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Tesla is disrupting the auto industry by implementing strategies from the tech sector. It offers incremental upgrades to cars frequently, unlike traditional automakers. Tesla also does not use the standard model of negotiating car prices or mass producing a single model. This allows customers more customization and undercuts rivals. By reading its competitors' reactions, Tesla's most effective tactic is leveraging openings in the market to attract new customer bases with affordable, environmentally friendly vehicles.

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Aries Christian S Padilla
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340 views2 pages

This Study Resource Was

Tesla is disrupting the auto industry by implementing strategies from the tech sector. It offers incremental upgrades to cars frequently, unlike traditional automakers. Tesla also does not use the standard model of negotiating car prices or mass producing a single model. This allows customers more customization and undercuts rivals. By reading its competitors' reactions, Tesla's most effective tactic is leveraging openings in the market to attract new customer bases with affordable, environmentally friendly vehicles.

Uploaded by

Aries Christian S Padilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tesla Drives to Change the Structure of an Industry

1. What is/are the prerequisite/s of strategy implementation present in the case


study?
The implementation of strategy is the fourth phase of the Strategic Management
Process, with the other three being strategic mission, vision and goals, environmental
and organizational analysis and strategy formulation. In the success of the company,
the strategy implementation process has a significant role to play. After environmental
scanning, SWOT analysis and determination of strategic issues, the process takes
place.
a. Utilized Institutionalized Strategy
First of all the policy must be institutionalized, in the sense that it can be supported or
defended before the participants by the person who framed it so it can be weakened. As
an organization, they made sure that all of their strategized activities are aligned to their
mission and vision that allows them to match staff requirements effectively with their

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overall strategy that drives the company's optimal growth.
b. Building an acceptable operational environment

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The organizational climate refers to the components of the internal atmosphere,
including collaboration, staff growth, degree of commitment and determination,

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effectiveness, etc., which translate the intent into performance. In the case of Tesla,
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there are no employee teams meeting with franchisees, no logistical teams arranging
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car assignments, no sales departments planning the next "big" marketing/sale plan.
With their limited pool of workers, the business simply creates a deep camaraderie and
staff dedication.
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c. Formulation of preparations for service


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Operating plans relate to the action plans, decisions and projects in various areas of the
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organization that take place daily. When they are framed to indicate the strategic
outcomes proposed, they help accomplish the organization's priorities by reflecting on
the important considerations. The corporation has been organized around a retail model
that is more focused towards supplying data rather than sale. By integrating their
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organizational divisions with their project teams, Tesla successfully managed to develop
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the company using this unorthodox model, which facilitates more complex and open
collaboration in their entire enterprise. The price of the Tesla vehicle is not negotiated,
and the website explicitly marks any feature.
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2. What type of offensive tactic is being used by Tesla?


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Either individually or as part of a coordinated attempt to create an aggressive


competitive strategy, different tactics and methods may be used. When corporations
aggressively aim to buy other companies to fuel growth or reduce rivalry, the most
intense aggressive strategic strategy is. This businesses are also perceived to be more
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risky than defensive ones because they are more likely to be heavily financed or
leveraged, which may prove troublesome in the case of a recession or dislocation of the
market.
Tesla is not mass- producing car model, which is very unique as other car manufacturer
does this. This allows them to compete with other companies’ usefulness and efficiency

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as customers can create their very own car with their personal touch to it. It is little
wonder that Tesla, based in Palo Alto, Calif., is also implementing the approach of the
tech industry to its product, setting aside the fixed cadence of redesigns and mid-cycle
refreshes of the auto industry and adopting the more fluid rhythm of the technology
industry, offering incremental upgrades as they become available.

3. What is the most appropriate offensive/defensive tactic should Tesla employ


to retain its market share?
Based on a defensive strategy, Tesla broke into the market. Due to the cost of the
nature of its products, this strategy was different from other car manufacturers. As a
consequence, instead of acting, the market in kind reacted to Tesla's success. This
reaction gave birth to an opportunity for Tesla to chisel out of other customer bases of
manufacturing by selling an alternative cost-effective, more economically friendly
commodity. Tesla's leveraging of openings proves that the marketable approach of Tesla
is to read the market and operate on the basis of its competition's reactions.

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