Marketing Strategy For Tesla Motors Inc.

Tesla Inc. Environment Analysis

Tesla Motors company is one of the largest companies which has been able to impact a very significant change in the automobile industry in the world. Since the establishment of Tesla Motors Inc. in 2003, the company has gained an enormous success in the development of new electric vehicles. The popularity and support of Tesla have been attributed to the ability of Tesla to solve the rising concern of energy issues and environmental effect caused by the over-dependence of gasoline-fueled engines. Tesla introduced its first product, the Roadster, in the year 2008 (Morrish, Miles, & Deacon, 2010). Later in the same year, Tesla added the Model S in its product portfolio and declaring it as the superior car against all-electric and auto vehicles ever developed. The Tesla Model S has very incredible features which comprise of a full-sized electric vehicle with an energy consumption of 200.9 watt-hours per kilometer (Schaltegger & Wagner, 2011). Currently, the leading market for Model S is the U.S with over 119,000 delivered units. Over the past few years, Tesla Model S has continued to improve in its sales performance whereby the end of 2017 review it was rated as the top-selling electric vehicle company in the world.

The organization structure of Tesla Motors is majorly characterized as an authoritative structure which has been designed for the promotion of continuous development of the company broad control. The authoritative structure of the company is one its many strengths focus which is supposed to aid Tesla in coping with the undetermined changes in the market and to also maintain focus in the company goals and mission. The functionality of the Tesla authoritative structure has been further characterized into three major groups which are a Global chain of command, Global centralization, and Minimal provincial divisions (Bohnsack, Pinkse, & Kolk, 2014). Global chain of command is known as the chief head division in charge of all the important details in the company and the entire market setup. In the company authoritative structure, the head of each Tesla chain offices is liable to all operations in the specific region including overseeing all activities in minimum regional divisions. The distribution of these divisions is aimed at improving the company budgetary campaign and effective leadership in all company operation and promotion activities (Mohr, Sengupta, & Slater, 2010).

Tesla Inc. SWOT Analysis

Fig: 1 Tesla Motors SWOT analysis

Strength

One of the greatest strengths of Tesla Inc. is its brand recognition in the automotive industry. Since it was established in 2003, Tesla company has continued to grow becoming the world leading electric car seller in the world. Tesla Motor success has been contributed by the increase in demand for sustainable products and due to this fact, the company has received an enormous support from the government of over USD 465 billion in the approach of improving its sustainable energy projects. Compared to its competitors like Nissan, Tesla has an outstanding capability in engineering and technology expertise giving the company a significant competitive advantage. Tesla also has a very strong organizational structure and leadership which has been able to maintain the continuous growth (Mas, 2018).

Internal Environment Analysis- SWOT Analysis of Tesla Inc.

Weaknesses

The operation cost is one of the great issues which currently still face Tesla Motors today. Due to this, Tesla products have been described to be significantly expensive where only a few in the middle-class level can be able to afford them (Rothaermel, 2015). On the same note, the survival of Tesla operation in the automotive industry is questionable due to its poor liquidity aspect. The issue of poor liquidity is also perceived by the company production capacity in the ability to meet the increasing demand. Tesla has also been accused of having a very poor relationship with its customers and the public in general.

Opportunities

The issue of oil and gas production is increasingly becoming an issue which has led to an increase in sustainable approaches. This has also been attributed to the increase in climate change initiatives in minimization of carbon gas emission (Mangram, 2012). Through this, the demand for Tesla products has a huge potential growth especially in the untapped market in other countries and the rising middle class in the 21^st century. Technological growth and change is another platform which places Tesla in a very advantageous position in the automotive industry.

Threats

One of the growing threat for Tesla is the continuous increase in competition. The increase in competition has been led by the adaptation of sustainable approaches in luxury brands like Porsche and Audi in developing environment-friendly products. The operation of Tesla in a foreign market is also majorly affected by legal and regulatory problems which also led to an increase in product prices (Hatten, 2015).

Political Environment

As stated earlier, the political environment of any business has a significant impact on the output performance either directly or indirectly. On the case of Tesla, the U.S government has continued to offer support in the development of sustainable product and companies which has boosted the growth of Tesla in many ways (Rothaermel, 2015). However, in support of local industries, other governments emplaced regulations which affect Tesla in many ways making it difficult for Tesla to expand in potential markets. The issue of political instability factor which affects Tesla generic growth due to poor market penetration (Wheelen & Hunger, 2011).

Economic Environment

The economic stability of Tesla can be considered to be very stable. The success of the company has continued to increase over the years with numbers orders and deliveries growing every year. Tesla position in the country economy is considerably very huge where the company approach in decreasing energy cost has been highly embraced in most of the developed and developing countries all around the world (Grant, 2016). With this in mind, despite the development of unpredicted economic instability threat, Tesla economic future prospects can be characterized as very promising as the increase of its product demand is expected to continue to grow.

Social Environment

Today the issue of climate change and energy sustainability are one of the most discussed topics in the world with an enormous ‘weight’ in various industries. The approach by Tesla to develop electric vehicles has been highly embraced in the automotive industry and the entire market in general. Unlike gasoline vehicles, the electric vehicles have zero carbon emission with a very minimum use of renewable energy (Mangram, 2012).

Tesla Inc. PEST Analysis

Technological Environment

The increase in technology changes and advancement is basically a direct advantage and disadvantage for Tesla. One of the basic advantages of technological growth in the future development of the automotive industry where the future is dependent on companies such as Tesla (Kancherla & Daim, 2018). On the other hand, in the past decade, the growth of technology has been at a considerably very high rate where technology obsolescence is a factor to be considered. With this, innovation initiatives in Tesla Motors have to be at a considerably very high level thus to be able to maintain its market dominance in the manufacture of electric vehicles and sustainable products.

Marketing Strategy of Tesla

Majorly, Tesla has a very specific type of customer target which comprise of green-friendly and wealthy individuals, business entrepreneurs and executives, and a few listed middle-class individuals who are tech-savvy. According to a Tesla customer survey, the majority of its customers are considered to be male who are about 83.1% while the female population is approximately 16.1% of the total customer number. In order to have brand equity, Tesla normally uses premium pricing method (Grant, 2016). Apart from just selling electric vehicles, Tesla has significantly invested its effort in improving brand technology design and style. In this case, Tesla Model S is a very unique brand model with an enhanced functionality in safety and energy consumption and style presentation of the car. The performance the Model S in the market has had a significant achievement where its reported to scope more than 34% sales while competing against top 10 luxury models. Generally, Tesla Motors products prices are set to reduce with time where the company committed to identifying means of cutting cost production which will help to reduce the cost of products (Hatten, 2015).

One of the most used means of promotion strategies by Tesla is the Viral marketing strategy. A good example of viral marketing was the use of viral video content in all major social media platforms and websites. Despite the inability to maintain effective customer relation, Tesla usually uses PR to promote its initiatives and boost its market popularity. However, Tesla also utilizes direct marketing strategy on occasions like selling batteries and powertrain components to other enterprises. Tesla market segmentation has largely been characterized by the potential of an economy (Somssich, 2016). With this, Tesla has set up an international market network in more than 27 countries all around the world. Through the galleries and store, Tesla serves its customers directly where one can be able to receive various services and product sale more efficiently.

Conclusion

The change in technology has been described as a key threat for Tesla. Due to this, there are no any continuous improvement campaigns which have applied by the company to improve on the current Model S efficiency thus to be able to maintain its demand in the market. In order to achieve this, Tesla has set aside teams to focus on the rebranding of Model S where also the segmentation of the product should be reviewed (Bilton & Cummings, 2010). The focus should aim at improving the customer perception to Tesla Model S as more of a self-construal, self-enhancement, and a self-verification brand image. Therefore, with the success Model S attained in the automotive industry, Tesla should concentrate its effort in portraying Tesla Model S as community brand through a more effective integrated marketing communication strategy (Zdravkovic, Magnusson, & Stanley, 2010).

In summary, Tesla main priority should be focused on being a market leader in the automotive industry. Tesla should also enhance its effort in improving the functionality of Model S making the brand one of the most unique luxury vehicles with world-class standards. On the other hand, with effective improvement in industry leadership and innovation, Tesla is considered to have a very bright future in the automotive industry (Kancherla & Daim, 2018). Through the increase of sustainability awareness, Tesla should not only focus on producing luxury models but it should also establish strategies which will be able to develop more efficient and cheap products.

References

Bilton, C., & Cummings, S. (2010). Creative strategy: Reconnecting business and innovation (Vol. 3). John Wiley & Sons.

Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2), 284-300.

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

Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Nelson Education.

Kancherla, Y. D., & Daim, T. U. (2018). Technology Roadmap: A Roadmap for Tesla. In Infrastructure and Technology Management (pp. 347-366). Springer, Cham.

Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), 289-312.

Mas, S. M. (2018). Tesla Motors. SWOT analysis and corporate strategy. GRIN Verlag.

Mohr, J. J., Sengupta, S., & Slater, S. F. (2010). Marketing of high-technology products and innovations. Pearson Prentice Hall.

Morrish, S. C., Miles, M. P., & Deacon, J. H. (2010). Entrepreneurial marketing: acknowledging the entrepreneur and customer-centric interrelationship. Journal of Strategic Marketing, 18(4), 303-316.

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

Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: categories and interactions. Business strategy and the environment, 20(4), 222-237.

Somssich, E. (2016). Definition and Market Analysis of the Tesla Motors Model S.

Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.

Zdravkovic, S., Magnusson, P., & Stanley, S. M. (2010). Dimensions of fit between a brand and a social cause and their influence on attitudes. International Journal of Research in Marketing, 27(2), 151-160.

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