Information Technology In Organizations Free Writing Sample

Technological advancement is amongst the most important instruments used in many organizations to enhance productivity in their operations while also lowering expenses. Currently, many brands have implemented e-business techniques, which are used to carry out company operations and improve organizational effectiveness. Companies that install computer systems need to evaluate the relevance of the IT network, which is a common information distribution foundation and helps organize (Blackler, 1994). The comprehensive IT network comprises computing and information technologies and sharing information systems and analytics. By supporting efforts like cycle time optimization, cross-functional operations, and cross-selling possibilities, technology helps a company gain a competitive edge. Emerging managerial approaches emerge as a consequence of computer technology to promote a highly efficient atmosphere in businesses. Information technology dramatically enhances a company’s capacity to interact with other companies and achieve a competitive advantage. All sectors’ structures and operations have been significantly transformed by technology. The essential issue for every current business’s operation was whether or not technological advancement will be helpful to it and, therefore, what we would have to do to benefit from it. Numerous parts of the business are developing, and startup possibilities are emerging. Computer technology has led to extraordinary organizational changes in the previous few years, so this technological advance is impacting how we do business and how individuals maneuver in life (Poppe et al., 2013). The essay explores the aspect of information technology creating a significant change in the organization.

The 21st century is a business-driven culture which essentially requires information technology for efficient coordination of activities. Industry professionals are more conscious of maintaining connections and relationships efficiently, both inside the workplace and with their consumers, in highly competitive industries; hence, most organizations have incorporated information technology into their operations (Blackler, 1994). Digital transformation is a system that uses computer technology to regulate, monitor, analyze, and produce information. For instance, information technology has dramatically revolutionized the vehicle manufacturing industry. Due to advance technical advances, the manufacturing industry is consistently shifting from fossil fuels to green energy (Willcocks, 1991). A clear example is Tesla which has incorporated the production of electric cars, which are consistently replacing fossil fuel cars. Most importantly, the advancement is due to a well-equipped and rationalized information system.

Whenever it concerns embracing change in enterprises, information technology seems to have the dominant position. In most cases, technology is brought into businesses to increase performance. Indeed, firms’ ability to perceive, assess, and absorb new technological innovations into their structure, invention, and environment may explain increased productivity (Willcocks, 1991). Businesses could also save costs and resources by implementing effective information technology in many business processes. For instance, technology is efficient in maintaining market supremacy; hence business organizations aim to incorporate the most technological advances far more than feasible. As a result, regulating contemporary systems guarantees that businesses continue to use cutting-edge complex technology to better their operations and that these regulations are coherent (Blackler, 1994). As a consequence of increased performance and decreased expenses, productivity rises, resulting in total revenue.

Information technology, such as communications networks, is increasingly used by businesses to promote their products and draw their critical demographic. The organization accomplishes this by analyzing information and then doing market research, which assists the thriving firm in evaluating client wants and interacting with clients’ worries by adjusting or updating things to match their standards (Poppe et al., 2013). Businesses may also determine what merchandise a particular set of people need. Consequently, business organizations grow, resulting in good improvements in the company. As a reaction, it is necessary to demonstrate that information media are being used as a primary change engine in contemporary businesses.

Another advancement in technology is the interactive system, which consistently reduces the demand for conventional office spaces, simultaneously doubling the frequency of teleworkers. The face-to-face connection between enterprises, their vendors, business associates, and consumers is reducing due to modern digital media. Employees may profit from being more mobile, performing operations outside of typical professional situations via Smart Phones, telephones, and notebook computers (Blackler, 1994). Thanks to the enhanced connection to the internet, increasingly, workers are becoming “remote workers,” who undertake work-related tasks from homes or another distant place.

The conventional hierarchical organization of roles and duties is changing, as is the type of assessment. Additional design aspects are provided by desktop monitoring and management of social networks. They influence decisions about job division, individual duties, and accountability (Poppe et al., 2013). Firms may now follow changes in client preferences considerably more quickly and efficiently thanks to new digitized information systems. Through the installation of computer systems, companies have managed to enhance operational efficiency, enhance collaboration, cut costs, grow their strong reputation, and acquire a competitive edge.

Technical revolution boosts competitiveness, allows for quick expansion, and decreases existing impacts on the external business environment, supporting businesses in reforming. Technology, which is often the fundamental primary driver of organization operations in digitalization, governs the speed of economic activities. In the 21st century, developing nations place a high priority on integrating advanced information systems into enterprises. Utilizing the advanced technology networks in the industry is considered an income for developing countries; hence many developed-country businesses expatriate to developing nations. Globalization has a significant impact on the social development of developing nations (Poppe et al., 2013). Technology has changed people’s private and social lives by providing groundbreaking innovations to every field. Organizations may enhance productivity, save expenses, and save labour due to technological advancement.

Over the past few years, the utilization of technology in human resource services has grown dramatically, with businesses now employing some HR information system (HRIS). An HRIS may handle various tasks, from basic data transmission to more complicated operations. The variety of assignments an HRIS may do expands as technology gets better (Blackler, 1994). The HR department, level managers, and the whole business may all benefit from the adoption of HRIS. Solely on a single one, technologies have been proved to result in quicker, more reliable, more efficient systems and lower HR expenses. Technology may also be utilized to offer HR information that allows managers and supervisors to undertake essential HR functions independently. On some other dimension, using HRIS to relieve the HR function’s administrative and procedural burdens might result in a shift in HR’s framework, allowing it to assume a more proactive role in the industry.

Communication services have made resources for personnel departments accessible, enabling the government’s actions to be more efficient. Human resources workers at enterprises which do not employ technological advances must face a multitude of emails, phone messages, and paperwork. The individual who needs to be physically available would also have to memorize dozens of tasks and processes. Digital technologies have previously been used to develop human resource technologies. The technologies’ elements are effectively accomplished from an exemplary computer system. The tasks performed by an information system include operational efficiencies, employee data management, encompassing companies, personnel records creation, community interactions, and remuneration (Haldorai & Anandakumar, 2020). As previously said, the attributes of this Personnel management solution help organization experts save every significant amount of time which may be committed to staff tasks that assist in the company’s development and success. Enterprises may enhance revenues by transitioning to a technology work environment; consequently, information technology in corporations is the core engine of change in organizations.

Digital technology, as per, has improved through candidate selection. Organizations consider the employability procedure to ensure they get qualified and competent people to carry out their services. The internet has radically impacted recruitment techniques; for example, it now enables human resource professionals to search for qualified candidates worldwide. Freelancing workers is perhaps one of the strategies managers utilize to discover individuals who meet the standards. Management may also use modern technological tools to select some applicants and focus on someone who fulfills the requirements. The approach helps to reduce the time by shortening the search and assisting in choosing the best candidate who can immediately take on duties (Willcocks, 1991). Furthermore, Hr practitioners may utilize various online resources to locate possible candidates. Obtaining the best possibilities for a firm ensures success and good change, so technical progress is a transforming engine in organizations.

Thanks to digital technology, businesses may now brand themselves in different manners. Website designers and developers, online discussions, and involvement in essential forums help to improve consumer-business connections. As a consequence of technical advancements, social platforms have significantly expanded internal corporate operations and external commercial opportunities (Blackler, 1994). Consequently, it’s worth arguing that computer networks are the driving force behind organizational transformation.

Data portability has become more relevant as information technology systems have advanced. This is no surprise that perhaps the technology makes it simple to transfer vast quantities of data swiftly and affordably. This has improved the ability of computer networks to interact with each other. The changes that result are substantial. Instead of relying on the webserver to “broadcast” information to the database on a predetermined timetable, users may still “fetch” data out of a remote system whenever they need the data (Martin, 2003). It is a lot simpler to provide “data” instead of assessments. Instead of receiving a paper version of a presentation through facsimile, a customer may get a worksheet containing data.

Additional improvement is that computers nowadays can pull content files from many other databases instead of depending on a person to get data from one place and input it into another. When recording an employee’s claim for compensation, for example, a policyholder may need to get documentation on the injured party from its human resource department and afterwards transmit the information to an insurance provider agent, who will input the data into the insurer’s computing device (Poppe et al., 2013). It is now feasible to remove the intermediary stages by enabling the insurer’s computer to communicate directly with the business’s computer. This is not only conceivable, and it is also common practice among certain companies and their insurance. A well-structured information system achieves coordination of information; hence it is a crucial driver in several organizations.

In the establishment of an organization, technology plays a crucial influence. Although technological advancements may alter a company’s overall architecture or connections, this has not been the situation. When firms change how they function, there could be a transition resulting from digitalization advancement. One futuristic masterplan whose notions are being confirmed by technology components is the premise of the virtualized geographic point. The technological strategy’s main principle is that workers should be allowed to work independently and even with accessibility to records online (Reynolds & Yetton, 2015). Responsibilities may become more concentrated and purposeful, with productivity judged by how people do their assigned tasks rather than physical touch.

Computer-based technologies are becoming more effective as it drifts away from a primarily supporting position in the back office. A corporation may utilize this technology to reduce competitive pressure and, in some instances, fundamentally reshape the competitive landscape. The technological system provides a more significant competitive edge, significantly increasing customer experience and sales. A key rival is forced into a business restructuring and a vast system engineering effort to reduce the damage due to the sudden market expansion; however, these restorative steps have achieved significant success (Blackler, 1994). Technology advancement has indicated how some businesses have taken advantage of the opportunity, while others can be forced to play the arduous and costly version. Besides, IT can enable the executives to efficiently conduct this market analysis when determining where the system fits in their organizations because it can perform a supporting role in some instances and add decently to the significance of an organization’s activities. In contrast, in other situations, it is critical to their competitive survival. Identifying where a firm falls in the range may aid the executive in determining the appropriate amount of expenditures and the computer network organizational structure (Poppe et al., 2013). Essentially, information technology is the primary change engine in many commercial enterprises.

Eventually, information systems are being used as a significant contributor to today’s modern contemporary businesses due to their numerous applications. The process involves HR department technology, quality enhancement, organizational upgrades, effective data collecting, assessment, and effective specialist recruitment. Additionally, information technology has boosted corporate marketing strategies by using social networks. Organizations are undergoing significant changes as a result of improved technology. Information Technology is being embraced as a transformative engine in today’s contemporary organizations in this situation. In essence, information technology reduces cost, improves efficiency, and increases production.


Blackler, F. (1994). Post(-)Modern Organizations: Understanding how Cscw Affects Organizations. Journal of Information Technology9(2), 129–136.

Haldorai, A., & Anandakumar, S. (2020). Business Information System Culture in Global Organizations. International Journal of Advanced Information and Communication Technology, 204–212.

Martin, A. (2003). What Drives the Configuration of Information Technology Projects? Exploratory Research in 10 Organizations. Journal of Information Technology18(1), 1–15.

Poppe, K. J., Wolfert, S., Verdouw, C., & Verwaart, T. (2013). Information and Communication Technology as a Driver for Change in Agrifood Chains. EuroChoices12(1), 60–65.

Reynolds, P., & Yetton, P. (2015). Aligning Business and IT Strategies in Multi-business Organizations. Journal of Information Technology30(2), 101–118.

Willcocks, L. (1991). Transforming Organizations through Information Management. Journal of Information Technology6(1), 56–59.

Interference And Decay Theories Of Forgetting Sample College Essay


The term “memory” describes a wide range of mental abilities that help us remember things and piece together our history, often for the benefit of the present. One of the most significant ways our pasts shape our present is through memory. Specifically, it is a common and perplexing characteristic of individuality that humans can recall distant yet concrete moments from their past. Knowledge appears to be stored in one’s memory. Memory is distinct from perception in that it involves the recall of past events and experiences that are no longer occurring. Since our memories are based on past experiences, recollection is distinct from the realm of pure imagination. However, in actual use, recalling, perceiving, and envisioning can all have close connections. Emotional intensity permeates the process of remembering, which is intricately linked to not just protracted emotional states like love and loss but also to promising and commemorating. It plays a crucial role in deliberation and choice-making at all levels of society. It has some mysterious ties to the dream state. Language can shape specific memories, while pictures can shape others. The ways humans are anchored in time have profound implications for our moral and social lives. When memory fails, it might be in a little, everyday way, or it can be catastrophic, affecting one’s entire life. This study will examine Interference Theory and Decay Theory and show that Interference Theory provides a satisfactory explanation for forgetting.

The difficulty of explaining

It was discovered by Underwood and Ekstrand in 1966 that there are seven common ways in which our memories let us down. Encoding errors can occur when people are not paying close enough attention. The effects of transference are wide-ranging, from gradually fading away information that is no longer needed to the complete blocking of previously acquired knowledge, like thinking of a specific performer from a long-ago film. Another kind of misunderstanding occurs when people mistake their dreams for forthcoming events. Leading questions based on false information might trick people into thinking something happened when it has not. It is a fabricated recollection. More Schacter has been discovered. Unless the information is encoded, it will be lost over time. Anyone can learn anything new, but children do it more efficiently and quickly. The brains of older adults are less active. This clarifies why our memories deteriorate with age.

Suppose you cannot recall particular info from memory. In that case, Retrieval theory says it’s probably because the encoding was not good enough, there is no connection to your preexisting semantic knowledge, or the material is not a good fit for retrieval indices (Feld & Born, 2017). Although you may not be able to recall specifics at this time, this does not indicate that the knowledge has been completely lost from your memory; instead, it only serves as proof that you may recall these details later. That is to say, no matter where the knowledge came from or where it is now, it will stay in our long-term memory for some time. This explains why there is no such thing as “Oblivion.” The issue at hand is what became of the newfound knowledge. The “information” in your head is irrelevant now, so forget about retrieving it. Whether the data has been deliberately erased or forgotten, the end consequence is the same: it has been forgotten.

It was discovered by Underwood and Ekstrand in 1966 that there are seven common ways in which our memories let us down. Encoding errors can occur when people are not paying close enough attention. The effects of transference are wide-ranging, from gradually fading away information that is no longer needed to the complete blocking of previously acquired knowledge, like thinking of a particular performer from a long-ago film. Another kind of misunderstanding occurs when people mistake their dreams for genuine events. Leading questions based on false information might trick people into thinking something happened when it has not. It is a fabricated recollection. More Schacter has been discovered. Unless the information is encoded, it will be lost over time. Anyone can learn anything new, but children do it more efficiently and quickly. The brains of older people are less active. This clarifies why our memories deteriorate with age.

Suppose you can’t recall specific info from memory. In that case, Retrieval theory says it’s probably because the encoding wasn’t good enough, there’s no connection to your preexisting semantic knowledge, or the material isn’t a good fit for retrieval indices (Feld & Born, 2017). Although you may not be able to recall specifics at this time, this does not indicate that the knowledge has been completely lost from your memory; instead, it only serves as proof that you may recall these details later. That is to say, no matter where the knowledge came from or where it is now, it will stay in our long-term memory for some time. This explains why there is no such thing as “Oblivion.” The issue at hand is what became of the newfound knowledge. The “information” in your head is irrelevant now, so forget about retrieving it. Whether the data has been deliberately erased or forgotten, the end consequence is the same: it has been forgotten.

Theories of Forgetting

Interference theory

According to the research of John A. Bergstrom, the reason that humans are unable to remember things is due to a phenomenon known as the negative transmission effect, which takes place in the long-term memory (LTM) system whenever new and old information comes into contact with one another (Botwinick, 1967).

It is possible to forget to be either retroactive or proactive according to the concepts of interference theory (Steinman et al., 1965). According to the proactive interference hypothesis, forgetting occurs when interference from previously learned material inhibits newly acquired information from being recorded in long-term memory (LTM). The phenomenon of retroactive interference, in which new information prevents a person from recalling earlier information because it conflicts with the processing of the new information, may be illustrated by the fact that a person can forget an old phone number shortly after learning a new one. According to Underwood (1969), retroactive interference takes place when the learning and recall of following functions interfere with remembering the “primary studied functions,” which refers to the knowledge that was first encoded (later encoded information).

It is generally agreed that interference is a valid theory. Maxcey et al. (2021)looked at the factors contributing to the interference. They came to this conclusion after studying word pairs and finding that people tend to favor the information they already know rather than the new information offered to them in an experiment involving dual tasks. The more information processed at once, the more likely one is to forget things. It does not matter how excellent a person’s memory is; trying to remember anything while simultaneously juggling many things will always be challenging. Data back this universality of the idea, and interference theory demonstrates that most people have a standard forgetting process.

According to Olsen (2014), the process of forgetting is bolstered when new material has a high degree of similarity to previously stored knowledge. As part of their research, they looked at how interference across languages might affect learning. This lends credence to the retroactive interference theory by suggesting that new information encoded into our LTM ‘blocks out’ or replaces older information without conscious effort (Keppel, 2014). However, as LTM has an infinite capacity, their findings may lend credence to other models of forgetting in which the stimulus type is prioritized above information interactions. The assumptions behind interference theory, on the other hand, undermine it.

All memories are safe under LTM; the thinking goes; forgetting happens only during recall, even if the data themselves are incorrect (Ecke, 2004). This is disregarded by interference theory. It is not possible to say that interference theory encompasses all forgetting components since it lacks evidence from indirect memory studies; most studies have been searching for interference explicitly.

Evidence for forgetting things in the past (retroactive forgetting) may be produced, but how can one demonstrate that memories are not messed with? Even though no significant study directly opposes interference in memory, it is challenging to rule out the potential of forgetfulness from other explanations and interference because of confounds like those mentioned by Henderson (2005), which are difficult to verify scientifically.

The Decay Theory of Forgetting

The trace theory of memory postulates that remembering anything involves making physiological and chemical adjustments to the brain (Keppel, 2014). The neurochemical memory trace of information stored in short-term memory only lasts a few seconds if it is not reviewed often. The events that occur between the time a memory is formed and the time it is retrieved have no bearing on the likelihood of its recall, per the trace decay hypothesis of forgetting. According to trace theory, remembering something influences how likely it is to be remembered in the future (Keppel, 2014). More data will be recalled if the period between exposures is shorter. We lose more knowledge and have less reliable memories as time goes on.

Brown argues that over a short amount of time, the reliability of one’s memories declines until one reaches a certain tipping point (Ricker, Vergauwe & Cowan, 2016). According to Brown, there is a simple reason why our memories have a finite capacity, and we forget things. Because of the time, it takes to perceive an object and the time it takes to recall it, as well as the time it takes for an item in memory to decay while being perceived and retrieved, decay is seen as the direct source of memory spans in this perspective (Ricker, Vergauwe & Cowan, 2016). The amount of things that may be remembered or experienced at one time is limited by this process. Brown may have explained why decay leads to forgetfulness in the abstract, but the meaning of decay may be taken in various ways. In the years after Brown’s findings, many hypotheses have presented diverse explanations of how decay operates (Anderson, 2003). (Anderson, 2003). Disparate interpretations of degradation provide radically divergent forecasts for the durability of short-term memory.

The concept that memories degrade over time is nothing new. About 2,600 years ago, the Greek philosopher Plato made a similar suggestion in his Republic. Ebbinghaus and other psychologists later conducted experiments to support this view (Keppel, 2014). In particular, it is not easy to show that time alone is to blame for memory loss, which is one of the theory’s main flaws. Many things occur in real life between the time a memory is formed and the time it is recalled. Between the time he or she learns something in class and has to recollect it for an exam, the student may have hundreds of one-of-a-kind experiences.

Was too much time between studying for the American History test and taking it that caused you to forget the date the American Revolutionary War began? Or was it influenced by the vast knowledge gained in that time? An extreme testing difficulty may arise. Eliminating every single factor that might impact the construction and retrieval of memory is an almost impossible task (Henderson, 2005). The deterioration hypothesis also fails to explain why specific memories quickly fade while others persist. The element of surprise also contributes. For instance, the first day of college is more likely to stick out in your mind than any other day. The following days may not feel as thrilling as the first ones since they will likely all start to blend.


Human beings are prone to forget regularly. We do not always recall everything, whether it is an activity we have accomplished or an event from our youth. The interference theory appears to offer a reasonable explanation for forgetting. Interference theory performs well in reflecting the perception of being surrounded by fresh stimuli; very few individuals can retain the exact specifics of situations in their memory since we continuously encode new information from external stimuli. Interference theory, on the other hand, may better explain forgetting when used in conjunction with other models of forgetting and memory since its restricted interpretation of memory information as interchangeable pieces cannot account for diverse types of memories and stimuli. A growing body of evidence supports the idea of decay. However, it is unclear why some researchers have been unable to detect the decay signature in their data despite making reasonable efforts to do so and why the decay rates detected by various researchers appear to differ. Another fascinating potential process that does not seem to involve decay is time pressure. However, we have doubts about the importance of temporal constraints in the aging process, as contrasted to cognitive load. The specifics of this time-pressure framework and its potential effects on recall are yet unclear.


Ecke, P. (2004). Language attrition and theories of forgetting: A cross-disciplinary review. International journal of bilingualism, 8(3), 321–354.

Olsen, L. (2014). Theories of Forgetting. University of Alabama Press.

Gibbons, A. (2019). Anthropology and the end of nature in Lance Olsen’s Theories of Forgetting. Textual Practice33(2), 280–299.

Maxcey, A. M., Joykutty, Z., & Megla, E. (2021). Tracking induced forgetting across both strong and weak memory representations to test competing theories of forgetting. Scientific Reports11(1), 1–9. Henderson, J. (2005). Memory and forgetting. Routledge.

Botwinick, J. (1967). Theories of Forgetting. Cognitive Processes in Maturity and Old Age (pp. 131-154). Springer, Berlin, Heidelberg.

Anderson, M. C. (2003). Rethinking interference theory: Executive control and the mechanisms of forgetting. Journal of memory and language49(4), 415–445.

Keppel, G. (2014). Consolidation and forgetting theory. In Memory Consolidation (pp. 161–174). Psychology Press.

Underwood, B. J., & Ekstrand, B. R. (1966). An analysis of some shortcomings in the interference theory of forgetting. Psychological Review73(6), 540.

Postman, L. (1961). The present status of interference theory. In Conference on Verbal Learning and Verbal Behavior, 1959, US. McGraw-Hill Book Company.

Keppel, G. (2014). Consolidation and forgetting theory. In Memory Consolidation (pp. 161–174). Psychology Press.

Wickelgren, W. A. (1979). Chunking and consolidation: A theoretical synthesis of semantic networks, configuring in conditioning, SR versus cognitive learning, normal forgetting, the amnesic syndrome, and the hippocampal arousal system. Psychological Review86(1), 44.

Feld, G. B., & Born, J. (2017). Sculpting memory during sleep: concurrent consolidation and forgetting. Current Opinion in Neurobiology44, 20-27.

Gleitman, H., Steinman, F., & Bernheim, J. W. (1965). Effect of prior interference upon retention of fixed-interval performance in rats. Journal of comparative and physiological psychology59(3), 461.

Ricker, T. J., Vergauwe, E., & Cowan, N. (2016). Decay theory of immediate memory: From Brown (1958) to today (2014). Quarterly Journal of Experimental Psychology69(10), 1969-1995.

Internal And External Strategic Analysis Of Tesla Essay Example

Tesla, Inc. is an American-based company operating in the automobile and energy industry. It has its headquarters in Pablo Alto, California, United States. The company specializes in the design and manufacture of electric cars, energy batteries, solar roof tiles, and other related products. Elon Musk, the founder and CEO of Tesla, established the company with a mission of accelerating the production of sustainable electric cars (Kim, 2020). This mission statement is at the heart of the company’s successful corporate-level strategy. Since its inception, Tesla has established several production and assembly plants in California. In addition, it has multiple subsidiaries including Solar City, Maxwell Technologies, Tesla Energy, and Tesla Motors Canada. It has produced various classic models of electric cars such as Model S, Model 3, Model X, model, and Cyber-truck. In 2018, the company was recognized and ranked as the market leader in the manufacturing and sale of the best plug-in cars releasing over 245,240 units every year. As of 2020, the company’s revenue grew to 31.5 billion dollars, representing a 28% increase from 2019. This report focuses on Tesla’s internal and external environmental analysis, including corporate-level strategy, SWOT analysis, business-level strategies, and financial analysis.

Corporate-Level Strategy

Tesla’s main corporate-level strategy is differentiation. The company sets itself apart from its rivals by producing products that are unique. No automotive company other than Tesla has been able to produce a fully electric car that can travel over 250 miles with a single charge. Further to this, the company has a wide network of charging stations allowing customers to travel across the country with a lot of ease. Tesla’s brands are superior equipped with top-notch features such as 24’ LCD screen, leather seats, and a 90KWH battery (Kim, 2020). Through the production of quality brands, customers derive value for their money. The unique customer experience has ensured that the company continues to grow to greater heights. The demand for Tesla’s electric cars continues to grow mainly due to technological advancement, the changing customer expectations, and the new laws on safety and vehicle effluence. However, the widespread acceptance of electric cars can be linked to Tesla’s ability to improve customer experience through the production of superior products. Tesla’s shift to a web-based sales model allows the company to cut on overhead costs while allowing easy access for its products. Customers can now place their orders online, which allows for the customization of products and services. The majority of Tesla’s processes are automated, which allows the company to save millions of dollars on labor costs. Most of its manufacturing and assembling are carried out by robots. For example, the 10ft tall robots are able to rivet, weld, and install various components. An average of 8 robots manufacture a single car and can produce 83 units in a day.

SWOT Analysis

Tesla’s SWOT analysis captures the company’s internal and external strategic factors. Strengths and weaknesses highlight the internal strategic factors while threats and opportunities highlight the company’s external strategic factors.

Strengths: Tesla’s highly innovative processes, powerful brand, and strong control over the production processes put the company in a unique position as a business leader in the automotive industry. The company is known for being highly innovative, especially after it introduced the first fully electric car (Kim, 2020). This capability allows the company to continue manufacturing competitive and profitable products. Tesla’s powerful brand enhances the company’s ability to attract new customers as well as retain them by offering them renewable energy solutions. Tesla’s strong control over its production processes is a unique strength that is possible due to centralization and vertical integration. As a result, Tesla overcomes issues that arise with the involvement of third parties in production processes.

Weaknesses: High prices, limited market presence, and a limited supply chain are the main weaknesses facing Tesla. Most of Tesla’s revenue is generated in the United States because the company has little or no presence in China and the emerging economies. This internal weakness limits the company’s growth given the potential market in the overseas. Having limited market presence overseas means that the company has a lean supply chain (Kim, 2020). The limited supply chain prevents Tesla from expanding and growing. Further to this, Tesla’s products are relatively expensive compared to those of competitors, especially the electric cars with an inbuilt combustion engine. The high prices prevent Tesla from expanding its market share and customer base. These weaknesses demonstrate that Tesla needs to change its strategies to allow for expansion and growth globally.

Opportunities: Business diversification, global sales expansion, and global supply chain expansion are potential opportunities for Tesla’s growth. For example, the company would increase its sales revenues rapidly by establishing operations in emerging economies such as Asian countries. In line with global expansion, the company should consider expanding its supply chain globally to support its production and sales operations (Kim, 2020). Tesla can also increase its profitability through diversification. Introducing new product lines and acquiring new businesses will allow Tesla to reduce the risk of overreliance. All these opportunities highlight the importance of international expansion to match larger companies in the automotive industry like General Motors.

Threats: Fluctuations in material prices, aggressive completion, and dealership regulations are the main threats that prevent Tesla from maximizing its strengths and opportunities. For instance, the competition in the automotive industry, especially for electric cars, solar panels, and batteries limit Tesla’s revenues from international markets. Fluctuations in global prices of materials such as lithium used for the storage of energy products affect the company’s profits (Kim, 2020). Dealership regulations, given that Tesla sells its products directly to customers without involving dealers, increases the selling price for its product offerings. However, dealership regulations in some States such as Texas and Virginia prevent the company from selling directly to customers, so it has to sell through dealers.

Recommendations: Tesla has the necessary strengths to succeed in the automotive industry for some years to come. However, as indicated in the SWOT analysis, there are areas where the company must improve to remain competitive and increase its profitability. For example, Tesla must expand to international markets, especially in emerging markets with high potential for growth (Kim, 2020). Similarly, the company needs to invest heavily in research and development to continue producing advanced products that are more competitive. Thus, Tesla needs to put in place the necessary reforms, strategies, and initiatives that increase international presence, boost innovation, and allow for diversification.

Tesla’s SWOT analysis can be summarized in a table as shown below:

Strengths Weaknesses
1. Powerful brand

2. Highly innovative processes

3. Strong control over production processes

1. High prices for its products

2. Limited market

3. Limited supply chain

Opportunities Threats
1. Global expansion for more revenues

2. Global expansion of supply chain

3. Diversification to several product lines

1. Dealership regulations

2. Fluctuations in prices of materials

3. Aggressive competition

IFE Matrix and Analysis

The Internal Factor Evaluation (IFE) matrix is a strategic management tool that is used to evaluate a company’s internal environment to indicate its strengths and weaknesses. Fred R. David developed the IFE matrix to summarize a company’s internal environment (David & David, 2017). Given that strengths and weaknesses form the key internal factors in an organization, they are used as the primary factors in the IFE matrix. Fred suggested that when thinking about the strengths of a company, things that a company does better than its competitors should be considered. Similarly, when thinking about the weaknesses of a company, areas, where improvements are needed, should be considered. Fred argues that for the IFE matrix to be an effective evaluation tool, several internal factors should be identified.

Weights: Once the internal factors (strengths and weaknesses) have been identified, each factor is then assigned some weights ranging from 0.0 to 1.0 in order of importance. The number is an indication of how valuable a factor is if a company wishes to succeed (David & David, 2017). If no weights were assigned, it would mean that all the factors are equally important, which is not practical. For purposes of accuracy, the sum of all weights is equal to 1.0.

Ratings: The ratings in an IFE matrix point to how strong or weak each internal factor is in a company. The ratings are in the form of numbers ranging from 1 to 4, where 4 indicates a major strength while 3 indicates minor strength (David & David, 2017). Number 2 is a sign of minor weakness, while 1 is a sign of a major weakness. For accuracy purposes, strengths can only be assigned a rating of 3 or 4, while weaknesses can only be assigned a rating of 1 or 2.

Weighted Score: The score is arrived at by multiplying the weight by the rating, so each internal factor must receive a certain score. The total weighted score is arrived at by summing up all the individual weighted scores. According to David & David (2017), a low total weighted score is an indication that a company is weak in relation to its competitors, while a higher weighted score shows that the company is strong compared to its competitors in the industry.

The Internal Factor Evaluation (IFE) matrix for Tesla is shown below:

Internal Factor Weight Rating Weighted Score
Powerful brand 0.10 3 0.3
Highly innovative processes 0.20 4 0.8
Strong control over production processes 0.20 4 0.8
High prices for its products 0.15 1 0.15
Limited market 0.15 1 0.15
Limited supply chain 0.20 2 0.4
Total Weighted score 1.0   2.6

Grand Strategy Matrix and Analysis

The Grand Strategy Matrix is a classic tool used to formulate and create alternative strategies for a company. All companies fall in one of the Grand Strategy Matrix’s 4 quadrants based on market growth and competitiveness (Betts, 2019). Given that the four quadrants are arranged in order of attractiveness, the matrix provides feasible strategies for an organization to consider.

Firms falling in quadrant 1 is are highly competitive and operate in a rapidly growing market. Companies in this quadrant of the Grand Strategy Matrix are in a favorable position since they have a competitive advantage and operate in a fast-growing market (Betts, 2019). Such companies are in a better position to implement strategies like market penetration, market development, product development, and much more. Firms in quadrant 1 seek to enhance their competitive base and growing their market share to greater heights.

Companies falling in quadrant II operate in a rapidly growing market but are not able to compete effectively. They need to evaluate their current approach to the market to determine what needs to be changed to improve competitiveness (Betts, 2019). The most appropriate strategies for firms in this quadrant is to penetrate into several markets, develop their products, and target market. Since they operate in a rapidly growing market, intensive strategies should be considered to enhance competitiveness. For example, they can opt for horizontal integration depending on the available resources.

Businesses falling in quadrant III are weak in terms of competitiveness and operate in a slowly growing market. These companies need to take drastic measures as quickly as possible to avoid being liquidated. Strategies such as cost reduction, sale of some assets, and retrenchment of redundant labor force should be implemented (Betts, 2019). Shifting the available resources from the current business line to a different line is an alternative strategy that can be pursued by firms in this quadrant. If everything fails, then liquidation is the only option.

Firms falling in quadrant IV compete effectively but operate in a slow-growth market. Such businesses need to pursue related or unrelated integration to establish a market for their products and services. Since these companies have the financial capacity, they should consider launching diversified programs to tap more markets (Betts, 2019). The most ideal strategies for firms in this quadrant include concentric, conglomerate, or horizontal diversification. Joint ventures is also a potential strategy for companies in quadrant IV.

Tesla currently falls in quadrant I of Grand Strategy Matrix pursuing concentric diversification and market penetration strategies. The recent purchase of Solar City, a popular company specializing in solar energy is an indication that the company is serious about diversification (Betts, 2019). The company is also putting in place measures to expand to international markets. Tesla currently dominates the United States of America market, so expanding to emerging markets will help the company to grow its revenues and increase profitability.

The Grand Strategy Matrix according to Betts (2019) is shown below:

The Grand Strategy Matrix according to Betts

Business-Level Strategies

Most average consumers consider Tesla products, especially electric cars to be expensive. Accordingly, the company targets wealthy individuals who are concerned about environmental conservation. However, with more tax incentives to promote the use of all-electric vehicles, the demand for Tesla’s fully electric cars continues to rise (Sharma, 2016). In addition, economic considerations, such as the rising prices of raw materials, fuel prices, and fluctuations in the exchange rate, the demand for Tesla’s cars is expected to rapidly increase. The US government’s effort to create awareness of climate change and the need for sustainable development continues to boost Tesla’s sales.

Tesla’s business-level strategy is to penetrate high-end markets where customers are willing to pay a premium price for its products. However, the company plans to lower the prices once the model succeeds. Thus, the company’s business-level strategy is broader differentiation which targets both premium customers today and low-price customers in the future (Sharma, 2016). Tesla sets itself apart from its rivals through extensive research and development which allows the company to produce highly innovative products. Further to this, the company’s product offerings are eco-friendly, which increases its economies of scale and competitive advantage.

Tesla’s product line can be described as purely energy-based since it deals in capital goods in the larger auto manufacturing industry. It currently manufactures all-electric vehicles, specializing in a range of models including Model S, Model X, and Model Y. In addition, it manufactures mega pack, power pack solar panels, and solar roofs. Today, Tesla is unable to keep up with the high demand for cars, resulting in a waitlist on backorders. The company’s production capacity is lower than demand, so drastic measures are needed to set up more production plants (Sharma, 2016). The demand is influenced by the modern designs, a highly innovative technology used, and the effectiveness of its products.

Functional-Level Strategies

Tesla has an innovative and problem-solving culture that motivates employees to develop ideas to solve the emerging problems in the market. For example, it applies the organizational culture in manufacturing fully electric cars that offer a solution to environmental issues currently facing the automotive industry. The ability to continue introducing advanced products shows the usefulness of its corporate culture. Tesla’s corporate culture is founded on six pillars that are linked to the company’s mission. These pillars are seriously executed by the employees and include moving fast to solve problems, doing the impossible, being constantly innovative, reasoning from first principles, thinking like owners, and being all-inclusive.

Tesla has a functional organizational structure with a function-based hierarchy. For instance, the company has structural groups of employees from the engineering department, sales department, and customer service department. The function-based hierarchy includes functional teams that oversee international and domestic operations (Sakhartov, 2016). This type of structure is traditional in nature and is widely used in companies that want to maintain close managerial control over the operations. Accordingly, the company’s structure includes six functional offices in order of hierarchy. These offices include the office of the chairman, who is also the CEO, Finance, Technology, Global sales and service, engineering, and legal office.

Ratio Analysis

Date of analysis 31/12/2020

Source NASDAQ. (2020 December 31)

Ratio  Tesla Industry Comment
Liquidity Ratios
Current ratio=current assets/current liabilities

Current ratio=$26,717,000/$14,248,000=1.8751

1.8751 2.46 weak
Leverage Ratios
Debt/equity ratio=total liabilities/shareholder’s equity

Debt/equity ratio=$29,073,000/$52,148,000=0.5575

0.5575 0.6 strong
Efficiency Ratios
Asset turnover ratio=Total sales/ total assets

Asset turnover ratio=$31,536,000/$52,148,000=0.6047

0.6047 1.35 weak
Profitability Ratios
Return on Assets=(Net income/total assets)*100

Return on assets=($862,000/$52,148,000)*100=1.6530%

1.653% -0.7% strong

The Current ratio measures Tesla’s ability to honor its short-term obligations, which fall within one year, using the current assets like cash and cash equivalents. It is a liquidity ratio and shows the company’s level of solvency. A ratio of 1.8751 indicates that the company has sufficient current assets to honor its short-term obligations (NASDAQ, 2020). However, Tesla’s current ratio is weaker compared to the industry’s average current ratio 0f 2.46

Debt-to-equity ratio is a leverage ratio that shows the level of creditor financing versus shareholders’ financing. Tesla’s debt-to-equity ratio of 0.5575 means that shareholders have invested more than creditors, which is desirable (NASDAQ, 2020). Tesla’s debt-to-equity ratio is stronger compared to the industry’s average of 0.6

Asset turnover ratio is an efficiency ratio that measures Tesla’s ability to generate revenues from its assets. For every dollar of assets, Tesla generates 60 cents of sales, which is considerably lower (NASDAQ, 2020). Tesla’s asset turnover ratio is weaker compared to the industry’s average of 1.35

Return on assets is a profitability ratio that indicates how much money Tesla earns by putting its assets to use (NASDAQ, 2020). Tesla’s return on assets of 1.653% shows that the company is efficient relative to the assets that it controls. Tesla’s return on assets is stronger compared to the industry’s average of -0.7%


Overall, Tesla continues to experience robust growth having successfully gained a market share of over 60% in the US market alone. However, from the analysis, the company needs to increase its production capacity to meet the customer demand. To further increase its profitability, the company needs to expand into emerging markets in developing countries. The company is highly innovative, but it must continue investing in research and development to continue producing technologically advanced products.


Betts, R. K. (2019). The Grandiosity of Grand Strategy. The Washington Quarterly42(4), 7-22.

David, F. R., & David, F. R. (2017). Strategic management concepts and cases. Pearson Education Limited.

Kim, H. (2020). Analysis of How Tesla Creates Core Innovation Capability. International Journal of Business and Management15(6), 42-61.

NASDAQ. (2020,December 31). Tesla, Inc. (TSLA). Retrieved from

Sakhartov, A. V. (2016). Selecting corporate structure for diversified firms. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 11521). Briarcliff Manor, NY 10510: Academy of Management.

Sharma, S. (2016). The Tesla Phenomena A Business Strategy Report.