Marketing Strategy and Plan of Tesla Motors

This report discusses the organizational strategies, business model, operations, marketing, product development, innovation, growth, and strategic implementation of Tesla Motors.

Running head: MARKETING STRATEGY AND PLAN OF TESLA MOTORS
Marketing Strategy and Plan of Tesla Motors
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1MARKETING STRATEGY AND PLAN OF TESLA MOTORS
Introduction
Named after the Serbian American inventor Nikola Tesla, the Tesla Motors Inc is an
American automotive company, based on energy in California. It was founded by the American
entrepreneurs Martin Eberhard and Marc Tarpenning in the year 2003 (Van den Steen, 2014).
The company was primarily formed to develop electric sports car, with findings from various
other sources. The company has it specialization in the manufacturing of electric car through the
use of solar panel. The purpose of this report is to articulate the organizational strategies of the
Tesla Motors and the business model of the organization. It also deals with the different
approaches of the company to operations, the developments of its products and marketing, as
well as the innovation and growth.
Discussion
Summary of Tesla’s Strategy
Tesla's business strategy is to recreate distinctive life cycles to the technological
products and the first target wealthy buyers, then shift to the bigger markets at the reduced
prices. The present strategy is to maintain a competitive advantage and attract the global
automotive market. On the other hand, the Tesla Motor’s mission and strategy is to accelerate the
world’s transition to sustainable energy (Rothaermel, 2013). Its main aim is to maximize its
productivity , by selling products at reasonable prices. The Tesla Motors has strategized in a
manner in which it can reflect the company’s aim for the dominance in the global electric
vehicles and the market of battery.

2MARKETING STRATEGY AND PLAN OF TESLA MOTORS
Operations and undertakings of Tesla
Tesla Motors’ expansion plans in the global market depend on the successful practices
and the overall performance in the productivity. It depends on the operations management and its
effectiveness, the organization’s operations management is focused on the innovations of the
electric cars and car accessories. The operation managers conduct quality reviews on a regular
basis and implements enhancements to the manufacturing processes (Hemelka, 2015). The
operations management decision focuses on the business processes, and it automates the
manufacturing processes along with human intervention. The operations of the Tesla Motors
focus on the global supply chain as well as well as enhances the productivity through the regular
training and leadership development programs (www.tesla.com , 2019)
Marketing
The target customers of the Tesla Motors are the individuals or the households who are
not indifferent towards the environmental issues and the negative environmental implications of
the emission of carbon dioxide. It recognizes it market segment ad has a target to reach a greater
customer base. The people belong to the categories of eco-friendly nature, tech-savvy as well as
the luxury buyers, ranging in the age group of 20s to 40s. Since 2015, the company has been
successfully selling the all electric luxury car SUV which has reached to a record of 100,00
vehicles in the year 2017 (www.tesla.com, 2019). Its biggest strength is its positioning the
market of cars, with its price incentive performance automobile segment. Tesla’s marketing, its
promotional as well as its advertisement costs amounted to 66.5 million US dollars in the year
2017. According to a report from Global Equities Research, Tesla spends as little as USD6 per
vehicle on advertising (www.tesla.com 2019).

3MARKETING STRATEGY AND PLAN OF TESLA MOTORS
Product development and Innovation
The Tesla Motors is effectively expanding its global market segment with new
innovations. The most prominent one and the recent one is the rollout of the Model Y electric
crossover. Tesla releases software updates frequently in order to improve and change the
functionality of the designs of the existing cars and their manufacture. It updated its best selling
Model S, releasing a new version of the model. Tesla has recently started its delivery efforts of
the Model 3 in Europe and China, in the year 2019 (Karamitsios, 2013). The recent innovations
of the company include the Semi truck, which us the new Tesla Roaster. The Model S and the
Model X are modified and innovated with the Solar Roof. There is also a need to build the
charger network which would be helpful in accommodating the real volumes of EVs rolling off
to Tesla’s lines. Tesla has recently launched an utility scale energy storage product called the
Megapack (www.tesla.com , 2019). It is a giant battery system which has been deployed in the
South Australia. Since it hopes for sustainable alternatives, the Tesla utilizes the Megapack to
store the excess solar energies. They also announced that the company will be rolling out the
Standard Range base models in the year 2019 (Chen & Perez, 2018). The Model 3 has passed the
Model S and has successfully become the top selling electric car in the United States. In
accordance with this the company also revealed about its new innovative product the 2020
Roadster. The new model would be expected to have a range of 620 miles, with a 200kWh
battery pack the vehicle is supposed to have three electric motors, with all-wheel drive and
torque vectoring.
Growth
The growth of the Tesla Motors had been remarkable in the past ten years. Its
incredible growth in the revenue had been ranging from $15 million in its annual revenue in

4MARKETING STRATEGY AND PLAN OF TESLA MOTORS
2008, to more than $21 billion in 2018. The company has been able to withstand its growth rates
of almost 74 percent over the last 3 years (www.teslacom , 2019). The company has successfully
produced about $4 billion from the operations which existed beforehand. Tesla could be the
world’s largest manufacturer by 2050, depending on the amount of sales that the manufactures
drop. When customers all over the globe realize that electric cars are greater and are then
unwilling to buy another diesel car, Tesla could take hold of the global market. (Narins, 2017).
Change
The announcement for the Model Y was a strategic change on the part of the
company. The company wanted to show the world that it is capable of developing the best cars
all over the world, within best prices and a profitable range. The goal that was associated with
the Model S, the Model X and the Model 3 had been changed to a modest goal. There is change
in the motor vehicle as well (Hardman, Shiu & Steinberger-Wilckens, 2015). The Model S Long
range has now been changed to be more effective, since it has a new electronic motor
technology, according to the Motor Trend. Not only the vehicles but the company also changed
its name to “Tesla Inc”, from “Tesla Motors”, and its website from teslamotors.com to tesla.com,
in order to acquire more domain (www.tesla.com 2019).
Strategic Implementation
The main elements that have an impact over the strategic implementation of Tesla
Motors are the structures of the organisation, the people and the leadership. According to the co-
founder and the CEO of the Tesla Motors, the strategy is to make sports car, use the money to
build a reasonable and cost effective car with options of zero emission electric power generation
(Maniatopoulos, Andrews & Shabani, 2015).

5MARKETING STRATEGY AND PLAN OF TESLA MOTORS
Conclusion
Thus from the above discussion it can be concluded that the Tesla Motors being one of
the greatest automotive industry can successfully be the world’s largest manufacturer by the year
2050, with the implementation of its new strategies and innovations. The company has the ability
to take hold of the global market with the mission and vision of producing automobiles under
reasonable prices taking the sustainable development in mind as well. Having its specialization
in the manufacturing of electric car through the use of solar panel, the company has its target
customers in three categories, which involve the rich buyers and the people who are
environmentally conscious.

6MARKETING STRATEGY AND PLAN OF TESLA MOTORS
References:
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
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Hemelka, J. (2015). What Types of Marketing Strategies Should be Used in Order to Sell More
Eco-friendly Cars (Doctoral dissertation, Empire State College).
Karamitsios, A. (2013). Open innovation in EVs: A case study of Tesla Motors.
Maniatopoulos, P., Andrews, J., & Shabani, B. (2015). Towards a sustainable strategy for road
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electric car industry. The Extractive Industries and Society, 4(2), 321-328.
Rothaermel, F. T. (2013). Strategic management: concepts. New York, NY: McGraw-Hill Irwin.
Tesla.com. (2019). Electric Cars, Solar Panels & Clean Energy Storage | Tesla. Retrieved 16
September 2019, from https://www.tesla.com/
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