Stakeholder Analysis and Strategy

Development Report

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Executive Summary

In this report, all of the aspects which are important in respect of stakeholder's analysis have
been taken into account. In addition to this, there is the inclusion of the strategy development
concept also and all of this is done in the context of Tesla. The report covers all the mission and
vision in relation to the company and proper information about the company is provided in it. All
the relevant stakeholders in the company have been identified and with that their viewpoint is
also taken into account. In order to carry out the analysis, four main stakeholders have been
selected and the whole process is performed on them. The categorization of the identified
stakeholders is done in the report and with that program which is undertaken for them is also
represented. In the last part of the report, the recommendations for the programs to be adopted
for all the stakeholders have been provided.

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Table of Contents

Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
View of stakeholders in Tesla......................................................................................................5
Stakeholder Analysis of stakeholder groups................................................................................8
Identification of the category of stakeholders and strategic programs for selected stakeholders 9
Recommendation of the strategic program for selected stakeholder groups.............................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................14

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Introduction

Tesla is the company which deals in the automotive sector and was founded in 2003.
Manufacturing of the electric car is the main area of operation for the company and this is due to
the fact that it was founded for the same purpose. It is identified that the founders of the
company were engineers who started with an aim to prove the electric cars better than the cars
which run on diesel and petrol. The new technology of roadster and electric power train was
introduced by Tesla in 2008.

Every company has a mission and vision statement and it operates in accordance with the same.
In the case of Tesla, the mission statement is “to accelerate the world’s transition to sustainable
energy”. In this focus is made on the energy which is renewable and with the help of that it wants
to have the opportunities in the changing and growing market.

“To make the most fascinating or convincing car company of the 21 st century by delivering the
world’s transition to electric vehicles” is the vision of the company. The main motive behind this
is to provide the market with electric cars in the global environment so that the development of
renewable energy is motivated.

Tesla has undertaken various risks in the past for the attainment of growth and similarly, model 3
has been made in the Europe and China and in that there were various assumptions according to
which working was required to be made. By the help of this, the company will be increasing its
profitability with the rising volume. There were various challenges which were faced in the past
and in that a recall was also made in respect of power steering in Model S sedan. There were
various reasons which were listed by the company for this recall. Various production targets
have also been missed by the company. Due to this, there are certainly other challenges which
will be faced in the coming period. The company will have a threat to its leadership and also
there will be a high level of competition which will be faced. This will be affecting the overall
development of the company.

The proper stakeholder’s analysis will be performed and also the strategies will be developed for
the overall benefit of all.

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View of stakeholders in Tesla

In all the businesses which are carries, there are certain parties which have an interest in the
company and all of them are identified as the stakeholders of the organization. It is important to
identify them and also the impact of them on the business which can be in favor of or against
(Matousek, 2018). There are several stakeholders and all of them are divided into two parts
which are internal and external. The ones who are directly interested in the company are covered
under internal stakeholders and in this employees, managers and directors are taken into
consideration. On the other hand, all of the parties which have an indirect interest in the business
are included in external stakeholders such as government, suppliers, and creditors.

Figure 1: Stakeholders group

Description of all the stakeholders identified:

Internal stakeholders

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Managers: They carry out the operations in the company and the reward which is provided to
them in the form of bonus or incentive is considered as their interest (Ferretti, 2016). They play
an essential role in the company by managing all the activities in the most effective and efficient
manner.

Investors: There are several people who invest their money in the business in the form of shares
and other modes. In return to this, they are provided with the interest or dividend and that is the
stake they hold in the company.

Directors: They are provided with the power in the company and also certain returns are given
which is the stake held by them and makes them a stakeholder. All of the tasks are maintained by
them in which the future contingencies are also taken into account and working is made
accordingly.

Employees: They are the people working in the company and receive a direct salary from the
business. Due to this, they are treated as internal stakeholder (Tarhini, et. al., 2015). In addition
to the monetary benefits, there are certain non-monetary benefits also which are provided to
them and will be counted in their total earning.

External stakeholders

Government: It is considered as the stakeholder of the company because of the income it makes
in the form of the taxed which are collected. This is the earning of company and with this, there
is the overall development in GDP also which is their gain in an indirect manner.

Suppliers: The business receives its products and material from suppliers and in return of that an
amount is paid to them which will be included in the stake of the supplier. The further operations
of the company are dependent on them as they provide with the required material.

Community: In the large scale businesses there are several services which are provided to
communities such as economic safety and health-related incentives. The earnings or the benefits
are provided to them in the form of the jobs which are provided which raise the economic level
of the society.

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Financial institutions: The Company requires funds to carry out the operations and that is
provided by the financial institutions. On the amount that is taken, there is the rate at which
interest is paid by the business which is considered as the earning of the institution.

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Stakeholder Analysis of stakeholder groups

All the stakeholders which are involved have different behavior and motives. It is required to
identify them and have complete knowledge about them. In order to complete this main
stakeholders have been selected and their motive and behavior are provided below:

Customers:

The operations which are performed in Tesla are affected to a great extent by the behavior of its
customer. Due to this, it is necessary that they shall be satisfied in an appropriate manner by
which positive response will be received (Beringer, et. al., 2012). This will be helping in
attracting more customers and making the base strong.

The customers have the motive to receive such products and services from the company which is
of the best quality and as per their needs.

Communities:

The company performs various operations which have a mixed impact on the community and
that define behavior of the community. If the society will receive a positive response then it will
also be behaving in a positive manner and vice-versa. There will be overall economic
development also which will be achieved by this.

The community has various motives for which it is interested in the company and they are
required to focus on them. They require the overall economic development and such aspects by
which environment will be benefited. The health-related services will also be needed by them
and all of this is possible in Tesla.

Investors:

The investors invest in the company which makes the funds available to the business on which
the operations are performed. If Tesla will be having the funds and will be carrying out business
in an effective manner then it will be earning more and that way can provide the investors with

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required returns. This will be the benefit of the investors and they will be behaving in a positive
manner. It is necessary to ensure that the expectations of investors are met and they are satisfied.

The main motive of the investors is to invest in such a company which will be providing them
with the required returns. It can be said that they need the appropriate return on the amount
which is invested by them in the company and due to this they take this decision very wisely.

Employees:

There are various aspects which affect the behavior of customers and it is needed by the
company to fulfill them as then only the targets will be met (Arena, et. al., 2015). Employees
expect the company to provide them with a timely salary and also the incentives in addition to
that. If all of these are properly done then the favorable behavior will be experienced.

Employees work with the motive of earning well and to have a satisfactory working atmosphere.
They choose the organization in which all their needs are given importance and the issues which
are faced by them are resolved effectively.

In the changing environment, it is essential that the company provide satisfactory returns to
stakeholders as that is their motive and behavior of the stakeholders is highly influenced by the
same. If they will be satisfied then they will be providing a positive response to Tesla. There are
various forms in which returns are provided such as dividends, interest, incentives, and other
facilities. The motive and behavior of main stakeholders are identified and by that, it can be said
that advantage will be received by Tesla only after fulfilling the above-mentioned requirements.

Identification of the category of stakeholders and strategic programs for selected

stakeholders

Stakeholders have various categories in which they can be placed and it is difficult to identify
their respective categories. All of them have different scopes and motives and so it will be
required that proper analyzation shall be made to determine the correct category. All of them
have different strategic programs which are required to be undertaken by them and for that
proper identification of category us essential (Grant, 2016). The same for all the four
stakeholders is done in below-provided section:

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Customers: They belong to the external stakeholders as they are not within the organization.
They are very important to business as the profitability and growth depends on them. Due to this,
it is necessary that their preferences shall be considered in strategy formulation. They are the
mixed blessing stakeholders and for that, they will be treated accordingly.

The strategic program of collaboration will be undertaken with them. As they can be highly
cooperative or can create a threat so it will be beneficial to collaborate with them (Kinyua, et. al.,
2015). In this merger is also included and if one party is in favor then others will not be able to
oppose them.

Community: All of those who are available in the society or the environment are covered under
this. There is no direct impact on them and this makes them the external stakeholders. There is
the need to win the trust of them so that they do not create any hindrance and for that various
measures are adopted by Tesla. By this, the company will be able to achieve the set targets and
goals and by that overall development in the environment will be made. They can be considered
as non-supportive stakeholders as the support from them is not guaranteed.

The defensive strategy will be used for them as in that the dependency is reduced. There are
various assumptions which are made in this while making the proper policies and strategies.

Investors: They come with the intention to earn more return in the form of dividends and for
that, they invest in the company. They are external group and will be not affected indirect
manner by the operations which are taking place in a direct manner (Rothaermel, 2015). They
are also identified as marginal stakeholders as they have a marginal level of cooperation.

The policy of monitoring will be followed for this group in which all the activities which are
undergoing in their respect will be identified and avoided for the coming period. All of the issues
which are involved in the whole process will be resolved in a proper manner.

Employees: They are the ones who carry out all the operations in business and due to this they
will be covered in the internal category. They are directly in contact and will be affected by all
the activities of the business. They can be used in a proper manner that required targets are
accomplished by them. They will be treated as the supportive stakeholders as will be performing
the tasks and operations in the company.

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The strategy of involving supportive shareholders will be considered in this (Chen & Perez,
2018). By the help of this, the employees will be able to take decisions and cooperation will be
enhanced for all.

Recommendation of the strategic program for selected stakeholder groups

In Tesla there are various such strategies which are undertaken for the stakeholders and by the
mixed impacts will be realized. There are new innovations which are made and added in the
business and so it is required that strategies in this respect shall also be formulated. Tesla follows
the corporate social responsibility strategy and due to that customers are given the most preferred
and then the investors and employees are covered. The recommendations in this respect for all
the groups are provided below:

Customers

The company is providing electric cars to the customers and for that, it will be required to focus
on the quality of cars. It shall also be ensured that the cards are provided to the customers at the
affordable prices and for that such strategy shall be developed by which cost will be controlled.
If this will be achieved when there will be more customers who will be attracted and will be
using the company's car and this will be helpful for the business in attaining growth and increase
in profitability (Dibble, 2018). There will be the inclusion of the new technologies so that the
best facilities at most convenient prices are made available.

Investors

The capital structure of the company is required to be maintained in an appropriate manner and
for that proper investments are required so that capital is available. This will be helping Tesla in
incorporating new technology and products with the help of the funds which are collected. There
will be an increase in production and that will raise the earning of the company. It will be
ensuring the benefit of investors as they will be receiving their stake on time in the form of
dividends.

Employees

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The employees are the main part of the business as they are the ones who will be manufacturing
the products which are required by the company. So it is required that their interest shall be kept
at priority and they shall be satisfied appropriately. In order to meet this concern of employees
will have to be identified and then measures for them will have to be taken (Gilson and Abbott,
2018). There will be proper policies by which they will be provided with the required incentives
based on their level of performance. By this, they will be motivated and motive of the company,
as well as employees, will be fulfilled.

Communities

In the process of making cars and other automobiles, there is the harm which is made to the
environment and due to this, it is essential to meet the interest of the community. There will be a
formulation of the policies by which it will be ensured that there will be no damage to the
community by the undertaking of the company's processes. The technological development will
be made which will be making the motive to be attained.

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Conclusion

From the report, all the concepts in relation to the stakeholder’s analysis have been understood in
an appropriate manner. All of the important aspects and factors which are related to it have been
identified and taken into account. The major groups of the stakeholders which are available have
been determined and their description is also provided. Four of the main stakeholders have been
selected and then the discussion on their motive and behavior is made which helped in gaining
the required knowledge. The mission and vision of Tesla were also mentioned together with the
challenges which will be faced by Tesla. The manners in which strategies will be used for the
satisfaction of stakeholders have been provided together with the recommendations in this
respect. The categorization of the stakeholders is made and with that generic strategy for them
are also determined.

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References

Arena, C., Bozzolan, S., & Michelon, G. (2015). Environmental reporting: Transparency to
stakeholders or stakeholder manipulation? An analysis of disclosure tone and the role of the
board of directors. Corporate Social Responsibility and Environmental Management, 22(6),
346-361.

Beringer, C., Jonas, D., & Georg Gemünden, H. (2012). Establishing project portfolio
management: An exploratory analysis of the influence of internal stakeholders'
interactions. Project Management Journal, 43(6), 16-32.

Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.

Dibble, C. (2018). Exploring the Potential of Environmental Impact Investing for Sustainable
Development: The Cases of Dominion Energy and Tesla Motors.

Ferretti, V. (2016). From stakeholders analysis to cognitive mapping and Multi-Attribute

Value Theory: An integrated approach for policy support. European Journal of Operational
Research, 253(2), 524-541.

Gilson, S. C., & Abbott, S. (2018). Tesla Motors (A): Financing Growth.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
Sons.

Kinyua, J. M., Amuhaya, M. I., & Namusonge, G. (2015). Stakeholder Management Generic
Strategies and Financial Performance of Deposit Taking SACCOs in Kenya.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Tarhini, A., Ammar, H., Tarhini, T., & Masa'deh, R. E. (2015). Analysis of the critical
success factors for enterprise resource planning implementation from the stakeholders'
perspective: A systematic review. International Business Research, 8(4), 25-40.

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Matousek, M. (2018). Tesla's problems are mounting - here's everything that has gone wrong
so far this year. [Online] business insider. Available at:
<https://www.businessinsider.in/Teslas-problems-are-mounting-heres-everything-that-has-
gone-wrong-so-far-this-year/articleshow/63848170.cms>.

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