Introduction to Tesla Inc

Discuss about the Transportation Costs and Economic Activity.

Tesla Inc. is an American multinational corporation, which specializes in manufacturing electric vehicles, energy storage and solar panel manufacturing. The organization is headquartered in Palo Alto, California(Grant2016). The organization was founded in the year 2003 and the progression since its inception was dependent on the innovation that the organization brought about in the automobile industry. The specialization of the organization is based on commercializing high quality electric cars, which are powered by high performance battery packs. The development of the organization is dependent on the steady innovations that are planned by the business while operating in the markets (Rothaermel2015). On the other hand, the identification of the needs of the customers has helped in maintaining the different levels of changes in the processes of the business.  

The purpose of the report is to identify the different prospects of expansion of the organization while operating in the international markets. The report enumerates the different key roles of the strategies that are undertaken by the organization and the manner in which it supports the expansion of the business in the international markets.

Political	The environmental issues that are faced by the world have led different governments to promote non- emitting cars to reduce the levels of CO2 emissions. It will be helping in the growth of the organization in the different markets with their product offering of electronic cars (Moritzet al.2015). Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Economic	The fluctuations in the world economy have constrained the limit of the common people to change to the environmental friendly processes. The fluctuations in the economy have greatly affected the sales of the organization as they promote the green approach through the innovations (Moehrle2017).
Social	The conservative approach among the people has helped the organization to promote their product offerings on the basis of the identification of the needs of the people to resort to environment friendly automobile technologies. The wide acceptance of the innovative idea of the organization to revolutionize the concept of conservation has helped in maintaining the different changes in the systems and the performance of the business while operating in the international markets (Linxweiler2017).
Technological	The general cost of the lithium ion cells have decreased which will be allowing the organization to maintain a high profit margin at a comparatively lower cost. The rise in the demand of the solar panels for charging the cells has made it mandatory for the organization to form charging stations proportionate to the sales.
Environmental	The agreements that are undertaken by some 183 countries have helped in promoting the eco- friendly approach that is promoted by the organization while bringing forth modifications in the automobile industry. The objective of the nations to reduce the pollution level by 20% is supported through the innovations that is undertaken by the industry (Smith2017).
Legal	The different lawsuits that are engaged with the patent rights of the organization have created barriers for the functioning of the business. On the other hand, the lack of legislation in the artificial intelligence’s decision making has created an impact on the auto- pilot provision that is created by the industry.

Porters’ five forces analysis is carried out for EV (electronic Vehicle) industry in analyzing the business environment within which the company operates (Walton2017). This analysis will lo facilitate the industry with the development of different innovative strategies that can bring competitive advantages to all business units.

• Competitive Rivalry: The industry operates in highly competitive markets of the automobile sectors. High power of competitive rivalry is because of certain forces such as small number of companies, increased aggressiveness of companies and lowswitching costs. Large automobile companies have aggressive marketing campaigns that can increase competition for the business (Birk2015). Considering such intense competition the EV industry is implementing aggressive innovation and marketing campaigns for all its product promotions.
• Bargaining Power of Buyers:Low switching costs decreases barriers for the industry’s consumers for purchasing vehicles from various providers. This external factor imposes a strong force against EV industry and other players within automotive industry. Conversely, availability of substitutes is moderate that decreases consumer bargaining power against EV industry. For instance, several consumers in suburban regions have less access to public transportation that as it highly practical to drive their own vehicle. In addition, low purchase volume decreases impact of consumers on EV industry (Flamand 2016).
• Bargaining Power of Suppliers:This force indicates that the suppliers have low forward level integration. The external factor indicates limited control of suppliers within the distribution along with sale of products. For instance, few suppliers use third party to sell their goods, while on the other hand, others directly go into transaction with the organization. This force is observed to have moderate impact on the company.
• Threat of New Entrants: Businesses of EV industry is difficult to compete with, particularly because of increased cost of brand development as well as popularity for the industry leaders. For instance, it is difficult for new entrants to match strong brand of the company. Additionally, automobile manufacturing has increased expenses that impose barriers to new automobile companies (Liuand Meng2017). Established companies in EV industry attain advantages from increasing economies of scale that can only be attained by new entrants through exceeding a production threshold.
• Threat of Substitutes: EV industry experiences substitute’s impact on the automotive and energy solutions industry surrounding. For instance, low switching costs for EV industry enables substitutes like public transportation that easily attract consumers. Such external factor is deemed to have a strong force against environment in EV industry (Cheong, Songand Hu2016).

From business environment analysis of EV industry it has been gathered that there are several competitors of the automobile company. High power of competitive rivalry is because of certain forces such as small number of companies, increased aggressiveness of companies and low switching costs. Large automobile companies have aggressive marketing campaigns that can increase competition for the business (Millard2016). Considering such intense competition EV industry is implementing aggressive innovation and marketing campaigns for all its product promotions. EV industry Roadster has certain major competitors are Porchse and Ferrari and once they alunched the Model S Sedan, the company will require to compete against the future and the current competitors in the industry. These competitors include major automobile manufacturers of the world such as BMW, Audi, Mercedes, Ford, Toyota and Honda. In order to attain a competitive edge over them, EV industry is recently collaborating with Toyota to manufacture an electronic version of RAV4 (Moehrle2017).

Strengths ·       Mobility service- EV industry has launched ride sharing service that can offer its consumer with cheaper transportation mode. ·       Autonomous driving technology that is offered by EV industry having self driving capability

Weaknesses ·       Expensive cars-The currently released model S is overprized. However, the price might seem reasonable based on its quality, it remains unattainable for most of the middle class Americans. At the time the middle class people are not considered the company might face threat for business for a long time (O’Neillet al.2015). ·       Competition-EV industry is facing threat of increased competition from luxury and environment friendly brands. Other than luxury brands such as Porsche and Audi, the brands developing environment friendly goods pose a competitive threat.

Opportunities ·       Increasing demand of sustainable products-EV industry is a major factor of increasing demand of environment friendly product options for transportation that can make consumers use less polluting automobiles (Sharma2016). ·       Sales, supply chain and maintenance network all over its business units ·       Increased low priced models for attaining attention of increasing middle class

Threats ·       Strong opposition-Well capitalized renowned companies such as Toyota, Volkswagen and Ford present threat to EV industry. This is for the reason that these companies have high capabilities to be competent in manufacturing field as well as distribution. ·       Less attractive for younger generation-Considering the image of EV industry, fuel driven sports cars are observed to be highly demanded cars internationally because of its exceptional features. Electrics cars are observed to be less attractive for young generation.  ·       Legal and regulatory issues-Such threat can be costly for the organization and this can result in an increase in expense. EV industry has its business operations in numerous nations for which its business is subject to political and legal regulation in such markets.

SO Strategies ·       Tesla can shift its operations to other nations in attaining decreased overall business costs ·       Intrducing consuer oriented products can help the company in positioning itself as a leader in the market	WO Strategies ·       The resours used in automobile manufacturing can be equally distributed that can help in divertsing less time to work on developing manufacturing facilities.
ST Strategies ·       Offering innovation in the automobiles can decrase the loss that is incurred in prices against its business rivals. ·       Expansion within the new economies can be helpful in decrasing the currency impact on the company.	WT Strategies ·       The strategy that can be implemented by Tesla is that it can associate with a large superstore. Opening a store in the highway can serve as a better strategy ·       Developing plug-in battery and the spare batteries must be kept in the cars in long trip

Strategic position of EV industry in the current year is deemed to be unique as it has effectively played a new game strategy that generated a niche product along with a position for itself in the global automobile market. The automobile brand is also observed to convert its lack of knowledge in generating an advantage through launching new electric based drive train for its automobiles along with implementing direct-to-consumer selling model (Bonelli2017). Moreover, it has also been observed that EV industry is strategically position in the electric vehicle industry as a high end dealer and manufacturer. This is because the automobile company attains competitive advantage over its major business rivals such as Toyota, Porsche and Volkswagen along with attaining exceptional stores and service centres, innovative options of consumer financing along with technological innovations. EV industry Motors is observed to be unique internationally as it is selling cars along with new technologies(Colmorn and Hülsmann 2016). Over, the years till now, EV industry has developed and dominated the international market for luxury and long range electric automobiles. EV industry has developed a market for less expensive electric automobiles along with market for luxury gas powered cars. In case of this automobile company, EV industry is focused on developing a network of superchargers, service stations along with battery swap stations.

Expansion of Tesla’s International Markets

There are several strategies that are observed to be successful for EV industry in attaining competitive advantages for all its business units internationally.

• Technology: Strategy of EV industry in implementing effective technology is deemed to be successful in all its global strategic business units. The automobile spare parts manufactured by EV industry are so advanced and powerful that it has made the company to attain competitive advantage. Few renowned companies like Daimler uses its battery packs, Mercedes Benz employs EV industrypower train and Toyota employs EV industry Motor (Birk2015).
• Monopoly:Another strategy of attaining monopoly has turned out to be successful for EV industry in attaining competitive advantages. EV industry stated its business with a supermarket and has attained a monopoly business with presenting high-end electric sports cars. Rapidly innovating on its technology has facilitated EV industry in leading the automobile market and along with attaining high revenue from all its strategic business units.
• Team: Employee team of EV industry is deemed to be highly efficient under the leadership of the current CEO of the company who is a summate engineer and salesman.The employees of the company are highly motivated in delivering quality consumer service in all its business units(Moritz et al. 2015).
• Distribution: EV industry has the strategic advantage of owning its entire distribution chain. Despite the fact that up-front costs of the company in opening service centres and stores in its business units of New Jersey, New York and Ohio is high, it has maintained control over consumer experience, strengthened its brand and maintained cost control in the long run.

Moreover, there are few strategies those failed to offer competitive benefits to the company’s business units(Moritz et al. 2015).

• Production Issue: Model 3 of EV industry faced certain production issue because of which it launched late. Through EV industry has been pioneer in technology and attained huge market share in electric vehicle sector, its manufacturing strategy is observed to fail that troubled the company.

Based on the business environment in which EV industry operates, certain effective strategic business unit and corporate strategies based strategies are implemented by EV industry in the current years are explained under:

EV industry’s current business strategy is based on the automation of its vehicles manufacturing. The processing plant of the company used increased use of numerous robots that had multi-joint arms and performed several tasks. Such current innovated strategy was successful in increasing its production to eighty three vehicles per day on a same assembly line (Colmorn and Hülsmann2016). Offering innovation in the automobiles of Tesla can decrease the loss that is incurred in prices against its business rivals. Expansion within the new economies can be helpful in decreasing the currency impact on the company.

EV industry Company’s CEO Musk’s strategy of owning and operating all the dealerships was an exceptional strategy that was not yet implemented by any other automobile company. Moreover, the company’s dealerships are compared with the stores along with upgraded shopping malls. The company’s sales professionals are capable to answer questions that facilitate consumers in analyzing the sales pitch of EV industry. EV industry has also implemented a strategy of offering high performance chargers along with building enough charge stations that can form a network such as gas station. The company also offers products with lower prices because of which sales of EV industry cars has increased over years (Martins, Rindovaand Greenbaum2015). The strategy that can be implemented by Tesla is that it can associate with a large superstore. Opening a store in the highway can serve as a better strategy

Mission and goal of EV industry is focused on increasing the advent of sustainable transport through bringing huge number of electric cars to the international automobile market as fast as possible. Corporate strategy of EV industry is not just to position itself as an automaker but also as a design and technology organization with great focus on energy innovation. The company has drastically implemented strategy in increasing car production that has expanding the company’s charging infrastructure for accommodating increase in number of cars and self driving vehicles in the future years (Escoda2018).

Environmental and Political Perspectives of Tesla’s Expansion

There are a number of strategies that the EV industry Company will be followed for future sustainability. The possible recommendations are, firstly, the strategy is going to focus on the supply chain management strategy. It can be argued the business model of EV industry is unique in compare to the other automobile manufacturing companies. The focus of this strategy is to reduce the cost of the manufacturing as well as the cost of goods sold. The previous models of EV industry were very good and user friendly. However, high pricing caused a major setback for the EV industry Automobile Company in the intense competitive market. As a result of that the company wants to develop such a product that will moderate in price but resembles the features of a future car. In this regards, the electric vehicles are very effective and also eco friendly that will help the company to maintain its environmental sustainability.

Secondly, the EV industry Automobile company is going to introduce a change in bits production mechanism. The Company has an ambition to have close to 80,000 cars on road by the end of the 2020. In this context, the company is willing to launch the new electric filling stations that are capable of charging a EV industry vehicle up to 200 miles of range in just 30 minutes. Moreover, the EV industry Company wants to develop low cost lithium batteries that will easy to charge and giving long time back up. As a matter of fact, the company wants to develop more effective batteries for future purposes.

Thirdly, there is a corporate strategy that the EV industry Automobile Company can follow for its future sustainability in form of making the organizational function more effective and transparent. The simple problem solving rules are supposed to be important in this regards. It can be argued that to manufacture new product it is imperative for the company to establish a strong communicative framework (Beiker2015). The company management must use tools for root cause analysis and scientific thinking. It also incorporates the interest of the individuals and the departments throughout the organization by encouraging employees to work efficiently and helping to learn more profoundly.

It can be argued that there are some problems regarding the recommended strategies for EV industry Automobiles. The issues are as follows:

• The possible expenses are very important in this regard. It can be identified that introducing new products in the form of e-vehicles and battery may be costly for the company (Redding and Turner 2015). In fact, these products require a separate establishment from technological innovation to maintenance. As a result of that it will increase the initial expenses for the company.
• Moreover, the introduction of the new e-vehicle and the batteries require a proper marketing analysis. Therefore, bulk of money has to be invested in the marketing. Furthermore, it is associated with customer behavior and responses. In this manner, it can be stated that apparently the strategies look so simple but at the time of implementing it creates complexities to perceive an idea of the whole mechanism (Van Aken and Berends 2018).
• Communication is considered to be an important aspect for the organizational activities of a company. It can be ascribe that imperfect or improper strategy can create obstacles in the organizational activities (Duffield and Whitty 2015). Therefore, it requires the managerial intervention in order to make the communication successful. As a matter of fact, incorporating the employees in managerial decisions will discredit the entire effort (Karfopoulos and Hatziargyriou 2016).

Conclusion

The purpose of the report was to identify the different prospects of expansion of the organization while operating in the international markets. Business of EV industry is difficult to compete with, particularly because of increased cost of brand development as well as popularity for Elon Musk. For instance, it is difficult for new entrants to match strong brand of the company. Additionally, automobile manufacturing has increased expenses that impose barriers to new automobile companies. The paper also revealed that mission and goal of EV industry is focused on increasing the advent of sustainable transport through bringing huge number of electric cars to the international automobile market as fast as possible. Corporate strategy of EV industry is not just to position itself as an automaker but also as a design and technology organization with great focus on energy innovation.

Economic and Social Perspectives of Tesla’s Expansion

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