Tesla Globalization and the Corporate Strategy Essay

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Strategic Management

Introduction

Tesla, Inc., is a car manufacturer with a global market that specializes in the manufacturing of electric vehicles (EVs). In terms of strategic management of the company there are several factors to consider, especially how globalization and technology have impacted the company. This paper will discuss the vision, mission, stakeholders, impact of globalization and technology on the company as well as how the industrial organization model and resource based model can be applied.

Globalization

Globalization refers to the concept that all things around the world are connected—economies, industries, cultures, markets, governments and so on. Nothing is isolated from any other sector: what is seen in China for instance is likely to have an impact on markets in Europe and vice versa. In the global economy, goods move freely from nation to nation. However, globalization does have its drawbacks and those are becoming more and more apparent today with the rise of populism and nationalism both in the East and in the West. For Tesla, which is trying to expand throughout Europe and China, the rise of nationalism could not have come at a worse time. Globalization has allowed for goods to move freely (Hitt, Ireland & Hoskisson, 2013)—but it has also led companies like Tesla to try to expand quickly in order to be globally relevant. Most of Tesla’s revenue comes from the domestic market in the U.S. (Yuying & Qingrun, 2018). Tesla is the only all-American manufacturer in the U.S. and also leads the EV market. Yet, as information now spreads quickly in the globalized world, competitors in Europe and Asia are getting involved in the EV space—and this is why it was important for Tesla to get market share in Europe and Asia before competitors began manufacturing EVs in imitation of Tesla. Globalization has led to fiercer competition, especially in China where there are now 486 EV manufacturers all competing directly with Tesla (Durden, 2019). Thanks to the trade war with the U.S., China is more than ever attempting to take care of its by buying Chinese, just as Americans promote the concept of buying American. Thus, globalization has presented a serious challenge to Tesla’s global market dominance.

Technology

Tesla has been hugely impacted by technology. It has made a name for itself by being a forerunner of autonomous vehicles using AI and it also uses the Internet of Things to provide updates to software, connections between the car and the driver’s phone, and much more. The Tesla EV is not just a car—it is also a giant computer on wheels.

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However, while it uses advanced AI technology in its auto pilot function, the technology is by no means perfect yet and there have been several stories published about accidents that have happened while driving (Reuters, 2019). Some celebrities have had their cars spontaneously combust and others, like Sheryl Crow, have been locked…

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…defining the pathway by which Tesla will distinguish itself from its competitors, which is what Trout and Rivkin (2006) say a business must do to survive—differentiate or die. By setting itself up as the car company of the future and by appealing to domestic consumers as the only all-American car company, it has enabled itself to fulfill its mission in short order. Still, the mission is not quite complete because the future of sustainability still hangs in the balance and Tesla is determined to reshape the future into one where EVs are the norm and Tesla is the leader of the car manufacturing market.

Stakeholders

Stakeholders in Tesla include shareholders, the Board of Directors, consumers, employees, and managers. Shareholders are one of the most important stakeholders for Tesla as they are the ones who allow Tesla to take on more debt so as to scale and increase production. Without investors, Tesla would not be anywhere near the size it is today. However, without consumers, the investors have no reason to invest—so the consumers are also important stakeholders in the company. The Board of Directors is another important stakeholder, as it makes decisions about the company’s direction, such as how it will conserve money, expand, and reign in its CEO when that becomes necessary. Employees and managers are also important stakeholders because without them the products that Tesla produces could not be manufactured. All of these stakeholders contribute to Tesla’s success and without….....

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