Tesla motors is an enterprises which have been engaged in designing, producing as well as marketing of the electric components as well vehicles. In the current world, the Tesla has been known as the same is the only electric manufactures which have been selling the zero- emission sports car using the serial production which is opposed to the concept vehicle as well as prototypes (Sun, 2011).. However it has also been observed that they are under process to enhancing their technology s as to produce the luxury vehicles sedan market. It has seen that strategy adopted by the Tesla is eco friendly which have been designed at high margins echoes adopting the business model similar to the Apple computers model and hence it ultimately differ from the peer of the industry sucks ford, Chrysler which seems to have been struggling order to aging their lines so as to met the enhancing demand for the hybrids as well as electric vehicles. Inspire of the fact that the Tesla have made the global strides in terms of the development in technology, market adoption as well as global branding, it seems to remain as a young company across the industry. The more popularity is there because of their focus relatively for the technology strides or innovation which led to gain popularity of the product manufactured by the teslas. Research & analysis more seems to be related in regard to the marketing as well as business aspects for the company as well as its product. In respect the research gaps, some of the addressed issues are as
- Higher development have been in regard to the electric vehicle eco system which have been created a situation for the unique environment forth company
- Response of the Tesla is to capitalize in respect of the market opportunity
After taking into consideration the opportunities available in the market, they have provide that they have developed a strategy which will support them to produce luxury vehlcesbrand loyalty though out the world and also earning of the profit
This report will commence from the introduction of the company which involves back ground etc and also provide the situation analysis such as demand analysis, SWOT analysis, competitor’s strategy adoption etc and conclusion taking into consideration all the relevant fact of the Tesla Motors
Tesla motors was established or founded in the year 2003 .it was founded by the group of the engineers in Silicon Valley. They all are involved and desired to prove that in comparison to the gasoline powered car, electric cars would be better. Taking into view the same desire they have invented an incredible power with the zero emission hence it can be said that the product of the Tesla would be cars without any compromise. Also it has been seen that the each of the new generation keep going the same up and have been increasingly affordable which would indirectly help the company to work towards achieving its mission “to accelerate the transition of the world towards the sustainable vehicle.
In the beginning, the engineer of Tesla designed one power train for the purpose of the sports car which was built around the AC Induction motor, the same was that time patented by the Nikola Tesla (he is the inventor who has inspired the name of the company).In the year 2008, teal roadster launched which have been accelerating from 0 to 60 mph in approx 3.8 seconds and led to achieve range of approx 240 miles per charge. As a result it has been assumed that the Roadster has been proving to be new standard in regard to the electric mobility. Now it has seeled approx 2500 roadster which have been sold approx 30 countries.
Tesla’s vision is mainly to be created as one of the most compelling company of the car during 21st Century through the drive of the world’s transition in regard to the electric vehicles.
To accelerate the transition of the world towards the sustainable vehicle. Moreover, the mission not only to provide the safety of vehicle but aloe to ensure the safety if the consumer as well as their families.
Current Marketing Objective
Tesla engaged to increase the market share in the electric vehicles or hybrid market by 5% in the coming next 5 year with the introduction of lower priced model EV which Gen 3 model of 2015, having price base from $40,000 - $ 47000.
For Tesla, it has been seem that currently most of people are purchasing tussle Model S vehicle which price nearby 75 k. Those who are involves n purchase of the same have been a successful business executives as well entrepreneurs who are mainly city dwellers which are tech savvy as well green friendly.. Also there is teal’s roadster which is considered as high end luxury cars and one of the expensive vehicles. This is fully electrical and has ability to computer with the luxury car .even the price is high but still is cheaper than the other competitive luxury vehicle available in the market. On elf the feature is provide zero emission as one drove.
In the year2014, they develop a plan for new luxury car known as Sedan or Gen 3 the main to provide fully electric luxury car to the cutovers atman affordable price keeping in mind the budget to bring growth to the potential target market. They fixed a time period for reserving of the same. They annunced to provide the test drive after the same will be fully announced.
At that time, the estimated demand for the Gnu 3 was on the basis of EV/Hybrid market or the coming next5 years. That time the strategy was to increase the market share of the Tesla by 5% in the coming 5 years and as a result 20% ROI. The estimation in regard to the revenues as well profit was that it will bring about $7817 lacks revenue and profit of about $1606 lace to the company.
As per the current scenario, on receiving of the approx 35000 per order for the Sedan (Gen 3 models), the company has boost or increase its production capacity for approx 5, 00,000 cars by the end of year 2018. This rate is 10 times more than the cars which have actually delivered by the Tesla during the year 2015. In order to increase the production capacity they have planned to sell its stock of about $1.4 billon which resultant led to reduction of return to the excising shareholders.
Forecast for the year 2016-17
Fuel Cell Vehicle
All Electric Vehicles
SWOT supports to highlight the issues that have risen from the external as well as internal environment which may have an effect for the strategy development. Moreover, also taken as a base for future planning as well as for strategy development
Some of the strengths with the teal’s motors company that are available seem to help the company to take over others competitor in the automotive industry.
- Outsourcing of the components by the company help them to keep their cost low as well as their focus to be made entirely on the advancement of the technological (Mackenzie, 2013). Which in result led to provide strong research & development department as well as create high productivity and also led to provide overwhelming result over other competitors during the market? As a result, Model S has been declared as winner of Motors trend car for the year 2013.
- There is prevailing lean management system where althea employee working together in small decorated offices. Which in turn allow them to simplify tee decision making in regard to management as well as internal control? It will also lead to enhance trust as well as relations among the managers as well as employees.
- It has also seems that Tesla came into successful strategic relationship with the Panasonic and Daimler from Toyota Motors which in result bring mutual benefits for both the parties. This is because relationship as a result brought the parties to share their expertise in regard to the production process as well as technologies. As a result buy; trusted with the customers, future investors etc.
- Distribution of products through their own channels by placing their stores in high traffic locations which resultant increase interaction wit the customers. And also proving e commerce’s as well as digital marketing. All these activities help to increase efficiency as well also led d?class? franchisee cost i.e. saving money and increasing sale.
The main weakness incorporated with the Tesla Motors is lack of liquidity. Even though there is high amount of sale by Tesla on Model S during the year 2013 & 2014sill the company had a loss of approx 70 million this is mainly due to the high amount of debt and also the rate which is very slow at which clients have been buying the Tesla motors. Moreover the reason for lack of liquidity is also failure to reduction in the planned cost as well as controlling operational cost. Some f the weakness is
- There is limitation in the manufacturing capacity which in result led to failure of meeting the increase in the demand of the customers, mainly the strategy for expanding teals to Europe as well as Asia. Moreover, in addition to this, the teals Motors also struggling with the shortage of the Lithium Battery cell and also rely on supplier which in result led to harm the brand image because of the delay for delivering the vehicle r product on time to the customers.
It has seem that the Company “teals Motors have high range of opportunities available with them especially which in realty to the external factors regard to thea utomoble environment. One of the ways for opportunities is the significant change in regard to the customer awareness which in relation to the benefits of electric car, which is mainly more profitable at the time of raise in price of petrol or dieseling the market. Also the demand for the electric vehicle increase when concern for the environmental pollution as well as global warming developed. This would led to increase the demand for the electric vehicle.
Also, it has seen that subsidy program by the government as well as loan provided or issued for green energy company provides an opportunity to the Tesla motors as an additional investment for the growth. Also, the company has been prevailing in the market segment which is under continued growth in demand. Because of the same, it provides them opportunity to increase the capacity and to meet the consumer demand by producing more vehicles. As a result, it led to acquire more shares and high profit.
The main threat available with the Tesla is the entering of the established manufacture with high scale capabilitities and with higher expertise in the automobile market which may position their car at a lower price. As a result may lead to take away potential customers as well as surpass development of the battery cell. Moreover, any problem associated with the electric vehicle such as catching fire, short term decrease in the oil prices also treated as a concern for safety as well as discourages buyers to purchase the electrical vehicles.
| || |
| || |
BMW, being one of the potential competitors always continues to provide their best or put efforts for entering into the high performance, luxury as well as low consumption auto market. They also unveiled the production of the i3. It has also provided that BMW is also under process to reveal the all electric series which will at high competitive price with the Tesla. Even more, the i3 is not merely however the first plan of EV soaks to deliver the individual mobility. This is what the brand denotes. BMW by own design as well as develop electric motors.
Daimler AG one of the development is Mercedes B Class which have been at high sale in US as well as Europe. Dr. Thomas who is manager of product R & D clear that the technology for the electric vehicle will be more quickly advanced for those who want to travel large distance and on the same time no pay premium for the diesel or petrol. Elsa has partnered with the Mercedes Benz for the electric motors as well as battery technology
Taking into consideration the above action, it is advisable that the “telemotors” must improve their brand awareness as well as global expansion before the occurrence of the most serious threat which would be from the entry of the new European countries in the market.
The following table clearly specifies the marketing position of Tesla with their Competitors
As per the current Scenario, it has been seen that the Tesla is under planning to reveal its new Model i.e. Model 3, which have been the long anticipated for the middle class persons as well as one of the key component in vision of the founder was to mainstream the electric car.
So taking into consideration the same, it can be said that the target market to grab the middle class with the use of its new Model 3. Moreover, it has been seen that the “teslas” till now as a purveyor for the luxury electric cars with a tag of luxurious price have been under planning for selling of new Model 3 for a range of $ 35000 which is consider as half for the price in regard to the Model S. They are planning to put out approx 50,000 car for the year and also having plan to use this Model for turning themselves for a mainstream automaker where selling 5,00,000 electrics in a year by the end of 2020. Also it has been justified by the Analyst that the thief new card Model may be challenging for the Teslas the time when there is cheap gasoline i.e. the same is challenging for all the green cars and also their rival such as General Motors have been staking its claim for the electric vehicle middle market with the new Chevrolet Bolt.
On the baize of the data collation it has been revealed thither are planning to deliver their first Model 3 in the US by the end of year 2017 and in Europe by the end of year 2018. They have declared that the consumers may pre orders their vehicles from 31st March by making a deposit of $ 1000 or 1000 Euros.
Hence target market as a whole is US and Europe and also the Middle class.
Marketing promotion objective and Strategy for 2016-17
In regard to the strategy to be use, it has been provided that they are using Strategy clock which has been introduced by the Cliff Bowman that is finally representing different position in the market where it is clear that customers were having differs requirements in the terms of money value. The position of “Tesla” also represents range of the strategy in order to gain the competitive advantage over others. It has also provided that the teals Motors has more focus on the differentiation strategy which provide concentration on small group of the people those who are rich as well as environmental which has been attracted due to their stylish as well as attractive look regarding the cars.
Because, it will be hard to reach out and compete with other auto-manufactured brands as common person would not go and buy an electric car with short-distance travel and weak charging network with the price more than $60000 (Tesla Motors, 2014). It has also provided that Tesla could not in a position to adopt the low Costas well as hybrid strategy this is so because they do not have that production capacity, scale so as to comate on cost basis. It cane said that the company has been surviving only due to the product uniqueness designing as well as their innovative technologies which in a result attract people to purchase their cars. Hence, it can be said that it has been suitable position for the Tesla that may give core competitive advantage.
In addition to above, they are also involved for the development of Tesla Gig factory where the company works with their supplier so as to integrate artery material, cell and also the battery pack at one location. They planned to use the same for their vehicle and also for stationary storage. In the beginning of the year2016, they expected to produce cells initially for the Model X and Model S. The Giga factor also expected to attain their full capacity of production by 2020.And the same predicted to be sufficient for the production of approx 5, 00,000 vehicles in a year.
Media and Budget allocation for 2016-17
For the year 2016-17, tesla have been aiming to produce its Model 3 as an answer to the BMW’s3 Series during the March, 2016. They have announced that the production of the electric car Model 3 which have been able to drive approx 200 miles on the single charge have been expected to start in the mid or late2017. However it would be rumour that the Tesla have been targeting the price in approx $ 35000. Model 3 which has been 20 % in small than the teslas’ Model S have been considered as a crucial project of the company because it have been proving that it owns tier electric vehicle more affordable as well as attainable in order to achieve the target audience for the car shoppers.
The Model 3 is set to become Tesla's mainstream vehicle, with the Model S and Model X retaining their higher price points, superior range, and more luxurious features. The Model 3, which will be 20 percent smaller than the Model S, is a crucial project for the company as it looks to make its own electric vehicles more affordable and attainable for a much larger audience of car shoppers.
But first comes the Model X, which has been in production for some time and is finally nearing availability. Musk said that the company will begin accepting online customization orders in July. "This is really a great car. I mean, because it has such a low center of mass, it handles like a sports car even though it's an SUV," Musk said. "The performance is just surreal. Nothing else is comparable." Tesla had a decent first quarter, posting a smaller net loss than Wall Street had expected and announcing 10,045 Model S deliveries.
Taking into consideration the all relevant facts, current situational analysis can be taken as a base which provides that the Tesla have been in apathy that they would be able to perform in a way to provide strategy that help them to survive in the competitive environment. Also it has been proven the company “ Tesla “ has been succeful start up which has further become an one of the leading edge company because of the innovational ideas as well as management of good leadership in respect of the car manufacturing. They have also realized the importance in respect of the renewable energy as well as for the environmental protection. I has also proven that he macro environment that has been associated with the internal processes helps to create the good condition for the growth of Tesla in future and accordingly make them one of the leading “ auto motive manufacturing companies. This will also provide popularity as they have been providing unique product using the innovative technologies as well design at the convenient cost. Hence the Tesla has decided to adopt for the differentiated strategy with the purpose of targeting the upper class people and hence to provide the high performance as well as creative vehicles which enable them to gain competitive advantage.
It is recommended that the Tesla must shift from the strategy of Focus Differentiation to the differentiation which would help them to provide benefits which are different from the competitors as well as rivals in the market. This would also in turn enhance the price of market share as well as also the long term profitability. Also in order to achieve this strategy i.e. “Differentiation Strategy” it is advisable to increase the range of Models which will consequently allows the completion with the others.
Forbes.com. (2016). Forbes Welcome.
Ir.tesla.com. (2016). Tesla Motors - Annual Report.
Markets.ft.com. (2016). Tesla Motors Inc, TSLA:NSQ forecasts - FT.com.
Slideshare.net. (2016). Tesla Marketing Plan.