Tesla Strategic Management: Globalization, Technology & Models
This paper examines Tesla, Inc.'s strategic management across several dimensions. It explores how globalization has intensified competitive pressures—particularly in China's crowded EV market—and how technology, including AI-driven autopilot and social media, has simultaneously advanced and complicated the company's position. The paper applies the Industrial Organization (IO) model and the Resource-Based Model to Tesla's competitive strategy, highlighting the role of Elon Musk's personal brand, battery technology partnerships, and Panasonic's Gigafactory. It further outlines Tesla's sustainability-centered vision and mission, its differentiation strategy, and the range of stakeholders—from shareholders and consumers to the Board of Directors and employees—who collectively shape the company's trajectory.
- Introduction: Overview of Tesla's strategic management topics
- Globalization and Tesla's Competitive Landscape: Globalization's impact on Tesla's global expansion
- Technology as Both Enabler and Obstacle: AI, social media, and technology challenges
- Industrial Organization Model Applied to Tesla: External environment and IO model strategy
- Resource-Based Model and Tesla's Core Assets: Musk's brand and battery technology as resources
- Vision, Mission, and Stakeholders: Sustainability vision, differentiation mission, key stakeholders
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What makes this paper effective
- Grounds each strategic management concept (IO model, resource-based model) directly in Tesla-specific evidence, avoiding generic descriptions.
- Balances praise of Tesla's strengths with honest acknowledgment of risks—SEC scrutiny, the Panasonic partnership strain, and autopilot accidents—giving the analysis credibility.
- Uses the "differentiate or die" framework from Trout and Rivkin to anchor the mission section, demonstrating engagement with external theoretical sources beyond the core textbook.
Key academic technique demonstrated
The paper demonstrates applied framework analysis: it takes established strategic management models (IO and resource-based) and maps them systematically onto a real company, explaining not just what the models say but how Tesla's specific decisions, assets, and environment fit each model's logic. This technique—describe the framework, then apply it with concrete examples—is a foundational skill in business and management coursework.
Structure breakdown
The paper opens with a brief introduction that previews all topics, then moves through six substantive sections in a logical order: external environment forces (globalization, technology), strategic models (IO, resource-based), and internal identity (vision, mission, stakeholders). Each section is self-contained but contributes to a cumulative picture of Tesla's overall strategic position. The references blend a core textbook with recent news sources, showing students how to combine theoretical and contemporary evidence.
Introduction
Tesla, Inc. is a car manufacturer with a global market that specializes in the production of electric vehicles (EVs). In terms of strategic management, there are several factors to consider—particularly how globalization and technology have impacted the company. This paper discusses Tesla's vision, mission, and stakeholders, examines the impact of globalization and technology on its operations, and explores how the Industrial Organization (IO) model and the Resource-Based Model can be applied to the company.
Globalization and Tesla's Competitive Landscape
Globalization refers to the concept that all things around the world are interconnected—economies, industries, cultures, markets, governments, and so on. Nothing is isolated from any other sector: what occurs in China, for instance, is likely to have an impact on markets in Europe, and vice versa. In the global economy, goods move freely from nation to nation. However, globalization does have its drawbacks, and those are becoming more apparent today with the rise of populism and nationalism in both the East and the West.
For Tesla, which is attempting to expand throughout Europe and China, the rise of nationalism could not have come at a worse time. Globalization has allowed goods to move freely (Hitt, Ireland & Hoskisson, 2013), but it has also led companies like Tesla to expand quickly in order to remain globally relevant. Most of Tesla's revenue comes from the domestic market in the United States (Yuying & Qingrun, 2018). Tesla is the only all-American EV manufacturer in the U.S. and also leads the domestic EV market. Yet, as information now spreads rapidly in a globalized world, competitors in Europe and Asia are entering the EV space—which is precisely why it was important for Tesla to secure market share in those regions before rivals began manufacturing EVs in imitation of Tesla's model.
Globalization has led to fiercer competition, especially in China, where there are now 486 EV manufacturers competing directly with Tesla (Durden, 2019). Fueled by the trade war with the United States, China is increasingly encouraging consumers to buy Chinese-made products, just as Americans promote the concept of buying American. Thus, globalization has presented a serious challenge to Tesla's ambitions for global market dominance.
Technology as Both Enabler and Obstacle
Tesla has been profoundly shaped by technology. It has made a name for itself as a forerunner of autonomous vehicles using artificial intelligence, and it also leverages the Internet of Things to deliver software updates, enable connections between the car and the driver's smartphone, and provide a range of other digital features. The Tesla EV is not just a car—it is also a giant computer on wheels.
However, while Tesla uses advanced AI technology in its Autopilot function, the technology is by no means perfect, and there have been several published reports of accidents occurring while the system was engaged (Reuters, 2019). Some owners have reported their vehicles spontaneously catching fire, and others have been locked inside their cars with no means of escape—incidents that were quickly shared across social media platforms, generating significant negative publicity. Technology has therefore been both a major asset to Tesla and, in some respects, a significant obstacle as the company continues working to deploy advanced technology reliably and safely.
Tesla's CEO, Elon Musk, is also a skilled social media user whose online presence has helped elevate the company's stock price in recent years. At the same time, Musk has made notable missteps on social media that have attracted criticism and regulatory scrutiny—most prominently, his claim that he had secured funding to take the company private at $420 per share, when in reality he had not. This led to an SEC investigation, and Tesla faced the real possibility of losing the CEO widely regarded as the visionary behind the company's success (Langlois, 2019).
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