The challenges of growing a business -

RUNNING HEAD: COMPANY GROWTH PROBLEMS
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1COMPANY GROWTH PROBLEMS
Introduction:
Tesla is a well Known American Electronic Vehicle producer company that is reputed for
revolutionising the concept of vehicle. The company is noted for its production of the electric
vehicles and their promotion of sustainable and environmental friendly luxury cars. The
company serves worldwide and according to a 2019 survey, it had a revenue of $24.57 Billion
(Andersen Dauner Lang and Palme, 2017.). The company strives for perfection and the revenue
growth by producing almost every year new and more up graded versions of their cars. The cars
that Tesla produces are targeted towards a niche market, mainly the affluent buyers. At present,
however, the company had been facing a few problems with their new product, the Tesla Model
3. The latest challenge for the company had been to find new customers for this model. It has
been identified, that the present market of Tesla has been saturated and thus, they need to shift
their focus for a sustainable market.
The present report will deal with the challenge that is being faced by the company in
dealing with the sale of new model and will discuss about the possible solution.
Discussion of the Issues:
The company of Tesla has reportedly been facing a year full of “production hell and the delivery
hell” since the end of last year. The question that has arised that how many customer will the
company get for selling the car. The industry analysts had been voicing their concerns regarding
the future of this model since they think that the company has tapped out the demand for the
higher price versions of cars in the United States. However, the CEO of the company, Elon Musk
has dismissed the issue claiming that there is no dearth in the demand of the new Model and that
there are a lot of scopes in their present market. However, customers do not have enough money

2COMPANY GROWTH PROBLEMS
to afford the model 3. He is positive about the fact that is the price of the car can be slashed to
some extent, there will be no dearth of customers in their present market. there are, still some
serious problems relating to the lowering of the price (Wu and Yang 2017). Since the Tesla cars
are no more eligible for the “7,500 dollar federal tax credit for electric vehicles,” Tesla cannot
afford to reduce the price of the model unless there is a price cut. The analysis of the industry
gives the verdict that though there had been a lot of focus on the part of the company in
expanding the supply chain, te pent up demand for the high priced variants have been
extinguished in the market of US.
The issues thus arrived is of great impact to the business of Tesla. Saturation in the
market means than if they produce more developed and up graded versions, the company will not
be able to get the customers. This will bring in the saturation within the company as well.
Moreover, since the trend for high price variants has exhausted, new entrants with low priced
products can take the market. Though, Tesla has a quite loyal base of customers, the lack of
variety in their favourite brand will definitely make them shift their focus (Dzamic and Kirby
2018). The reports of the low sales figure since the last month and the declined graph presented
by the delivery team have already been noted as a threat to the company.
The decision of shifting the market and focusing on a new economy is however, can be
thought as the best opportunity to explore new countries and new markets like China and Europe.
China at present, is considered as the largest EV markets and the market condition of Europe is
in par with that of US. Elon musk himself admitted that there are opportunities and chances of
having a more developed market in this area.
Approaches that can be used: