Description

‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬

Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 2
Strategic Management (MGT 401)
Due Date: 02/11/2024 @ 23:59
Course Name: Strategic Management

Student’s Name: Essa Alayed

Course Code: MGT 401

Student’s ID Number: s210064911

Semester: 1

CRN:11669
Academic Year:2024-25-1st

For Instructor’s Use only
Instructor’s Name:
Students’ Grade:

/10

Level of Marks: High/Middle/Low

General Instructions – PLEASE READ THEM CAREFULLY
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The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Learning Outcomes:
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CLO1-PLO1.1- Recognize the basic concepts and terminology used in Strategic Management.
CLO1-PLO1.3 -Describe the different issues related to environmental scanning, strategy formulation, and strategy
implementation in diversified organizations.
CLO3-PLO2.2- Explain the contribution of functional, business, and corporate strategies to the competitive advantage of
the organization.
CLO4-PLO2.3-Distinguish between different types and levels of strategy and strategy implementation.
CLO6-PLO3.1-Communicate issues, results, and recommendations coherently, and effectively regarding appropriate
strategies for different situations

Case study
Assignment Question(s):
Read carefully the mini case No. 18 from your textbook (entitled ‘Tesla Motors Inc.) and answer the
following questions: (2 marks for each question)

1. Describe the different functional strategies of the Tesla Motors company.
2. Describe the relationship of Tesla Motors with its primary stakeholders.
3. Discuss any strategic alliance (acquisition, outsourcing, joint venture, ….) that Tesla Motors uses.
Why did this company choose it? was it successful? Justify your answer.
4. Describe the core competency and assess the competitive advantage of Tesla Motors in its
market.
5. Recommend solutions for Tesla Motors to improve its competitive advantage.

Answers
1. Tesla Motors Inc. applies several functional strategies to become a leader in the development of
alternative energy vehicles with high performance and high prices, competing with traditional
vehicles such as Porsche and BMW.
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Research and Development: The Company has spent considerable resources on
research and development to produce an electric power train with high performance and
long mileage, as demanded by enthusiast buyers.

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Human Resources: Tesla is focusing on sustainability and innovation by hiring and
retaining the best talent because the company faces difficulties in capacity designing,
manufacturing, testing, and selling at the same time. That is why, Intellectual capital is
very important for the company and that is why the company wants happy employees.

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Sales and Marketing: Tesla’s marketing and sales growth strategy is to focus on digital
marketing and direct selling to consumers. To foster direct sales, the company has
ignored traditional advertising and marketing, internet ads, and product placement. It is
turning its recent customers into vocal brand ambassadors. This promotional strategy is
heavily influenced by influential factors e.g. recommendations from friends and family
and word-of-mouth marketing.

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Production and Operations: Tesla has decided to develop its network of stores and
distribution channels for greater operational efficiency and inventory control.

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Strategic Partnerships: The Company has made strategic partnerships with Daimler and
Toyota to supply electric power trains for their electric vehicle designs. Through these
strategic partnerships, Tesla can diversify its network, revenue streams, and its supply
chain network (Wheelen, Hunger, Hoffman & Bamford, 2015).

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Sustainability and Social Responsibility: The Company is working on a strategy to
develop automobiles that are free from petroleum products and emit low carbon. In 2009,
the company also won the Globe Innovation Award.

2. The company has a direct impact on its primary shareholders via the design of batteries, electric
vehicles, and solar panels. Its relationship with the primary stakeholders depends on its position
in the automobile industry. The primary stakeholders of Tesla Motors include employees,
customers, suppliers, and shareholders. Tesla builds a strong relationship with its primary
stakeholders
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Customers are the major stakeholders of the company in the market of electric vehicle
cars. They provide exceptional customer service for electric vehicles to satisfy the needs
and wants of their customers. The company prefers direct selling to customers which then
turn into brand ambassadors by recommending products to their family and friends.

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Tesla attracts top-level talent and provides the best compensation and competitive salary
packages, benefits, meaningful equity, and aesthetically amusing office space to retain
their employees because the company faces difficulties in capacity designing,
manufacturing, testing, and selling at the same time. Intellectual capital is very important
for the company. It is hiring and retaining the best talent.

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Shareholders and investors are very important for the company as the company needs
investment to fund its projects as part of its long-term growth strategy. The Company
provides significant returns to its shareholders as the company grow with innovation and
sales growth (Wheelen, Hunger, Hoffman & Bamford, 2015).

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As the company is a leading vehicle manufacturing supplier also gets benefits from its
relationship by enjoying its growth and prosperity as the company grows.

3. Yes, Tesla Motors has a strategic partnership with Toyota because, in May 2010, Tesla acquired
the former NUMMI factory situated in Fremont, California which was a joint venture between
Toyota and General Motors Corporation. It is the cleanest and most advanced automotive
production plant where Tesla can develop its Model S Sedan and future Tesla vehicles. This
partnership was a success because it provided an opportunity for the company to expand its
supply chains, network, and revenue streams. Both companies benefited from this deal because
they agreed to develop the electric version of Toyota’s new RAV4. Moreover, Tesla benefited as
Toyota invested US$50 million and also supplied parts for the development of Model S, and also
provided high-quality engineering support and a production system (Wheelen, Hunger, Hoffman
& Bamford, 2015). With this partnership, Tesla was able to manufacture its powertrain
components for Toyota and also for other automobile makers in Palo Alto, California, and
expand its electric powertrain facility.

4. Tesla Motor’s core competencies include electric powertrain systems for electric vehicles, safety
designs, battery pack technology, and innovative and advanced manufacturing processes. These
core competencies give the company a competitive advantage over its competitors in the
automobile industry. The company’s investment in efficient and advanced production systems,
efficient battery technology, and the development of an expanded charging network provided a
competitive advantage that would ensure a more sustainable and autonomous future for the
company. The company uses the latest technology and innovative systems to differentiate itself

from its rivals. Tesla’s battery packs and battery chemistry are excellent and it offers smaller-size
batteries as compared to rivals. The company will be able to manufacture a full range of electric
vehicles and provide flexible recharging facilities to customers as compared to their rivals. Its
supercharge stations provide fast charging (Wheelen, Hunger, Hoffman & Bamford, 2015).

5. Several factors provide a competitive advantage to the company like technological
advancements, market share, and strong brand awareness, however, other technology companies
will prevail over this competitive advantage by developing the same technology. Here are some
recommendations for Tesla to improve its competitive advantage over its rivals:
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The company’s wider network of electric charging stations provides it a competitive
advantage. No other electric vehicle manufacturer has a similar kind of network. It has
fast superchargers that are hardly comparable with other public charging stations.

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Tesla has to regularly update its EV software which will let the company continuously
improve the vehicles’ performance.

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The company should focus more on remote monitoring which will help in regular system
updates.

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The company can do better by continuously improving its autonomous driving
capabilities.

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The company should work more on solar energy generation to sustain and improve its
competitive advantage.

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The company should prefer carbon emission reduction and energy-saving green practices.

References
Wheelen, T. L., Hunger, J. D., Hoffman, A. L. & Bamford, C. E. (2015). Strategic Management and
Business Policy: Globalization, Innovation, and Sustainability. Pearson

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