Tesla Global Marketing Report

This report focuses on Tesla's expansion into the South African market. It includes a business proposal, market analysis, target market, marketing research, product/service profile, and market entry strategies.

Running Head: MARKETING
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TESLA
GLOBAL MARKETING
REPORT
STUDENT
9/18/2019

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Executive Summary
To expand a business into a new market, a brief market research needed to conducted .In this
assignment, the focus has been placed over a Tesla automobile company, which is known for its
unique electronic-based cars models. To attain a market position, in the global market, Tesla has
been preparing to expand business in South African market. Therefore in this report, a business
proposal has been prepared in which brief description about the company profile has been
provided. In the report the market analyses( PESTEL), market research, prevailing
opportunities and threats in the South Africa has been conducted so that company can get
insights about the prevailing market conditions of the country. At the end of Tesla, it can
perceive two main market entries.

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Contents
Overview of Tesla..................................................................................................................................3
Market analysis (PESTEL of South Africa)..........................................................................................3
VI. Target market...................................................................................................................................5
Market opportunities and threats such as competition, and potential demand......................................5
Marketing research................................................................................................................................7
Product/service profile...........................................................................................................................8
Market entry...........................................................................................................................................9
Conclusion...........................................................................................................................................11
Bibliography........................................................................................................................................12

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Overview of Tesla
Tesla, Inc. is one of the famous and well renowned American e-based car company which was
launched in the market around 16 years ago, in 2003. It was founded and developed by Martin
Eberherd and Mark Tarpenning which was later joined by other future executives Elon Musk, Jb
Straubel, and Ian Wright. The U .S.P of Tesla Motors is tom manufacture advanced cars
through the efficient utilization of solar energy (Tesla, 2019). The main ideology behind the
launch was to demonstrate the usage of electronic cars, so that people can reach their destination
before time without hindrances. Tesla promotes zero discharge of greenhouses gases, creates
awareness so that companies reduce their dependency over fossil fuels, and adopt environment-
friendly techniques to manufacture cars (Tesla, 2019). The main production of Tesla is
conducted in Fremont, California where the majority of its parts and tools are developed (Tesla,
2019). Along with the automotive, the company has developed a sustainable energy
environment by producing an exclusive combination of various energy. In 2019 the Quarterly
sales of Tesla were $6.50 Billion which means, it has shown exceptional growth by 58.65%
(Macro Trends , 2019).
Market analysis (PESTEL of South Africa)
To expand the business and retain a market position in South Africa, the prevailing conditions
are required to be studied so that company can analyse the conditions. For the studies, PESTEL
has been conducted.

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Political: South Africa is a democratic country, which encourages globalization and permits the
expansion of international companies in the nation. Such a favorable environment is suitable for
the market of Tesla Motors (Getting The Deal Through, 2019).
I. Economical: It is the second-fastest developing nation with great financial stability with
low tax rates and duties. Such conditions make it easy for delivering Tesla luxury cars
(Rani Singh, 2015).
II. Social: In 2018, demographic of South Africa was about 57.73 million, which is
consisted of a mix population of high class as wells as poverty-stricken people. This has
created an opportunity for Tesla as it can meet the demand of elite class and can provide
employment opportunities (Sinden, 2017).
III. Technological: South Africa is known for its numerous coal-fired power stations.
However, the majority of the companies have not explored advanced technology, which
can be a competitive advantage for it (Wheels 24, 2019).
IV. Ecological: This country is full of nature. Despite that, the pollution level in South
Africa is quite high which has created various health issues. With the entrance of Tesla e-
cars, pollutions will be prevented.
V. Legal: The laws and regulations of the country are liberal as well as non-liberal, which is
favorable for Tesla (NAAMSA, 2019).

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VI. Target market
In 2018, On the global level, Tesla electric automobile company supplied about 245000 units of
cars as compared to the statics of 2017. Currently, Tesla has manufactured and launched a wide
range of models which are Model S, Model X, and Model 3. However, these models of Tesla
motors is considered to be expensive in comparison to other automobile companies and therefore
the target market of this car company is Elite and high-class people. It generally caters the wants
and desires of upper-class people (Macro Trends , 2019). Majority of the customers of Tesla are
business executive, entrepreneurs who are interested in technology in which the male buyers are
higher who want to invest in this luxury brand. Although in South Africa the demand for luxuries
cars has become weak. Due to the economic recession, there has been a decline in purchasing
power and due to a lack of financial stability in South Africa, the scope of growth has become
limited (Tesla, 2019).
Market opportunities and threats such as competition, and potential demand
Opportunities
I. Credit Suisse, which is a Swiss
International Bank forecast that
about 61000 South Africans are 1%
are high class and wealthy.
Moreover, after Asia, South Africa
is considered as the second fastest
developing nation. With an increase
in the purchasing power of the
people and luxury life, the
Threats
Despite such a golden future of growth, the
market of the top and premium cars has
been declined by 20%. Such decline and
downfall have created hindrance for
various international luxuries brand (R
News, 2019).
.
“

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customers are investing in luxury
items (Business Wire , 2016).
II. In 2017, the annual profit of
African Luxury sectors was
approximately US$6.0 billion which
covers every luxury product like
cars, fashion couture, and luxuries
suits.
III. A market analysis has been
conducted by Market Research
Future looking at Global Luxury
Vehicle for the period from 2018-
2023, in which it was evaluated that
in the upcoming 4 years the market
of luxury cars will be expanded
(Wheels 24, 2019).
.
.
Competition
In South Africa ‘s market, Porsche has
dominated and outperformed various top
car companies and has topped the charts by
selling 105 cars in a year (R News, 2019).
Demand
The demand for luxury cars has been
increased in South Africa. A study has been
conducted which displays the demand
premium products are influenced by
various factors geographical, market

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position, profession (Wheels 24, 2019).
Marketing research
To analyze the market for the tesla electronic car company, brief market research has been
conducted to perceive the insights regarding the future opportunities and target market. Form the
long period of time, it has been observed that South Africa had been a male dominating society,
where the man majorly interested in purchases luxury cars (Sinden, 2017). However, this era has
come to an end and now ate every stage of the society women are moving forward against men.
Nowadays male-centered society is diminishing and the women are now purchasing the products
that are available in the market, which is masculine whether they are luxury cars or any normal
brand of product. In history, South Africans women had faced discrimination at every level of
society. But now the government of South Africa is empowering and providing financial aids to
the women of the society by providing various career opportunities to them so that they become
confident and independent (Sinden, 2017). This has brought change in the demand for luxury
brands. Such developments have created various opportunities for international brands that are
preparing to expand their business in South Africa. For Tesla its emerging opportunities as they
can manufacture and electronic eco-friendly car models which are comfortable not only to the
women but to the men also. With the latest technology the company should launch its latest
innovations that is Model Y, Model X, Roadster, and Model 3.

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Product/service profile
There are various innovative products, which have been launched by Tesla Company. It
involves
I. Roadster: It is one of the fastest cars which has ever launched on the global platform
with a highest in speed series and performance. It was launched in 2008 which a modern
cutting edge battery technology and power train The design of its product is unique as it
has delicate detachable Glass Roof Stores which is convertible and thus enrich the
driving experience of the customers (Tesla, 2019).
II. Model S: After Roadster, Tesla designed and launched the first first-class and luxuries
electric-powered Sedan, Model S which was resulted profitable and exceptional for the
company. It is known for its best and unique features like protection, performance, and
productivity, Model S has reset the world’s expectations for the car of the 21st century
with the longest range of any electric vehicle (Tesla, 2019).
III. Model Y: Tesla has designed another, Model Y I, which is considered to be as best
protective car in its class. With a low focus of gravity, restricted body structure, and big
crease, zones provide supreme security. Model Y delivers maximum adaptability in
which 7 people can be comfortably able carried along with traveling bags. Model Y can
be easily moved and travel in all seasons (Macro Trends , 2019).
IV. Model 3: It is the latest model that has been, launched in the market. Model3 involves
the structure of metal with a combination of aluminum and steel, which provides
maximum strength in every area (Tesla, 2019).
V. Model X: It is an medium-sized luxury SUV. This model is unique and creative as it
depicts that instead of traditional and existing locomotive doors it uses falcon wing doors.

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Tesla has expanded its product and service line with the National Highway Safety
Administration. It is one of the safes cars with high speed which is suitable for sports
utility cars in history.
VI. Power Energy: In Power energy, solar panels can be placed over the roof of the houses
to convert sunlight into clean energy, or a brand new Solar Roof. Power wall incorporates
solar to store daytime excess energy and makes it accessible when it needs it to minimize
dependence on your utility (Tesla, 2019).
The strategy followed by Tesla is that the company will be delivering The Roadster at low- and
in the affordable price range. Model S and Model X targeted the wide luxury market. Besides
this Model 3 and the Model Y is delivered to higher-volume segment.
In 2010, Tesla opened and expanded its market to Sydney's Australia. Till 2019, e-vehicles
became so popular that, Tesla opened four service centers in Australia. Following a series of
regional blackouts in September 2016 and February 2017 that shook South Australia, a heated
discussion arose about how to handle the battery issue. Musk got involved in the debate and
fulfilled the demand in a 100-day challenge (Spector, 2017).
Market entry
Two main strategies which a company can adopt to enter in South African Market is Licensing
and Joint Venture
In South Africa, NAAMSA is a government body which looks after the interest of every new
and existing automobile country. To operate and launch its electronic vehicles and power energy

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in South Africa, Tesla has to get registered itself with NAAMSA (NAAMSA, 2019). The
advantage of getting itself licensed is that the company will be provided financial assistance in
the initial years of its set-up, which can be proved as one of the biggest advantages for it, with an
attractive return on investment. Along with NAAMSA, The National Traffic Road act has been
initiated which important for every company to get registered. However, there are certain
drawbacks of licensing like limited market control and loss of interest. Despite such losses, Tesla
can retain its market position by offering the best products, installed with advanced technology
(Getting The Deal Through, 2019).
The second strategy of entering the competitive market is through Joint Venture. It can be used,
when the market is uncertain. Moreover, it is useful strategy to enter into a single market. This
strategy involves learning from the prevailing environment. Tesla can enter into a joint venture
in South Africa before opening its personal outlets of cars.
From the above two strategies, the first one is recommended as in South Africa licensing is
compulsory and very much profitable than market entry strategies (Business Wire , 2016).

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Conclusion
It can be concluded that expansion in a particular country requires a brief study of its prevailing
business as well as an economic environment so that the company can plan its marketing
strategies and efficiently move forward to operate in that business environment. In the report the
information about Tesla, which is one of the famous e- the vehicle has been provided which is
planning to expand its business in South Africa, In the above assignment PESTEL, Marketing
Research to analyze the business opportunities has been conducted. Along with two major entries
has been also disused.

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Bibliography
Business Wire , 2016. Demand Analysis for Luxury Cars in Africa - Luxury Cars Surge in
African Automotive Markets - Research and Markets. [Online] Available at:
https://www.businesswire.com/news/home/20161219005569/en/Demand-Analysis-Luxury-
Cars-Africa---Luxury [Accessed 18 September 2019].
Getting The Deal Through, 2019. Automative. [Online] Available at:
https://gettingthedealthrough.com/area/95/jurisdiction/2/automotive-south-africa/ [Accessed
17 September 2019].
Macro Trends , 2019. Tesla Revenue 2009-2019 | TSLA. [Online] Available at:
https://www.macrotrends.net/stocks/charts/TSLA/tesla/revenue [Accessed 18 September
2019].
NAAMSA, 2019. South Africa’s Leading Authority and information Provider for the Motor
Industry. [Online] Available at: https://www.naamsa.co.za/ [Accessed 17 September 2019].
R News, 2019. Premium car market plummeting in South Africa and Europe. [Online] Available
at: https://www.rnews.co.za/article/24536/premium-car-market-plummeting-in-south-africa-
and-europe [Accessed 18 September 2019].
Rani Singh, 2015. Millionaires In Africa Like These Luxury Brands. [Online] Available at:
https://www.forbes.com/sites/ranisingh/2015/11/29/millionaires-in-africa-like-these-luxury-
brands-and-watch-buying-is-on-the-up-among-men/#2c6002a696fc [Accessed 17 September
2019].

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Sinden, E., 2017. Exploring the Gap Between Male and Female Employment in the South
African Workforce. Mediterranean Journal of Social Sciences, 8(6), pp.37-51.
Spector, J., 2017. Tesla Fulfilled Its 100-Day Australia Battery Bet. What’s That Mean for the
Industry? [Online] Available at: https://www.greentechmedia.com/articles/read/tesla-fulfills-
australia-battery-bet-whats-that-mean-industry#gs.4df4g4 [Accessed 17 September 2019].
Tesla, 2019. About Tesla. [Online] Available at: https://www.tesla.com/about [Accessed 17
September 2019].
Tesla, 2019. Model 3. [Online] Available at: https://www.tesla.com/model3 [Accessed 17
September 2019].
Tesla, 2019. Powerwall. [Online] Available at: https://www.tesla.com/powerwall [Accessed 17
September 2019].
Tesla, 2019. Roadster. [Online] Available at: https://www.tesla.com/roadster [Accessed 17
September 2019].
Wheels 24, 2019. SA vehicle sales: Maserati South Africa is optimistic about the year ahead.
[Online] Available at: https://www.wheels24.co.za/News/SA_vehicle_sales/sa-vehicle-sales-
maserati-south-africa-is-optimistic-about-the-year-ahead-20190130 [Accessed 18 September
2019].