Btec business level 3 national diploma - unit 1, task 2... this is from a distinction* distinction* student in 2023
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Discuss the Internal, External and Competitive Environment on a
Given Organisation
Understanding the internal, external and competitive factors in the environment in which a business
is surrounded in is essential as failing to do so can lead to catastrophic consequences for any kind of
organisation.
External Environment
The external domain impacts businesses like Tesla in many different ways and explains all external
forces affecting the company which has no direct control. These factors are frequently used by
enterprises to analyse how and why they will be successful or not through a given period – this
method of analysis is known as PESTLE.
Political – Tesla will have multiple external factors that affect their enterprise. They received some
government subsides, the company received $465 million from the governments Advanced
Technology Vehicles Manufacturing Loan Program. This allowed the enterprise to develop the model
S, a luxury vehicle. This also contributed to other projects and provided him the capital to help his
businesses take off even further.
Another political factor that may have affected the enterprise would have been covid-19, In Elon
Musks’ case the business boomed, hitting their objective for more than 500,000 car deliveries during
the pandemic, when other automotive enterprises hit rock bottom, this is according to BBC News.
His autonomous workforce may have positively contributed to this success as there was a lack of
confusion and uncertainty.
Their freedom of press, means that they can receive both good and bad reports on their business.
An example of this could be where they sourced their cobalt from – a material used in a multitude of
his vehicles – which is from the DRC (Democratic Republic of Congo). According to a report by
Amnesty International, cobalt rush has increased the cases of conflicts, corruption and child labour
in Congo. Accordingly, it can be argued that political instability and warfare in Congo can create
supply chain risk for Tesla in relation to cobalt, an important component for electric vehicles. As of
2020, this forced Tesla to strike a new deal with a Swiss mining giant ‘Glencore’, despite this they
source their cobalt from the same distributer, Tesla did stipulate in their contract that suppliers must
use “conflict-free” minerals.
Exchange rates practically 1-1
Economic – Due to current exchange rate changes, Tesla has managed to benefit by improving their
income.
Tax rates are also very important when it comes to Tesla. Tesla benefits massively compared to
other automotive companies, for example, from 6th April 2021, both new and existing Tesla cars are
eligible for a 1 percent BiK rate for the 2021/22 tax year. The BiK rate will rise to 2 percent in
2022/23, being held at 2% for 2023/24 & 2024/25. The average petrol or diesel vehicle has a BiK rate
of 20 to 37 percent.
The cost of battery has been decreasing and it is a significant external economic factor for the
electric car makers. According to estimations by Bloomberg New Energy Finance report, the current
price of USD137 per kilowatt-hour for lithium-ion will drop as low as USD 100 per kWh by 2023.
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There are other studies and forecasts that support this viewpoint. Decreasing cost of battery is going
to increase the appeal of electric vehicles among the general population with potentially positive
implications for Tesla. Statista predicts that by 2030 that the price may drop to 58 USD, however by
this point, new technology may have been introduced.
Fiscal Policy is one that no business can hide from. It is government controlled and dictates levels of
taxation on the cost of borrowing. This is how the government generates its income and decides its
budget. Tesla would have borrowed money on multiple occasions especially when attempting
growth or improvements.
Social – Social responsibilities can and does affect businesses like Tesla, this is because their whole
aim is to develop products that have both societal and economic benefits to the company and to
their consumers. Managing this means they must be careful when making decisions considering the
enterprise as stepping outside the line that is perceived to be socially acceptable can result in
devastating consequences for the businesses general success.
Some consumers’ taste changes constantly and others not so much. This can really affect
companies, including Tesla. Tesla have engineered their EV’s to be efficient, becoming
continuously affordable while being extremely attractive. This is a factor that has
considerably underpinned their success. For example, the current culture of society is quite
aware of the damages that fuelled cars pose to the environment, because of this there is a
new level of demand from customers that Tesla fulfils. The sociocultural factors that can affect
Tesla’s business include the increasing popularity of low carbon lifestyles, and the increasing
preference of renewable energy. An increase in the preference for renewable energy or less carbon
usage has significantly affected the demand for the company’s products
Technological – Technological advancements in the external environment can seriously affect the
dominance in the automotive industry. The reason behind this is that it is a mass market, with a vast
range of competitors. One example of this is automation, Tesla has managed dominate this area by
eliminating staff and the baggage costs with it and replaced it with autonomous robotics that
improves their efficiency and therefore sales. Competitors that adopt this methodology could really
make an impact on the sales of Tesla, Inc’s.
Technology has led to improved communications and quality of an online presence. This can really
set businesses apart from other businesses, providing new opportunities. An example of this, is that
is can provide tesla with the ability to generate more leads and as a result reach a sparser variety of
potential target customers
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
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, Name
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics, and
rolling resistance are leading to an increase of 40-50% in range efficiency for the prototype
Roadster 3.0; making it the first car to have an expected range of 400 miles.
Their improvements in batteries, aerodynamics and rolling resistance in their SUV range has
provided an innovative, substantial advantage over other competitors both in the EV and fuel car
industry. New batteries and technology provide Tesla many opportunities that could also be threats
if they are not one of the first to incorporate the new designs within their products.
Legal – The government has many departments in ensuring that businesses such a Tesla abide by
their word and act in trustworthy and responsible manners. Competition Act 1998 (undergoing
amendments late 2015), This act came into force to prevent domination by any one business by
addressing:
- Anti-competitive agreements which prevent, restrict or distort competition in the UK
- Abuse of dominant market positions which prohibits limiting production, markets or
technical development to the detriment of the consumer.
Environment - The environmental factors include climate change and expanding environmental
programs. Climate change is a serious concern of many individuals. This creates an opportunity for
Tesla to promote its environmentally friendly products. Environmental programs also spread
awareness of the impact continuous use of fossil fuels has on the environment. Environmental
concern offers Tesla numerous opportunities for growth as they have their sole aim heading towards
a zero-emission future.
Internal Environment
The internal environment is a set of elements that define the atmosphere within the company’s
structure, of which they ca control. Describing the way activities and relationships are carried out on
the inside, normally within co-workers.
Corporate Culture
An enterprises culture within the businesses can determine many different factors that may
contribute to a company, like Tesla, Inc., to succeed within their market, including: productivity,
efficiency, sales, communication and overall market domination. Tesla’s organizational culture
empowers its workforce to search for ideal solutions that make the business stand out in the
automotive industry, energy generating and storage market. Commonly this provides tesla with
pragmatic results and a greater intensity of productivity between co-workers. By providing this
atmosphere this encourages employees to innovate to support continuous improvement of the
business, which is therefore reflected to the customer leading to a growth in sales. CEO of Tesla,
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