Strategic Management: Tesla Motors Merger With Solarcity




Strategic management involves the use of specific strategic models to improve the performance of an organization.
Tesla Motors’s bid to merge with SolarCity, a solar panel company, was a strategic move in expanding their market from sector of the market to another.
The involvement of an advisory firm, Institutional Shareholder Services, was also a move to encourage shareholders and investors that the merger was going to benefit both companies.


Tesla Motors has the support of Institutional Shareholder Services who consider the merge to be an extension of the company’s growth strategy.
The growth strategy will open opportunities to shift to a better and stronger competitive position.
Tesla’s position n the market gives it an upper hand in supporting small corporate companies which carries a mutual fund benefit for the company.

Acquisition screening/ Growth strategy

The strategic model used by Tesla Motors is Merger and Acquisition model.
This strategy enabled Tesla to acquire ownership and incorporate a new business model to increase their market share.
The merger was a successful strategy in achieving profitable growth of the company and expansion of its products from green energy company to electric cars’ solar panels.

Strategic Models


The acquisition cost of SolarCity would be cheaper in comparison to its value whereby its stock price had already declined.
Similarly, the merger would have a cost saving of $150 million which will generate revenue of up to $1.5 billion in the long run.
The aim of the merger was to establish a strong competitive advantage over its competitors and recover from any outstanding debt.

Strategic Models- Continuation

Tesla’s shareholders have an advantage in acquiring SolarCity at a cheaper price and implementing a new business models to their products.
The lack of other significant bidders to provide better bids makes Tesla Motors the only better option to merger with.
With the shareholders backing the merger deal, Tesla gets to acquire the company at a cheaper price which will generate more capital and promote market expansion.

Merger and Acquisition strategy

The merger and acquisition strategic model is effective when both companies complement each other’s products.
Growth and expansion is also one of the factors t consider so as to build a stronger competitive advantage against any competition.
A successful merger and acquisition is solely based on what each company can gain from the other hence implementation of better business models is a priority.


Merced, M. (2016). Tesla’s Bid for SolarCity Gets Support From Shareholder Adviser. Retrieved from


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Strategic Management: Tesla Motors Merger With Solarcity. (2022, Feb 05). Retrieved from

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