The particular report aims to analyze the success of the Tesla Motors company from several perspectives. The first part relates to the methods and factors which led the company to the advancement of the market. Taking into consideration the uniqueness of the company, it is interesting to analyze the reasons for the emergence of the business. The second part refers to the examination of the environment of the market where TESLA operates. The critical tool for such evaluation is the PESTLE analysis. It would help to provide the recommendations and possible development of the company on the market.
The analysis of the company contemplates the examination of the background of the company. First of all, it is necessary to admit that the creation of the company derived from the ideas of Eberhard, the entrepreneur, who wanted to create an environmentally friendly sports car (Hill, Schilling, and Jones, 2016, p. 243). Moreover, he aspired to make the vehicle which would not depend on the prices of oil. As a result, it provided the concept for the automobile company which would focus on the production of the cars on the alternative fuel. Following, the company was founded in 2003, and now it operates in the sphere of electric vehicles, energy storage, and panels.
The growth of the company to the current size and power is concerned with the activity of the company on the market. The primary source of the changes by the company were the methods of the company. They are based on several principles that can be traced through the history of the firm. The first method to outline refers to the focus on innovation. The innovations, in particular, changes in electric power as the source of the car, have become the critical factor in the emergence of the Tesla company. The company donated substantial funds to support the inventions and the development of the batteries. The reason is that the technologies are always changing. Following, without the support of the new technological solutions the company would lose its identity and advantage towards others. Other than that, the motor giants are developing and become more competitive in the implementation of alternative fuel options.
The second strategy refers to the idea that the company has taken the niche which later evolved to the broader market where its role became dominant. It is concerned with the fact that the market for advanced electric cars was not evolved. With the development of society and technologies, the demand for individual groups produced the launch of such a project as Tesla Motors. The success was made possible due to the specific technological development of the society and industry as well as the social trends.
Another component of the successful strategy refers to the person of Elon Musk. He represents the world of technology, startups, and the future. Moreover, he was one of the key players in the formation of the business. His initial contributions in the form of $13 million underpinned further development (Bolland, 2017, Case 8.1). Other than that, he constitutes a significant part of the image, reputation, and marketing efforts of Tesla Motors. It contributes to the idea that the product is an innovative solution for the needs of the future. The explanation for such a move refers to the fact that people need to trust in what they buy. Elon Musk has the reputation of the person who provides a safe and comfortable future. The company has presented several generations of the Tesla cars. Each shall be more accessible than the previous one providing the massive market in the future (Dyer and Gregersen, 2018). The reason for such development of the pricing policy is concerned with the demands of the society, in particular, in the higher comfort of life, aspiration for equality and caring for the environment. As a result, the methods of Tesla Motors are caused by the demands of the market, concerns of society, and technological markets. The comprehensive strategy of Tesla Motors focused its actions on innovation, environment, safety, trust, and future which reflect the demands and concerns of the society in the period of constant transitions. It made the company successful not only in the UK but overseas.
The analysis of the further development of the business shall be contemplated due to the external and internal factors. Considering the role of society and the market in influencing the company, the PESTLE evaluation would be an appropriate tool for understanding the process. The first part relates to the definition of the political factors affecting Tesla Motors. They include the government initiatives to foster the production and use of electric cars and electric sources of power. Possible aid or support from the government will provide the expansion of the market. The power of civil society backs this factor and reflects the international agenda on lowering emissions rate resulting from the petrol and diesel engines. Moreover, Brexit gives opportunities to new agreements in trade and production, including stronger cooperation between the U.S. and the UK. The government wants to provide the smooth transition of the economy after the Brexit, and it gives the risks and opportunities for Tesla. However, there are more opportunities as the market would be more independent.
Economic factors refer to the stability of the market and costs on the production of the electric panels and batteries. With the development of the renewable energy market, the values of the batteries would lower. As a result, it would make the products of the company more accessible because of the lower costs of productions. Following, more people would be able to buy the goods, while the market would grow. It contributes to the increase in revenues. Nevertheless, the company shall focus on the creation of the unified supply and production chain to be completely independent of the market. There are some controversial issues. The cost of old cars would decrease, but there would be restrictions on the use of them. Moreover, there is a threat in the face of such automobile giants as BMW or Audi. They develop new electric cars but incorporate them gradually to avoid the collapse of the market. Following, in the future, there were be more competitors.
The social factors represent the concerns of civil society. International trends are showing that people support healthy and environmentally friendly policies. The development of the low-carbon lifestyle backs it. The significant environmental issue promotes the use of renewable energies, creating the demand. Moreover, the recent success of Mask and his Falcon project contributes to the image of him which is projected on the Tesla Motors.
Describing the technological factors, it is necessary to outline the rates of technological transformations. It creates risks and opportunities. The company can answer the challenges, but the dominance may be lost due to the appearance of new actors with the competitive technological base. The automation of the business would contribute to the production of more cars. Besides, the collaborations within the Mask’s companies would give an advantage in the implementation of mobile systems into the vehicles.
The ecological factors provide tremendous opportunities for the business. The issue of climate change makes the market significantly for the future of the planet. Following, it leads to an increase in the number of environmental programs and initiatives. Tesla Motors is one of the pioneers in renewable energy. Following, there will be many projects for the company to realize. Other than that, it leads to the improvement of the standards of the disposals of the wastes. By that, the company would be the trendsetter in this field having the highest level of development.
Legal aspects are concerned with possible legislative acts. They are connected to the political agenda and social trends. The UK is known for its strict emissions laws. Other than that, the Brexit processes show that Britain would be able to implement its environmental policy and to ban the diesel and petrol cars (Swinford, 2018). The strict system towards the future ecological situation in the country provides the opportunity for the proliferation of electric cars in the long run. As a result, the PESTLE analysis showed that there are more opportunities for the company rather than risks. The main threats are concerned with the emergence of the actors and competitors. While the political, social, ecological factors show the positive implications for the development of environmentally friendly products, providing demand and support in the future. By that, the focus on the innovations, technology, and support of renewable energy would help to fulfill the opportunities. The company shall pay particular attention to the investment in technology and the free supply chain to maintain a competitive advantage in the future.
In conclusion, Tesla Motors is a successful company in the field of production of electric cars, energy storage, and batteries. The primary methods of the company relate to the focus on innovations, fulfilling the demand of the market of renewable energy and reputation of Elon Musk as the face of future and change. The PESTLE analysis showed many opportunities for the business as the political, social, and legal factors back the development of environmentally friendly cars and technologies. The company is the leader in that sphere, and the technological inventions would decrease the cost of production lowering the prices and expanding the market. The company shall follow the previous strategy and back its unique methods and supply chain.
- Dyer, J. and Gregersen, H. 2018. Decoding Tesla’s Secret Formula. [online] Forbes.com. Available at: https://www.forbes.com/sites/innovatorsdna/2015/08/19/teslas-secret-formula/#efb262653c4b [Accessed 15 Feb. 2018].
- Bolland, E. 2017. Comprehensive strategic management. Bingley: Emerald Publishing.
- Hill, C., Schilling, M. and Jones, G. 2016. Strategic Management: Theory & Cases: An Integrated Approach. 12th ed. Cengage Learning.
- Swinford, S. 2018. Diesel and petrol car ban: Plan for 2040 unravels as 10 new power stations needed to cope with electric revolution. [online] The Telegraph. Available at: http://www.telegraph.co.uk/news/2017/07/25/new-diesel-petrol-cars-banned-uk-roads-2040-government-unveils/ [Accessed 15 Feb. 2018].