Tesla Inc. Five Forces Analysis (Porter’s Model) & Recommendations.pdf

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AUGUST 4, 2016 Tesla Inc. Five Forces Analysis (Porter’s Model) & Recommendations Tesla Inc. (formerly Tesla Motors, Inc.) maintains its pro±tability through strategic measures that address the competitive challenges outlined in this Five Forces analysis of the global automotive business. Michael Porter developed the Five Forces Analysis model as a strategic management tool to understand the impact of external factors on ±rms and the competitive landscape of their industry environment. This Five Forces analysis of Tesla looks into the external factors signi±cant in the automotive industry and the energy solutions industry, and how such factors affect the company. As one of the biggest players in the electric vehicle market, Tesla must effectively address such external factors to ensure its long-term competence and resilience in the face of competitive rivalry involving automakers like Honda Motor Company, General Motors Company , Ford Motor Company , Volkswagen, Toyota Motor Corporation , Nissan Motor Company, and BMW (Bavarian Motor Works). The company must account for the nature and characteristics of such competition in the domestic and international markets for electric automobiles, batteries, and solar panels, as considered in this external analysis. Tesla Inc.’s success as an innovative manufacturer of electric vehicles is partly based on its strategies that tackle the external factors in the automotive industry environment and the energy storage and solutions market. This Five Forces analysis (Porter’s model) shows that Tesla must prioritize competitive rivalry as the most signi±cant of the forces in its multinational business environment. Pressures from substitutes, suppliers and buyers are also 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, including raw material availability and technology-based ±rm competitiveness. Tesla’s resilience is a re²ection of strategic effectiveness. This company analysis shows that the business manages to grow in spite of competitive challenges. However, Tesla must ensure that it addresses external factors according to the intensity of the forces 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 MODE panmore.com VIEW ORIGINAL Tesla 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 the most signi±cant force that impacts the business. Thus, the company must prioritize this force in its strategic

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