Strategic management reading homework help

| November 25, 2015

After read the attachment, answer these question:

  1. Evaluation of strategic fit with external environment and industry (does the firm’s strategy make sense given the external environment?)
  2. Evaluation of strategic fit with internal factors (does their strategy make sense given their strengths and weaknesses?)
  3. Key strategic issues (synthesis and ranking of critical external and internal issues that affect sustained competitive advantage)
  4. Recommendations and Required Actions
  5. Critical recommendations and alternatives firm should pursue
  6. Rationale for recommendations
  7. Choose and prioritize recommendations
  8. Analysis of potential resistance and outcomes


  1. Implementation plan (timeframe, control and structural issues)


Need strategic knowledge


About 2 pages, double space


Please answer the ABCD questions carefully


No plagiarism


APA Style







  2. Company and Industry Description
  3. Industry type, Brief description of firm and its current strategy, History of firm.

Industry type: (1) Automotive: electric vehicles, luxury; manufacture powertrain components. (2) Renewable energy systems (batteries).

Brief description: HQ, locations, employees, share price since going public

Current strategy: product differentiation (high-end vehicles, powertrain components, and battery systems). Product/market diversification.

History of the firm:


  1. Financial condition: past, present, trends
  2. a) Analysis of financial statements and performance
  3. b) Performance and soundness in comparison to industry/ competitors
  4. Organization and Structure: Some of this information may not be publicly available- do as much as possible.
  5. Compensation policies
  6. Management controls
  7. Subsidiaries
  8. Centralization




  1. Macroenvironment
  2.    Cultural trends. Fortunately for Tesla, the world has become more and more aware of the environment and the effect emissions have on it.  This has helped BEVs become popular as an alternative for gas powered vehicles, which in 2007 contributed about 56.6% of global greenhouse gases in the atmosphere (291).  Although BEVs do not emit greenhouse gases into the atmosphere, the sources of power used to charge the BEVs do contribute to some air pollution, however; there are alternative power sources that would eliminate the pollution, such as “wind, solar, geothermal, hydrogen and even nuclear power plants (291).”  In addition to the necessary eco-friendly alternatives, Tesla provides consumers with a luxury vehicle that surpasses competitors.  “Within twelve years, Tesla has created one of the top-selling full-sized luxury cars in the United States and has built a company with a market capitalization about twice that of Fiat Chrysler and half of Ford or General Motors (86).”


  1. Demographic trends. – people buying teslas.  rich… income race sex.  who want them?
  2. UPDATE with Wiki – (getting into some states) Legal and political issues. Public policy is very focused on the transportation sector due to all of the pollution gas-powered vehicles emit into the atmosphere.  As previously stated, the transportation sector makes up almost 57% of greenhouse gases in the atmosphere, and up to 70% of petroleum consumption (294).  Because of these environmental issues, BEVs are widely supported by governments around the world.  There are several benefits offered to the producers and consumers of BEVs.  The US government offers “subsidies for electric vehicle producers, consumer price incentives, tax credits for producers and consumers, and sponsorship of technological research and development (294).”  In 2011, since there was not a lot of investments in the private sector for electric powered vehicles the government wanted to promote them.  “Grants, loan guarantees and public-private partnerships” were some of the benefits policymakers implemented to increase awareness of BEVs (294).  Strict emissions standards have also been increased in different countries, including the European Union to promote BEVs and reduce damage to the environment (294).  Also, in 2010, China “committed to supportive policies and annual government investments of $150 billion a year into the clean energy industry – citing the ‘emerging’ electric vehicle sector as a core strategic industry component (294).”  Other countries, including the US, China, and Japan, have created electric-vehicle targets to drive investments and additional resources into the sector (294).


  1. Technological issues. One of the large technological issues Tesla has had to face is the reliance on electricity.  BEVs have led to increased demands from electric grid systems.  In addition, there are limited charging systems which also play a role for BEVs, as gas-powered cars have endless amounts of gas stations to fuel up at, there are not as many charging stations for BEV consumers to rely on.  To charge BEVs at home, it takes about 8-hours, whereas the charging stations have to provide BEV consumers with accelerated charging, as fast as 30 minutes to fully charge.


  1. Global issues
  2. Other issues. Telsa (2012) did not have many economies of scale available, which would make it difficult to compete directly with mass-market production of BEVs.  Attempting to mass produce these vehicles without economies of scale available to Tesla would be extremely costly and risky.   DEFINITELY IN THE BEGINNING, BUT MAYBE NOT A HUGE ISSUE NOW.


  1. Industry environment and strategic groups (5 Forces evaluation)
  2. Competitors. The threat of competitors has been relatively low, but is increasing, making it moderately high for Tesla. From the beginning Tesla has not had to deal with many competitors in the electric car industry, luxury or not. Tesla was the first car manufacturer to design and create an all-electric automobile, the Roadster, in 2008. Other car manufacturers, namely General Motors (GM), didn’t start manufacturing electric cars until 2010, and were only creating electric-gasoline hybrids (citation). In 2017, both Tesla and GM will introduce new all-electric vehicles and this will be the first time Tesla has had any direct competition. GM plans to offer their new car, the Bolt, for a lower price in hopes to appeal to a wider range of buyers. Although this is in direct competition with Tesla’s new Model 3, Tesla’s pricing includes tax incentives which may not be available to buyers of the Bolt (Exhibit ?).


  1. New entrants, entry barriers. The threat of new entrants could be considered low because of the high entry barriers in the car manufacturing industry (Exhibit ?). Although the barriers to entry are high, there is one company which may enter the all-electric, and self-driving, car industry. Reports indicate that Apple is pursuing an all-electric car which they would plan to introduce by 2019. Apple would be able to overcome the entry barriers for a few reasons. First, Apple has around $178 billion in cash which they can put towards designing and creating an electric self-driving car (citation). Second, Apple’s brand is extremely valuable and they already have a massive following of consumers – making it easier for Apple to sell their cars post production. Third, Elon Musk has now made Tesla’s patents open to the public, inviting other companies to compete in the all-electric car industry (citation). The way it sits now, Apple is poised to enter this market and compete as if it had been in the market from the beginning.


  1. Substitutes and Complementors. There are many alternatives to purchasing an electric car from Tesla (Exhibit ?), making the threat of substitutes moderate. Unfortunately, all other options are not of the same quality or environmental friendliness as the luxury all-electric cars from Tesla. Tesla’s cars mainly appeal to the wealthy and environmentally conscientious consumers. Although the $70,000 sticker price of the Model S may only attract wealthy buyers, many other consumers will be drawn by the trends towards all-electric vehicles (citation). By selling the Model 3 for$35,000 Tesla will be able to attract a larger consumer base than before, lessening the threat of substitutes.


  1. Suppliers. Tesla’s threat of suppliers is currently considered low (Exhibit ?). At the time Tesla began manufacturing electric cars they were purchasing many of the parts from numerous suppliers. As time passed, Tesla began to innovate and manufacture their own parts, almost eliminating supplier’s altogether (citation). Because of this, Tesla is able to have full vertical integration (forward and backward), lessening the threat of suppliers. In addition, the large amount of suppliers available for parts not produced by Tesla means Tesla has more power when negotiating with other suppliers. In addition, the Gigafactory to be built will help in eliminating more suppliers of their lithium ion batteries (citation).


  1. Buyers. The threat of buyers for Tesla is low for three major reasons. First, Tesla is currently the only company selling an all-electric vehicle and demand is still extremely high (citation). No other company offers such a car – making the number of buyers large and the number of seller small. Second, both the Model S and Model X are highly differentiated from any other cars on the market. Third, consumers do not purchase cars in large volumes. The low threat of buyers makes the EV industry very attractive and increases the profit potential for Tesla.


  1. Industry structure type

Compared to the mature car industry, Tesla’s innovative EVs are part of an emerging industry. Because of Tesla’s technological innovations (citation) they have had the opportunity to exploit the first-mover advantages in the industry. Tesla has been able to make investments early on in their battery technology which has revolutionized the all-electric car industry, making the Tesla cars run longer than competitors’ hybrid cars (citation). By utilizing a technological leadership strategy Tesla continues to push ahead of their competitors and change the way people drive.


  1. Summary of opportunities and threats


  2. Strategic condition of the Firm

Resources and capabilities.

Distinctive competencies.Tesla, as a leader in the BEV market, produces premium sports cars and luxury sedans.  Tesla has been successfully positioned to capture and sustain significant share of the high-end luxury sedan ‘niche’ market because of its competitive advantages.  Some of the large factors that drive Tesla’s competitive advantage include: superior BEV technology, first-mover market position, brand recognition, and their unique component product lines.


Customer value proposition & profit model for primary products. Tesla has established a primary goal to increase the number of electric vehicles available to mainstream consumers.  They want to “serve as a catalyst and positive example of how ‘fun’ and ‘social responsibility’ driving are mutually compatible (296).  Tesla, in 2011 was often compared to Apple, as the company strayed away from the strategy used by industry competitors, such as Chrysler, Ford, and General Motors.  “Tesla’s strategy of selling sleek, eco-friendly designs at high margins echoes Apple Computer’s business model (289).”  At this time in 2011, the industry competitors previous mentioned were having a difficult time on updating their technology to align with the increasing demand for eco-friendly vehicles, in both electric and hybrid form (289).


  1. Summary of strengths and weaknesses
  2. Current Strategies
  3. Elaborate corporate strategy (from brief description in Part II. A. 1.)

2.Highlight and discuss critical current business-level strategies.

  1. Check for and discuss relevant current corporate strategies:

Vertical integration


Strategic alliances

Mergers and acquisitions

  2. Evaluation of strategic fit with external environment and industry (does the firm’s strategy make sense given the external environment?)
  3. Evaluation of strategic fit with internal factors (does their strategy make sense given their strengths and weaknesses?)
  4. Key strategic issues (synthesis and ranking of critical external and internal issues that affect sustained competitive advantage)
  5. Recommendations and Required Actions
  6. Critical recommendations and alternatives firm should pursue
  7. Rationale for recommendations
  8. Choose and prioritize recommendations
  9. Analysis of potential resistance and outcomes
  10. Implementation plan (timeframe, control and structural issues)

[Need full charge in 10 minutes (super charging) potential charging station ……….try to make a balance of cost leadership and differentiation through model 3]





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