Strategic Management Plan: Tesla

Assignment Code:		RQFBMU43SEP24YF
Programme:		BTEC HND in Business (RQF)
Unit Title and Number:		Business Strategy - Unit 43
RQF Level:		5		Module code:	H/618/5124
Credit value:		15 credits
Module Tutor:		Yannick Fansi
Module Tutor Email:		y.fansi@mrcollege.ac.uk mailto:f.marfo@mrcollege.ac.uk
Date Set:		02/09/2024		Distribution Date:			09/09/2024
Cohort:		September 23 A / B
Student’s name:
Registration number:
Submission
First Submission	?		Formative Submission			?
Second Submission	?		Word Count:
Learner’s statement of authenticity  I certify that the work submitted for this assignment is my own. Where the work of others has been used to support my work then credit has been acknowledged. I have identified and acknowledged all sources used in this assignment and have referenced them according to the Harvard referencing system. I have read and understood the Plagiarism, Collusion and AI sections provided with the assignment brief and understood the consequences of plagiarising.
Signature				Submission Date

Submission Front Sheet

 

Strategic Management Plan: Tesla

Executive Summary

The Tesla Strategic Management Plan outlines a strategy to enhance the company's competitiveness in the electric vehicle (EV) and renewable energy sectors. Targeting Southeast Asia, Tesla aims to capitalise on growing EV demand in countries like Indonesia and Vietnam by establishing local production, charging infrastructure, and tailored models. The plan leverages tools like PESTLE, SWOT, and Porter’s Five Forces, emphasising a balanced scorecard approach with key priorities in financial, customer, internal business, and innovation. Focusing on differentiation, Tesla aims to expand market share and brand equity, solidifying its leadership in sustainable energy and EV innovation globally.

Background to the Organisation

History

Tesla, Inc. was established in 2003 by two engineers Martin Eberhard and Marc Tarpenning in San Carlos California. The company was launched to advance the process of increasing the usage of electricity related to sustainable energy through the manufacture and sale of electric vehicles. Tesla started in 2004 under Martin Eberhard an electric car company and entrepreneur Elon Musk were appointed as the chairman and later C.E.O of the company. Tesla first attracted attention in the summer of 2008 by introducing the Tesla Roadster, the first road-certified electric vehicle with lithium-ion battery cells, the sustainable electric vehicle with excellent range and acceleration performance was a proof of concept. Since then, Tesla Motors has strived to ascend to greater heights in automobile innovation making it among the biggest contributors to the electric vehicles market in the globe (Tesla, 2024).

Products

Currently, Tesla has electric cars for different classes of consumers and energy products that support sustainable futures. The main vehicle offerings include:

• Model S: An electric luxury sedan that is fast, has a long range and has great features. This car is especially famed for its acceleration and exquisite design on the external and internal parts of the vehicle.

• Model 3: The Lucid Air is a cheaper electric sedan designed to extend the ability of EVs to appeal to a wider market. Since its launch on the market, it has become one of the most successful electric vehicles in the world.

• Model X: An electric luxury SUV with a specific look and design with attractive falcon-wing doors providing more room, security measures, and power.

• Model Y: A new model of compact crossover mainly based on the Model 3, but designed to meet the growing market need for SUVs while offering Tesla’s performance and safety features.

• Cybertruck: A new-generation all-electric pickup truck with a design in a concept of the future and high-performance characteristics to redefine the market of pickup trucks.

Also, the company deals in energy products, such as Powerwall, Powerpack and Megapack that are intended for application in Individual homes, businesses and utility providers. Tesla also has solar energy products like solar panels, and solar power roof tiles called the Solar Roof (Businesscasetudies.co.uk, 2024).

Mission

Tesla's business and mission statement is, "to speed up the shift to sustainable transport by bringing compelling mass market electric cars to market as soon as possible." This mission makes the company develop products that will break the cyclical use of fossil fuels while at the same time championing clean energy solutions globally. Tesla's vision is to reduce the world's dependence on fossil fuels and help combat climate change through electric vehicles, energy storage products and solar energy products (Amit and Zott, 2020).

Vision

Tesla wants to see society switched towards electric cars and other forms of green energy as soon as possible. It aims at making premium products in the business of electric vehicle design and production while at the same time supporting the development of renewable energies. Tesla has a clear mission and goal: use electric vehicles; generate and store energy; and help make the world cleaner and greener.

Strategic Position

External Environment

The external environment of Tesla can be examined using three critical frameworks: PESTLE analysis, Porter's Five Forces analysis and stakeholder mapping matrix. Collectively, they refer to a set of macro business conditions, rivalry pressures and stakeholders' activities that affect Tesla's business strategy.

PESTLE Analysis

A PESTLE analysis provides insight into the external forces influencing Tesla's business environment (Henry, 2021).

• Political Factors: The United States provides a stable political climate, with opportunities for businesses to thrive, especially with free trade agreements and partnerships for technology exchange. For US-based automakers like Tesla, this is a significant advantage. Additionally, the US federal government has allocated $7.5 billion to help establish EV infrastructure, which is a strong incentive for electric vehicle manufacturers (Rabalais, 2017). However, the semiconductor chip shortage, exacerbated by the COVID-19 pandemic and the reduction in neon supply from Ukraine (a crucial element for chip production), continues to hinder production across the industry.

In the UK, the political environment is relatively stable. However, post-Brexit disruptions have impacted trade. Moreover, the UK government’s plan to ban vehicles that run on red diesel and biofuels pushes companies toward sustainable technologies (Ahmad et al., 2022). For Tesla, this presents both a challenge and an opportunity to capitalize on the growing demand for environmentally-friendly vehicles.

• Economic Factors: The US economy remains one of the strongest globally, although growth rates are expected to slow from 5.7% in 2021 to 4% in 2022 and 2.6% in 2023 (Miller, 2022). While the unemployment rate is forecasted to drop, companies like Tesla may face increased competition for talent, leading to higher wages and potential cost pressures. Inflation is another critical concern, with rates reaching 7.5% in 2021, increasing raw material costs, and potentially raising the price of final products, which could dampen consumer demand.

Despite these challenges, the electric vehicle (EV) market in the US is poised for significant growth, valued at $287.36 billion and projected to expand at a 24.3% compound annual growth rate (CAGR) through 2028, reaching $1.3 trillion.

In the UK, economic growth is expected to slow from 7.5% in 2021 to 3.6% in 2022 and 1.3% in 2023 (Miller, 2022). The rising per capita income, however, presents an opportunity, as increased disposable income could boost EV sales.

Source: Miller, 2022

• Social Factors: Tesla stands to benefit from shifting consumer preferences toward more sustainable vehicles. In the US, 39% of customers are considering EVs for their next purchase. Consumers are also seeking enhanced features, with a focus on safety and efficiency, which aligns with Tesla's innovation-driven approach (SPENCER & Funk, 2021). As fuel prices rise, the demand for alternatives to petrol and diesel vehicles continues to grow.

• Cultural trends also favor Tesla, as modern consumers, particularly younger demographics, gravitate toward premium and luxury brands. In the UK, a similar shift is occurring, with 69% of drivers considering a switch to electric vehicles due to rising fuel costs (Crider, 2022).

• Technological Factors: The US leads global research and development (R&D) spending, with $171 billion allocated in 2022. Emerging technologies, such as wireless EV charging and ultra-fast charging systems, promise to revolutionize the industry. For instance, graphene-based chargers, capable of reducing charging time to as little as 15-20 seconds, are in development. Additionally, new battery technologies, such as NanoBolt lithium tungsten and gold nanowire gel electrolyte batteries, are pushing the boundaries of EV performance (Miller, 2022).

Tesla must continue to innovate while managing the risks associated with technological misuse by employees or other stakeholders.

• Legal Factors: The US automotive industry is governed by strict regulations under the National Highway Traffic Safety Administration, which oversees vehicle design, construction, and operational standards. The Bipartisan Infrastructure Bill mandates the installation of advanced safety features, such as forward-collision warning systems and automatic emergency braking, which may increase production costs for automakers (Lovells, 2021).

Similarly, in the UK, new laws require the installation of intelligent speed assistance systems in vehicles. While these legal requirements may raise vehicle prices, they align with Tesla's focus on safety innovation. Additionally, the UK government offers financial assistance for intellectual property management, supporting innovation in the EV sector (Miller, 2022).

• Environmental Factors: The nature of Tesla's business model fits well into the current global trend where sustainability is being called for. The focus on cutting carbon and decreasing an industry's reliance on fossil fuels is beneficial to Tesla because its elements of solar energy and battery help lead to a cleaner environment.

Porter’s Five Forces Analysis

Porter’s Five Forces framework assesses the competitive pressures within Tesla’s industry, determining how external factors shape the company's strategies.

Force	Description	Impact on Tesla
Threat of New Entrants	The threat is high due to low entry barriers in the EV market. New EV start-ups like Nio, Rivian, and traditional automakers (Ford, GM, etc.) are switching to electric vehicles, increasing competition. Tesla’s first-mover advantage and economies of scale help mitigate this, but the company must continually innovate and differentiate to stay ahead.	High
Bargaining Power of Suppliers	Suppliers have high bargaining power because Tesla relies on a limited supply chain, particularly for batteries and computer chips. Disruptions, such as chip shortages, can significantly impact production. Tesla counters this by building Gigafactories, shortening the supply chain, and diversifying suppliers. The company's agility, like rewriting software for different chips, also reduces supplier power.	High
Bargaining Power of Buyers	Tesla targets the premium market, which gives it more control over pricing and reduces buyer bargaining power. However, the company may face buyer pressure to diversify its product range, especially in popular segments like large SUVs. Tesla’s strong brand, innovation, and unique offerings further reduce buyer influence.	Low
Threat of Substitutes	There is a high threat from substitutes, including traditional internal combustion vehicles and alternative EV brands. Tesla combats this through its strong brand loyalty, innovative technology, and CEO Elon Musk’s influence, which acts as free marketing. Tesla’s focus on premium products and differentiation reduces the impact of substitutes.	High
Industry Rivalry	Industry rivalry is intense as both start-ups and established automakers are investing heavily in EVs. Competitors employ pricing and differentiation strategies, making it difficult for Tesla to expand its market share. Tesla relies on innovation, vertical integration, and cost leadership to stay competitive in a fiercely contested market.	High

Industry Lifecycle Analysis

The electric vehicle (EV) industry is currently in the Growth stage of the industry lifecycle that is highly characterized by high growth rates of a growing size, low rivalry. The themes for advancement are evident in this domain: innovation and differentiation can be seen in the market, with companies like Tesla at the forefront of creating new solutions like battery and auto-driving technologies. However, competitive pressure is gradually increasing, mainly because new entrants such as Rivian begin with governmental support and advancements in technology. Segment rivalry in Porter’s Five Forces is also inclined to increase with the growth stage of the industry, although threats from substitutes remain moderate, and the bargaining power of suppliers remains high due to the scarcity of resources such as lithium.

Stakeholder Matrix

	High Interest	Low Interest
High Power	Manage Closely	Keep Satisfied
	Local Governments (Indonesia, Vietnam)	Suppliers (Battery materials)
	Consumers (Middle-class, urban dwellers)	Investors/Shareholders
Low Power	Keep Informed	Monitor
	Environmental Advocacy Groups	Local Competitors (Emerging EV manufacturers)
	Local Businesses (Charging infrastructure)

The Stakeholder Matrix provides a clear framework for managing Tesla's key stakeholders based on their levels of power and interest.

• Manage Closely: This group consists of the local governments and the consumers. The local governments exert high power and are highly interested in places like Indonesia and Vietnam, where Tesla may source materials or set up manufacturing facilities due to regulatory control and manufacturing incentives. High interest and power is represented by middle-class, urban consumers who can influence Tesla’s sales and brand recognition, therefore it is important to interact with them.

• Keep Satisfied: Suppliers of those strategic battery materials enjoy high power but low operational interest. Although these stakeholders are much less involved in the strategy of Tesla, the car manufacturer must sustain a positive relationship, which guarantees the supply of material. Likewise, investors/shareholders enjoy more power, but are more interested in financial outcomes of Tesla, and hence do not need to interfere very often.

• Keep Informed: Environmental activist organizations and local businesses actively participating in Tesla’s charging network must be closely informed of Tesla’s sustainability initiatives and EV growth since their perceptions shape the public’s perception. These groups are not endowed as directly with power but they play a significant role in the sustainability of the success.

• Monitor: Local competitors, including new EV makers, should be watched in the region, but are not a significant threat to Tesla’s world conquests at the moment.

Strategic Capabilities

Tesla’s strategic assets relate to the firm-specific resources that the firm brings to bear in the management of strategic initiatives within the electric vehicle (EV) and renewable energy spaces. In terms of resource management, fabrication of the overall company structure, and advanced usage of technology, Tesla shapes innovation and profit (JOHNSON, 2023). The subsequent part evaluates these capabilities specifically by Value Chain Analysis and the Framework of the McKinsey 7S.

Value Chain Analysis

Tesla’s value chain outlines the primary and support activities that contribute to value creation for its customers.

Primary Activities:

• Inbound Logistics:

Tesla has also established a long supply chain for its production and has focused greatly on battery supply. The Gigafactories in Nevada, Shanghai and Berlin are a way to implement the concept of vertical integration which is aimed at minimising the risks derived from reliance only on outsourced parts and components such as batteries. Thus, battery production allows Tesla to cut costs significantly and retain the most important link of the chain (Corporate Finance Institute, 2024).

• Operations:

Currently, assembly lines in the Tesla production system are largely computerised, especially at the Fremont plant and Gigafactories. This concentration on the usage of machines and robots has greatly enhanced the production process and has allowed Tesla to ramp up production considerably faster than has been seen with conventional auto manufacturers. However operational obstacles have emerged especially during the Model 3 segment launch where production concerns affected set goals.

• Outbound Logistics:

Tesla has managed to popularise direct sales that cut down on the dealerships hence enabling the company to control the purchase experiences directly. Since the company came up with an online platform for customers and Tesla stores, it has been cutting on extra costs of dealership networks (KIM and MAUBORGNE, 2015).

• Marketing and Sales:

Marketing communication: Tesla does not have conventional marketing communication; it does not spend much money on advertisements. Instead, it solely leans on its big brand appeal, people's word of mouth, and the image of its chief executive officer Elon Musk to create awareness and subsequently people's demand.

• Service:

This company has a unique approach when it comes to customer relations concerning software issues and car repairs. OTA updates improve vehicle performance without necessarily needing to physically visit the garage which is a strong proposition from a traditional automaker. There is yet another solution designed for better access to owners of Tesla vehicles: the global Supercharger network (Strategy+business, 2024).

McKinsey 7S Framework

The McKinsey 7S Framework analyses seven key internal elements necessary for success:

• Strategy: The competitive strategy of Tesla revolves around the aspect of differentiation being a provider of differentiation and industry standards in terms of range and performance while keeping concentrated on the economies of vertical integration to control for costs.

• Structure: Tesla is organised in a decentralised manner, that allows for quick decision making and encourages creativity. On the other hand, such a structure may cause communication barriers as the firm grows big.

• Systems: The operational systems at Tesla include those that are integrated with a slew of software solutions that augment manufacturing and support customer services; however, expansion of such complex systems bears inherent dangers as demand increases (McKinsey & Company, 2008).

• Shared Values: Innovation, sustainability, and excellence are non-negotiable principles that drive the organisation and create a customer-employee nexus of reducing the carbon footprint.

• Style: The visionary leadership of Elon Musk in his companies has been marked by the high speed of innovation but at the same time, the actions of the CEO and his personality may cause fluctuation in the company.

• Staff: Employees in the company are highly skilled personnel required for innovation at the Tesla company. However, factors like high working pressure which is a barrier to talent retention remain unattended as they fall under the workplace culture.

• Skills: If compared to its main competitors, Tesla stands out in technology advancement especially in battery and self-driving systems to advance in the new EV business.

Strategic Position

To build its strategic capability, Tesla organises its business activities around strong technological advantage, brand reputation, and environmental responsibility. These enhanced strengths set Tesla apart in the rivals' competitive EV and related renewable energy markets. Still, the company has its threats including high production costs as well as supply chain relating to battery materials. The opportunities are the innovation of new markets, for example, SEA and the development of autonomy in cars (ROTHAERMEL, 2018). However, there are some threats that Tesla needs to face; rising competition by traditional car makers venturing into EV production and; the threat of regulatory adjustments in business operations in different countries.

SWOT Analysis of Tesla

The Tesla Company’s SWOT analysis focuses on the company’s strategic competencies and opportunity in the electric vehicle (EV) business and the renewable energy market. Conducted in this process, SWOT helps us to analyse the company’s competitive environment and its prospect.

Strengths

Tesla’s most effective sources of competitive advantage are in technology, including battery and autopilot systems. The company has built a brand image and identity based on innovation, going green, and high performance to attract consumers loyalty. Furthermore, through an example of Gigafactories, Tesla has a type of vertical integration that provides control over certain links of the supply chain and powers it, in particular, batteries. By following this strategy the costs are lowered, and the supplier’s risks for having to supply a large number of buyers are also minimized. It directly improves the customer experience while reducing cost relations to traditional dealership networks central to the business (Cam.ac.uk, 2016b).

Weaknesses

At the same time, there are several weaknesses in the Tesla organization’s functioning: Cost challenges have implications for returns and price setting; operational issues have presented themselves, as during the case of the Model 3, evincing problems in achieving economies of scale. This is also partly the case of the company as it has invested a lot on its CEO Elon Musk whose words can either work positively or negatively on brand image and shareholders’ value. In addition, the high pressure work environment may lead to the talent retention problems, when people cannot manage working and personal lives.

Opportunities

There are some great opportunities for Tesla Company to grow. The company has an opportunity to diversify and enter new markets, especially in SE Asia as the market for EVs increases. The second prospect for leadership is the further investment in the AV creation; currently, it is one of the key segments that can be the leader in the following years. Moreover, it can apply expertise to the development of such related fields as solar energy and energy storage, in accordance with global tendencies towards sustainability. Ventures with other suppliers and technological firms can also increase Tesla’s industry specifications and advance technology (Strategy+business, 2024).

Threats

However, several threats are present here, though quite significant to an extent. The car manufacturers are now shifting towards this segment, their old-school industries are coming with new models of electric cars that may put a shift on the tesla cars business and its pricing strategies. High risk is associated with direct material such as lithium and cobalt since suppliers’ disruptions affect production schedules and expenses. Various threats include regulatory changes in the different countries that affect operation, cost of production as well as market entry. Finally, due to the market development of EVs, Tesla needs to ensure it introduces new products that will give it an edge over market competitors (BusinessBalls, 2023).

Opportunities, Strategic Priorities and Objectives

Opportunities for Growth

Market Development Strategy for Tesla in Southeast Asia

The market Development strategy of Tesla is to deliver its product in the Southeast Asia region, particularly Indonesia and Vietnam since the market for EVs is highly likely to grow.

The reason for selecting Southeast Asia includes an increased need for EVs as countries fight emissions and embrace ecology in transportation trends. Indonesia had initiated plans for new vehicle sales to be electric by 2025 while Vietnam has been boosting its local industry for electric vehicles, a perfect environment for Tesla. Moreover, most of the Southeast Asian countries are giving incentives such as subsidies and tax exemptions to the use of EVs, which will continue to fuel the company's growth.

For Tesla to effectively undertake this strategy the following actions should be undertaken Strategic actions. First, local automobile plants in Indonesia or Vietnam will lower import taxes or domestic logistic costs and position Tesla to effectively meet demand while providing employment opportunities in the area (Loredana, 2016). Secondly, the cultivation of relationships with local authorities is a key to receiving subsidies and dealing with the legislation.

Strategic Priorities and Objectives

To effectively link its operations with its growth opportunities, Tesla needs to define some strategic directions. Indeed, the Balanced Scorecard helps do this because it serves as a map to turn strategic vision into operations. The Balanced Scorecard evaluates four key perspectives: Financial, Customer, Internal Business, Innovation & Learning.

Financial Perspective

Question: How do we look to shareholders?

Goals	Measures
Increase revenue	Revenue growth rate
Improve profitability	Net profit margin
Enhance shareholder value	Return on equity (ROE)
Cost reduction	Operating costs as a percentage of sales

This focuses on financial performance, aiming to increase revenue, profitability, and shareholder value while reducing costs. Key performance indicators include revenue growth, net profit margin, and return on equity (Harvard Business Review, 1992). These measures demonstrate the company’s financial health and efficiency in using resources.

Customer Perspective

Question: How do customers see us?

Goals	Measures
Improve customer satisfaction	Customer Satisfaction Index (CSI)
Increase market share	Market share percentage
Enhance brand loyalty	Customer retention rate
Improve product quality	Number of customer complaints

Customer satisfaction and loyalty are critical for business success. Goals include improving market share, customer satisfaction, and brand loyalty. Metrics such as customer retention rate and complaint numbers track how well the company meets customer expectations, indicating long-term relationships and competitive positioning.

Internal Business Perspective

Question: What must we excel at?

Goals	Measures
Improve operational efficiency	Time to market
Enhance product development	R&D investment as a percentage of sales
Streamline supply chain	Cycle time or inventory turnover rate
Improve employee productivity	Employee efficiency ratio

Operational efficiency and product innovation are crucial for competitive advantage. This perspective emphasises streamlining operations, improving productivity, and developing products quickly. Measures such as time to market, employee efficiency, and supply chain performance reflect the company’s internal ability to meet customer needs and manage resources effectively (Harvard Business Review, 1992).

Innovation and Learning Perspective

Question: Can we continue to improve and create value?

Goals	Measures
Foster innovation	Number of new products launched
Improve employee skills	Training hours per employee
Encourage knowledge sharing	Internal promotion rate
Adopt new technologies	IT investment ratio

This perspective focuses on fostering innovation, improving employee skills, and adopting new technologies. Key metrics include the number of new products launched, training hours per employee, and internal promotion rates. It ensures the company remains adaptive, innovative, and able to sustain long-term growth and competitiveness.

SMART Objectives

Accordingly, Tesla needs to develop clear, specific, achievable, realistic, and time-bound goals to support its strategic plans. Two SMART objectives are outlined below:

1. Reduce production costs by 15% within the next three years by optimising Gigafactory operations and increasing the efficiency of battery production.

   • This objective is aligned with Tesla’s financial goal of improving margins and increasing profitability. Achieving this reduction will make Tesla’s vehicles more affordable, helping it compete in both developed and emerging markets.

2. Achieve a 25% increase in market share in the Asia-Pacific region by 2026 through the expansion of local manufacturing, entry into new markets, and enhanced charging infrastructure.

   • This objective focuses on Tesla’s market development strategy, particularly in high-growth regions such as China, India, and Southeast Asia (Harvard Business Review, 1992). Tesla must capitalise on the rising demand for electric vehicles in these regions, where government policies favour clean transportation.

Competitive Strategy and Tactics

Tesla competes in a very crowded industry, with not only traditional automakers but also the new crop of pure-play EV manufacturers. This paper aims to explore how Tesla MOTOR uses Porter's Generic Strategies and Bowman's Strategy Clock to sustain its competitiveness (Cam.ac.uk, 2016a). These are the following strategies and the associated tactics by which Tesla can bolster its position in the market, which will be defined in this section.

Porter’s Generic Strategies

Porter's framework identifies three primary strategies that companies can adopt to achieve a competitive advantage: Each of the strategic business models involves Cost Leadership, Differentiation, and Focus. The best strategies suitable for Tesla include; Differentiation and Differentiation Focus strategies.

Differentiation Strategy

Tesla mainly practices the Differentiation Strategy as it involves growth differentiation that aims at delivering distinctive products in the market. This strategy focuses on several key aspects:

• Technological Innovation: Some of these technologies include; battery technology, full self-driving technology and over-the-air software updates among others. These innovations give Tesla the competitive edge that sets its automobiles apart from all other automobiles in the market (Lang et al., 2021). These innovations provide Tesla with a unique selling proposition (USP) that distinguishes its vehicles from competitors.

• Sustainability: The aspects of sustainability are familiar to environmentally aware consumers, and Tesla has adopted them in its business. However, Tesla built a brand that identifies itself as the market leader in the transition to renewable sources of energy and also those people who are willing to buy environmentally friendly vehicles would prefer to buy Tesla cars.

• Brand Image: Currently, Tesla's brand association is based on three pillars that include innovation, luxury, and environmentalism. This is supported by the charismatic leadership of the CEO Elon Musk which makes customers want to identify with his company.

Differentiation Focus Strategy

In addition to a broad differentiation approach, Tesla also employs a Differentiation Focus Strategy by targeting specific market segments that value its unique offerings:

• Premium Segment: Having its high-end models like Model S and Model X, Tesla targets affluent consumers who are willing to pay for luxury electric cars with fascinating functions (Saxena and Vibhandik, 2021).

• Tech-Savvy Consumers: The purchase decision associated with this scheme is usually made by first adopters who are eager to buy technologically advanced products, focusing on the unique features of such automobiles as cars of Tesla.

Bowman's Strategy Clock

Another tool that is worth looking into is called Bowman's Strategy Clock which deals with the thin-client model based on the identified dimensions of perceived value and price. Tesla's strategy can be visualised on the clock as follows:

1. Differentiation (Position 1): Tesla is placed above the 50% clock, especially in the differentiation segment, where high value is given at a high cost (Villagrasa et al., 2021). This positioning reflects its high technology, performance standards and environmental conservation issues.

2. Hybrid Strategy (Position 3): Tesla also uses a twofold strategy here, with the hope of providing some distinctive features while at the same time average vs luxury brands' pricing. Tesla's use of this strategy helps the company reach out to more people in the market without lowering the quality of its cars or the invention of technologies.

5.3 Tactics to Support Competitive Strategy

Subsequently, to support these competitive strategies, Tesla needs to follow particular short-term moves that will help achieve the long-term vision. The following tactics can support Tesla’s differentiation and focus strategies:

1. Continuous R&D Investment

• Tactic: This in part means that more should be invested in such areas as research and development regarding battery technology as well as self-driving automobiles. This will allow Tesla to be a technological leader in EV advancement and sustain the company's unique selling proposition.

• Impact: Ongoing advancement in technology will enhance brand association with the company as an innovator and thus create a reputation for attracting tech-savvy customers.

2. Expansion of Product Lines

• Tactic: Introduce new vehicles, new models at different price ranges, mid-price vehicles and budget vehicles (Maradin et al., 2022). This could be seen in small-sised EVs that would appeal to city-centred and middle-income consumers.

• Impact: The following potential Element C strategies will improve Tesla’s competitiveness: The expansion of product portfolios will advance the market coverage and promote novel users’ attractiveness.

3. Strategic Partnerships and Collaborations

• Tactic: Establish collaborations and alliances with these sub-national governments and enterprises to create infrastructure for charging the EVs and spurring their use. Renewable energy companies can also be helpful in engineering and strengthening Tesla's sustainable reputation.

• Impact: Good relationships will complement the development of Tesla’s brand image, provide increased convenience to customers, and help with market expansion.

4. Focus on Customer Experience

• Tactic: Pay particular attention to customer satisfaction, expectations during the pre-sale, the process of purchase, product usage, and in case of a complaint, customer relations after the purchase (Jing, 2020). In addition, extending the customer value proposition to include services like home charging solutions will help to give customers increased satisfaction.

• Impact: Consumers’ experience will be a strong driver for brand association and organic recommendations.

5. Marketing and Brand Positioning

• Tactic: Launch advertising messages that base Tesla's specific selling proposition such as performance, technology and sustainability. Utilise social networking sites and the use of influential personalities in the promotion of the products for the target group of technology-savvy clients.

• Impact: Marketing strategies will strengthen Tesla’s brand image and market ‘face recognition’ in the new markets.

Action Plan, Implementation and Control

To implement Tesla’s competitive strategies effectively, a comprehensive Action Plan with measurable Key Performance Indicators (KPIs) across the Balanced Scorecard perspectives—Financial, Customer, Internal Business, and Innovation and Learning—is essential (Harvard Business Review, 1992).

Financial Perspective

This perspective focuses on evaluating Tesla’s financial performance. Key KPIs include the Revenue Growth Rate, targeting 20% annual growth over the next three years. Additionally, Tesla aims to improve its Operating Margin by 5% within two years and achieve a 15% ROI on R&D investments. Reducing the Cost per Vehicle Produced by 15% within three years will also enhance profitability.

Customer Perspective

The Customer Perspective assesses how well Tesla meets customer needs. KPIs include a Customer Satisfaction Score (CSAT) of 90% or higher, a Net Promoter Score (NPS) of 70 or above, and a 25% increase in market share in the Asia-Pacific region by 2026 (Benzidia et al., 2021). Improving the Customer Retention Rate to 80% within three years is crucial for sustaining revenue.

Internal Business Perspective

This perspective evaluates internal processes. KPIs include achieving 95% production efficiency in Gigafactories, reducing Supply Chain Lead Time by 20% within two years, and increasing Employee Productivity Rate by 10% through training. Maintaining a defect rate of less than 1% in manufactured vehicles is essential for quality assurance.

Innovation and Learning Perspective

This perspective assesses Tesla’s ability to foster innovation. Key KPIs include allocating 10% of annual revenue to R&D, filing at least 50 new patents annually, providing 40 hours of training per employee each year, and reducing the Time to Market for New Products by 15% within the next two years (Sovacool et al., 2020).

Strategic/Tactical Objectives	Implementation Target Date
Financial Perspective
Achieve a Revenue Growth Rate of 20% annually	End of Year 3
Improve Operating Margin by 5%	End of Year 2
Attain a 15% ROI on R&D investments	End of Year 2
Reduce Cost per Vehicle Produced by 15%	End of Year 3
Customer Perspective
Achieve a Customer Satisfaction Score (CSAT) of 90% or higher	End of Year 1
Maintain a Net Promoter Score (NPS) of 70 or above	End of Year 1
Increase market share in the Asia-Pacific region by 25%	End of Year 3
Improve Customer Retention Rate to 80%	End of Year 3
Internal Business Perspective
Achieve 95% production efficiency in Gigafactories	End of Year 2
Reduce Supply Chain Lead Time by 20%	End of Year 2
Increase Employee Productivity Rate by 10% through training	End of Year 2
Maintain a defect rate of less than 1% in manufactured vehicles	Ongoing
Innovation and Learning Perspective
Allocate 10% of annual revenue to R&D	Annually
File at least 50 new patents annually	Annually
Provide 40 hours of training per employee each year	Annually
Reduce Time to Market for New Products by 15%	End of Year 2

Conclusion

All in all, the company Tesla, Inc. has become a market leaders in electric vehicle and renewable energy industries due to the company's vision of promoting sustainable change globally. Based on the PESTLE, SWOT, and Porter's Five Force models in this Strategic Management Plan, those vital growth areas are seen, including the Southeast Asia region. Market development can be achieved by following the Market Development Strategy with the help of the Differentiation Strategy to increase the market share and improve the customer retention rate in the company.

The clear definition of tangible KPIs by using BSC will help Tesla to evaluate its performance according to such perspectives as financial, customers, internal business processes, and innovation. This strategic perspective, matched with particular strategic actions, allows Tesla to manage threats while serving disruptive opportunities. In the end, Tesla looks to maintain their focus on innovation and sustainability to not only become and remain the leading EV company but also to be an example and a positive force for change in the world and the automotive industry. Tesla therefore possesses the key competitive advantage that will allow the firm to realise long-term objectives and drive change in the automobile value chain.

References

? SPENCER, A., & Funk, C. (2021). Electric vehicles get mixed reception from American consumers. /www.pewresearch.org. Retrieved 29 March 2022, from https://www.pewresearch.org/fact-tank/2021/06/03/electric-vehicles-get-mixed-reception-from-american-consumers/.

Ahmad, I., Alqurashi, F., Abozinadah, E. and Mehmood, R. (2022) Deep journalism and DeepJournal V1. 0: a data-driven deep learning approach to discover parameters for transportation. Sustainability, 14(9), p.5711.

Amit, R. and Zott, C., (2020). Business model innovation strategy: Transformational concepts and tools for entrepreneurial leaders. John Wiley & Sons.

BusinessBalls: Leadership, Compliance, Soft Skills Training. (2023). Home | BusinessBalls: Leadership, Compliance, Soft Skills Training. [online] Available at: https://www.businessballs.com/ [Accessed 29 Sep. 2024].

Businesscasetudies.co.uk. (2024). Available at: http://ww1.businesscasetudies.co.uk/ [Accessed 29 Sep. 2024].

Cam.ac.uk. (2016a). Porter’s Generic Competitive Strategies (ways of competing). [online] Available at: https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/ [Accessed 29 Sep. 2024].

Cam.ac.uk. (2016b). Porter’s Value Chain. [online] Available at: https://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/ [Accessed 29 Sep. 2024].

Corporate Finance Institute. (2024). Home page. [online] Available at: https://corporatefinanceinstitute.com/ [Accessed 29 Sep. 2024].

Crider, J. (2022). UK Drivers Cut Fuel Costs 69% Switching To EVs From Petrol/Diesel Cars. cleantechnica.com. Retrieved 29 March 2022, from https://cleantechnica.com/2022/02/04/uk-drivers-cut-fuel-costs-69-switching-to-evs-from-petrol-diesel-cars/

Harvard Business Review. (1992). The Balanced Scorecard—Measures that Drive Performance. [online] Available at: https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2 [Accessed 29 Sep. 2024].

Henry, A., (2021). Understanding strategic management. Oxford University Press.

Jing, N., (2020), December. Research on Tesla’s Customer Care Innovation. In 2020 Management Science Informatization and Economic Innovation Development Conference (MSIEID) (pp. 469-478). IEEE.

JOHNSON, G. et al (2023) Exploring Strategy: Text and Cases.13^th Ed. Harlow: Pearson.

KIM, W. C. and MAUBORGNE, R. (2015) Blue Ocean Strategy. Expanded Ed. Boston: Harvard Business Review Press.

Lang, J.W., Reber, B. and Aldori, H., (2021). How Tesla created advantages in the ev automotive paradigm, through an integrated business model of value capture and value creation. Business & Management Studies: An International Journal, 9(1), pp.385-404.

Loredana, E.M. (2016) The use of Ansoff matrix in the field of business. In MATEC Web of Conferences (Vol. 44, p. 01006). Les Ulis, France: EDP Sciences.

Lovells, H. (2021). Bipartisan Infrastructure Bill includes new safety mandates for auto industry. www.jdsupra.com. Retrieved 29 March 2022, from https://www.jdsupra.com/legalnews/bipartisan-infrastructure-bill-includes-3175735/

Maradin, D., Malnar, A. and Kaštelan, A., (2022). Sustainable and clean energy: the case of tesla company. Journal of economics, finance and management studies, 5(12), pp.3531-3542.

McKinsey & Company. (2008). Enduring Ideas: The 7-S Framework. [online] Available at: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/enduring-ideas-the-7-s-framework [Accessed 29 Sep. 2024].

Miller, K. (2022). A Substantial and Scrupulous PESTLE Analysis of Tesla. [online] Crowjack. Available at: https://crowjack.com/pestle-analysis/tesla [Accessed 9 Oct. 2024].

?Rabalais, A. (2017) Drive down to electric avenue: Taking electric vehicle incentives higher. LSU J. Energy L. & Resources, 5, p.427.

ROTHAERMEL, F. (2018) Strategic Management. 4^th Ed. Maidenhead: McGraw-Hill.

Saxena, N. and Vibhandik, S., (2021). Tesla's Competitive Strategies and Emerging Markets Challenges. IUP Journal of Brand Management, 18(3).

Skye Gould,Danielle Muoio (2016). Here’s how Tesla’s electric cars stack up against the competition | Business Insider India. [online] Business Insider. Available at: https://www.businessinsider.in/heres-how-teslas-electric-cars-stack-up-against-the-competition/articleshow/53964503.cms [Accessed 9 Oct. 2024].

Strategy+business. (2024). strategy+business: international business strategy news articles and award-winning analysis. [online] Available at: https://www.strategy-business.com/ [Accessed 29 Sep. 2024].

Villagrasa, J., Sánchez, F. and Donaldson, C., (2021). Deciphering the strategic clock hands: from theory to reality. In INTED2021 Proceedings (pp. 9571-9584). IATED.