Marketing Strategy for Tesla: Pestle Analysis, SWOT Analysis, and Competitive Advantage

This report discusses the marketing strategy used by Tesla, including a Pestle analysis, SWOT analysis, and competitive advantage. It evaluates the external and internal factors affecting Tesla's marketing strategies and highlights growth opportunities in different markets.

MARKETING STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PART A...........................................................................................................................................3
Pestle Analysis of Tesla...............................................................................................................3
SWOT Analysis...........................................................................................................................5
Competitive Advantage...............................................................................................................6
Evaluating current marketing strategy.........................................................................................7
PART B...........................................................................................................................................7
STP analysis of TESLA solar panel............................................................................................7
SMART analysis of TESLA's Solar Panels:................................................................................8
Recommendation.......................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Marketing is the process to selling products while considering needs and wants of
customers to increase their satisfaction. It is the approach of attracting more customers within the
organization and increasing the potential and seize by high profitability effectively. It is very
essential of businesses to evaluate different market factors to formulate marketing strategies
according to external and internal factors of business environment. In this report there is a brief
explanation about marketing strategies used in Tesla motor to increase the efficiency to sell more
Electric cars in market effectively. Report highlights internal and external market environment
audit to analyse growth opportunities to expand business in different market effectively.
MAIN BODY
PART A
Pestle Analysis of Tesla
Pestle analysis is a strategic planning framework which helps to analyse external
environment of business. Even it includes political, sociocultural, economic, environmental
technological and legal factors which supports to examine organization performance in different
terms. Tesla applies this model on company to analyse external environment of company which
is described below:
Political factors: Political stability, foreign trade policy, trade restrictions etc. are
political factor which gives impact on Tesla. It is a vehicle manufacture company which operates
in various countries and offers their vehicles product services to customer across the world.
Organization can get financial benefits because government offer various incentive to company
for electric vehicle. As per the view of government, if consumer purchases this electronic vehicle
they automatically quality for tax credit as result GDP rate of country will improve. Therefore,
Tesla gets financial support from government. Brexit can give negative impact on organization
while trading raw material from other countries. According to Brexit if company exports raw
products from neighbour countries, in that state they have to pay high cost on raw materials
which directly influence production cost of final products.
Economic factors: Foreign exchange rate, interest rate, tax rates and cost etc. are economic
factors. Cost factor gives positive impact on Tesla because they introduce electrical car which
uses electrical battery that has low cost (Aithal, 2017). Another benefit uses renewable energy
which can renew continuously without expending higher cost. These both factors reduces cost of

car as result economic stability maintain out within company. Thus, organization can easily
improve purchasing power of customers and can generate high revenue of company. Thus,
economic factors can give positive impact on organization performance.
Socio-cultural factors: Demographical changes is major socio-cultural factor which can
give impact on electrical car. For example some customer promotes electrical car because it
prevents depletion of coal in environment by using solar energy, additionally it improves weather
distribution for developing market (Ofosu-Boateng and Jiping, 2020). On the other hand some
customers gives negative aspects because they think electronic car release various radiations
which can directly impact on public health. It can lead climate change due to excessive rays
releasing. Thus, company can get impact on organization performance.
Technological factors: Emerging of new technologies and technology development are
technological factors which gives impact on organization performance. For example
development in existing in new technology can get positive impact Tesla. It manufactures
electrical car with advance technology such as high power electrical battery instead of coal.
Organization uses renewable solar energy which can utilize continuously without investing high
cost. Thus, advance technology helps company to manufacture sustainable vehicle. Even new
technology supports company to maintain it's competitive edge in the competition market. New
technology assists company to enhance product portfolio. Through the new product easily
attracts large number of customers for buying electrical car. Overall technology factors gives
positive aspect on new product profile.
Legal factors: Legal factors are Health and safety law, labour law, employment law,
consumer law, copyright law and minimum wage law etc. gives impact on organization. Tesla
makes plan to expand their business in other countries by trading the latest electronic cars. Here
organization can get negative impact on this decision because they have to update with overall
international patents and existing copyright in different region. Such kind law directly impact on
financial performance of company because they have to follow different policies that can create
complexity for company (Islam and Mamun, 2017). Tesla can get positive impact through
employment law because government has aim to reduce unemployment from country so recruits
job opportunity for those people who don't have job. While Tesla can get support of government
because they want high productivity of labour at workplace so that product demand enhances in

public. So when Tesla recruits job vacancies automatically government will support for this
operation.
Environmental factors: Health and safety law and climate change are major factor of
environment which gives positive impact on organization. Health and safety law gives positive
impact because electrical car is purely fuelled free as result no carbon emission that directly
reserve coal properly in world (Rastogi and Trivedi, 2016). Electrical energy doesn't pollute
environment that directly leads stability in climate. Overall health and safety law can give
positive impact on new launched electrical car product. Apart from this it builds brand image in
global market because electrical vehicle is totally manufactured to keep environment pollution
free.
Overall factors of Pestle analysis can be concluded which aware about external
environment of company. Additionally, it has been summarized positive and negative aspect of
factors on company's product.
SWOT Analysis
Swot analysis is internal analysis of company working structure which determines what
are the strengths, weakness, threats and opportunities for company in business world. This
analysis helps to determine how organization can enhance its position among other competitors
in volatile competitive industry where there are large new brands coming up every day.
Strengths
 Top employer company- Tesla has advanced skill develop employees working wit h high
quality performance levels which enable company to reach production targets with cost
efficiency (Büyüközkan and Ilıcak,2019).
 Best in class electronics cars-Tesla has highly captivated market share with new
electronic cars which has high innovation for consumers and diversified operations.
 Tesla dominates U.S electric vehicle sales-Company has high percentage of sales in US
market share where large loyalty of consumers for products has enabled company to
dominate its position.
Weakness
 Manufacturing complications- Production complications have decreased manufacturing
by high percentage margins, downfall statistics show company is not able to keep quality
in check.

 Lack of high volume production- There is high shortage of products and electronics of
Tesla due to lack of large scale productions. This has highly influenced company
reputation among consumers.
 Shortage of batteries- Tesla has been facing shortage of electronic batteries die to which
it is not able to meet customer demand in market share.
Opportunities
 Sales expansion in untapped market-Bringing electric cars production technology, Tesla
has large expansion opportunities in countries where there is less consumer awareness
about products.
 Less expensive car- Tesla has large opportunities to hold high market share percentage of
consumers by producing less expensive cars and electronics.
 Large goodwill among customer market- Tesla has high goodwill among consumers
worldwide which has enabled company to occupy large market share.
Threats
 Extensive competitive growth in industry-Tesla has been facing threat of high
competitive industries in automotive industry, with new brands and electronics coming
up (Hajizadeh, 2019).
 Product defects- Quality defects in products has been an increasing threat and area of
concern where it has failed to reach consumer preferences regrading high quality
standards.
Competitive Advantage
The electric cars of Tesla are one of its kind where the promise on quality regarding its
electrical vehicles has made it possible for the company to sell their cars even at a higher price.
The electric cars and their global market has also made it necessary for Tesla to develop an
extensive network of the superchargers, service stations or battery swap stations that helps them
in providing service to the electric cars at all time. The major USP occurred in the form of Tesla
Model S which is being launched in the Long Range EV car market (Rengarajan, 2019). The car
was a high range electric car and despite some very limited sales figure, the profits that Tesla
earned due to these were enormous. Other companies failed to compete with such extensive
technology and figure because these companies cannot risk the loss in the share of other

profitable luxury car segment if the electric car launched by them turns out to be a failure.
Therefore the extensive technological investment has really turned out to be an USP for Tesla.
Evaluating current marketing strategy
Currently, the competitive marketing environment of Tesla with other auto mobile
manufacturers is highly misunderstood. Tesla is the only company where they have higher range
electric vehicles and when any other competitive auto mobile company plans to launch any
electric auto mobile it is a just a modification or up gradation of existing EV auto mobiles (Bae
and Kim, 2017). This is because other competitors do not want to compromise with their highly
performing assets such as ICE cars etc. This helps in avoiding cannibalizing with the profits of
the company. In the year 2019 the sales of the electric vehicles continue to rise where the market
reached 4.7% in China and approximately 3.8% in Europe (Tesla’s competitors find that going
electric has its own set of problems, 2019). The rigorous regulations that were implicated on EU
has made the increased inclination towards buying electric vehicles. The reports have indicated
that all over the world the performance of Tesla's Model 3 as an electric vehicle could not be
beaten down whether it be in the terms of availability, in terms of cost or quality efficiency etc.
In China, Canada, Norway, US, UK different reports and figures have shown that the Model- 3
sales has been delivered globally at a figure of 128000 units (Global EV Sales for the 1st Half of
2019. 2020).
Another is the aspect that currently Tesla is not really facing competition from the electric
vehicle segment but it is indeed in the ICE car segment. For instance, currently the competition
for Tesla does not lies with the Chevy Bolt EV launched recently or the Toyota Canary but with
other ICE models such as Audi A series, BMW’s X series, Regal etc. A Chinese company, Nio
has indeed come up closer with the competition towards Tesla regarding the EV where the
vehicles are tried to being launched within the range of Tesla i.e. at $104000 as a starting price
(Tesla’s competitors find that going electric has its own set of problems, 2019).
Therefore, the company is going strong in their competitive market and in the field of
electric cars, it is indeed performing in a much better range.
PART B
STP analysis of TESLA solar panel
Segmentation: TESLA has chosen the Australian markets as the perfect place to introduce their
solar panels based on the rising trend of Australians switching to adopting solar panels on a large

scale. TESLA has chosen two different segments to focus on for the sale, maintenance and repair
of its proprietary solar panels. After due consideration, TESLA has identified a segment of
middle class of Australian homes on the basis of demographic segmentation. TESLA has also
segmented their potential customers on psychographic basis as Australians who are
environmentally conscious and wish to reduce their carbon footprint on the environment.
Target: Within the chosen segments, TESLA intends to target the general middle class
Australian homes who posses the required installing costs needed for the initial installation of
solar panels (Camilleri, 2018). This particular target segment is quite conscious of their current
energy expenses, costs associated with buying and installing solar panels and the payback period
needed to break even with respect to investment.
From the other chosen segment, TESLA has targetted Australians who have become
conscious of the environmental impact their carbon footprint inflicts upon the atmosphere and
are looking for alternative products which help reduce such harmful effects and for those who
wish to switch towards sustainable development in their operations.
Positioning: According to Forbes, there exists tremendous potential for growth in the renewable
energy sector worldwide. TESLA recognises the power of its brand image and public's
perception of TESLA products being high in quality. With a continuous rise in global need to
switch towards alternative renewable sources of energy and with the rise of Australia's renewable
energy market, TESLA has geared its solar panels for growth and has positioned its product on
the high end side on positioning matrix. TESLA has decided to maintain its products high
quality for solar panels, while trying to keep the price of product in the medium range when
compared to other solar alternatives present in market (Moutinho, 2000). This would make the
TESLA solar panels widely accessible to most consumers who wish to switch towards
alternative sources of renewable energy.
SMART analysis of TESLA's Solar Panels: Specific: TESLA's specific goal in relation to its solar panels is to encourage the public to
make the switch towards using renewable sources of energy, by providing a high quality,
state of the art solar panels at competitive prices in the market.
 Measurable: TESLA intends to measure the success or failure of its solar panels by the
number of units it can manage to sell in Australia's market within one fiscal year. TESLA
predicts the sale of half a million solar panels in one fiscal year

 Achievable: TESLA thinks the above target set is achievable in the Australian market as
the market is currently growing, with more and more Australians now making the switch
towards alternative renewable sources of energy. Analysts have also predicted a higher
growth in the renewable energy market than electric vehicles market- the market TESLA
primarily operates in. (Tesla's Musk says solar, energy storage will grow faster than
electric cars, and there's some truth to it. 2019). Relevant: In our digital age where every little mishap or accident goes viral on the
internet, the huge gaping hole that we have created in our ozone layer also attracts global
attention. Since renewable sources of energy leave no carbon footprint in addition to
being economically viable in the long run TESLA believe this product to be extremely
relevant and important in our digital age.
 Time Bound: TESLA wishes to reach its target sale of half a million solar panels in the
Australian markets within one fiscal year from the solar panel's introduction into the
market.
7Ps of Marketing Mix
Marketing mix is the finest marketing strategy to the businesses. With the support of this
strategy, Tesla can achieve positive results in different market segments. This strategy includes
seven major Ps of marketing which will guide to company for systematically launching their
products and services. These all Ps has been discussed below;
 Product: Top level management of Tesla has decided to launch their exclusive solar
panel in different market segment (Hanlon, 2019). Company realize that, currently
customer in the market demanding for quality solar panel which has high efficiency to
produce energy. That's why management decides to launch this product. This company
highly believes in advance technology, so customers are expecting a productive solar
panel from this.
 Place: Company want to launch this product in global market, but in initial stage it'll only
launch in America and in some European countries like; UK, Ireland, Ireland and
Germany etc. These markets are too favourable to this company, because people in these
countries are easily able to afford a solar panel. Company has some authorized stores too
in these markets, so it can easily deliver its product to customers.

 Price: Pricing strategy is excellent of this company. Top-level management of Tesla give
higher priority to quality than price. Customers know about company's pricing policy,
that Tesla charge some high than other companies but it'll provide quality product.
Company invested huge fund in development of this product. That's why company will
charge some high cost from customers. But on the basis of product quality, company will
offer favourable price to customers.
 Promotion: Tesla has very effective marketing team. It has a specific marketing plan for
promoting solar panel in international market. Promotion process is too necessary for the
company to inform customers about new product. Company able to use various tools of
marketing like, social media, broadcasting, T.V. Advertisements, etc. With the support of
these tools Tesla will easily promote its solar panel in initial stage.
 People: Currently Tesla has great brand reputation in the international market, so with
the support of this reputation or goodwill it can influence people to buy its product
(Bakopoulos, Baronello and Briggs, 2017). People currently blindly trust on Tesla's
technology, because owner of company Elon Musk has large fan base in whole world.
Elon always believes in advance technology, so it'll gain effective results from this
product too.
 Processes: Company will sell this product to customers in both terms online and offline.
Product delivery process is too simple of Tesco. Mainly people buy this type of products
from authorized stores, so company already make active their staff in different stores.
 Physical Evidence: Tesla has very productive workforce which completely knows how
to deal with customers. When customers buy product in stores, then they interact with
company's staff. These situations build extra-ordinary relationship between customers
and company. Tesla's employees capable to show all features of this product to
customers. These actions of company are very effective in improving customer service
level.
Recommendation
 Tesla need to improve the marketing of new solar electric cars in the market with the use
of social media marketing which will help to reduce cost and also improve customer
awarenesses about the new segments with high fuel efficiency effectively. Tesla also
should increase the efficiency by vertical and horizontal integration in supply chain to

gain better control over its distribution and sales. This will reduce the processing time
and decision-making for company.
 Tesla also need to adopt effective training and development programs for employees to
gain better information about the new technology which is launched by company in solar
energy. This can help Tesla to gain better potential workforce to increase the customer
engagement by various marketing campaigns and innovative ideas to attract more
customers and increase profit margins of the company. With the increase in efficiency of
employees it will also improve cultural values and create healthy working environment
effectively.
 Diversification strategy can also help Tesla to increase their sales of solar part cars
effectively. This will helps customers to gain better option to choose between different
variants and increase the potential of company.
 Company have to increase the quality of products which will helps them to increase the
brand satisfaction of customers and motivate customers to become loyal and increase the
sales. High loyalty in company also increase the Brand equity to gain better products and
service premiums and promote mouth publicity to increase large customer base in the
market to compete effectively.
 Tesla also establishes their dealerships at very feasible locations to reduce the cost of
transportation from the manufacturing units. Company need to develop charging hub
network in the market which is changed through solar panels.
CONCLUSION
This report concludes that marketing strategy is very essential for businesses and it
improves quality of products and services by effective market research. Developing marketing
strategy also helped company to gain better perspective of needs and wants of customers to
innovate products and services and satisfy them effectively. With the help of external and
internal marketing analysis tools company increased the efficiency differentiate target customers
in to different segments and increase sales of products effectively. Report also discussed
competitive advantage analysis to determine the market share and profitability of new product in
market.

REFERENCES
Books and journals
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Bakopoulos, V., Baronello, J. and Briggs, R., 2017. How Brands Can Make Smarter Decisions in
Mobile Marketing: Strategies for Improved Media-Mix Effectiveness And Questions
for Future Research. Journal of Advertising Research. 57(4). pp.447-461.
Büyüközkan, G. and Ilıcak, Ö., 2019. Integrated SWOT analysis with multiple preference
relations. Kybernetes.
Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Hajizadeh, Y., 2019. Machine learning in oil and gas; a SWOT analysis approach. Journal of
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Islam, F.R. and Mamun, K.A., 2017. Possibilities and challenges of implementing renewable
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Moutinho, L., 2000. Segmentation, targeting, positioning and strategic marketing. Strategic
management in tourism, pp.121-166.
Ofosu-Boateng, C.N.R.L. and Jiping, Z., 2020. A Pestle Analysis of Maritime Piracy and
Maritime Security in the Gulf of Guinea. Advances in Social Sciences Research
Journal. 7(1). pp.472-482.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Rengarajan, S., 2019. Letter to the editor: Complementing the Tesla forum EV discussion with a
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1

Global EV Sales for the 1st Half of 2019. 2020. [Online]. Available through: <http://www.ev-
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Tesla’s competitors find that going electric has its own set of problems. 2019. [Online].
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Tesla's Musk says solar, energy storage will grow faster than electric cars, and there's some
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2