External Analysis: An Analysis Of The PESTEL Model

Strategic Audit
External Analysis
Growth and profitability of this industry. Frank Rothaermel (2013) tells readers, “The PESTEL model provides a straightforward way to categorize and analyze an important set of external forces that might be impinge upon a firm (p. 57).” These forces are rooted in the global environment and can create both opportunities and threats for the firm. These external forces are political, economic, sociocultural, technological, environmental, and legal.
Political. In the fall of 2008, to facilitate growth, Congress funded a direct loan program called the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program. This $25 billion program would provide debt capital to the U.S. automotive industry for the purpose of funding a project that would help vehicles manufactured in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil. The U.S. Department of Energy (DOE) announced in 2009 that $8 billion in conditional loan agreements would go to Ford Motor Company; Nissan North America, Inc.; and Tesla Motors, Inc. to fund the development of advanced vehicle technologies. The loan commitments included a $5.9 billion loan to Ford for upgrading factories in five states to produce 13 more fuel-efficient models, a $1.6 billion loan to Nissan to build advanced electric vehicles and advanced batteries, and a $465 million loan to Tesla to manufacture its new electric sedan the Model S. These were the first conditional loans released under DOE’s ATVM loan program, which is using an open competitive process to provide about $25 billion in loans to companies’ that produce vehicle and components of, within the United States.
Economic. The constant rise of fuel prices is making ...

... middle of paper ...

... Tesla and battery cell maker Panasonic announced that they would together develop nickel-based lithium-ion battery cells for electric vehicles. Panasonic and Tesla have since reached an agreement to expand supply of automotive-grade battery cells. This agreement builds upon a multi-year collaboration between Panasonic and Tesla to develop next-generation automotive-grade battery cells and accelerate the market expansion of electric vehicles.
Tesla markets and sells its vehicles directly to individual customers through international network of company-owned stores and galleries, as well as over the Internet. Unusual in the car business, Tesla Motors does no advertising and relies on the Internet and word-of-mouth. As of October 3, 2013, the company operates a network of 42 stores and galleries in the North America, Europe and Asia. (Bloomberg Businessweek, n.d.)