Marketing Strategy for TESLA: A Situational Analysis

This report analyzes the marketing strategy of TESLA, a leading electric vehicle manufacturer, and evaluates the impact of factors such as PESTLE, Brexit, and epidemics on the company. It also examines the competitive advantages of TESLA and provides recommendations for improving its marketing strategy.

MKT306 MARKETING
STRATEGY

EXECUTIVE SUMMARY
From the report it has summarised that business industry is introducing different types of
products and services in changing environment where it is important to use marketing channel
and sources which can help to operate the business and increase organisational profitability. This
report of marketing strategy is based on TESLA that manufactures electric cars in London, UK.
This organisation uses marketing strategy with objective of meeting its organisational goals and
attaining higher profitability. This report helped to increase the insight by knowing that how
PESTLE affected the operation of TESLA, strength and weakness are evaluated by management
that support to operate business. Moreover, STP helps to target a potential number of customers
who are demanding special products and services that fills requirements and increase the
profitability.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Introduction of company..............................................................................................................1
Evaluation of threat of epidemic or Brexit on company .............................................................5
Analysing competitive advantage (USP).....................................................................................6
Evaluation of existing marketing strategy...................................................................................7
..........................................................................................................................................................8
Source: The financial performance of TESLA. 2020......................................................................8
PART 2............................................................................................................................................8
Analysing market STP.................................................................................................................8
Recommendation of objectives and goals for the entity (SMART)............................................9
CONCLUSION .............................................................................................................................12
REFERENCE.................................................................................................................................13

INTRODUCTION
Marketing strategy defined as long term and forward looking approach used by
organisation in order to increase the sales and improved profitability. The strategy of
organisation should be effective and manageable that can help to increase organisational
performance (AGUSTINI, SUCIARTO and Retnawati, 2019). To understand about this, TESLA
has been selected in present report to analyse how marketing strategy helps respective firm in
reaching its customers. It is an American electric vehicle and clean energy based company. This
is large size industry that uses different types of marketing channel to introduce from different
types of auto mobile products that increases sales and profitability. This report covers two
sections,first part gives an overview of chosen company, situational analysis, epidemic on
business, current marketing strategy and competitive benefits. On the other side, section 2
provides an analyses segmentation, target and positioning by recommending marketing strategy
that can help to attain the business goals.
PART 1
Introduction of company
TESLA is an American electric vehicle manufacturing firm, that was founded in July
2003 by engineers Martin Eberhard and Marc Tarpenning.. This is large size organisation where
number of employees and engineers are working collectively in order to provide cars and
increase organisational profitability. In 2008, TESLA Motors released its first car which was
completely electric Roadster that covered capacity of 245 miles on a single charge. The main
objective behind this to reduce the uses of fuels and attaining the competitive advantages. This
organisation has designed the world’s first ever premium all-electric sedan Model S – which has
become the best car in its class in every category. This model was appreciated by people that
become motivation for chosen organisation to bring new model and technology in organisation
for increasing sales. In the year 2015 TESLA has expended its product line with Model X which
was safest, quickest and valuable product has got 5 star safety rating. This organisation is
operating business many countries and have a good distributor that helps to sale products and
increase profitability. The management of such organisation is managing all activities and
performance in changing environment that helps to develop the products and services so
customers will be attracted and attain the good performance. This organisation underpins
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different automotive products for different customers who wants luxury products and managing
their life. The mission of business organisation is to apply visceral along with attracting thrill of
electric dicing experience by producing best quality and design of products ( Al-Surmi, Cao and
Duan, 2020). In other words, marketing strategy is defined as goals and objectives that
comprises with regulation and planning, which influence people and encourage them to buy the
products as well as services.
Situational analysis (PESTLE Analysis)
The situational analysis is determined as a method that uses to evaluate factors and
conditions which has impact on business and its operations. It is important for business concern
to analyse the business situation and make plans accordingly which can help to increase the
organisational sales and profitability. In context to TESLA, situational analysis helps to define
the venture health and planning which can be used to improve the business performance. This is
used by marketers for the purpose of evaluating marketing environment and delivering variety of
products. For determining the situational analysis PESTLE analysis is being used in context to
chosen organisation are as defined:
Political – This factor is showing government regulation that states how government
interferes in business industry. This is considering trade policy, tax rates, foreign exchange,
political stability and corruption that needs to be focus while operating a business. In UK,
government is supportive and tax regulations are stable which provide opportunities to
companies to manage and operate their business successfully. The government is providing
initiatives to auto mobile sector for developing the hybrid and electric engines that impacts
positively on TESLA organisation to produce cars and increase the sales in automotive sector. In
this, management improve their selling and financial performance as no need to paying high
taxes. Moreover, it has been seen that government is focusing on removing trade barriers that
will help to make sales in other nation and create a sustainable position of business industry
( Amelia, Salamah and Sofyan, 2019). Oppositely, BMW that is also car manufacturer in UK ,
produce electric cars and running the business. Due to Brexit, the sales of organization affected
negatively as it withdrawal its business from European countries due to new trade regulation
which has reduced sales.
Economical – The relation of economic factor is with money and economy of a nation
that impacts epochal on doing business operations and to make the profit. This contains
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consumer disposable income, economic trend, monetary policies, labour cost, inflation rate, and
international trade that impacts on business organisation. UK is globalised economy that has
good economic position in relation to other nation. After Brexit, number of businesses are closed
because they operated in Europe due to which rate of employment decreased. This can be
challenging point for TESLA to sale its cars in challenging economy and maintain their sales.
These activities affected the business negatively as if customers will not have money then how
they will buy the cars, automatically this decreases sales. On the other side, decreases inflation
rate and increases employment rate in UK and U.S would be opportunity to operate the business
by selling cars to different customers and increase sales. Therefore, economy of a nation is main
factor that should also be considered while operation and selling the products. Oppositely, BMW
faced the challenge of higher inflation rate where management buy the raw material at high cost
and sale their product at higher that became a challenging point to sale their cars at high prices.
This has reduced the sales and profitability of organisation.
Social – This factor showing the demographic qualities, customs, norms and values of
people who lives in society and requires to fill their expectations. The trends in relation to
population considering income distribution, lifestyle attitudes, population growth rate and safety
emphasis that need to be focused in situation analysis. In UK and U.S., people demands electric
cars that is eco- friendly and cost saving by eliminating the uses of fuels used and maintain
good health of people. TESLA is producing electric based cars in luxurious design that builds
amazing demand and increases the sales which helps to attain the competitive advantages. This
step and launching electric cars built good brand image and sustain in competitive environment.
Oppositely, the income distribution and lifestyle of people is not focusing by company and
developing traditional cars then will be difficult to continue business in changing environment
(Bala and Verma, 2018). Oppositely, BMW focusing on customer's demand has introduced
BMW i3 which influenced huge number of people and have increased the organisational
effectiveness. Therefore, this factor impacted positively as compare to others.
Technological – The factor of situational analysis is pertaining to innovation and new
technology in their existing process that impacts and influence operations of automobile
industry. This factor reflects that organisation should use new technology and innovation process
in their organisation that can help to introduce new products and helps to increase the
organisational sales. Main advantages of technological factor is taking by TESLA company
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where it develops its existing products and produce electric cars that impacts on operation
positively. In changing environment, team of chosen organisation is using new technology after
getting proper training that sets automation in cars with Artificial Intelligence, Self Auto driving
cars, High capacity of battery, lithium-ion batteries, and Auto gearing that influenced people and
encouraged them to buy products. in order to increase sales. On the other side, not necessary that
this factor affected positively, it can impacts negatively in adopting new technology as it increase
spendings and other programme that consume time and cost (Blašková and Střelec, 2019).
Where as BMW, affected from this factor positively as it brought Autonomous vehicles, GPS
vehicle tracking, predictive auto mobile technology etc. that help to capture high market share
and profitability.
Legal – Laws and regulations are main force that relates to company and needs to be
focus in case of running a business. If someone is running business without following the
international trade, employment regulation, Equality act 2010 and others then it impacts
negatively on business performance. TESLA is most popular brand in UK and other nation
where it introduces whole team about domestic and international regulations in relation to auto
mobile sector that helps to accomplishing all organisational goals without any interferes. This
helps to maintain multiple supply chain and making working easier with the support of
government that create a sustainable business. Where as, BMW is negatively affected from
legislation to auto mobile sector as it does not focus on how legislations are implemented in
other country as resulting low sales and profitability.
Environmental – This force of situational analysis states that for running and operating a
business, firms need to be focused in growing environment and its related activities that should
be eco-friendlily. In UK, there are many brands who follows different environmental acts in
order to reducing scarcity of population target, carbon footprints, raw material and many more
authorities that affected the business. TESLA mainly emphasises on launching electric cars that
is fuel and pollution free, which increases greenery and increases the performance effectively.
This provide diverse opportunity to chosen organisation to increase the value of brand and save
people lives by reducing carbon emission (De Pelsmacker, Van Tilburg, and Holthof, 2018).
BMW is also focusing on health consciousness in which it bring new electric car model and save
the environment that support to run business.
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Therefore, from the above analysis it has examined that TESLA must focus on situational
forces that may arises in business operation and can be opportunity as well as challenging task
for organisation to maintain their business activities effectively.
Evaluation of threat of epidemic or Brexit on company
Various situation in relation to a business are facing by organisation that impacts on
organisation and affected the business. This is important for organisation to analyse the internal
situation of business that can help to increase insights and managing the activities. For example,
Brexit is the decision which is taken by UK's government to withdrawal and leave the European
nation that become challenge to regulate and operate business in domestic country. Brexit has
created a threat for TESLA as it made tentative plans to open research and development centre in
UK. This became a challenge for TESLA to invest money in manufacturing and mostly product
are sale in European country that had been stopped. The area covers right of citizen, managing
business, security trade etc. that can help to operate the business and increase profitability.
This trend states that Brexit has affected the sales and profitability of TESLA as shown in
the year 2017 sales and total revenue have been reduced that become a threat for organisation to
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operate business regularly. After using auto motive technology and introducing new electric cars
this has capture a good market and sales ratio as shown in trend.
As Tesla has acquired a unique position in the car market, therefore, to analyse other factors that
reflects high competitive strengths and factors which possess challenge on the same, SWOT
analysis on its business has been conducted in following manner-
Strength Weakness
 TESLA Develops cars by using
software and unique hardware.
 This sustain in sharp and modern auto
mobile industry.
 This simplifies buying process and
putting the consumer in control.
 It leverages its prowess in battery
technology to minimize the total cost of
ownership over the vehicle’s lifetime.
 deliver best quality of cars.
 Low profitability due to less selling
activities as compared to BMW and
other electric manufacturer
organisation.
 In UK, changes in government
regulations and tax rates.
 Brexit and other new trade wars.
 Unable to meed demand that may
affects brand value (Fuciu and
Dumitrescu, 2018).
Opportunities Threat
 It attaches itself to the predominant
market trend of the day — going green
to reduce global warming.
 TESLA tends to make its own batteries
by using new technology.
 Market confidence in organisation.
 Expansion of sales in untapped market
that create brand image.
 There is security risk with software cars
and connectivity.
 TESLA does not take any liability
claims while launching many autopilot
vehicles that create financial risk.
 The competition facing by organisation
is related to Hybrid, fully electric car,
and plug- in -hybrid that impacts on
sales.
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Analysing competitive advantage (USP)
Competitive advantages is the condition of a business that gains over competitors by
offering greater values of products in market. If organisation is adopting USP then it will an
opportunity for business to attain high range of profits and increase the productivity. TESLA is a
auto mobile industry that create a unique selling point for customers by promoting electric and
automotive cars in domestic and international market. The main competitor of TESLA is BMW
that also manufacture luxurious electric cars and creating the unique selling point in business
environment. The unique selling point which provides competitive advantages to TESLA
Company are as analysed:
Brings innovation: For increasing sales USP is main factor that uses by TESLA in order
to introduce products in front of all and increase the sales. Tesla brings new model as TESLA S,
Tesla model 3, Lexus ES Hybrid etc. By producing electric and hybrid cars it give feeling to
customers as they have meet with future taste. USP is not only providing new products but also it
make the easy purchase for customers on internet that saves money and time of their potential
customers (Gajanova, Nadanyiova and Moravcikova, 2019). On the other side, BMW bring new
model as BME i3 as electric cars by using new technology that helps capture high market share
and maintain profits.
Increases marketing channel: USP is the process which uses to increase the selling
activities in business environment and attain competitive advantages. TESLA uses different
sources such as online marketing, social media, magazine, T.V and banners that influences
customers and encourage them to buy cars. BMW uses social marketing, magazine, online
marketing and hoardings that influence customers and increase the sales.
Evaluation of existing marketing strategy
Marketing strategy is considered as industrial course or planning which uses to promote
merchandise and selling activities in an organisation for the purpose of making higher profits. In
other words, marketing strategy is a blueprint for company that uses to attain the marketing and
organisational goals by influencing customers. For instance, marketers of TESLA conducts
research and uses social media and online marketing strategy which helps to connect audience by
using social media and increase sales. According to Nuseir, (2020), marketer of chosen
organisation is enough skilled and talented who bring new technology and innovation in their
existing products which can help to increase sales and maintain higher profits. Moreover,
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management create a USP by providing electric cars and better services that attracts number of
customers and helps to expand the business performance by sustaining in competitive
environment (Hunt, 2018).
Illustration 1: The financial performance of TESLA. 2020
Source: The financial performance of TESLA. 2020
The above analysis states that TESLA is using effective marketing strategy and new
technology that helps to increase the sales and profitability ration from the past years. The
management of such organisation thinks about continuously changes and bring the innovation
which influence customers and encourage them to buy products.
PART 2
Analysing market STP
Market STP
Market segmentation is defined as process and activity of dividing a broad consumer or
business market into small groups, in order to manage the business activities and increase
profitability. TESLA is forming STP analysis for the purpose of introducing electric cars in
global market that are as explained:
Segmentation: TESLA is manufacturer of electric cars that uses new innovation and
technology in their organisation in order to fill the customer's requirement and manage the good
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performance. For instance the new model is TESLA S which is launched by chosen organisation
by considering customer's demand and their interest that helps to increase the sales and capture
high market share. In this, management are focusing on geographic segmentation where it set the
new location for launching new product and influencing customers.
Targeting: This is the process that indicates niche specific market and developing the
business by targetting number of customers. TESLA is auto mobile company that targets
youngsters and high profile person between the age of 25 to 50 years who are obsessed with
electronics, information technology and cars that can attracts number of customers and maintain
good performance (Nurcholis, 2018).
Positioning: This can be defined as STP Marketing, that determine place and
terminology which uses to maintain a position in market and develop the products for
maintaining higher position. UK is stablish nation where TESLA introduces Model S that will
help organisation to meet with electronic mode and gain the competitive benefits in changing
market. By offering variety of design of electronic cars chosen organisation maintains a good
position and increase profitability (Morgan, Whitler, Feng and Chari , 2019).
Recommendation of objectives and goals for the entity (SMART)
Goals and objectives of organisation are main step that gives a reason to operate and
manage the business activities. This is important for organisation to set the goals and focus on
progress which can be used to increase sales and profitability. For attaining the goals there is
need to have proper planning, organise, directing and controlling activities which increases
business performance and profitability. The management of TESLA sets their SMART Goals for
launching Model S which are as explained:
Goals and
objectives
Specific Measurable Actionable Relevant Time
Bound
Boost
digital
marketin
g and
sales for
launching
To increase the
traffic on social
media and online
marketing
platform by
publishing blogs
18% improvement
in the goal b y
launching new
model that will
attracts the
number of
The social
media and
blog traffic
is started to
increased by
10% with
TESLA is
attracting number
of customers by
increasing brand
awareness hat
helps to generate
The time
for
completin
g goals is
1 year as
it will
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Model S and using social
media that can
help to attract
customers.
customers. the help of
publishing
weekly. This
will launch
Model S in
electric
model that
will increase
sales.
more sales leads. take time
to
manufactu
re.
Becoming
leading
marketer
of well
known
electronic
car expert
TESLA is larger
organisation in
UK that goals is
to become well
known and
popular marketer
of electronic cars
in auto mobile
manufacturing
industry.
This goal of
company will be
success only
when it start to
speak publicly
and meet with
customer's needs
that provide
suitable
experience.
Introducing
new
products and
services by
using new
technology
will help to
acquire
large
publicity.
By using
campaigns,
becoming well
known, meeting
with customer
experience and
generating product
value will help to
reach the more
customers and
maintain good
performance.
It will be
achieved
years by
year by
adopting
new
technolog
y.
Recommending marketing strategies that are based on application of marketing mix to the brand
Marketing strategy is the effective way of evaluating business performance by using
different channels and promoting ways which increases number of customers and helps to attain
the goals. TESLA is auto mobile industry that produce products or different design of cars and
uses marketing plans in order to inform customers and increase sales. For example, TESLA is
using marketing mix that is set of tactics and planning implementing by organisation to increase
sales and profitability. Execution of marketing mix is used by TESLA that are as explained:
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 Product: This refers as commodity and item provided by organisation in order to operate
and manage the business activities. TESLA is auto mobile company that manufacture
different types of cars like hybrid, fuel, electric and other by using new technology that
helps to create a good business environment and manages the activities. By introducing
Model S this will capture high brand image and boost the organisational performance.
Moreover, this offer online services where customer get information and place the order
of purchasing ( Zhao, 2018).
 Price: This means when products are manufactured and launching in market then it
required to set the prices of products which can help to increase business performance
and profitability. TESLA is setting the premium pricing strategy for Model S that will
help to attracts number of customers and increases sales by influencing customers.
 Place: When product are manufactured and prices are set then organisation should focus
on place that can help to increase sales. TESLA is recommended to set the location and
place where it is going to introduce TESLA S that is new model for increasing brand
image. For example, it make presence in Europe, Japan, Dubai and Italy (Nuseir, 2020).
 Promotion: In this, organisation uses different channel and sources to promote the
products. TESLA is recommended to use online marketing, AR, and chatbot strategy that
will help to respond customers properly and increase the performance by introducing
Model S.
 Physical evidence: This means visible activities and increases the value of products and
make happy to customers regarding their products. TESLA is using brochures, well
organised building and different design of cars that attracts customers to make purchase
(Su, Lu, and Lin, 2018).
 People: In organisation people are important who contribute in organisational activities
and complete the task. TESLA is recommended to use reward management, performance
appraisal and employment regulation that increases morale of employees and increase
production with the help of employees (Umar, Sasongko and Aguzman,2018).
 Process: It is recommended to TESLA to start the uses of websites, AR, VR, in- store
waiting time and client support in their operation and delivery process that can help to
attain business goals (Tafesse and Wien , 2018).
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CONCLUSION
From the above report, it can be concluded that marketing strategies are considered as
planning which should be formulate by management, in order to increase sales and maintaining
good position. PESTLE states external factor that may influence business where as SWOT define
internal position of business. Segmentation is uses to divide objectives in smaller groups and
marketing mix is a tactics which uses by company to increase profitability. Marketing mix is a
tactic that uses by organisation in order to launch products and attracting the potential customers
in larger market.
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Online
The financial performance of TESLA. 2020. [Online]. Available through:
<https://www.morningstar.com/stocks/xnas/tsla/financials>
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