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Corporate strategy refers to the direction as well as scope of actions of company in alignment with the stipulated organisational goals and objectives (Davies, 2016). Every organisation has a unique corporate strategy which is applied by them to gain a strategic and competitive edge in marketplace. It is largely concerned with the management of resources, risks and returns done by an entity which provides an opportunity to the firm to become a leader in corporate world within the specific business industry. Designing and formulating an effective corporate strategy lays the foundation for success of a business enterprise in global market place and assists the entity in carrying out its operations in accordance with the targets stipulated by the management of a company.

The following report is based on Tesla Motors which is an American automotive and energy organisation that enjoys a leading stature within the global marketplace. This report consists of external business environment and industry analysis by way of PESTLE and Porter Five Force analysis. Further, it includes the resources and key competences of entity to determine the core competences. And lastly, it constitutes of SAFe criteria applied to a strategy executed by organisation in marketplace.

External analysis (business environment and industry) to identify Opportunities and Threats and assess industry attractiveness

Tesla Motors is a leading name within the vehicle manufacturing sector owing to the wide variety of cars that the entity offers to public as per their choice and relevance. This organisation is having its head office located at Palo Alto, in Silicon Valley. Company mainly is a car manufacturer unit established in the year 2003. Entity is one of the leading car manufacturer company having more than 79 stores around the world and have approximate number of 10,161 employees in its organisational structure. With the help of PESTEL evaluation, Tesla will effectively be able to analyse its opportunities and threats in the sector including, political, legal, environmental, technical and social (Mittal and Dhar, 2015). Along with this, present analysis also benefits company to assess their currently present competitors within automobile industry.  In addition with this, as Tesla is looking forward to build up environment friendly alternatives, environment factor of PESTEL analysis aid Tesla to find opportunities and threats in effective way in order to stimulate its growth process:

  • PESTEL Analysis

Political:Political factor consists, different types of trade regulations such as EU & NAFTA, entry mode regulation, stability of government, social policies and more. Tesla underway its business by trading cars in the region of North America and after then expanded their business services in Western Europe and Asia. This expansion brings numerous political factors that influence its culture. Some of the basic political factors that put their impact on functioning of Tesla include, environmental regulation that aim towards decreasing the emissions level for this, it has been encouraged to produce environmental friendly cars along with this, element of government subsidies and other various incentives make consumers to use greener vehicles. Government institution of US created a programme in which they provide energy loan programmes that will effectively encourage industries to use new vehicles technologies. For instance, in Europe, Norway government encourage industries in market by providing certain measures like, nationwide access bus lanes and offering free parking of electric vehicles (Du and et. al., 2013). All these political decisions adopted by countries effectively represents as an opportunities for Tesla in order to find new market and make further investments in those market as to gain more growth and maximise profitability of company. While on the other hand, various types of environmental regulations can result as a major threat for Tesla to operate their functions in smooth and effective way as these regulation affect day to day functioning of company.

Economic: These factors are mainly related to, current level of inflation, economic growth rate, credit accessibility, interest rates and more. As demand of sustainable car demand rose around the globe as price of fuel-engine vehicles is rapidly raising with the fast phase increment in fuel prices worldwide this factor will work as an effective opportunity for Tesla to offer their environmental friendly cars in global market and acquire large market share. Along with this, increase in GDP rate lead towards significant rise in buying power of customers that will automatically increase sale of electric cars in global market.

Social: Change in lifestyles and trends, education level, distribution of wealth is some of the factor which is covered in this aspect of PESTEL analyses. Social factor is related to buying behaviour and attitude of customers related to a product or a service. In today’s modern world, there is an increase in environmental awareness. Recently individuals prefer to buy eco-friendly products rather than purchasing the pollutants ones (Engert and Baumgartner, 2016). People like to spend their money on environment friendly products as to safe both environment and their money. Convinced individual’s acts as a great opportunity for Tesla to offer electric cars in market and generate effective growth of their products in a global level in order to satisfy demands of consumer on a great base.

Technological: These include new and innovative discoveries, different types of new technological platforms and more. Technological factor effectively benefits rapid progress of organisational effectiveness. With the adoption of highly advanced technological measure in its manufacturing process Tesla can find numerous sets of opportunities in order to improve its level of efficiencies and decrease overall cost of input in their car industry. Along with this, technological factor enables Tesla to gain opportunity, to offer wide range of car choices to customers worldwide. While on the other hand, in order to find different types of effective technological measure for company it is required for Tesla to input more cost in their R&D expenditure budget (Gnan, Montemerlo and Huse, 2015). This will act as a threat as it is quite hard to find out one of the best effective and suitable technological measure for company which can effectively stimulate its growth.

Environmental: There are different types of factors included in environmental section such as, attitude towards environment, waste disposal law, energy consumption law etc. As individuals in all over the world is getting so much aware about environmental concern so this factor can be seen as a threat for Tesla to face more competition in order to produce eco-friendly vehicles in both economical and affordable way. While, as Tesla is planning to bring eco-friendly car in the market this concern of environment results in increase in high end demand of company products at global market which effectively stimulate its growth.

 Legal: There are a variety of legal factors which are required to be considered by companies in order to perform their functions in a manner desirable by law. Some of these factors include product regulation, patent infringement, health and safety regulation, employment regulation etc. World is leading towards, go green movements in which brings large and leading manufacturers to build vehicles in an eco-friendly way. There are different types of legal regulations implemented by government such as, carbon tax, green policies and more (Lam and O'Higgins, 2012). All these regulations and laws acts as an opportunity for Tesla in order to boost their demand of electric cars in global market. While on the other hand numerous taxation policies on green business results as a threat for Tesla to operate their business in glob

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