International Business in Practice Case Study Sample

Introduction To International Business In Practice Case Study

Background

The international company Tesla, Inc. is widely recognised for developing solar technologies, energy goods and electric cars (EVs). Established in 2003 with Elon Musk, Martin Eberhard as well as Marc Tarpenning, Tesla, Inc. started in Palo Alto, California, USA, as an electric car (EV) and renewable power company (Tesla, 2023). Tesla's line of goods has grown to encompass mass-market electric automobiles, battery packs and solar items in addition to its initial concentration on powerful electrical sports automobiles. Tesla is among the leaders in renewable energy in alongside its electric automobiles. Solar panels, rooftop solar tiles and storage systems for energy such as the Power Wall & Power-pack make up its power offerings. By encouraging the use of renewable energy, these inventions promote the environment as well as a sustainable economy.

Other clean energy businesses and established automakers venturing into the electric car sector pose a threat to Tesla. Prominent rivals comprise established manufacturers like as BMW and recent arrivals like NIO. Tesla's innovative technology, its integrated business strategy, and Supercharger network are its key competitive advantages. Notwithstanding, plausible vulnerabilities encompass manufacturing impediments and regulatory ambiguities across diverse marketplaces, underscoring the necessity of tactical flexibility. In general, Tesla's effects on hosting and destination economies include employment growth, technical innovation and a move towards environmentally friendly practises.

Product Target Overseas Location

Tesla is going to expand internationally with its range of cutting-edge energy goods, which will be introduced in India and include solar panels and solutions for storing energy. Tesla's energy solutions provide an avenue for development and revenue, in line with India's growing focus on environment and energy from renewable sources. In addition to lowering the release of carbon dioxide, the solar panels meet India's growing need for renewable energy remedies, notably in both the residential and business sectors (Nambisan, et. al, 2019). Tesla's energy storage technologies concurrently solve India's problems with irregular supply of energy and electrical system reliability.

India is a very appealing location for such expansion because of its high standards for renewable energy, subsidies and growing market for eco-friendly products. The goal of Tesla is aligned with the Indian government's shift to greener energy sources, which will foster a climate that will support the business's development and market acceptability. Tesla is well-positioned to benefit from India's changing energy landscape. Due to its dedication to technological advancement and ethical business practices, which simultaneously promote economic development and solve problems within the environment. The choice exhibits a global perspective, taking into account the legislative and cultural backdrops for effective integration in addition to market possibilities.

Literature Reviews

According to the views of Bahoo, et. al, (2020) a critical examination of Tesla's potential diversification into the Indian energy industry via the prism of global economic concepts is sparked by the company's consideration of solar panels as well as energy storage systems. The diverse model is a well-known theoretical framework that sheds the spotlight on the variables affecting foreign direct investment (FDI). The model states that ownership, place of residence, and internalization benefits influence foreign direct investment. Positively, worldwide trends encouraging environmental consciousness are in line with India's increasing emphasis on conservation and renewable energy sources. The body of study on ethical business practices and social responsibility in general emphasises the importance it is for businesses to support international efforts to tackle the effects of climate change. In addition to this, being in line with these values, Tesla's entry into the solar energy and technology products market presents the corporation as a conscientious corporate citizen.

Le (2019) assessed the monetary benefit of Tesla in relation to its possible expansion stems from its expertise in energy goods. With a history of developing breakthroughs in electric vehicles, Tesla has the ability to take advantage of this knowledge in energy solutions. With India putting more and more emphasis on environment and energy from renewable sources, the geographical benefit becomes clear. Tesla's energy products are placed in a favourable setting by virtue of their compatible with India's ambitions that might lead to their commercial adoption and profitability. On the critical note, Shenkar et. al. (2021) said that the diverse paradigm's fundamental component the internalisation advantage raises important concerns. It has to do with the ability of an organisation to use its benefits internally as opposed to depending on alliances or outside licensing. Tesla is a technologically advanced company, but moving from electric automobiles to renewable energy sources is a big change from its primary business. The internalisation advantage necessitates a thorough assessment of Tesla's capacity to successfully oversee a variety of product lines. This covers factors like knowledge transfer, organisational change, and the creation of internal processes to efficiently incorporate and take use of the benefits that have been found.

Montiel, et. al, (2021) ascertained the fact that the body of study on market entrance tactics highlights the significance it is to adjust to local wants and tastes. Tesla has the chance to reach a new client group within India by expanding its business there, one that values environmentally friendly energy practices more and more. This action could improve the business's image and maintain its position in a nation where sustainability concerns are becoming more important. However, Osano (2019) argued that the evaluation of Tesla's an opportunity internalization difficulties is essential given the complexity related to going into a new product type (Tien, et. al, 2019). The sudden shift calls for a careful assessment of the organisation, skills and strategy preparedness of the business. For Tesla, to attain a competitive edge in the fast-paced Indian market and also to use its financial and geographical benefits it is critical that it manage the internalization procedure well.

According to the views of Chi et. al, (2019) Tesla could get into the Indian market by offering energy products like solar panels and batteries for energy storage, using the Uppsala Model for Internationalizations as a lens through which to view the situation. This theory, which usually advocates for a progressive approach to development, emphasises the experience and progressive nature of entering international markets. However, Tesla's consideration of a move into India's energy goods market marks an important divergence from its well-established core skill of electric vehicles. The potential move appears to have some positive aspects as it aligns with India's environmental aims; yet, the sudden change presents issues that are consistent with the concepts of the Uppsala Model. As Tesla enters a new product area, organizational education and expertise transfer become crucial factors to take into account. In the event of a quick switch to renewable products, the model emphasises the value of practical expertise obtained via progressive internationalization, which might not be immediately relevant.

Katsikeas, Leonidou and Zeriti (2020) described in this situation, handling multiple lines of products successfully becomes crucial. According to the Uppsala Model, companies improve their strategy as they traverse international markets by gaining knowledge and expertise over time. Tesla's entry into the energy solutions market requires a detailed evaluation of its capacity to quickly adjust and handle this diversification. To enable the exchange of expertise and guarantee the seamless introduction of energy-related goods into Tesla's current portfolio, this involves assessing the creation of internal sharing information channels. However, Montiel, et. al. (2021) argued that the Uppsala Model underscores the possible difficulties that may arise from a non-incremental approach to market entrance and stresses the necessity for Tesla to deliberately handle organisational education and expertise transfer with the goal to secure success in the fast-paced Indian market.

Shenkar, Luo and Chi (2021) described a helpful perspective on Tesla's possible expansion towards India's renewable power sector is the Resource-Based View (RBV). The widely recognised technological expertise of Tesla in the field of electric cars is a unique asset that could give a competitive edge. For an asset to have an ongoing competitive edge, it has to be valuable, rare, distinctive, and non-substitutable (VRIN), according to the RBV. Tesla's technological know-how is clearly significant; however in the larger picture of energy goods, it becomes even more crucial to assess its uniqueness, uniqueness, and non-substitutability. It is imperative to conduct an in-depth enquiry to determine if Tesla's breakthroughs in technology in electric automobiles can be utilized efficiently and distinguished in the field of renewable energy, given the particular obstacles related to solar panels as well as energy storage systems.

Thomas and Maine (2019) examined consequences of Tesla's internationalization approach include helping India achieve its sustainability objectives, staying viable in a market that prioritizes renewable energy, and matching worldwide environmental trends. Nonetheless, there can be drawbacks. The abrupt transition from electric vehicles to energy products presents organizational adaption as well as information transfer problems that might put a burden on Tesla's internal resources. Furthermore, a proactive strategy is necessary to guarantee conformity and prevent legal obstacles due to India's complex regulatory environment.

Analysis Of The Host Country And Industry Characteristics

Assessing the possible advantages and disadvantages of Tesla's expansion into India, especially regarding the renewable energy product industry and with regard to solar panels as well as solutions for storing energy, needs a thorough analysis on the host nation and its economic characteristics.

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Formal Institutional Factors:

Infrastructures and Economic Systems

The economy of India, which is among the most rapidly expanding in the world, offers Tesla attractive prospects. The increase in the GDP rate, which has been about 7% on average in the last few years, shows a strong economic climate. However, issues like economic inequality and a comparatively smaller GDP per capita than in advanced nations can affect people's ability to afford luxury energy items (Handa, 2020). The labour force's combination of trained and untrained people presents an opportunity to produce goods that can be done at a reasonable cost. However, the labour force's educational attainment may make it difficult for consumers to accept high-tech products.

Although there have been advancements, administrative hurdles and intricate laws and regulations still exist in India. Logistics and technology also paint a conflicted image. Large cities may have extensive facilities yet rural regions might not. A changing environment is shown by measures like internet prevalence and the state of ports and airports. In order to guarantee effective logistics and transportation systems for its electrical products, Tesla must take into account these elements.

Political and Legal Systems

The federated parliamentary democratic republic that is India's political system helps to create a usually stable political climate. However, since each state had a different political environment, the decentralized form of administration creates complications. Divergences in the understanding and execution of laws may provide difficulties for national businesses such as Tesla. Political hazards are low, but careful strategic planning is required due to unpredictability in regulation and the possibility of policy modifications. Specifically in the field of renewable energy, Tesla has to negotiate a complex regulatory environment. Differentiating government rules and laws across different locations necessitates an elaborate strategy to compliance. India's regulatory framework is dynamic, which adds another level of complication and necessitates ongoing observation and adjustment for any modifications.

Following and comprehending government regulations becomes crucial within the green energy space, where Tesla plans to expand. In addition to keeping up with changing rules that might affect its market entrance and operational strategy, Tesla must synchronize its activities with India's aspirations for renewable energy (Gayathri and Kumari, 2019). For Tesla, the preservation of its intellectual property (IPR) is a top priority in India. Its technical advancements in energy items and electrical autos make trademark protection essential. To stay ahead of the competition and guarantee that Tesla's advances in technology are unique in the Indian market, it is crucial to evaluate the legal environment and put strong anti-infringement procedures in place.

Informal Institutional Factors:

Demographic Characteristics

India's youthful demographic and expanding middle class, along with the country's notable demographic dividend, make the country an appealing target audience for Tesla's energy-related goods. The growing middle class suggests an audience population with greater financial resources, which will facilitate the uptake of Tesla's ground-breaking goods. However, to achieve successful market penetration, a deep grasp of the varied customs and tastes throughout various regions of India is necessary. Tesla needs to change its marketing tactics to appeal to the diverse tastes and ideals of different market groups, taking into account things like way of life, cultural norms, and regional techniques.

Sustainability and awareness of the environment are influencing consumer tastes more and more in India, which fits in nicely with Tesla's goal of pulling sustainable energy solutions. By taking advantage of this position, Tesla's energy offerings may become more appealing to consumers (Daifen, 2022). With so many languages spoken all throughout the nation, managing linguistic diversity necessitates using focused advertising tactics. To guarantee that Tesla effectively conveys its corporate identity and product advantages to varied linguistic populations and fosters universal understanding and acceptance of its green energy remedies, it will be imperative to use specific to a language methods of communication. Tesla may enhance its market penetration approach and achieve maximum success in India's vibrant and heterogeneous market by acknowledging and resolving these demographics and cultural intricacies.

Cultural Norms and Social Responsibilities

India's diverse social structure and broad spectrum of customs present both possibilities and difficulties for Tesla's market share. Tesla's sustainability mission is well-aligned with the growing focus on the environment and social responsibility in India. An atmosphere that is open to Tesla's energy-related goods is created by a greater understanding of sustainability and global warming. It is necessary to navigate cultural differences pertaining to interpersonal methods and business practices (Nippa and Reuer, 2019). The intricate cultural differences of India impact the business scene and necessitate a cautious and courteous attitude. Building strong partnerships requires a thorough understanding of processes for making decisions, organisational frameworks, and the value of connections in commercial transactions.

Maintaining a commitment to moral behaviour and social responsibility as a company is essential to being accepted and building confidence in the Indian market. It could be accomplished to improve Tesla's standing and win over Indian customers by showcasing a dedication to environmental and social reasons as well as open, moral corporate practices. Tesla may successfully capitalise India's unique cultural setting and solve its related problems by prioritizing responsible business practises, embracing various cultures and connecting with social norms.

Impact of Religion and Perceptions of Bribery and Corruption

Religion might not have a direct impact on Tesla's energy goods, yet within India's diverse market, cultural considerations related to sure religious practises are important. Gaining a good reputation in the community and entering a market successfully depend on your ability to recognize & appreciate these social quirks (Bahoo, et. al, 2020). There have been admirable attempts to tackle corruption in India's economic environment. Nevertheless, difficulties still exist, so Tesla needs to be on guard. It is essential to have strong anti-corruption policies in place in order to promote an open corporate climate and comply with international ethical standards. These steps should include rigors oversight protocols, in-depth staff training and well-defined regulations that discourage unethical behaviour.

Tesla's dedication to moral business practices would improve its position within the Indian market in addition to its brand image, which is both enduring and responsible. In light of the growing emphasis on social responsibility for businesses around the globe, it will be legally required as well as strategically advantageous for Tesla. Thus, company needs to consider these ethical and cultural issues in line with its purpose and core principles. Tesla can effectively traverse India's intricate business ecosystem and have a good impact on the country's commercial climate by placing a high priority on understanding culture and business ethics.

Entry Mechanism

A joint venture is the best way for Tesla to present itself within Indian market, with a focus on solar power and solutions for energy storage (JV). By making this deliberate decision, Tesla is able to employ local expertise, reduce risks and deftly handle the complicated dynamics underlying the Indian market. A joint venture (JV) offers a practical and mutually beneficial route for long-term development in India's rapidly expanding green energy industry, while also completely in line with Tesla's objective.

Joint Venture Rationale

To get traction within India's renewable energy industry, especially for solar panels and storage of energy, Tesla finds that a joint venture (JV) is the most efficient way to get into the market. This calculated move fits well with Tesla's objective of hastening the global switch to renewable energy sources and takes use of the special opportunities and challenges which the Indian market offers (Nambisan, et. al. 2019). India has a complex regulatory environment that is always changing, particularly in the rapidly expanding field of renewable energy. Tesla may benefit from the local partner's comprehensive knowledge of these nuances by forming a joint venture. With this cooperative strategy, Tesla will be able to successfully manage regulatory hurdles, comply with legal standards, and quickly adjust to any changes in policy. A more efficient market entry can result from the local partner's experience with official procedures, which can greatly speed up permissions and licence purchase.

In addition, the varied consumer behaviours in India require sophisticated knowledge that a local partnership already has. Through a joint venture, Tesla can benefit from the partner's knowledge of local tastes, cultural peculiarities, and industry trends. The ability to adjust products, advertising tactics, and customer interaction techniques to the unique needs and desires for the Indian consumer group is made possible by this local expertise. In India, where personal ties frequently determine economic success, cultivating local relationships is essential. Because of the local partner's established relationships and industry reputation, working together makes it easier to develop these crucial ties. This is especially pertinent in an area like renewable energy, wherein working together with lawmakers, government departments, and industry players is essential. Basically, a joint venture offers a practical means of overcoming the obstacles posed by India's regulatory complexities, varied customer base, and the critical significance of local connections in the field of clean energy (Debellis and Pinelli, 2020). It also strategically aligns with Tesla's overall mission. By doing this, Tesla increases the likelihood of profitable development by preparing the company for a more seamless and culturally sensitive approach to entering the Indian market.

Partner Selection

Finding a qualified local partner is essential. The ideal partner would have a background in a dynamic business, a strong grasp of regional rules, and established relationships. Working with a credible Indian firm, maybe one with an emphasis on energy efficiency or an established reputation in the electronics sector could strengthen Tesla's market position.

Step 1: Market research and preliminary assessment: Launch the joint venture through carrying out a market analysis and initial evaluation. Determine the market in India for solar panels as well as energy storage systems, examine the competitive environment, and comprehend legal requirements (Sadegh, et. al. 2020). To assess the elements impacting the venture's viability on an economic, politics, as well as cultural straight, an overall feasibility evaluation takes place in this phase. An evaluation of the market's size, potential for development, and any obstacles are important factors.

Step 2: Framework for Law and Regulation: Work together with legal professionals to negotiate India's regulatory framework and ensure adherence. Create precise written contracts that define the obligations, functions, and stakes in ownership of each party. This process entails a thorough analysis of regional legislation, environmental rules, and industry norms. For the joint venture to operate smoothly and lawfully, it is imperative to build a strong legal basis in order to reduce risks.

Step 3: Transfer of Technology and Integration: Assist the local partners in receiving Tesla's technological know-how (Debellis and Pinelli, 2020). This entails creating comprehensive training curriculum, holding information-sharing meetings, and encouraging ongoing cooperation. It is important to guarantee the smooth assimilation of Tesla's energy products inside the Indian market. For the company to provide the best possible product creation and implementation, this stage focuses on utilising Tesla's technology edge and matching it with the skills of the local partner.

Step 4: Supply Chain Optimization: To create an effective supply chain, collaborate extensively with the local partner. Locate regional vendors, streamline logistics, and guarantee the supply of parts needed for solar panels as well as energy storage systems. This stage places a strong emphasis on supply chain localization with the goal to lower costs, shorten lead times, and satisfy the unique demands for the Indian market.

Step 5: Potential Growth, Support Services and Marketing: Create customized advertising and promotional plans that appeal to the Indian market by employing the local partner's knowledge of cultural quirks and consumer needs. Provide comprehensive post-purchase services and client support, including regional training programmes and troubleshooting. Take part in CSR initiatives that are community-focused and in line with Indian society principles. Develop a good rapport with authorities and interested parties in order to negotiate bureaucratic procedures and promote beneficial policies (Olie, Klijn and Leenders, 2020). Put in place reliable processes for assessment and monitoring that are in line with important indicators of performance. Scalability should be taken into account while designing the joint venture, taking into account opportunities for future growth or changing the company plan in response to changing market conditions. In the Indian green energy sector, this phase guarantees a thorough strategy to market access, sustainability and sustained development.

Conclusion And Recommendation

Conclusion

In conclusion, it can be stated that a planned and flexible strategy is essential for Tesla's successful entrance into the Indian market including an emphasis on energy goods. Assistance is provided by theoretical frameworks including the Resource-Based View, Uppsala Model, as well as Eclectic Paradigm. The company should prioritize diversity, inclusion, and ethical behaviours that are compatible with Indian ideals, even above market dynamics. Along with contributing to successfully navigating the complexity of the market and regulations, this all-encompassing strategy will establish an environmentally as well as socially responsible position in India's expanding renewable energy industry.

Recommendations:

• Proactive Legal Engagement: Tesla should take a proactive approach to legal interaction with the goal to guarantee an easy entrance on the Indian market along with negotiate its regulatory environment. This entails putting in place a reliable mechanism for keeping an eye on developments in regulations and communicating with the local government.
• Strategic Joint Venture: Building a solid and cooperative relationship within the local partnership should be Tesla's top priority when it comes to handling strategic joint venture difficulties. This means encouraging open lines of communication and efficient information transmission.
• Diversity and Inclusivity: Creating a workforce that is fair and represents the diversity of India's cultures is crucial for integrating into society as well as for fostering innovative thinking and ability to solve problems. Through the integration of varied viewpoints in its decision-making procedures, Tesla may access an abundance of concepts, fostering strategic ingenuity and a more profound comprehension of the regional market dynamics.
• Ethical Business Practices: Tesla's activities in India need to prioritize ethical business practices. The business ought to include ethical issues in its dedication to sustainability. This entails upholding international ethical norms in commerce, foreign investment, and community involvement as well as guaranteeing responsibility and openness in commercial operations.

References

Books and Journals

• Bahoo, S., Alon, I. and Paltrinieri, A., 2020. Corruption in international business: A review and research agenda. International Business Review, 29(4), p.101660.
• Chi, T., Li, J., Trigeorgis, L.G. and Tsekrekos, A.E., 2019. Real options theory in international business. Journal of International Business Studies, 50, pp.525-553.
• Daifen, T., 2022. Evaluate the sustainable marketing strategy to optimal online leasing of new energy vehicles under the background big data economy. Journal of Enterprise Information Management, 35(4/5), pp.1409-1424.
• Debellis, F. and Pinelli, M., 2020. Board interlocks in SMEs and the formation of international joint ventures. Piccola Impresa/Small Business, (2).
• Gayathri, S. and Kumari, D.A., 2019. Electric Vehicles-An Introduction of the Tesla for Strategy and Leadership. International Journal of Recent Technology and Engineering, 8(2), pp.1522-1524.
• Handa, B., 2020. Constant rise of Tesla Inc.: Strategic marketing plan leading to company's colossal growth in 2020. ENVISION–International Journal of Commerce and Management, 14, pp.45-49.
• Katsikeas, C., Leonidou, L. and Zeriti, A., 2020. Revisiting international marketing strategy in a digital era: Opportunities, challenges, and research directions. International Marketing Review, 37(3), pp.405-424.
• Le, C., 2019. China's Expansion in International Business: The Geopolitical Impact on the World Economy. Contemporary Chinese Political Economy and Strategic Relations, 5(3), pp.1249-XI.
• Montiel, I., Cuervo-Cazurra, A., Park, J., Antolín-López, R. and Husted, B.W., 2021. Implementing the United Nations' sustainable development goals in international business. Journal of International Business Studies, 52(5), pp.999-1030.
• Montiel, I., Cuervo-Cazurra, A., Park, J., Antolín-López, R. and Husted, B.W., 2021. Implementing the United Nations' sustainable development goals in international business. Journal of International Business Studies, 52(5), pp.999-1030.
• Nambisan, S., Zahra, S.A. and Luo, Y., 2019. Global platforms and ecosystems: Implications for international business theories. Journal of International Business Studies, 50, pp.1464-1486.
• Nippa, M. and Reuer, J.J., 2019. On the future of international joint venture research. Journal of International Business Studies, 50, pp.555-597.
• Olie, R., Klijn, E. and Leenders, H., 2020. United or Divided? Antecedents of Board Cohesiveness in International Joint Ventures. In Academy of Management Proceedings (Vol. 2020, No. 1, p. 21123). Briarcliff Manor, NY 10510: Academy of Management.
• Osano, H.M., 2019. Global expansion of SMEs: role of global market strategy for Kenyan SMEs. Journal of Innovation and Entrepreneurship, 8(1), p.13.
• Sadegh, M.H., Shah Hosseini, M.A. and Heidari, A., 2020. Extracting the Effective Factors on Corporate Governance Formation in Strategic Alliances with Focus on International Joint Ventures through Systematic Literature Review. Journal of Business Management, 12(1), pp.64-93.
• Shenkar, O., Luo, Y. and Chi, T., 2021. International business. Routledge.
• Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235, pp.653-663.
• Tien, N.H., Phu, P.P. and Chi, D.T.P., 2019. The role of international marketing in international business strategy. International journal of research in marketing management and sales, 1(2), pp.134-138.

Online

• Tesla. 2023. Solar roof. Online. Available through. :<https://www.tesla.com/solarroof>