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TESLA Motors: Strategic Management Case Study Assignment Solutions for MBA

Tesla motors case study solution & analysis.

Tesla Motors Inc. is an US electronic and clean energy company car based in Austin, Texas. The current CEO is the South African-born Elon Musk. Their product range currently includes solar products, electric cars, battery energy storage from home to grid scale, and a variety of other related services. The current CEO is the South African-born Elon Musk. Get Tesla case study help from professional experts. Order for best case study services in Australia , Canada , UAE , US , UK and other countries. Our experts are available 24/7.

Tesla Motors Case study

TESLA Motors Case Study

Tesla Motors: A Business Strategy

Globalisation permitted organisations to gain access to new markets and to foster the flow of technologies and scientific knowledge. This can be leveraged to stimulate the manufacturing of cutting-edge products which can enhance peoples’ living standards. In the case of Tesla Motors, the organisation developed as a technologically advanced company, who significantly indulged into research and development to deliver the most sophisticated electric vehicles and batteries. Recent innovations in the motor industry centred on the fight against pollution, by developing more environmentally friendly electric vehicles.

Tesla Motors have outshone the rest by attracting motor enthusiasts with their development of electric cars that have enough torque and which run on green energy. Globalisation, on the other hand, has allowed the organisation to operate in different countries, thereby entering a more significant customer base. Globalisation and technological innovation have thus contributed to larger organisational successes. The motor industry is highly competitive and is typified by the presence of numerous well-recognised brands.

The evaluation of their five competitive forces

  • Power of buyers: Customers in the motor industry have a variety to choose from. This increases their bargaining power by dropping their switching Tesla Motors, on the other hand, attained a substantial competitive advantage by developing technologically advanced electric vehicles which are not available from others in the industry. This allows Tesla to increase their returns.
  • Power of suppliers: Vehicle manufacturers rely on raw materials supplied to them by supplier Suppliers providing quality components thus have a higher bargaining power. To reduce the dependence on suppliers, Tesla Motors have created their own battery factory that enables them to achieve vertical integration in the supply chain, thereby achieving higher competitive advantage.
  • Threat of new entrants: Barriers to enter the motor industry are relatively high. The high capital investment makes it difficult for new entrants. This secures Tesla position in that there is a low threat that new entrants will disrupt their
  • Threat of substitutes: Public transport is the direct substitute for privately owned Since the ease and benefits provided by a personal electric vehicle cannot be matched, this threat for Tesla Motors is limited.
  • Rivalry among firms: The motor industry consists of several well-established firms such as Ford, Opel, Volkswagen, Mercedes, Toyota, These brands are continually looking for new ways to nurture competitive advantage by developing new products with appealing value propositions. However, the product line of Tesla Motors presents unique products that offer both power and electric driving, without compromising the aesthetic appeal. As a result, this has made it quite attractive for customers.

The resource-based model discusses the value produced by the organisation, by using its resources and skills. An analysis has been done to assess the resources of Tesla Motors.

Valuable: The brand image is one of the valuable resources of the company. The organisation was recently valuated at $700 billion. This mirrors the financial position of the organisation. The patented designs and innovations of Tesla are also part of its competitive advantage.

Rare: The distinctive value proposition presented by the organisation, which includes a blend of aesthetic appeal, power, and electric drive train, is relatively exceptional in the industry. This assists to create a strong differentiation in the market and to gain more than average returns.

Inimitability: One of the key matchless resources of the organisation is the brand image and related brand elements, such as the brand logo and brand name. The organisation’s patents such as designs and technologies are also inimitable. They are viewed as the intellectual property of the company.

Organisational exploitability : Tesla Motors have effectively been able to control its existing resources to create a firm footstep in the motor industry, especially in the electric vehicle sector. As a result, this has allowed the company to attract many potential customers. The industrial organisation and the resource-based model has clearly highlighted that the company is able to produce above average returns.

Tesla’s mission is “to accelerate the advent of sustainable transport by bringing compelling mass- market electric cars to market as soon as possible.” The mission statement clearly indicates that the company has realised that the opportunities ahead is dependent on green and sustainable energy. This proactive tactic taken by the organisation has allowed them to take a first mover attitude to come up as a mainstream electric automotive organisation. It seeks to boost the evolution of the industry from fossil fuel to green energy and to try to stand in the front of the shift process.

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The vision of the company is to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles. Tesla Motors also pursues to grow its product line up to accommodate a wider demographic range of the population. Their vision also incorporates expanding the production of the lithium ion cells to reduce the energy cost and to make the world a sustainable place.

Thus, it can be stated that the company is trying to bring drastic improvements in the industry and to fast-track the growth of the electric vehicle sector and energy storage systems. This has improved the company’s potential to proceed towards its success and to create a strong competitive advantage in the market.

Impact of stakeholders

The stakeholders of Tesla Motors include the customers, investors, ecosystem, and the governments. The customers are offered products with unique and rare value propositions, which as a result will help the company to increase its sales. Thus, the customers directly impact the sales and consequent revenue generation of the company. The investors’ contribution to the company offers financial support and stability that is essential to maintain the sustainability of the company.

The eco system or the environment in which the company operates plays a significant role in its business. The mission of the company is to create a sustainable environment where the ill effects of fossil fuel-based vehicles on the environment can be reduced as much as possible. Thus, the existing deteriorating condition of the environment due to the pollution has encouraged the company to take major steps in the development of green energy-based vehicles. The government policies and regulations have allowed the company to run its operations in a favourable environment. Thus, it can be stated that the stakeholders of Tesla Motors positively contribute to its success and ensures it future growth and sustainability.

The case study highlights that Tesla Motors have successfully leveraged the influences of globalisation and technological advancement to generate a strong differentiation in the industry. The external environment in which the company operates has been assessed to be quite competitive in nature, but the strong competitive advantage of the company has fostered the creation of a strong brand image in the market to ensure its sustainability and growth.


Read, analyse, and interpret the case study, then answer the questions below. The case study focuses on Tesla, Inc. Tesla is an American company. They are based in California, and they focus on electric vehicles and clean energy. Their product range currently includes solar products, electric cars, battery energy storage from home to grid scale, and a variety of other related services. The current CEO is the South African-born Elon Musk.

According to him, the predominant goal of Tesla is to move towards a solar electric economy away from a fossil fuel and hydrocarbon economy. To achieve this, Tesla must continue to build affordable solar panels and electric vehicles. Tesla has been chosen as the case study because it addresses a wide variety of strategic concepts that need to be considered when formulating an organisational strategy, such as globalisation, sustainability, return on investments, mission and vision statements, and their influence on success, stakeholders, and operations.

QUESTION 1                                                                                                                       [15 MARKS]

Analyse the case study on Tesla and examine how strategy, strategic management, and strategic planning complement each other as part of the overall strategy of the organisation.

QUESTION 2                                                                                                                       [10 MARKS]

Identify Tesla’s stakeholders, as well as the impact they have on the organisation and environment.

QUESTION 3                                                                                                                       [15 MARKS]

Tesla is all about innovation. Identify all the different innovations from the case study and indicate how it influenced product development at Tesla.

QUESTION 4                                                                                                                       [15 MARKS]

Search for the vision of Tesla in the case study provided. Analyse it by taking into consideration what researchers stated the criteria for a vision statement must be. Also search for the mission statement of Tesla in the case study provided. Analyse it by taking into consideration the criteria for a good mission statement. List improvements if you think it is necessary for both the vision and mission statement.

QUESTION 5                                                                                                                       [10 MARKS]

In the Tesla case study, external and environmental factors were taken into consideration. Work through the case study and identify the external and environmental factors that Tesla Motors are taking into consideration when making strategic decisions.

QUESTION 6                                                                                                                       [15 MARKS]

Identify the strengths that Tesla has accumulated within the organisation. Analyse their application of their strengths in building their brand and company.

QUESTION 7                                                                                                                       [10 MARKS]

When reading the Tesla case study, what would you determine as their long-term goals?

QUESTION 8                                                                                                                       [10 MARKS]

What would you consider to be Tesla’s competitive advantage, based on the case study? How sustainable is their competitive advantage?

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Lessons from Tesla’s Approach to Innovation

  • Nathan Furr

case study tesla assignment

There is a method to the madness.

Tesla has shifted the auto industry toward electric vehicles, achieved consistently growing revenues, and at the start of 2020 was the highest-performing automaker in terms of total return, sales growth, and long-term shareholder value. As a technology and innovation scholar, the author has studied how innovators commercialize new technologies and found that Tesla’s strategy offers enduring lessons for any innovator, especially in terms of how to win support for an idea and how to bring new technologies to market. To understand Tesla’s strategy, one must separate its two primary pillars: headline-grabbing moves like launching the Cybertruck or the Roadster 2.0 and the big bets it is making on its core vehicles, the models S, X, 3, and Y.

Few companies have attracted as much scorn and adoration as Tesla. When Tesla launches a product like the Cybertruck, the reception tends to be divisive: Critics see it as further evidence that founder Elon Musk is out of touch and doomed to fail, while supporters buy in — within a month Tesla received 200,000 preorders for the new vehicle. Compare that with the Ford-150, the world’s best-selling car in 2018, which sold just over 1 million vehicles that year.

case study tesla assignment

  • Nathan Furr is a Professor of Strategy at INSEAD and a coauthor of five best-selling books, including The Upside of Uncertainty, The Innovator’s Method, Leading Transformation, Innovation Cap i tal , and Nail It then Scale It .
  • Jeff Dyer is the Horace Beesley Professor of Strategy at BYU’s Marriott School of Management. He is the lead author of the best-selling book, The Innovator’s DNA , and coauthor of The Innovator’s Method .

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Tesla Change Management Case Study

From smartphones to self-driving cars, technology is constantly changing and evolving the way we interact with the world. 

Tesla is a company that has become synonymous with innovation and disruption in the automotive industry.

Over the years, Tesla has undergone significant organisational changes and implemented effective change management strategies to drive growth and success.

From transitioning to electric cars to expanding into energy storage and solar power, Tesla’s approach to change management has been key to its ability to stay ahead of the curve and maintain a devoted fanbase.

Tesla change management case study examines Tesla’s approach and strategies that have enabled the company to successfully navigate organizational change and achieve long-term success.

So, buckle up and get ready to explore the exciting insights about Tesla’s change management.

Brief introduction to Tesla and its importance in the automotive industry

Tesla is an American electric vehicle and clean energy company founded in 2003 by Elon Musk. The company has quickly become a major player in the automotive industry, revolutionizing the market with its innovative approach to electric cars and sustainable energy.

Tesla’s mission is to accelerate the world’s transition to sustainable energy, and it has made significant strides in this regard.

Its electric cars, such as the Model S, Model 3, and Model X, are known for their long-range capabilities, cutting-edge technology, and sleek designs.

Additionally, Tesla is also heavily invested in renewable energy, with products such as solar panels and the Powerwall battery system for homes.

With its commitment to sustainable energy and cutting-edge technology, Tesla has cemented its place as a leader in the automotive industry and a driving force behind the shift towards a more sustainable future.

Need for change management at Tesla

Tesla’s shift from traditional gasoline-powered cars to electric cars was a significant change in the automotive industry. The company recognized early on that electric cars were the future and set out to develop a range of electric cars that would compete with traditional gasoline-powered cars in terms of performance, range, and price.

Tesla’s rapid growth and success can be attributed to its innovative approach to change management.

Change management is the process of implementing changes in an organization in a structured and efficient manner to minimize disruptions and ensure a smooth transition.

Tesla has had to implement several significant changes over the years, including shifting from traditional gasoline-powered cars to electric cars, expanding its product line to include energy storage and solar power, and maintaining a cult-like following of dedicated fans.

Change management approach used by Tesla

Tesla’s change management approach is centered around its mission to accelerate the world’s transition to sustainable energy.

The company approaches change with a long-term vision, focused on innovation and disruption rather than simply reacting to market trends.

Tesla’s change management strategy is built on several key principles, including:

1. Clear communication

Tesla’s leadership is committed to clear and transparent communication with employees, shareholders, and customers. This includes regular updates on company strategy, product development, and progress towards sustainability goals.

Tesla has a clear and well-communicated strategy for each change, including a detailed plan for implementation and execution. 

One example of Tesla’s communication strategy is its use of social media to engage with customers and fans. Tesla has a strong presence on social media platforms such as Twitter and Instagram, where it shares news, updates, and behind-the-scenes glimpses of the company’s operations.

Tesla’s CEO, Elon Musk, is also known for his active presence on social media, where he communicates directly with customers and fans and responds to their feedback and concerns. Musk’s personal Twitter account has millions of followers, and he often uses the platform to announce new products, share updates on the company’s operations, and engage with fans.

2. Data-driven decision-making

Tesla heavily relies on data to inform its decision-making processes, including product development, production processes, and marketing strategies. This means that the company is able to make informed decisions based on real-time information, rather than relying on guesswork or intuition.

When implementing changes within the organization, Tesla uses data to inform decision making, monitor progress, and identify areas for improvement. For example, when transitioning from gasoline-powered cars to electric cars, Tesla used data on consumer preferences, energy consumption patterns, and market trends to inform its product development and marketing strategies.

Tesla also uses data to monitor the success of its change management efforts. For instance, when introducing a new product or service, Tesla collects and analyzes data on customer adoption rates, usage patterns, and feedback to determine whether the change has been successful or needs further refinement.

3. Agile methodology

Tesla uses an agile approach to product development and project management, which allows for flexibility and quick adaptation to changing market conditions. Tesla has a strong culture of innovation and creativity, which allows it to develop and implement changes quickly and efficiently.

The company encourages employees to think outside the box and experiment with new ideas, which has led to several game-changing innovations such as the electric powertrain and the autonomous driving system

4. Employee empowerment

Tesla values its employees and believes in empowering them to contribute to the company’s success. This includes encouraging innovation, creativity, and collaboration, as well as providing opportunities for growth and development.

Tesla empowers its employees by providing them with opportunities to take on leadership roles, make decisions, and contribute to the company’s success. For example, Tesla’s production line workers are trained to identify and address potential production issues, giving them a sense of ownership and responsibility over the manufacturing process.

Additionally, Tesla encourages employees to speak up and share their ideas and feedback. The company has an open-door policy, which means that employees can approach their managers or executives with any concerns, suggestions, or feedback they may have.

Tesla also has a “no titles” policy, which means that employees are not restricted by traditional job titles or hierarchies. Instead, employees are encouraged to take on responsibilities and projects that align with their strengths and interests, giving them a sense of autonomy and ownership over their work.

5. Sustainability focus

Sustainability is at the core of Tesla’s change management strategy, with a focus on developing products and processes that are environmentally friendly and socially responsible.

Tesla has invested heavily in solar energy, with the acquisition of SolarCity, a company that produces solar panels for residential and commercial use. Tesla’s solar panels are designed to be efficient, durable, and sustainable, with a focus on reducing carbon emissions and promoting renewable energy.

In addition, Tesla’s electric vehicles are designed to be sustainable and environmentally friendly. By replacing traditional gasoline-powered cars with electric vehicles, Tesla is reducing carbon emissions and promoting sustainability in the transportation industry.

Furthermore, Tesla has made a commitment to reducing its own carbon footprint. The company has set ambitious goals to reduce its own greenhouse gas emissions, with a target of net-zero emissions by 2050. Tesla is working to achieve this goal by investing in renewable energy, improving production efficiency, and reducing waste.

6. Innovation and R&D

Innovation and research and development (R&D) are integral components of Tesla’s change management approach. The company places a strong emphasis on innovation to stay ahead of the competition and disrupt traditional industries.

One example of Tesla’s innovation and R&D efforts is the development of its Autopilot system, which uses advanced artificial intelligence and machine learning to enable self-driving capabilities in Tesla vehicles. Tesla’s Autopilot system has been a major differentiator for the company, and has helped to position Tesla as a leader in the autonomous vehicle market.

Tesla’s approach to innovation and R&D is characterized by its willingness to take risks and invest in new technologies. The company has made significant investments in battery technology, solar energy, and artificial intelligence, among other areas.

For instance, Tesla’s Gigafactory in Nevada is one of the largest battery production facilities in the world, with the capacity to produce over 35 GWh of lithium-ion batteries annually. Tesla’s investment in battery technology has helped to reduce the cost and increase the efficiency of its electric vehicles, making them more accessible and appealing to consumers.

Additionally, Tesla’s research and development efforts extend beyond its products and services. The company is also working on developing new technologies to improve its production processes and supply chain management, such as the use of automation and robotics.

7. Strategic acquisitions

Tesla has acquired several companies to help it expand into new areas, such as energy storage and solar power. One example of Tesla’s strategic acquisition is its purchase of SolarCity in 2016, a leading provider of solar energy solutions. The acquisition was a key part of Tesla’s strategy to expand into the renewable energy market and establish itself as a leader in sustainable energy solutions.

By acquiring SolarCity, Tesla was able to integrate solar energy technology into its product line and offer a more complete suite of energy solutions to its customers. This acquisition also allowed Tesla to leverage SolarCity’s extensive network of installers and service providers, which helped to accelerate the growth of Tesla’s energy business.

Another example of Tesla’s strategic acquisition is its purchase of Maxwell Technologies in 2019, a company that specializes in developing energy storage solutions. The acquisition was part of Tesla’s strategy to improve the performance and efficiency of its battery technology, and to reduce the cost of producing batteries for its electric vehicles.

By acquiring Maxwell Technologies, Tesla was able to integrate its patented ultra-capacitor technology into its battery production process, which helped to increase the energy density and lifespan of its batteries. This acquisition also allowed Tesla to streamline its battery production process and reduce its overall production costs, which helped to make its electric vehicles more affordable and accessible to consumers.

Tesla’s Cult-Like Following 

Tesla’s devoted fanbase, often referred to as “Tesla cultists,” has played a significant role in the company’s success. These fans are passionate about Tesla and its products, and their enthusiasm has helped to generate buzz and excitement around the brand.

To maintain this cult-like following, Tesla has used a range of change management strategies. These strategies include:

  • Building a strong brand: Tesla has built a strong brand that resonates with its fans. The company’s focus on sustainability, innovation, and performance has helped to create a unique identity that sets it apart from other car companies.
  • Creating a community: Tesla has created a community of fans who share a common passion for the brand. This community includes Tesla owners, fans, and investors, and the company has fostered this community through events, social media, and other channels.
  • Continuous innovation: Tesla’s fans are attracted to the company’s constant innovation and its ability to push the boundaries of what is possible in the automotive industry. Tesla has used change management to maintain this innovation by investing in research and development, encouraging experimentation and creativity, and continuously improving its products based on customer feedback.
  • Exceptional customer service: Tesla is known for its exceptional customer service, which includes personalized attention, customization options, and a focus on customer satisfaction. This has helped to create a loyal customer base that is willing to promote the brand to others.

Key takeaways for other companies looking to implement successful change management strategies

Tesla change management case study offers some key takeaways for other companies looking to implement successful change management strategies:

  • Communicate clearly and consistently: It’s essential to communicate your vision and goals for the change clearly and consistently to build trust and credibility with stakeholders.
  • Empower employees: Empowering employees to contribute to the change process can help to generate ideas and solutions, foster a culture of innovation, and create a sense of ownership.
  • Focus on the customer: A customer-focused approach that prioritizes exceptional customer service, customization, and continuous improvement based on customer feedback can create a loyal customer base and drive sales.
  • Build a strong brand: Developing a unique identity that resonates with your customers and sets you apart from competitors can help to create a loyal fanbase and generate buzz around your brand.
  • Embrace innovation: Embracing innovation and encouraging experimentation and creativity can help to drive change and keep your brand fresh and exciting.

Final Words 

Tesla change management case study offers insights that how Tesla successfully applied change management strategies and have become one the leading world company. The company has successfully navigated significant shifts in its business model, from transitioning to electric cars to expanding into energy storage and solar power. Tesla has also maintained a devoted fanbase through a range of change management strategies, including building a strong brand, creating a community, embracing innovation, and focusing on exceptional customer service.

About The Author

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Tahir Abbas

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Tesla Case Study Examining The Functionalities And Business Process

Task: Discuss the different functionalities of Tesla and provide the clear understanding of their business process.

Introduction It is discussed in this Tesla case study that understanding the requirements of the business is considered one of the most essential tasks that should be performed by companies in order to sustain in their operational market. They can understand their business requirements and focus on implementing strategies that will provide them with profitable business outcomes. The study will focus on the different strategies used by Tesla for enhancing their growth and development in the market. With the help of this, one can clearly understand the importance of their business elements and focus on using the same to achieve greater returns. Tesla is one of the leading car manufacturing companies located in California, America. The study will emphasise on the different functionalities of Tesla and will provide the clear understanding of their business process.

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Business model description The following is a business model canvas for Tesla:

Tesla case study

Figure 1: Business Model Canvas of Tesla (Source: created by the learner)

Value proposition development In order to operate in a successful manner, it is mentioned in this Tesla case study that it is important for the management of the company to ensure that they are being able to provide appropriate value proposition to their potential customers in the market. With the help of this, it becomes easier for them to gain the attention of the customers and conduct their business flawlessly. One of the biggest value propositions offered by Tesla is their manufacture of electronic vehicles. This has created a significant position for the company in the competitive market. They have provided sleek designs for their customers and their focus in one the creation of energy efficient cars for the betterment of the customers (Karamitsios, 2013). The advanced technologies used by the company helps them to provide some of the best quality cars to the customers. Several automatic options are provided such as autopilot and software can be updated in a hassle free manner.

Business operations development It is important for Tesla to ensure that they are able to focus on the development of their business operations. However, it becomes important for the management authority of the organization to ensure that they are deigning their services and products in such a way that it suits the need of their customers. Apart from this, it is imperative for the higher officials to ensure that quality management is being done in the right manner. This helps to develop the quality of their products and excel in a competitive market scenario (Monsellato, 2016). Besides this, their supply chain management is important, as it provides them with access to quality raw materials that are needed to develop their products. The role of the human resource department is quite important, as it helps them to gather skilled and talented employees for accomplishing their business objectives in the right manner and engage in their business development. However, inventory management is necessary, as it allows the higher authorities to focus on the appropriate usage of materials for manufacturing their goods and services. Moreover, proper maintenance of their departmental operations enables them to meet with the market trends and function in a required manner.

Supply chain development One of the most important tasks performed by the management authority of Tesla as discussed in this Tesla case study is the management of their supply chain. With the help of this, they can focus on managing the supply of raw material within the organisational premises. One of the biggest reasons for the increased productivity of Tesla is their supply chain and supply of raw material within the workplace. As a result, the company is able to make enough progress to evolve as one of the biggest manufacturers of electric cars, globally (Dana, 2018). Successful management of the supply chain mentioned in this Tesla case study allows the organisation to make important and strategic decisions in the right manner and ensure the smooth operations of their business.

Financial value capture In order to conduct their business in a successful manner, it is important for the company to implement important strategies in the workplace to increase their profitability in the market and develop their competencies. In the year 2018, the total revenue generated by Tesla was about $21.4 billion. This was possible with the development of electronic vehicle by the company and its brand recognition in the competitive market. This was considered a record for the company and it helped to develop their business in an authentic manner. Due to this, the year 2018 was regarded as a pivotal year in the history of the company. Due to the manufacture of their mid-range cars, it becomes easier for them to reach out to a large population and conduct their business authentically.

Tesla case study

Figure 2: Profit and Loss of Tesla (Source:, 2019)

Competitive advantage Ideally, competitive advantage is one of the most important things that a company does in order to sustain in the market. However, it is important to ensure that the strategies are being used in the right manner. The Tesla case study focuses on analysing the other companies in the market and understands the differences in the strategies used by them. The focus on competitor’s strategies has helped Tesla to ensure that they are impose serious threats to the other automotive companies (Bilbeisi & Kesse, 2017). The main reason for their intense competitive advantage is that they focus on using software in terms of manufacturing their cars. However, other companies have yet not been able to develop their competencies in terms of manufacturing software-driven cars. As a result, it could be clearly understood that their innovation and implementation of ideas have provided prime support for their success in the market.

Strategic fit In order to achieve success in a competitive market, it is significant for companies to ensure that they are being able to develop their strategies in a profitable manner. With the help of this, it becomes easier for them to develop a competitive advantage over other companies operating in the similar sector (Schowalter, 2017). Tesla used wide range of management strategies in their workplace to ensure that they are being able to control the functioning of their staffs and departments simultaneously. Another crucial thing applied in Tesla’s business is the enhancement of operational effectiveness. It allows them to reduce the intensity of mistakes and develop the overall quality of their products. Besides this, they focus on thinking in a completely different mechanism.  This provides them with enough ability to conduct things differently. As a result, it allows them to make proper and apt use of their strategies.

Identification and assessment of assumptions and uncertainties The most important thing is to ensure that the uncertainties associated with the business do not affect the overall functioning of their operations. As a result, the management authority of the company ensures that they are being able to focus on reducing the level of mistakes being performed. The leaders and managers perform this assessment for understanding the market trends and functioning in a similar manner. Therefore, it becomes easier for the managerial staffs to develop their stronghold in the competitive market and focus on the process of gaining more and more customers for increasing their profitability in their business.

Phased development plan to address uncertainties in this Tesla case study The higher authorities of Tesla focussed on developing their products in a phase development manner to increase their profitability and revenue generation. Some of the phases of development applied by the company have been listed below:

  • Create an expensive and low volume car (, 2016)
  • Develop a medium value car of low price using the money generated
  • Use the same money to develop high volume but affordable cars

With the implementation of these phases in the workplace, it became easier for the organisation to develop their business in the right manner and enhance their level of growth in the competitive market. As a result, the gradual success of Tesla was a result of proper selection of the strategies and implementing them in the most precise manner.

Selection of innovation tools and techniques Competencies in the market can be developed with the selection of appropriate innovation tools and techniques that could be used for developing the quality of their products and performing better than the other companies could. Two of the biggest innovations were the use of software and Artificial Intelligence (AI) in the process of developing their fuel-efficient and energy saving cars. This has resulted in their steady growth and progress in the market and allowed them to develop their business in the right manner. However, another important part of the plan was their implementation of the selected techniques in the workplace. Moreover, they were successful in implementing the techniques successfully and provides high quality to their customers.

Candid and critical self-analysis After analysing the different facts, it could be understood that the use of strategies and innovation tools in the workplace have resulted in their success and manifestation in the operational market. They focus on gaining the attention of the customers with the help of their sleek designs and vibrant colours. However, the brand is well recognised in the market and therefore, it becomes easier for them to grow their consumer base and focus on increasing their level of profitability in the market. Despite the level of intense competition in the market, the company has not failed to evolve as the market leader over other companies. This clearly justifies their class and position in the market within this Tesla case study. They have enough market shares that could be used as a positive influence in terms of developing the overall competencies in the market.

Conclusion and recommendation Tesla is one of the better-known companies in the automobile market sector. This has happened because they are capable of selecting the right strategies and ensuring that the workforce is always prepared for accepting new trends in the market. Besides this, the study identifies the way in which innovation methods and tools have helped them to gain sustainable growth in the business. Besides this, they focus on using software and AI technologies in terms of developing their products in the business and it helps them to increase their sales and revenues in the competitive market. Therefore, they can easily implement ideas in the workplace for enhancing their business and gaining lucrative business returns.

Recommendations: The following recommendations could be provided to Tesla in terms of operating in the market:

  • They should keep developing their competencies in terms of using software and technological advancements in the workplace.
  • Besides this, the management should focus on monitoring the performance of the employees almost regularly to reduce the level of mistakes and allowing them to enhance the product quality.
  • They should perform intense market research to ensure that they have knowledge about all the trends existing in the market. This will enable them to understand the requirements of the potential customers.

Exclusive summary The study of Tesla case study is based on extensive research performed on the car company giant named Tesla that is known for manufacturing high quality cars and self-driven cars. The idea behind the process of developing such unique products is to make sure that they are being able to gain a strong command over the market and ensure their increase in profit margins. The study helps to understand the ideas behind their innovation and the desire to use technologies have helped them to become what they are, today. It is evident that other car manufacturing companies should slog for getting to Tesla’s standards. The study helps to understand the correct usage of the strategies for developing their business in the competitive environment.

References Bilbeisi, K. M., & Kesse, M. (2017). Tesla: A Successful Entrepreneurship Strategy. B> Quest. Available at:

Dana, C. (2018). A Strategic Audit of Tesla, Inc.: Electrifying our Future or About to Run out of Energy?. Available at:

Karamitsios, A. (2013). Tesla case study Open innovation in EVs: A case study of Tesla Motors. Available at:

Monsellato, A. (2016). Tesla Motors: a business model innovation in the automotive industry. Available at:

Schowalter, J. (2017). Determining the Effectiveness of Tesla's Strategy. Available at:, (2016). Retrieved 3 October 2019, from, (2019). Retrieved 3 October 2019, from


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Executive Summary

Tesla’s case study describes the business model used by this company to improve its business and get into international market. This also includes SWOT analysis to understand the internal factors that can affect the company and also PESTLE analysis to understand the external factor that can affect Tesla. It also includes the global strategy that will help Tesla to get into the high-end market. Tesla has amended various social responsibilities to satisfy stakeholders. The paper has aimed to cover all such ethical and social policies of Tesla. Moreover, Tesla has also faced certain issues due to lack of safety policy in its autopilot and self-driving cars. Recommendations are given so that Tesla can mitigate such issues and enhance their profitability.

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Table of content

Introduction. 5

Task 1 -The External and Internal Environment 5

Internal and external environmental analysis of Tesla. 5

Critical success factors. 8

Analyzing competitive advantage of Tesla. 9

Task 2 – Strategy in Global Environment 9

Market entry models adopted by companies. 9

Expansion strategy of Tesla. 10

Recommendations. 10

Task 3 – Corporate Strategy. 11

Use of horizontal integration, vertical integration, outsourcing or strategic alliance. 11

Recommendations for increasing profitability of Tesla. 11

Task 4 – Strategic Purpose – Ethics and CSR.. 12

CSR strategy of Tesla. 12

Recommendations to address the ethical issues. 14

Conclusion. 14

Reference list 16


A business model is a model that normally incorporates information and data of products, business plans, and company and company services. It also incorporates with the market to capture or sometimes future expenditure. This model generally helps a company to create a fundamental strategy for doing any business and also enhance its profitability. The business model helps the organization to create the basic structure for their business and help to improve their business from the core. It helps to create social value, economic value and cultural value in any organization. In a business model, there are various essential factors that are present to build a well structured business model. Some of the basic factors that are needed to build a proper business model are, marginal profit, and companies allotted assets. Factors that also include the problem of the company and its solution, company’s cost structure, customer attracting products, targeting an ideal market, identifying revenue framework etc.

There are various types of business models that are used by any organization to develop their business on a large scale. Different business organizations use various business models in their business. Tesla operates with a D2C business model in their business organization as this company directly deals with their customers without taking help from a middle man.

This current research paper is an analysis and discusses Tesla’s business model and how they implement and use their business model.

Task 1 -The External and Internal Environment

Internal and external environmental analysis of tesla.

Table 1: SWOT analysis of Tesla

  (Source: created by author)

According to a PESTLE analysis, the external factors that affect and create challenges for Tesla Inc. include factors like:

Political factors that determine Tesla Inc.

For Tesla, political factors play an opportunity role because of the new trade agreement that was made recently. Also, the global political consistency made it easy for Tesla to trade in global market.

Impact of Environmental factors on Tesla’s business organization.

The people who primarily focused on saving and protecting the environment can shift from regular fuel consuming vehicles to Tesla.

Economical factors that determine Tesla Inc.

Economic factors that determine Tesla’s business industry is that they produce affordable and budget-friendly products to their buyers. Furthermore, with a diminishing of battery prices, it has become cost-efficient for Tesla to produce an affordable electronic vehicle for their buyers without affecting their allotted financial budget.

Legal factors that influence Tesla’s business organization

As Tesla follows directly to consumer business model strategy it is very important for them to expand their patent protection in their business. Further with the rise of accidental cases of its failure in autopilot mode many states have banned Tesla.

Impact of Social factors on Tesla Inc.

A growing inclination towards using renewable resources among people is creating an opportunity for Tesla to expand its business globally.

Technological Factors that influence Tesla Inc.

According to PESTEL analysis, the rapid growth of new technology of renewable resource energy, and use of lithium-ion batteries in its car models are creating many opportunities for Tesla. They are also using CTP technology (Guno, Collera and Agaton, 2021).

Critical success factors

In the opinion of Hastig and Sodhi, (2020), some of the critical success factors of Tesla are their low vehicle prices that attract their target consumers. Also, their advanced entry into the electric vehicle market makes them unique from other brands. The strong branding name and the leadership of Elon Musk have created a powerful market value for Tesla Inc.

Analyzing competitive advantage of Tesla

After analyzing competitive advantage of Tesla it can be said that its supercharger network creates an upper hand for Tesla over other brands because no other brands are providing supercharging networks or stations for their electric vehicles. Tesla is also using lithium ion batteries in their electric vehicles whereas no other brands are using them. Thus, all these factors create a competitive advantage for Tesla Inc. and keep them a favourable brand for consumers in these sectors (Dai, 2020).

Task 2 – Strategy in Global Environment

Market entry models adopted by companies.

There are four broad categories of international business expansion that are determined by purpose of expansion. In the opinion of Thomas and Maine, (2019), international expansion strategy is categorized in exporting, licensing, foreign direct investment and joint ventures. Each of the entry modes has its own specific set of advantages and risks. The entry mode or strategy implemented by an organization rests on the extent to which an organization is allowed to take risks in its expansion procedure.

Exporting is defined as a sale of products in a different country from that one in which production has taken place. As stated by Teece, (2018), the advantage of this lies in adding the home country’s gross output. The downside of this entry strategy is least control over production procedure.

Licensing is the process of granting legal rights over intellectual property of a business including patents, technology, work procedure, copyrights and brand names. The advantage of this entry mode includes lower risks in foreign markets in terms of financial and legal fields. However, the negative side of this includes poor brand image as a result of ineffective brand management.

A joint venture is merging of two or more companies with a shared vision and mission. Joint ventures are usually formed between companies that have similar tasks and business operations. Joint venture members can share equal rights over profits and losses. The disadvantage of this includes a risk of conflict due to dissimilar opinions of partners.

Foreign direct investment is defined as attracting foreign investors who would provide financial backup needed for hiring people and conducting leading business operations. However, as influenced by Yan (2020), the high cost of this entry strategy is one of the most negative aspects.

Expansion strategy of Tesla

According to Lugtu Jr, (2019), Tesla uses a market penetration strategy in their business model to expand their business in both domestic market and international markets as well. Tesla wants to take part in cosmopolitan markets and wants to target the consumers who look forward to investing in supreme cards so that they can cut down the price and take over the market by introducing various car models. They also apply generic strategies in their business to accomplish competitive advantages in market. Further studied by Kim, (2020), by using a generic strategy they try to implement advanced and new sustainable technology in their business to get ahead from other brands such as BMW, Toyota Motors, and Volkswagen etc. Furthermore, Tesla also uses intensive strategy in their business for improving their market growth aside from generic strategy.

As studied by Grijalva, (2017), it can be said that the intensive strategy used by Tesla helps them to develop its business moderately in this EV market sector. This shows the company’s rising popularity in the market and its increasing profitability.

After SWOT analysis it can be seen that Tesla’s focus on building power stations for its electric vehicles also gives a higher advantage to the company to attract consumers who want to invest in an electric vehicle as no other brands have built power stations for their electric cars (Wu and Wang, 2021).


Recommendations that are needed for Tesla Inc. to improve their business and excel in international markets are described below:

Firstly, improving their Artificial Intelligence Technology to control their failure of autopilot technological mode in its electrical vehicle model would increase profitability. The major issue hindering competitive advantage of Tesla in global field is a risk of accidents in its autopilot cars. Therefore, integration of latest artificial intelligence in cars would eliminate this risk, leading to competitive advantage of Tesla in global field (Rong et al. 2019).

Secondly, diversification of leadership roles in Tesla Inc. Tesla is solely dependent on Elon Musk for their business. It needs to be changed and other CEOs and CTOs must take responsibility for improving their business (Bilbeisi and Kesse, 2017).

Thirdly, Tesla Inc. must improve their cars model according to its price so that it can attract more consumers and improve its business globally (Adnan et al. 2021).

Task 3 – Corporate Strategy

Use of horizontal integration, vertical integration, outsourcing or strategic alliance.

Horizontal integration strategy is a strategy that is used by many business sectors where they buy competitors to improve their business (Alghalith, 2018). This strategy is used by companies that have a potentially successful growth model.

Vertical integration is the procedure taken by any company to control the production chain of the company. According to Di Minin, Ferrigno and Zordan (2019), Tesla analyzes and understands the complication of using supply chains in automobile business sector. Thus, by incorporating vertical integration they revolutionized the whole automobile business sector. Various steps have been taken by Tesla to improve the battery quality of its electric vehicles. At present, it can be seen that vertical integration has helped Tesla to improve and grow its stock price in the share market.

According to Liu and Meng (2017), Tesla uses a radical approach in their business. It has also been seen that Tesla wants to build a super charging station that can charge its electric vehicle within 30-40 minutes.

As studied by Salman (2019), Tesla’s strategic alliance is collaborating with brands like Toyota and Daimler to enter into international markets and grow its business globally.

Recommendations for increasing profitability of Tesla

Collaboration of artificial intelligence with autopilot

Tesla can easily enhance their profitability by deploying artificial intelligence in their cars. Manual work leads to several calculation errors. Hence, robotic technology can be deployed to calculate complex formulas that can be used to improve autopilot services (Tesla, 2021). Neural networks and complex algorithms can be amended by robotic technology to improve autopilot facilities in cars. Tesla cars can also deploy several modern features which can improve safety of customers in cars that can be driven by autopilots. Modern technologies and improved safety measures will attract customers to try their new models and profit margins will increase significantly.

Cutting up cost of human resources

It is highly recorded that Tesla must cut out their huge workforce (Trefis, 2018). Staff members have to be tried and they need to be monitored regularly for errors. Tesla must aim to deploy modern technologies that can compete with work done by thousands of employees in a time-efficient manner. Robots can be depleted in various departments and big data can be used to keep a track of customer records. Employees who look after customer service can also be replaced by artificial intelligence. The firm can try to manage their stakeholders through automatic chatbots and keep them informed about new launches so that they can be attracted towards the firm. New designs of vehicles can be  invented by machines as well, which will encourage stakeholders to try the new models. Cutting off expenses on wages will increase their profit margins.

Management of price

Tesla cars are quite overpriced and consumers are not able to buy them easily, which leads to constriction of the consumer base. Hence, Tesla must aim to cut up miscellaneous expenses so that the cost of cars can be reduced. Moreover, reduction of price will enhance sales of electric cars and other products. Enhancement of sales margins will also enable engagement of profit margins. Whenever automatic tools are deployed to design and manufacture cars, the cost of hiring employees can also be cut and will cause a sharp decline in car prices as well (Özdemir and Hekim, 2018).

Task 4 – Strategic Purpose – Ethics and CSR

Csr strategy of tesla.

Carroll’s CSR model 

Caroll’s csr model includes four major social responsibilities such as economic, legal, ethical, and philanthropic. Tesla faces economic issues as it has quite expensive cars and the customer base is quite limited. Tesla has taken several initiatives to protect the environment. Tesla mainly develops electric cars that do not create any type of air pollution. Moreover, Tesla has been selling solar cells and allowing their consumers to have quick access to alternative as well cleaner sources of energy. However, one of the major ethical issues is that electric energy required running cars are generated from fossil fuels and indirectly pollute the environment.  Model 3 had several quality issues such as cracked glass windows and loose door locks. Illegal worker suits have been raised against the firm. Whistleblowers have also filed cases against issues in Model Y and Model 3. Dutch taxi service Bios Group has also filed cases against Tesla. Bios group has claimed 1.3 million from Tesla due to poor quality of steering in cars and odometers. Elon Musk supports several social communities and provides funding so as to improve living conditions of poorer segments of society. Elon Musk has spent $150 million in schools of Texas (Schleifer, 2021). He also provides clothing and food to poor people. Elon musk is the founder of several charitable foundations that aim to award financial support to people and students. However, the firm has allowed rival firms to use their technology for good purposes and have not initiated lawsuits or patents for future techniques (Hettich and Müller-Stewens, 2017).

Stakeholder theory 

Stakeholder theory ensures that ethical and social responsibility is maintained towards organizational stakeholders (Freeman and Dmytriyev, 2017). Tesla has several stakeholders such as customers, visitors, government sponsors and employees. Tesla has aimed to make its product more affordable for customers. Customer satisfaction is prioritized by this firm. Tesla has however not given much priority to stakeholder groups in the decision making process and that creates issues in the firm. Tesla has amended various policies to ensure stakeholder interest and manage all such activities that can impact their business entities. Tesla has always kept their stakeholders informed about the new models of cars and change of strategies that can benefit customers. For example, this firm has taken initiative to inform customers about the development of model 3 and have also informed them that this is not the big thing that was announced earlier. As for employees, Tesla has always allowed freedom at work and excessive work pressure is avoided. The Tesla workplace has several mentors that trains new staff to absorb the work culture of the firm and work accordingly to provide profits to the organization.

Ethical issues faced by Tesla

The major ethical issues faced by Tesla were the quality of their cars. Several safety issues were also raised where consumers were not satisfied with autopilot service of the cars (Banks et al . 2018). Tesla has developed self driving cars; however, consumers complain that such automatic software requires constant assistance of human resources. Hence, Tesla cars are facing several ethical issues, related to quality. Tesla batteries are not safe and get heated very easily. There is a safety issue that the battery may catch fire at any distance and it is not safe to travel in such as for a longer distance.

Recommendations to address the ethical issues

Checking of quality before selling the products

Tesla has been facing several issues due to lack of proper quality check while manufacturing. Development and manufacturing of car products must be checked several times. Checkpoints must be created and managers must be directed to check product quality before they are delivered to market. Such controlling of quality will enable managers to evaluate problems and quality issues of glass windows and door handles can be handled easily (Nichols, 2020). Automatic intelligence tools such as robots can be employed at several checkpoints to ensure the final product is made of superior quality products.

Providing guidance on autopilot and self driving cars

Consumers as stakeholders are not satisfied with autopilot or self driving cars facilities. Lack of knowledge and education may not enable customers to use such services effectively. Hence, Tesla must arrange for seminars so that proper education about autopilot can be given to consumers. Such seminars must provide necessary information about features of autopilot as well as self-driving cars of Tesla such as self parking, automatic lane changes and auto steer (Tesla, 2021). The firm must also look for improvement of services related to self driving cars.

After analyzing and researching about Tesla’s case study, it can be concluded that Tesla as a brand uses directly to consumer business model in its organization. The SWOT analysis states the internal environment of Tesla. The PESTLE analysis shows the external environment of Tesla Inc. Further, it can also be seen and understood that the drawbacks of Tesla company in the market and reason why they failed to capture the global market. Moreover, this research paper has also discussed the recommendation that Tesla must implement in its business sector. Also, the strategy used by Tesla to crack down on the global market.

Reference list

Adnan, M., Maboud, Y.E., Mahajan, D. and Nair, P.J., (2021). High-Performance Training by Exploiting Hot-Embeddings in Recommendation Systems. arXiv preprint arXiv:2103.00686 .

Alghalith, N., (2018). Tesla: innovation with information technology. International Journal of Business Research and Information Technology , 5 (1), pp.37-51.

Banks, V.A., Plant, K.L. and Stanton, N.A., (2018). Driver error or designer error: Using the Perceptual Cycle Model to explore the circumstances surrounding the fatal Tesla crash on 7th May 2016. Safety science , 108 , pp.278-285.

Bilbeisi, K.M. and Kesse, M., (2017). Tesla: A successful entrepreneurship strategy. Morrow, GA: Clayton State University .

Dai, R., (2020). The Analysis of Tesla’s Competitive Strategy for the Chinese Market.

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