The Tesla Business Environment Analysis

TESLA is a sustainable and successful organization that can be an example for other start-ups and businesses in the auto industry. The most striking advantage of the company is not only Elon Musk’s ability to enter new markets and expand production volumes, but also its focus on providing a more sustainable future for our planet. It is necessary to list the most significant PESTLE forces that affect TESLA to understand how they affect the organization’s activities.

Political and legal forces that impact the TESLA Company include the influence of the governments of the states in which the company’s factories and markets are located. In advanced economies such as the US, EU, or China, local policies such as taxes on production and sales or financial reporting requirements may have the greatest impact. At the same time, in developing economies where there are problems with corruption, this can become an obstacle to the formation of a stable market or the location of production facilities. For example, in the United States, which is known as a state with a stable legal system, some requirements related to the coronavirus, for example, led to the closure of TESLA factories for a long time. At the same time, in China, the company was faced with government policies to support local manufacturing.

Economic forces that can have a significant impact on the conduct of business include primarily competition in the markets. For example, when entering the Chinese market, TESLA had to work hard to cope with the pressure from other players, given that the Chinese market today is the world leader in the production of electric vehicles of elite, business, and economic class. TESLA has used brand appeal and brand recognition and a limited, excellent lineup of car models to attract customers.

Social forces that impact the company include the reactions and social makeup of the target audience in the markets where the company operates. Understanding the reaction of society to company policies, such as environmental policies, allows TESLA to maintain customer loyalty to the brand. At the same time, a correct assessment of the social status of the target audience of consumers allows regulating the production of business, premium, or economy class models. For example, when entering the Chinese market, TESLA was originally going to flood this market with business-class SUVs, but as a result, they switched to selling economy-class sedans.

At the same time, the demand for sedans in the EU dropped significantly, contrary to the company’s expectations, and TESLA had to reorient itself and reduce its presence in the European market. Significantly, the surge in consumer attention to technology marked the TESLA’s massive success, as the brand’s marketing vision was articulated around the interest in alternative power to electric motors and other types of energy other than oil or gas. At the same time, environmental issues in the environment have created an additional incentive for the purchase of electric cars and solar panels from the company.

Today, one of the main long-term business goals of the company is to conquer and consolidate positions in the Chinese market, where not so long ago TESLA built two new plants for the production of electric cars. To achieve this goal, the company needs to conduct market research from time to time and adjust its activity. The stage between obtaining the results of marketing research and the implementation of a new business strategy that would build on these results includes the need to create a strategic plan.

For example, when TESLA learned of the increased potential demand for sedans in more remote areas of China, they developed a strategic business plan, based on which the company reached out to a target audience of potential buyers. As part of this plan, various details were probably identified, such as the volume of additional products for which there is demand, the ability to produce cars in China or transport them from the United States, or, for example, the specifics of distributing marketing and advertising information through social networks. Traditional advertising or other sources. Likewise, TESLA needed to analyze the demand and plan to bring new products to the Chinese market, including the demand for solar panels and lithium batteries. After the company realized that the demand for solar panels was not high enough, adjustments were made to the strategic business plan and TESLA decided to relocate only electric car factories to China, transporting spare lithium batteries as needed.

The company’s main products are a line of electric vehicles, including business class cars, sedans, SUVs, and trucks. In addition, TESLA produces solar panels and replacement lithium batteries for electric cars that are comparable to other brands. Another important product that is in high demand among consumers is the electric car refueling network, especially in the United States, where this network is reaching unprecedented proportions, connecting the West and East coasts.

Setting up a chain of gas stations was the only way to attract customers and ensure stable demand, given the reluctance of consumers to trust new products. The factor of mistrust was especially difficult to overcome, given the nature of the product – electric cars, since consumers tend to be conservative in choosing products that require significant investment. The main customers of the TESLA products and services are usually middle class, both in the US and China markets. Given the upward trend in the Chinese market, the number of consumers here continues to grow, even though the overall growth rate of the Chinese economy has slowed.

Most TESLA employees work in production and therefore do not use personal computers in their work. At the same time, for the work of back-office employees, TESLA uses various technologies, such as a leave management system that automates the leave processing task, including policy configuration, application, approval, and leave balance. LMS and Oracle systems are extremely easy to use for financial reporting and reporting in HR management. HR also uses a variety of specific technologies to recruit employees; for example, Psytech.com is a handy tool that can be used by a company to select suitable candidates for vacancies through passing tests and filling out various forms.

Office workers also use useful software such as Microsoft’s HR Helpdesk and Teams for work communication and information exchange. Slack, Zoom, and ZenHr are also handy for the less formal communication between colleagues. These technologies have received increased demand at TESLA and around the world with the outbreak of the coronavirus epidemic. ZenHr is an especially interesting tool as it helps to implement the staff management of the company and manage the people’s personal information like position, name, or salary. ZenHr also shares some functionality with the LMS and HR Helpdesk, like sending requests for annual or overtime leaves.

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BusinessEssay. 2023. "The Tesla Business Environment Analysis." January 13, 2023. https://business-essay.com/the-tesla-business-environment-analysis/.

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