk. The fast pace gives Tesla a chance to advance the technology in its products. The same external element, though, poses a threat to the business since it might cause the technology utilized in its goods to quickly become obsolete. Nevertheless, the trend of growing commercial automation offers the opportunity (Tesla Inc., 2021). For instance, Tesla may expand by further automating its operational procedures. Additionally, the corporation should incorporate these technologies more deeply into its vehicles as a result of the rising adoption of online mobile systems. The distant or macroenvironment’s technical state highlights the potential for development based on technological advancement.
Industrial Organization Model
Although competition from huge companies like automakers including General Motors, Honda, Toyota, Volkswagen, Nissan, and BMW, Tesla’s sales profits for electric cars, batteries, and solar modules are rising. This state shows that the external issues in the distant or macro environment of the firm are effectively addressed (Hitt, 2020). Hence, the company is able to expand its operations toward an attractive industry with related characteristics – truck production, for example.
Tesla possesses the necessary resources to acquire a number of companies that are involved in truck production. The corporation can develop such acquisition firms toward electric vehicles. Tesla already has experience in this field – Cybertruck is a project with promising projections (Williams, 2021). The company should use this expertise and experience in this framework – which can be considered an asset – and utilize them within the acquired organizations. This strategy can be implemented in Europe – an area in which demand for expensive and exclusive cybertrucks will be significant. Such an approach is likely to result in superior returns and increased global presence.
Resource-Based Model
Internal business assets, including the company’s brand, provide the automobile company with the capacity to compete with other organizations for long-term prosperity in the world market. According to Elon Musk’s corporate objectives, the Tesla brand is a representation of innovation and sustainability. The corporation may launch new solar goods and automobile models that draw interest from target clients all around the world thanks to its strong brand (Tesla Inc., 2021). The tremendous rate of invention at Tesla is well recognized. It makes sense to regard this internal strategic component as a major competitive advantage that enables the business to create viable and lucrative goods for the market for electric cars (Hitt, 2020). This strength partially depends on Tesla’s company culture, which governs the support of human resources for creative improvements.
Given the mentioned factors, it seems that entering the market of nanotechnologies is an attractive industry for Tesla. An essential element here is to be able to introduce and implement innovations, which Tesla does significantly. It may establish some joint ventures with the leading players in the industry so that experience and expertise could be linked to considerable assets.
Vision
Tesla, Inc’s vision statement is to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles (Tesla Inc., 2021). The philosophy behind Tesla’s mission statement is also expressed in more detail in its vision statement. It concentrates on the corporate objective. The following essential elements make up the vision statement. First, it is to develop the 21st century’s most engaging automaker. Second, it is to drive the switch to electric automobiles throughout the world. These two elements are dependent on one another’s accomplishments. Tesla needs to develop into the most alluring automaker in order to steer and aid the world’s shift to electric automobiles, which are a healthier and greener choice.
When every other prominent automaker concentrated on gasoline-powered vehicles, Tesla was the first to focus substantially on electric vehicles. They made significant innovation investments in order to compete with gasoline-powered automobiles of similar size. Tesla’s electric vehicles were scrutinized and received unfavourable press in the beginning because of the models’ minor flaws. People had doubts about how practical and efficient electric cars were. However, Tesla has persevered and innovated over the past ten years, and as a result, newer Tesla car models have exceeded expectations. This proves that Tesla is making progress toward realizing its goal of being the most compelling automobile manufacturer of the twenty-first century.
Mission
Tesla’s mission statement is to accelerate the world’s transition to sustainable energy (Tesla Inc., 2021). The world’s unavoidable transition to sustainable energy is discussed in Tesla’s stated mission, along with the corporation’s commitment to actively accelerating the change. The utilization of energy is becoming more widely recognized. More than ever, the wider populace is aware of the risks posed by environmental degradation and climate change. They are aggressively looking for electric automobiles as a healthier form of mobility. Tesla’s innovations have completely changed the electric vehicle market; its electric vehicles provide a variety of benefits like uniqueness, speed, cutting-edge battery technology, cleanliness, and more.
The ability to position electric automobiles as a hip, modern, superior alternative to gasoline-powered vehicles is Tesla’s greatest accomplishment. This sparked curiosity and increased awareness in individuals. The strategic choices were made with the intention of making electric automobiles appear hip and environmentally friendly. The business was able to present itself as a captivating brand with a clear vision thanks to favourable media coverage and creative marketing techniques.
Stakeholders
Communities’ needs are directly met by Tesla’s car division. Communities are key stakeholders who shape brand perception through considerable advocacy efforts and reactions to the company. The preservation or protection of the natural ecosystem is one of the concerns of this stakeholder group. The corporation’s solar panels, electric cars, and chargers answer such desire in this business research scenario (Tesla Inc., 2021). Then, customers have an impact on Tesla’s profits and care about good products at fair prices. Given this considerable impact, the corporation places a strong premium on these stakeholders in its CSR initiatives. The company looks for innovative methods to save expenses in order to fulfil these interests.
Employees are an essential component of success for Tesla’s automotive and energy solutions businesses, according to the company’s plan for corporate social responsibility. Employees have an impact on corporate success and productivity as stakeholders. High pay and numerous job options are among their CSR priorities. The formative days of Tesla were financed by a number of investors. The capitalization of the firm is significantly impacted by these stakeholders. Shareholders and investors have a stake in the success and expansion of the company (Tesla Inc., 2021). Through long-term plans that seek to alter the transportation and energy markets, Tesla’s CSR strategy meets these objectives. Finally, governmental action has an impact on Tesla – governments are key players who provide companies with mandates, restrictions, and possibilities. The concerns of this stakeholder group encompass both commercial participation in economic growth and legal compliance.
Sources
Lara Williams. 2021. What Will Tesla Do Next? Investment Monitor. Web.
Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization. 13th ed. Cengage Learning.
Shiyong Liu. 2021. Competition and Valuation: A Case Study of Tesla Motors. IOP Conference Series: Earth and Environmental Science, 692.
Tesla Inc. 2021. Impact Report 2021. Web.