tesla business evaluation essay

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Tesla Motor, Inc. is an American company that started in 2003. The driving a car idea lurking behind the opportunity was demonstrating electric cars could be a viable substitute with the gasoline run cars without sacrificing comfort, functionality or high-class. Apart from the main function of designing and producing electric powered cars, Tesla also supplies advance electric vehicle powertrains components and know-how to other automakers, which are researching venturing in the EV (electric vehicles) industry, such as Daimler, Toyota and others. The company’s head office are located in Palo Alto, California.

Because of their specific business and advertising model, particularly, no middle-man and little-to-no mass size marketing campaigns, Tesla has wholly-owned subsidiaries in North America, Asia and europe. At present, there are more than 2k employees internationally working for the company in the making, design and the 23 stores and service places spread worldwide.

Although not the sole producer of entirely electrically powered vehicles, Tesla well known as the vanguard of the market. Tesla is the merely one to offer top of the line EVs for a highly competitive price.

In 2008 Tesla launched the Tesla Roadster, the first only electric performance car which became a worldwide discomfort, exhibiting high-end performance comparable, if not really better, with premium sporting activities cars. Pursuing the trickledown marketing plan, Tesla expanded their technological advantage to the high-class sedan market and introduced Model S in 2012.

Mission Statement and Current placement

Tesla’s goal is to accelerate the world’s move to electric vehicles with affordable and appealing electrical cars. Tesla’s CEO, Elon Musk, promises on the website that “we’re catalysing change in the industry. Tesla vehicles¦ are fun to drive and environmentally responsible (Musk, 2013). To make this happen, TESLA is also creating a network of asking stations, power by solar powered energy to make extended journeys more convenient for the EVs users. Tesla Motors designs and sells top of the line; highly effective electric athletics cars ” with no short-cuts.


Tesla Motor is a general public company that trades on the NASDAQ stock exchange under the sign TSLA. From the figures listed below, it revealed that Tesla had a net loss this year. It was before the first one fourth of 2013 that Tesla finally placed profits the first time in its eight year background. Tesla endured significant losses and spent approximately $709. 2 million of cash in operations through December 31, 2012. They reported $201. 9 million in funds and cash equivalents towards the end of year 2012 (Tesla, 2013)


In order to obtain their goal of changing the automobile industry, Tesla follows a trickle-down marketing and strategy. Simply put, they will couldn’t begin with an inexpensive electric powered car ” it would have been too expensive to build up. Instead they began with creating a “legend of abrand ” an expensive sports car ” the Roadster, generating fascination and a sound first step toward renown and fans, upon which they could build-up later on. The financial idea at the rear of this decision was that the earnings from the Roadster would pay for a less expensive car ” the Model S i9000, and revenue from the Style S could pay for a much cheaper car.

The Roadster sold quickly sold 2300 units, and after that production was stopped to launch the next model. About 2, 600 Model T cars had been sold in the U. S. in 2012, and 4, nine hundred units through the first quarter of 2013. This allowed Model S to become the very best selling connect to EV in North America during the first one fourth of 2013, ahead of the Chevrolet Volt plus the Nissan Tea leaf. Model T won the 2013 “Motor Trend Car of the Year, “World Green Car, Automobile Magazine’s 2013 “Car in the Year and Time Journal Best twenty-five Inventions with the Year 2012 award.


1 ) Developed ability to apply commoditized small cylindrical lithium cells, which are generally employed in consumer electronics, to cars through good amazing power managing. 2 . Empowering and self-driven employee that promotes company’s development. 3. Great relationships with Toyota, Daimler AKTIENGESELLSCHAFT, and Panasonic supported Tesla battery technology research and development, and also future innovations.

Core competences

1 . The low expense of Tesla’s battery pack, allowing Tesla to sell the Model T at a reasonable price using a 300 mile range when it is still a mixture that other electric vehicles in the industry include yet to deliver; this is offered by Tesla’s remarkable battery technology which gives it an advantage over other suppliers 2 . Having 40 us patents awarded and over 200 patent application pending technology to supply all future models. This will likely aid these people in complying with their focus on zero emissions, the performance and aesthetics of their cars.

Industry report

Global ELECTRONIC VEHICLES sales this year have been good, with over 110, 500 vehicles, morethan double the sales of preceding 2011 ” 45, 000). This kind of, of course is a small number when compared to the overall product sales of standard vehicles ” 82 million in 2012. Top among the countries the USA is the most significant market in absolute terms, with about 53, 000 sales. When it comes to absolute sales, Europe may be the smallest local market, however the European Union is definitely the host of six out of your top 10 countries for absolute EV product sales. Europe likewise hosts industry with the maximum percentage of EVs marketed compared to autos sold, with Norway wherever EVs captured 3. 3% of car sales in 2012.

The tendencies for the first two quarters of 2013 what is dynamics from the EV industry in the US and Europe. By the middle of May 2013, the US had sold 24, 550 devices, bringing the total sold in america to 90, 000 currently. In the Netherlands there have been much more than 10, 000 pre-orders of 1 new version.

Based on existing OEM bulletins, the total annual global production capacity of EVs, presently standing in approx. 500, 000 products, is projected to increase to at least one. 5 mil by 2015 (representing a 50% annual growth from 2012). To meet the aggregated EV focuses on set simply by at least fourteen key countries, the analysis discovers EV twelve-monthly production capacity will need to enhance by one more 30% each year post-2015 to succeed in 5. 6 million products by 2020. Such a growth rate is credible since OEMs are capable to scale up production (existing industrial facilities do not work at full capacity and some EV models are based on existing non-EV models). Even as of this level, ELECTRONIC VEHICLES production ability in 2020 would represent less than 7% of the current total light vehicle creation.

Potential restrictions and risks:

Due to the unique position of Tesla, namely it really is ahead of the industry by pretty much being a revolutionising agent within a vanguard market, Tesla carry out face a lot of key dangers and weaknesses. First, EVs suffer from brief mileage making long travel around impossible in the absence of an establish network of recharging stations. Even though such 1 exists, much more work is required to expand its coverage. Second, Tesla doesn’t always have the massive ownership rate of petrol automobiles and are unable to compete at present with their price and development costs. This means that Tesla has to fight for marketshare and pretty much establish a single by itself. Third, Tesla is dependent of the foreign trade of high end natural methods from China, a weakness inherent in the hardware electronics sector, with which the corporation has to be competitive against. Worth mentioning is also the fact that there aren’t that many skilled experts inside the area, hence the human reference pool is definitely not as big as one of the petrol vehicle industry.

BCG Research

The BCG matrix is a platform created by the Boston Asking Group to judge the tactical position of your business. It uses four categories (COWS, STARS, QUESTION REPRESENTS and DOGS) based on market attractiveness (growth rate) and competitive placement (relative market share). The objective of the research is, similarly, to identify investment opportunities or perhaps successful organization practices, and on the other, underline a purpose to divest. Currently, as a result of success of 2013, Tesla moved coming from a Question Draw to a Celebrity, as the earning and profits had been growing nevertheless the cash flow was negative, using a strategy to invest.

In the next part of this statement we will examine the company using the PESTLE framework

Political/Legal Segment

The political/legal environment is usually favourable. Countries worldwide have a positive outlook and motivate EV ownership as an alternative transport (Mangram, 2012). Government subsidies for ELECTRONIC VEHICLES manufacturers and consumer price incentives (tax breaks, free parking, etc) are the typical adoptee procedures. These policies motivate fascination and require in the general public. Worth mentioning is that various states take a look at setting vehicle carbon emissions standards, a thing that although targeted at petrol structured transport, indirectly creates a lot more adoption incentives for EVs.

Economic Segment

A global economic crisis of 2007 on the other hand has left a fingerprint on the industry ” people are even more cautious upon spending over the last few years, especially on high-end luxury merchandise. On the other hand, the increasing priceof oil during the recession plus the limited mother nature of the resources make electric power more appealing. Also, it is worth talking about that as 2014 the economy is displaying some basic signs of recuperation, which is favourable on the long haul.

Social-cultural Segment

Around the world has been one of the greatest movements in 20th 100 years. From the everyday people to political figures, famous individuals and even businesses are trying to implement, (not often voluntarily) selected eco-friendly guidelines and trip the green say. EVs will be, especially in the 0-emmission class of Tesla, the vanguard from the movement. Seeking from a more marketing perspective, Tesla can be successfully concentrating on and going through, very similar to your initial iPhone strategies, the market of change-makers and influencers, the 21 century young good entrepreneurs.

Scientific Segment

Electric automobile charging station infrastructure came into the market about 2011. A major electric motor vehicle rental business with charging infrastructure and associated amenities is based in Naha, Okinawa, The japanese. The procedure has 220 Nissan Leaf rental cars and a asking infrastructure consisting of 27 chargers in 18 locations (Electric Vehicle Local rental Application, 2012). The availability of recharging channels has offered a unique market environment for the development of Tesla.


Internal Elements

External Elements


Weak points

1 . Strong Management

2 . Produced the 1st totally electric sports car

3. Supplier to other producers

4. Strong R&D

a few. Ability to develop vehicles completely in-house

6. Their particular current system developed for Model S can utilized for their future models

1 . More expensive after that fuel alternatives

2 . No founded supporting infrastructure

three or more. Low battery pack range

4. Sluggish charging method

your five. No trustworthy fan base


THUS recommendation

WO suggestion

1 . The world is running low on oil, electrical energy is green

installment payments on your People more and more care more about the planet

several. Growing support from governments globally

4. Significant global market

1 . Concentrate on new product creation

2 . New technology to settle ahead of the market

three or more. Expand on new marketplaces ” Asia

four. Diversify consist of vehicle sectors (long term)

1 . Outsource non-key functions to reduce costs

installment payments on your Promote knowing of EV since attractive alternate


ST recommendation

WT recommendation

1 . Very strong competition with low costs

installment payments on your Economic slowdown

three or more. Limited way to obtain resources

4. Limited experienced qualified pool

5. General public awareness of EV as practical alternative is usually low

1 . Develop new product to target a unique buyer segment

2 . Reduce costs, concentrate on attracting a far more general and mass community

several. Attempt to limit reliance about natural resources through new technology ” graphene

1 . Stick to cost reduction strategies

2 . Due to the favourable marketplace position as well as the many hazards, possibility to offer the company by a very high earnings should be considered.

New Marketing Campaign

With the launch of Model Back button (an ELECTRONIC VEHICLES SUV) in 2015, Tesla is broadening to sink into into new markets. However , Model By will be, based upon SUV reputation trends, a lot more popular choice in the US within the space mindful Europe and particularly Asia. Because of this , we are going to focus on the marketing of the codenamed “BlueStar job, expected to be announced in 2017. Will probably be a smaller, 2 or 5 door unit similar to the BMW 3 series.

An effective idea pertaining to growth can be entering fresh markets. This could be achieved by starting additional retail locations, advertising internationally or reaching new types of shoppers. For each of our campaign, we have to focus on simultaneously increasing business in fresh markets and reaching a new type of consumer.

Let us explore the market segmentation.

Geography ” the marketing campaign can target a few continents ” North America, Asia and europe, focusing intensely on the last two. This is because the necessity there is top (China recently announced a plan to have your five million EVs on the road by simply 2020) and already designed charging place infrastructure. China is already the world’s most significant auto industry and it’s going grow a great deal larger in approaching years. Furthermore, many of the creation and parts assembly crops are located in Asia and parts of European countries, thus a more competitive price/added value can be achieved by concentrating on those markets as well.

This will likely lead to an increase in global brand recognition, help recruit new employees, maximize competition for brand spanking new distributors and present the opportunity to marketplace with community media professionals in the region aspart of the global marketing work. Disadvantages of the approach can be vulnerability to industry and other external neighborhood environmental alterations ” policy, intellectual property and security in the region are generally not a given. Furthermore, a large capital injection will probably be needed to begin the enlargement.

On the Market level ” the plan will follow fashionable established so far of targeting rich and upper-middle category individuals and young craze setters. However , it will build upon this and very carefully, given that simply by that time the popularity of EVs has increased and the reduced value of the item, start nearing other demographic segments as well ” very first time buyers, fresh professionals and families, etc .

Behavioural Segmentation ” additionally it is important to which the lowered price is going to lead to an immediate competition together with the cheaper choice of hybrids and EVs in the marketplace now, that can open the doorway to the industry of the eco cautious.

Psychographic Segmentation ” As we have already established, the campaign ought to focus on the upper-middle school and the wealthy, which in blend with the lowered price with the product, will certainly incentivise the other sections to seek the affordable exclusivity of the item as well. It is important not to forget that in the case of EVs, Tesla is known as a brand with already set up renown, as a result compromises with status with the product itself should not be produced in order to expand markets, otherwise the less costly alternatives will overcome the gap. What Tesla can offer as an alternative to the Prius clientele for example is the comfort and the status using a slight up-tick in price, something which currently can be lacking in the marketplace.

To conclude, the modern marketing campaign can aim to build upon the already existing industry, but also expand the marketplace share through targeting one more group of consumers, who weren’t previously able of affording the high end products of Tesla. In addition , the marketing campaign will be focusing on satisfying the growing requirements of Europe and Asia, which at present are in a process of positively promoting and building both the social popularity and the facilities required for the project. Your initial marketing shouldbegin in the end of 2015 with an introduction of any prototype, followed by the initial preorders available in mid-2016. This will likely give a sound 6-12 several weeks of time to make the initially line of cars. As a price range, we conclude that the craze of placing similar amounts for the consecutive releases should be stored, with a small increase of around five per cent to cover the greater active campaign through recently unused channels.

Question 02

What differences exist if you market your product or service to an organisation?

The difference comes from the feature-vs-benefits debate. Features can be “Open 24 hours,  “Batteries included,  “Newest model and “Largest repository,  to offer a few good examples from diverse industries. This sort of advertising focuses on what the merchandise already has established. Benefits, however explain can be in this for the customer, a larger but likewise deeper answer to their needs. This sort of benefits based upon the list of features of Tesla could be “We’re there when you require us ” lifelong support and updates, “We will give you the tools to acquire an environmentally responsible life or “We will reduce your expenses greatly. Notice that in this case the focus in on providing a solution, on making their particular lives better, on adding value. This shift from your organization’s offerings to the buyer’s needs makes customer-cantered marketing.

When you are promoting to an enterprise you will want to focus on the common sense of the item. This can be created by focusing on the features of the product and the value they cause the economical plane. There is not any emotion involved in the purchasing decision of the enterprise. The marketing should focus on understanding how the organisation runs within the confines of their very own procedures and target specifically this. It is because organisations are information searchers, which regularly try to self-improve through improvement. Thus, theoretically, the most effective promoting message to a organisation can focus on the way the product or service will save time, funds and methods. Let us observe how this can apply to Tesla. Apart from the EVs, Tesla offers an entire back-end type of services, including hardware and know-how to other manufacturers.

So instead of targeting a specific market portion based on location, demographic, psychology, etc, the client will be another manufacturer looking for entry possibly in the ELECTRONIC VEHICLES or Cross types markets. What Tesla may offer is the know-how of a leading producer (which is probably the most expensive option), brand and hardware. Thus, the purchase decision will be dedicated to technology specs, price, or perhaps eventually, support. A corrected case, but nevertheless really useful would be the way Tesla and Lotus focus on the underchassis. Both of the producers are competitors inside the segment of luxury cars, however , the partnership is usually mutually beneficial since on one side Tesla doesn’t have to develop the technology in-house and therefore can follow a competitive advantage, and the various other Lotus, who already gets the know-how as well as the manufacturing capabilities, thus not taking enjoy the it will result in safe-harming.

What is the difference via international advertising to home-based marketing?

International and home marketing can be equalized towards the same thing with regards to the fundamental principle of marketing and its particular purpose. Marketing is a essential part of the business operation, in fact it is responsible for moving the adopted plans and policies, along with product, towards the potential customers. An internet definition describes marketing as being a process of preparing and executing the conception, pricing, promo, and division of suggestions, goods and services. Together with the rapid development and the global reach in the globalised economy, the limitations between nations around the world are burning. This has triggered an unprecedented level of simplicity with which small , and medium corporations can go beyond the limitations in the local marketplace and reach out to a global consumer bottom. This is also for what reason many of the marketing strategies of big organizations are relatively identical worldwide. One may believe the practice and fact of marketing is a ploy that is used to attract, meet and maintain customers. If done in a local level or with the global level, the fundamental ideas of marketing stay the same.

Domestic Marketing

However , allow us to examine even more closely both equally arenas. The marketing strategies which can be employed to attract customers by a local level within the political boundaries of your state/region happen to be known as Home-based marketing. Every time a company

caters just to local markets and clients, despite can be competing against foreign corporations operating in the same place and focus, we can safely and securely say that it really is involved in household marketing. Major of firms is around the local customer and industry only with no thought is given to overseas markets. All of the product and services are produced bearing in mind local clients only, the requirements, preferences and buying power.

International Marketing

When simply no geographical restrictions are present for the company and, as a consequence it targets consumers overseas or in another country, may be to be involved in international advertising. As such, and in a simple way, it truly is nothing but putting on marketing principles across countries. It is worth mentioning the techniques used in international marketing are generally those utilized to target the home country market. According to a different definition, international marketing can be explained as the rule of business activities that direct the flow of products and companies of a firm to consumers in more than one region for earnings purposes just.

Difference among domestic advertising international marketing As we have previously seen there are a few fundamental commonalities between the two markets. However , there are some genuinely drastic dissimilarities as well, which in turn we will analyse in brief in the next part.

Opportunity ” The scope of domestic advertising is finite and will ultimately dry up. One the other side of the coin end, worldwide marketing offers, if not really endless, then simply vastly greater opportunities and width. I want to put Tesla into perspective. If Tesla was to focus on the US marketplace alone, it would be swallowed by the competition with the hybrids, which can be cheaper plus more readily available. Let us say they survive and thrive although, the niche area for eco-friendly luxurious sporting activities cars in america is too little to actually maintain a company, such as Tesla, and may eventually bring about either suffocation for customers on one part, or oversaturation of the market on the other.

Rewards ” As obvious, the advantages in home marketing are much less than in foreign marketing. Furthermore, there is an extra incentive of foreigncurrency that may be important as seen by of the home region as well. By a more monetary perspective, the exporting of a product, specifically a luxurious one, can be an opportunity to charge extra premium for the product plus the following companies.

Sharing of technology ” Domestic marketing is limited by the use and suppliers of technology although international marketing allows better transfer of technology and know-how. In the case of Tesla, a north american firm, foreign marketing and interconnection has led to the partnership with Lotus, a British manufacturer, Toyota ” a Japanese developer and countless others. In addition to increasing the really worth of the firm through attaining new technology, it enables the company to specialise and pursue competitive advantage and in the same time increase profits restoration the most suitable suppliers in the price/quality ratio.

Politics relations ” If we in order to follow the time-honored capitalist doctrine, domestic marketing should have and has very little to do with political relations although international marketing leads to the establishment of political contact between countries and countries, but likewise, and more importantly, between businesses and countries. As we have mentioned previously previously, Cina has a very ambitious plan for the future enlargement of the EV usage to be able to combat the ever-growing being hungry for oil and urban/air pollution. Consequently, Tesla, alongside other manufacturers, can will not receive many benefits, tax breaks and other bonuses to do business around the territory in the country. Therefore the success and the earnings of the promoting, and in general the company alone, increases.

Limitations ” On the more challenging take note, in the home marketing you will discover no limitations to trade/business but in intercontinental marketing there may be many. Samples of such happen to be cross ethnic differences, dialect, currency, customs and persuits. In the case of Tesla however , it can be fortunate that the message, idea and essence of the organization are easily transferable globally. The huge benefits, as well as the features are commonly preferred on the global market irrespective of regional position, and the deluxe nature with the product on its own, create the need for it. The sole actual barrier that theinternational marketing may possibly face when moving through the geographical areas is the organization of the helping infrastructure of charging areas.


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