Assignment 1
Assignment 1
Creating an e-car business encounters several difficulties in the competitive market. The
challenges include a limited driving range and increased car prices. Companies operating in
this industrial sector need to generate value and look for a way to cope with this issue. Many
new car manufacturing companies are attempting to join this industry because of the scarce
resources, the latest innovations, and the high need for conservation. Hence, Tesla has
effectively positioned itself in the industry by choosing a niche segment. It has dramatically
transformed its lack of understanding into a competitive advantage by providing the most
recent train for its electric-driven automobiles and bringing direct consumer exclusive sales
model. By doing so, the corporation has supplied its user with an incomparable experience
that no other car vendor can offer to its customers. The critical driver of Tesla's
accomplishment is its advancement in the manufacturing and innovative supply chain. The
Gigafactory arrangement for the production of lithium-ion cells on a massive scale has
enabled Tesla to become a predominant cell producer in the US and a leading supplier to the
Investors seem excited and optimistic about Tesla's initiatives and innovations and perceive it
as a leader in the future of the automotive EV business. Tesla has developed an intense
exclusive and value chain environment for its vehicles, bringing added value and advanced
encounters to end-users and buyers. Tesla has expanded its manufacturing capacity to support
mass production and reduce manufacturing time. They have set precise regulatory
requirements to increase the use of advanced technologies that make other corporations
dependent on them. Tesla has organized and positioned superchargers regarding other car
manufacturers and has empowered its brand through a global marketing campaign.
Tesla has emerged as a highly competitive player in the automotive sector because it
deployed technology primarily to facilitate the development of electric vehicles (EVs). Such
cars have boosted the company’s global standing because they consumed cleaner energy, as
opposed to gasoline that is linked to harmful emissions. In particular, Musk identified the
need for developing automobiles that could save the world from the detriments of pollution
and climate change as central towards fostering sustainable development. The company’s EV
car designs appeared at a time when global dignitaries were calling for the embracement of
Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t
need to compromise to drive that electric vehicles can be better, quicker and more fun to
drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely
scalable clean energy generation and storage products. Tesla believes the faster the world
stops relying on fossil fuels and moves towards a zero-emission future, the better.
Tesla took a unique approach to establish itself in the market. Instead of trying to build a
approach, focusing instead on creating a compelling car that would create a demand for
electric vehicles.
Once Tesla established its brand and had produced and delivered its concept car to the
marketplace, it reinforced its business model. Tesla's business model is based on a three-
Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly
By owning the sales channel, Tesla believes it can gain an advantage in the speed of its
Unlike car dealerships, Tesla showrooms have no potential conflicts of interest. Customers
Tesla has created its own network of 30,000+ Global Superchargers where drivers can
charge their Tesla vehicles in about 15 minutes for a quarter of the price of gasoline. The
purpose, of course, is to speed up the rate of adoption of electric cars by making it cheaper
On an international level, the strategy of Tesla is a transnational one. This means they are
present in a number of different countries and benefit from Tesla’s global structure but can
Tesla is transforming not only the way we think about transportation but renewable energy as
well. The representatives offered a look at the house of tomorrow as Elon Musk sees it: Solar
Roofing that is akin to traditional shingle or slate roofing aesthetically, with the exception of
having the same capabilities of solar panels. A Power wall that will act as a home energy
storage system that can seamlessly be integrated with the Solar Roof. The combined
capabilities of these innovations can more than meet the power needs of the modern
Tesla business strategy can be broadly classified as product differentiation. Accordingly, the
electric automaker differentiates its vehicles on the basis of sustainability, performance and
design. Tesla business strategy aims to accomplish this mission via Focus on electric cars,
Ownership of distribution, Low cost of ownership and Unconventional way of doing business
Strategy into action
Tesla is playing the long game with Research and Development, focusing on Automation,
Material Costs, and Software Updates. Electric vehicles are being adopted by many other
companies as well, and Tesla wants to sustain their competitive advantage by making their
products hard to imitate. The heavy spending in Research and Development is aimed to
develop more sophisticated technology for their products, increasing the barrier to entry in the
electric vehicle and battery markets. The significantly higher amount of investment in R&D
compared to other companies in the market granted Tesla the position of being the innovator
and the leader of the market, which keeps Tesla in the niche position of having a sustainable
Heavy spending allows Tesla to keep updating its Neural Networks and AI algorithms,
enhancing Tesla’s autopilot feature which differentiates itself from the current automobile
market. Within the Diamond Strategy, the staging of software update packages lowers the
perceived age of Tesla car models. Software iterations differentiate their products from the
market by enabling a customizable UI interface for the end-user, plus add the side benefit of
According to Tesla’s career page, its main mission is “to accelerate the world’s transition to
sustainable energy” by hiring the world’s best and brightest people that share the same
passions in changing the world and are willing to work in their fast-paced and innovative
culture. Tesla instils an organizational culture that encourages its employees to keep being
creative and innovative to improve their technological capabilities in which employees are
The company aims to expand its market worldwide by establishing new offices and facilities
upon which as part of its strategy of being a global leader in the automotive industry. In their
career page, they state that they aim to solve the world’s problems by hiring talented
Tesla uses the four P’s (product, place, promotion and price) in their marketing strategies to
Their strategy is entering the global market. They are opening new locations, expanding their
promotions and they are developing new unique products that will attract customers and
generate sales. They are currently forming new relations with other companies to expand their
business ventures. Tesla avoids the use of intermediaries as they prioritize the Direct-to-
Globalisation permitted organisations to gain access to new markets and to foster the flow of
technologies and scientific knowledge. This can be leveraged to stimulate the manufacturing
of cutting-edge products which can enhance peoples’ living standards. In the case of Tesla
significantly indulged into research and development to deliver the most sophisticated
electric vehicles and batteries. Recent innovations in the motor industry centred on the fight
Tesla’s mission is “to accelerate the advent of sustainable transport by bringing compelling
mass- market electric cars to market as soon as possible.” The mission statement clearly
indicates that the company has realised that the opportunities ahead is dependent on green
and sustainable energy. This proactive tactic taken by the organisation has allowed them to
seeks to boost the evolution of the industry from fossil fuel to green energy and to try to stand
The vision of the company is to create the most compelling car company in this century by
driving the world’s transition to electric vehicles. Tesla Motors also pursues to grow its
product line up to accommodate a wider demographic range of the population. Their vision
also incorporates expanding the production of the lithium ion cells to reduce the energy cost
The eco system or the environment in which the company operates plays a significant role in
its business. The mission of the company is to create a sustainable environment where the ill
effects of fossil fuel-based vehicles on the environment can be reduced as much as possible.
Thus, the existing deteriorating condition of the environment due to the pollution has
encouraged the company to take major steps in the development of green energy-based
vehicles. The government policies and regulations have allowed the company to run its
For Tesla, having a defined and attainable strategy for the future can determine its success or its
failure especially taking into consideration that the company is small, and does not have the
capabilities like the older and bigger car manufactures have. Tesla’s strategy has followed what
is considered the natural trend of technological innovations, entering the market with high-end
expensive products and as demand increases, prices for said technologies drop. Initially, Tesla
entered the automaker industry with an expensive, high-end product targeted at affluent buyers.
As the company matures, its products, and costumer’s acceptance matured, the company started
to switch into a larger, more competitive markets at lower price points, where the company
would have to compete for people who own less disposable income and are much more price
sensitive. Musk constantly maintained from the beginning that “Tesla’s long term strategic goal
was to create affordable mass market electric vehicles” (Fehrenbacker), and the company is on
track to fulfil the vision of Mr Musk. But, as Tesla grows it must have a defined strategy that
will help it maintain its position as the clear market leader in the EV market.
Tesla Inc.’s primary growth strategy is market penetration which enables growth by
increasing sales in the existing markets. This is only possible through aggressive marketing
which facilitates a rollout and sale of more electric cars in the home country, United States. It
maximizes its revenues from the market areas where it currently operates, and this strategy is
consistent with the company’s generic strategy that aims at increasing competitive advantage
by increased market share. Aggressive marketing by the company has made this strategy
Another intensive growth strategy of the company is product development whereby the
company develops by manufacturing new products to create a new revenue line. Product
development manifests itself through the development of new products using technologies
that have a minimal environmental impact. For example, the company produces solar panels
and the Tesla Roadster using a unique technology that makes clients attracted to the products.
research.
Other than a generic competitive advantage, Tesla Inc. uses intensive strategies that ensure
the growth of its business channels. Its growth strategies evolve with time, a reflection of its
improved profitability and popularity along with robust business strengths identified through
SWOT analysis. The company makes strategic adjustments over time to ensure it remains
resilient despite numerous technological advancements and changes in customers’ tastes and
preferences. The generic strategy gives the company a competitive edge over its competitors
and attracts different opportunities in the automobile market. The growth strategies support
the development of the organization based on increased sales revenue from Tesla Inc.’s
current markets. The company achieves operational effectiveness of the company through
Tesla Inc. employs different marketing tools and strategies aimed at targeting the existing and
potential customers. Its marketing communication tools involve the use of conventional and
contemporary marketing platforms ranging from direct selling, international auto shows,
service networks, and social media marketing. The mix of marketing communication tools
enables the company to improve its brand recognition, improve brand loyalty, popularity, and
competitive advantage. The company uses the marketing communication tools selective to
save cost and to minimize any chance of any negative aspect of their products spreading fast.
Direct selling in the company’s stores and galleries makes it possible for the company to get
rapid feedback and deliver a unique experience which strengthens its relationship with its
clients. To promote its brand recognition and competitiveness, Tesla Inc. employs the use of
word of mouth marketing. It is an important cost-saving factor and a very effective tool in
Tesla has an unparalleled position in the automobile market because it is in the business to
transform how people drive through its innovative technological advancements. It has
dominated the market for long range and luxury cars. The electric car’s market, where Tesla
operates, is different from the one for less expensive electric cars. Besides, the company has a
robust sales growth that has taken place over the last few years. The motor industry consists
of several well-established firms such as Ford, Opel, Volkswagen, Mercedes, Toyota, These
brands are continually looking for new ways to nurture competitive advantage by developing
new products with appealing value propositions. However, the product line of Tesla Motors
presents unique products that offer both power and electric driving, without compromising
the aesthetic appeal. As a result, this has made it quite attractive for customers. Vehicle
components thus have a higher bargaining power. To reduce the dependence on suppliers,
Tesla Motors have created their own battery factory that enables them to achieve vertical
Before, Tesla Inc. used differentiation technique to focus on its competitive advantage.
Through this, the company stressed on the unique features of its products and concentrated
only on adopting the affluent market segment for electric vehicles. The focus then was to
target rich clients who tend purchasing newly introduced cars. Today, the company is more
popular, and its production costs have reduced thereby shifting its competitive strategy to
broad differentiation. Through increasing popularity and declining production costs, the
company can target a broad market segment. The strategic objectives for the company aimed
at increasing the amount invested in research and development. Through this, it can develop
new products that meet the demands of the market for enhanced renewable energy solutions
and broadening the market reach to generate more revenue and support brand popularity.