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AUGUST 4, 2016Tesla Inc. Five Forces Analysis (Porter’s Model) &RecommendationsTesla Inc. (formerly Tesla Motors, Inc.) maintains its pro±tability through strategic measures that address thecompetitive challenges outlined in this Five Forces analysis of the global automotive business. Michael Porterdeveloped the Five Forces Analysis model as a strategic management tool to understand the impact of externalfactors on ±rms and the competitive landscape of their industry environment. This Five Forces analysis of Teslalooks into the external factors signi±cant in the automotive industry and the energy solutions industry, and howsuch factors affect the company. As one of the biggest players in the electric vehicle market, Tesla musteffectively address such external factors to ensure its long-term competence and resilience in the face ofcompetitive rivalry involving automakers like Honda Motor Company, General Motors Company, Ford MotorCompany, Volkswagen, Toyota Motor Corporation, Nissan Motor Company, and BMW (Bavarian MotorWorks). The company must account for the nature and characteristics of such competition in the domestic andinternational markets for electric automobiles, batteries, and solar panels, as considered in this externalanalysis.Tesla Inc.’s success as an innovative manufacturer of electric vehicles is partly based on its strategies that tacklethe external factors in the automotive industry environment and the energy storage and solutions market. ThisFive Forces analysis (Porter’s model) shows that Tesla must prioritize competitive rivalry as the most signi±cantof the forces in its multinational business environment. Pressures from substitutes, suppliers and buyers arealso considered in this business analysis.Summary & Recommendations: Porter’s Five Forces Analysis of Tesla,Inc.Firms in the international automotive industry environment experience a variety of external factors, includingraw material availability and technology-based ±rm competitiveness. Tesla’s resilience is a re²ection ofstrategic effectiveness. This company analysis shows that the business manages to grow in spite of competitivechallenges. However, Tesla must ensure that it addresses external factors according to the intensity of theforces impacting the business, as shown in this Five Forces analysis:1. Competitive rivalry or competition (Strong Force)2. Bargaining power of buyers or customers (Moderate Force)DARK MODEpanmore.comVIEW ORIGINALTesla Inc. (Tesla Motors, Inc.) Five Forces Analysis,Porter’s, competition, buyers, suppliers, substitution,new entrants, automotive
3. Bargaining power of suppliers (Moderate Force)4. Threat of substitutes or substitution (Moderate Force)5. Threat of new entrants or new entry (Weak Force)Recommendations. The results of this Porter’s Five Forces analysis of Tesla, Inc. show that competition is themost signi±cant force that impacts the business. Thus, the company must prioritize this force in its strategic