GLOBAL STRATEGY

1 Name: Student ID: Student No:

2 Table of Contents Introduction ................................................................................................................................................. 4 Section 1 ...................................................................................................................................................... 4 Porter’s Diamond Model ............................................................................................................................. 5 Factors and Conditions ................................................................................................................................ 5 Natural Resources .................................................................................................................................... 5 Necessary Expenses ................................................................................................................................. 5 Human Resources .................................................................................................................................... 6 Infrastructure ........................................................................................................................................... 6 Supporting and Related Industries ............................................................................................................... 6 Availability of Similar Industries ............................................................................................................. 6 Existence of auxiliary industries .............................................................................................................. 6 Existence of Competing Industries .......................................................................................................... 6 Strategy, Structure, and Rivalry ................................................................................................................... 7 Strategy ................................................................................................................................................... 7 Rivalry ..................................................................................................................................................... 7 Government ................................................................................................................................................. 7 Random Events ........................................................................................................................................ 7 Demand circumstances ............................................................................................................................ 7 Chance events .............................................................................................................................................. 7 Unexpected Events .................................................................................................................................. 7 Natural catastrophes ................................................................................................................................ 7 Demand Conditions ..................................................................................................................................... 8 The market size in the country ................................................................................................................. 8 Customers' expectations go beyond that elsewhere ................................................................................. 8 Section 2 ...................................................................................................................................................... 8 Transnational Strategy ............................................................................................................................. 8 Multi-domestic Strategy .......................................................................................................................... 8 Global Strategy ........................................................................................................................................ 9 International Strategy .............................................................................................................................. 9 Section 3 .................................................................................................................................................... 10 Country Analysis ....................................................................................................................................... 10

4 Introduction Tesla has been selected as my company. The main offices of American automaker and renewable energy company Tesla, Inc. is located in Austin, Texas. Tesla; Corp. has issued its third-quarter financial results for the fiscal year that ends on September 30, 2022. Sales for the q3 were 621 million dollars, up from 385 million dollars in the same period last year, according to the business (Bakan and Doğan, 2012). Revenue increased from 13757 million to 21454 million USD dollars. At the moment, 110,000 people work for Tesla. Since the firm will not really operate in our nation, I plan on taking it to Islamabad in Pakistan. Section 1 The Tesla Motors Company made the decision to enter the international marketplace for a number of purposes. Firstly, it's worth noting that the Tesla Corporation’s web-site states that its purpose is to produce and advertise the products which would enable more sustainably using the ecosystem (Musk, 2013). Promote the use of electric vehicles globally, not only in the United States, as environmental issues are a global problem. Furthermore, achieving its goal is among the driving forces behind Tesla Motors' expansion plans (Prawitz and Cohart, 2016).

5 Porter’s Diamond Model Factors and Conditions The following are some of the conditions that apply to Tesla Motors: Natural Resources These are the renewable resource that Tesla Motors has access to both in its homeland as well as the nations in which it has established operations and manufacturing facilities (Dagnino, 2012). Necessary Expenses For Tesla Inc. can be obtained via loans and funding sources (Bakan and Doğan, et al., 2012).

7 Rivalry Due to its global competitiveness, Tesla cars have gained knowledge of numerous regional, national, and international business practices and cultures (Fathali, 2016). Government Random Events Random Occurrences, Natural Catastrophes, Technological Discoveries, and Terrorist Attacks can all have a beneficial or negative impact on Tesla Motors' business (Parris et al., 2016). Demand circumstances For Tesla Motors, the scale of the local market and its affluent and demanding household consumers have been crucial to its internationalization and growth (Márkus, 2008). Chance events Unexpected Events Based on how they affect the overall company's activities and promotional strategies, unpredictable events have had varying effects on Tesla Inc. (Angwin et al., 2016). Natural catastrophes When they occur, natural calamities disrupt Tesla Motors' activities. Natural catastrophes frequently cause retail operations and everyday activities to be interrupted (Epstein et al., 2018). Demand Conditions Demand conditions are all those occurrences and circumstances that contribute to an organization's growth in a specific market. In addition to exposing a company to the difficulties of a wider market, local and domestic market is crucial for advancing the company's growth prospects (Rugman and Verbeke, 2017).

8 The market size in the country For Tesla Inc., the scale of the domestic economy has been crucial in its internationalization and growth efforts (Zhao, 2018). Customers' expectations go beyond that elsewhere Depending on the response they've had in another area, companies like Tesla Inc. can also affect consumer behavior in one marketplace (Thompson et al., 2015). Section 2 Transnational Strategy An organization that uses a growth strategy strives to strike equilibrium among a multi-domestic and an international strategy. This electric car's company makes an effort to integrate the requirement to react to specific circumstances in various countries with the demands for lower costs and higher production (Ahlstrom et al., 2010). With this strategy, the company must balance its demand for efficiency with its obligation to take into account local tastes in various nations. The corporation works to adjust its products to the requirements of the market place by using the standardize approach where feasible and adjusting when required. The international strategy is focused on sharing knowledge and ongoing learning, in addition to the fact that they can work with the maximum success and degree of customization (Teece 2018). Multi-domestic Strategy Tesla using a multi-domestic strategy that prioritizes marketplace responsiveness to regional demands over efficiency and cost. This technique allows the country leaders to act independently and in accordance with local inclinations and variations by delegating significant autonomy to them from the HQs. Usually, a multi-domestic strategy involves a variety of geographic regions and/or somewhat independent national entities (Pearre and Swan, 2022). For any company that is thinking about expanding into a new market makes sense to pick a location wherever it has a competitive edge. A company has a strong chance of succeeding if it can provide a good or service that nobody else is doing (Kotler et al., 2009).

10 The transnational strategy is Tesla's international level strategy, which is based on Bartlett and Ghoshal's model. Tesla wants to reduce costs simultaneously through improved efficiency, scope economies, and process improvement using this specific strategy. It also intends to modify its vehicles in various geographic markets in order to account for local peculiarities. Section 3 Country Analysis I've decided to introduce Tesla to Pakistan. A desirable location for electric automobiles is Pakistan. Economic, Political, Sociological and Legal (PESL) factors are included ( Burns et al., 2015) . PESL Analysis

11 Political Elements The government's connection in a particular sector is called as the political element in a PESTEL (Political, Economic, Social, Technical, Environmental, and Legal) analysis. It demonstrates the effects of numerous laws, laws, corruption, and other variables on an industry's continuous production (Liao et al., 2011). Economic Elements Economic aspects pertain to the company's revenue and overall economic expansion. Current interest rates, foreign exchange rates that measure client income, joblessness, the rate of productivity expansion, as well as other factors all have an influence on a business. It also takes unemployment rates into account (Menguc and Auh, 2010). Pakistan's economic situation makes it possible for Tesla to profit greatly from there. Social Elements The customers and all of their sociological component's influence on the consumer requirements and customer behavior may be traced back to social norms. Recognizing the social factors that shape and influence people helps advertisers better grasp the needs of their potential clients (Chaudhry and Javed, 2012). Companies decide on their short and long term goals based on the available data. Pakistani citizens, and more particularly those in Islamabad, the country's capital, are brand-conscious, making the country a profitable market for Tesla. Legal Elements Similar to how the political aspect does, the legal problem also considers the rules and laws of the nation. It monitors how changing legal regulations affect Tesla's growth, such as those affecting worker protections, equality of opportunity, safety & security, and many other issues. Given these elements, Pakistan presents a substantial development opportunity for Tesla (Connaughton and Shuffler, 2007).

13 Source: (Hoelzlhammer, 2018) Buyer Bargaining Power Due to the lack of market rivalry, purchasers have less leverage when negotiating prices. There is limited room for the purchasers to control the bargaining because the product provides significant inventiveness and a prospective value to the clients (Walder, 2013). Threat of Substituting Since alternatives for various sorts of cars are always developing, the threat of replacements to the hybrid cars business is minimal (Yang, 2022). The manufacturing of biofuel for turning gasoline- and fossil fuel-powered automobiles into biofuel-powered cars poses a threat to hybrid cars, as does the fact that electric cars themselves can replace gasoline- and fossil fuel-powered cars. China is setting a goal to use 50 per cent more biofuel in its cars by 2050, which poses a serious threat to the market for electric cars (Thomas, 2009). The Threat of Newbies Due to the need for numerous advanced technologies, starting the manufacture of electric vehicles isn't an easy process (Ou et al., 2021). Additionally, new competitors in the marketplace pose a challenge to Tesla. Section 4 (Entry Modes) Tesla is a company that is rapidly expanding, having retail locations across many countries, especially in England. It was chosen intentionally to grow to Europe. Johanson and Vahlne claim that businesses internationalize gradually. They initially begin with the low-commitment mode of entry in locations with short travel distances, and as they gain practical market and internationalization experience, they advance to greater coordinated control and locations with longer travel distances. Exporting The presumptions put forth by Johanson and Vahlne are in line with Tesla's entry points. When starting out in countries with small physical boundaries, Tesla frequently chooses low-

14 commitment options like exporting. Since marketing charges make up the majority of export- related costs, exporting is a low-commitment strategy. There is no need to finance foreign manufacturing. Since exporting is the simplest way to join a certain market, many companies, like Tesla, start their growth and expansion utilizing this strategy. Even if exporting has comparatively low prices, it also has drawbacks including high costs and little control. According to Johanson and Vahlne, businesses go on to the commitment to sustainable modes and geographically farther away nations after their initial introduction. JV (Joint Ventures) Joint ventures or strategic partnerships are other avenues for Tesla to join the Pakistani market. Tesla and Panasonic worked together in 2010 to create lithium batteries for electric cars. Companies can share the costs and manpower needed to access the global market through joint ventures. The top lithium battery manufacturer on the globe is Panasonic, which also offers a wide range of automotive products. Tesla will consequently be open to the benefits that Panasonic can offer the cooperation. For example, Panasonic seems to be more prone than Tesla to be familiar with the business practices, markets, and cultures of several Asian nations, like as Pakistan. The presence of a management team also has disadvantages (Grundy, 2006). Because there isn't any direct supervisor present, there is a danger that the goals of the two companies may conflict. Establishing branch offices abroad is yet another tactic for growing into new regions. In order to increase its capability for worldwide manufacturing, Tesla purchased Grohmann Engineering from Germany in 2017. Licensing or Franchising Consider licensing arrangements with foreign businesses if you want to enter the global market rapidly while assuming minimal legal and financial risks (Sherman, 2011). We lack the resources necessary to establish a Tesla Electric Car manufacturing in Pakistan. So we can't manufacture vehicles in Islamabad, Pakistan, since they will eventually become old. Thus, we will engage in a licensing arrangement with a Tesla US Company that gives us the right to produce Tesla Cars using their unique technique and to market them under our brand in Islamabad, Pakistan. We'll have to pay the Tesla Company a royalty charge in return (Brouthers

16 organizational structure of Tesla also places restrictions on staff reactivity, mitigating some of the consequences of the company culture that encourages making decisions on the fly and reacting to issues in the automobile market. Administration of Industry The producer is working to boost Model 3 production. According to Parris et al. (2016), it is important to consider how the target industry will respond to new products and services when creating new ones. It serves as an example of how vital it is for a company to predict how consumers will respond to particular creative products while begi For the new model car, for which the company set a goal of 5,000 vehicles each week, it has been decided that there was substantial demand from customers in the case of Tesla's management issues. However, in just 90 days, the company produces 9800 models (Lambert, 2021). Because of this, the business was unable to satisfy the high client demand, which contributed to Tesla's managerial issues. These are some extremely serious flaws in Tesla's management philosophy and organizational culture, which continuously pushes employees to come up with fresh ideas and has a tight framework that restricts decision-making during a lengthy manufacturing cycle. Section 6 (Solutions to the Problems) Examining the implications of Tesla's poor management as well as its several commercial enterprises, the business should improve its management style and methods in order to put itself on the right course. A balance between strict and flexible cultures is desperately needed in several firms today. By adopting organizational standards that have assisted Toyota as well as other top brands in producing high-quality cars on a large scale, Tesla should include rigidity. Managers like Musk must provide incentives for workers to demonstrate self-control, effectiveness, and reliability, whether through public praise, job advancement, or salary increases. Computational modeling may also be centralized by them (Frue, 2021). Above all, the business must keep an eye on behavior and stress the value of adhering to established guidelines. Additionally, a number of employees were let go as they couldn't keep up with the company's new standards. According to the human management theory, people desire to be a part of a team

17 that fosters advancement and growth. The company may focus on teaching and developing its workforce instead of terminating individuals, the argument goes, so they can support the company's goals as well as for achieving its objectives. The corporation must concentrate on the better allocation of resources in order to improve financial efficiency and reduce debt. Tesla's administration questions whether a business should operate as a closed environment or an open platform. In an open platform, there is a communication flow between the organization and its external environment, and the organization may be impacted by incidents taking place there. Therefore, while selling automobiles or letting clients test drive them, the business can function as an open platform and be honest with them about the requirements that the customers must meet to increase safety. On the other part, in order to resolve Tesla's management challenges, the business must also concentrate on its production procedure and accurately set its target while taking that ability into account. The company is recommended to strengthen its distribution network by closely observing car examination and testing in order to lower the risk of traffic accidents on the road. In addition, Tesla should empower its staff to make quick decisions that are in the best interests of the business in order to reduce the phenomena of power distance and make its framework flexible. Workers will experience a sense of responsibility as a result, and they will work more passionately as they'll perceive themselves as a member of management. References Agnihotri, A. and Bhattacharya, S., 2022. Tesla Innovation and Growth at the Cost of Quality?. In SAGE Business Cases. SAGE Publications: SAGE Business Cases Originals. Ahlstrom, David, and Garry Bruton. 2010. International Management: Strategy and Culture in an Emerging World. Mason-Ohio: Cengage Learning.

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