Tesla Motors Market Entry Strategy

This report examines Tesla Motors' potential market entry strategy into India, analyzing the company's strengths and weaknesses, the Indian market environment, and competitive forces. It also explores market segmentation, targeting, and positioning strategies, and recommends the most suitable market entry methods for Tesla, including direct exporting and partnerships.

REPORT

EXECUTIVE SUMMARY:
This report summarises that Globalisation is very crucial for company's growth. This
report discusses about marketing strategy of Tesla about entering new market of India for more
profit earning and getting strong hold in International market. Additionally, there are various
tools practised to understand different aspect of India market such as Porter's five force model
which helps in understanding different forces of market such as rivals, suppliers, etc. Similarly,
PESTLE analysis helped in understanding the marketing environment of India which will help in
decision making of Tesla. In order to understand marketing positioning of Company , STP model
is applied. Furthermore, there are various methods of entering new market such as exporting,
licensing, partnership, etc. which can be practised by Tesla to expand in market of India.

Table of Contents
EXECUTIVE SUMMARY: ...........................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Company analysis:......................................................................................................................4
Marketing Environment Analysis...............................................................................................5
Market Competitiveness..............................................................................................................6
Justification of the market choice and target segment................................................................7
Market Entry Strategy.................................................................................................................7
Recommendation.............................................................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Globalisation plays a very crucial role in an organisation. It helps in providing a vast
platform to perform business activities and earn more profit. This report will discuss about Tesla
Motors which is an automotive organisation that deals in serving products like solar panel and
electric car manufacturing which are energy efficient (Tesla Info, 2019). The respective
organisation has been operating its functions in various countries such as UK, Europe, Australia,
etc. This file will study about expansion strategy of Tesla motors to India. Further more,
company analysis, marketing environment analysis, market competitiveness of Tesla will also be
discussed. Along with the STP model will also be implemented to target the customers along
with different styles of market entries.
MAIN BODY
Company analysis:
In order to understand different aspect of the company, SWOT analysis can be practises
which helps in understanding the strength, weaknesses, opportunities and threats of the
respective company. Thus, SWOT analysis of Tesla is discussed below:
SWOT of Tesla-Tesla motors is a new age automotive company which can manufactures
alternative vehicles like solar powered cars, hybrid vehicles and battery operated vehicles.
 Strength- Tesla is associated with energy savings vehicles who are using USP, it is a
main strength of Tesla motors. The respective company has its own distribution channel
that have some capacity expansion plans which can be triggered factory (Pinto, Carbonell
and Rodríguez, 2011).
 Weaknesses- The products of Tesla are very expensive. Additionally, the respective
organisation only sells electric vehicles which limits the market and customers of
company. This is one of the weaknesses of Tesla.
 Opportunities- Vehicle technology is taking a whole new turn and are a host of new
technologies like hybrid vehicles,green cars,electric cars, battery cars and self driven
autonomous cars . Tesla can look forward to launch new products which can help to grab
a bigger market.

 Threats- It can be determine the growth of business that can have an impact on Tesla
that faces lot of competition from various car companies like ford, general motors, Fiat
Chrysler, etc. Thus, industry rivals are biggest threat to Tesla.
Marketing Environment Analysis
Tesla is looking forward to expand its business in India. Thus, in order to understand the
external marketing environment of respective country, PESTLE analysis is practised.
PESTLE-
 Political Factors- Political environment of any nation can affect business directly and
indirectly. As there are certain laws and regulations that are framed by the governing
bodies such as taxation, interest rates, etc. (Raff, Ryan and Stähler, 2012) The regulations
are different in each country. Thus, by following these regulation, Tesla can operate its
functions more smoothly across the globe.
 Economic factors- This element of PESTLE analysis discuss the impact of Tesla on the
economy. By expanding the business in new country like India, Tesla can create new job
opportunities which raises the employment growth of respective country.
 Social factors- These can pertain to some certain products that can make direct impact to
another culture in society. The demand for sustainable products in India is growing day
by day because people are now thinking of environmental protection. Thus, it gives a
great opportunity for Tesla to expand and earn profit from new market.
 Technological factors- It is the biggest factor influence growth and make market to be
enhanced globally. Tesla deals in electric cars which shows the advancement of
technology in the respective company.
 Legal factors- Tesla deals internationally, thus it becomes important to understand laws
and regulations which are required to be followed in different countries including India.
Some of the laws are employment law, minimum wages law, etc. (Henisz and Zelner,
2012).
 Environmental factors-Tesla has a very good reputation in terms of environmental
impact due to its energy efficient products and services. This provides a competitive
advantage to Tesla.

Market Competitiveness
In order to understand the competitiveness in the market, there are various factors that
needs to be taken in consideration such as threat of new entrants, market rivals, etc. Thus,
Porter's five force model can be studied.
Porter's five force of Tesla:
 Threat of new entrants- This factor of the model discuss threat of new entrants in the
market. As automotive is a big industry which involves high investment, the threat of
new entrants is very low (Beule, Elia and Piscitello, 2014).
 Threat of substitute- Tesla deals in electric cars. However, there are other alternatives
for travelling in India such as diesel cars, railways, airways, etc. Thus, threat of substitute
to Tesla in comparatively high.
 Bargaining power of buyer- Tesla is a big company which is well known for its
sustainable products. However, there are other companies selling similar technology in
India market. Due to this, bargaining power of buyer is more.
 Bargaining power of Supplier- Tesla operates in many different countries. Due to this,
it has a strong hold in international market. Thus, there are plenty of suppliers available
in the respective market. This reflects that bargaining power of supplier is very low.
Illustration 1: Porter's Five Forces
Sources: Porter's Five Forces, 2019

 Threat of Rivals- There are various big companies in India market such as Audi, BMW,
Jaguar, etc. These companies have a good hold in respective market. Hence, threat of
competitors is very high.
Justification of the market choice and target segment
In order to understand the market positioning of of Tesla in India market, STP model can
be practised which can help in Segmenting and targeting the customers and positioning product
in new market. Thus, STP of Tesla is discussed below:
STP of Tesla Motors:
Segmenting- In this segment, the customers are divided in small group based on their age,
profession, psychographics, geographic location, etc. (Ulrich, Hollensen and Boyd, 2014). As
product range of Tesla's products are expensive, the segmentation of customers can be done
according to their earning capacity which is high. Also, customers who prefer luxury cars are
focused.
Targeting Customers
The targeted customers of Tesla are high earning or business class customers which
belong to upper middle class of society of India. Additionally, the geographic targets developed
cities of India where customers have high income. The psychographics of targeted customers are
products that environment friendly and luxury.
Positioning
There are various luxury car brands which are well established in India. Thus, it is
important to have a strong marketing strategies which can influence customers (Wood and et. al.,
2011). Apart from this, there is a market gap for luxury products with sustainable benefits in
India market. Thus, Tesla can fill that gap and have a strong position in the respective location.
Market Entry Strategy
It is a method in which organisation enters into new market and delivery method of goods
and services to a new target market. There are variety of strategies through which Tesla can enter
into Indian market. These factors can increase cost to market but it also make to increase in sales
that will offset these costs.
 Direct Exporting- It is a process that use to sell the products into direct market that have
chosen for making resources. Tesla can use this form of exporting for India that can sell

their products. They are making different sales program that can turn to agents or
distributors to present different products in particular market
 Licensing- It is relatively sophisticated arrangement where a firm transfers the right to
use product or service of other firm. Thus, Tesla needs to consider all the formalities that
are involved in Licensing procedure in India in order to operate its functions.
 Partnering- It is necessary when company enters into another market and can make
different partners within the country (Javalgi and et. al., 2011). Tesla can have knowledge
about culture, business and social factors where local partners can provide Knowledge,
contacts and even potential customers in Indian market.
From the above discussion, it can be concluded that best method of entering market of
India is through direct exporting and partnership.
Recommendation
From the above discussion, it is recommended that Tesla should invest in India to expand
its business through partnership and exporting. Also, by doing market analyses it can be analysed
that Tesla expansion will be a positive outcome for the company. However, it is recommended
that organisation should launch new range of products that can help in attaining larger market
share.
CONCLUSION
From the above discussion, it can be analysed that globalisation plays a vital role in profit
earning of a company. Additionally, it helps in capturing large market and serving more
customers. Thus, company analysis shows the strength and weakness of organisation however,
PESTLE analysis helps in understanding the impact of external factors on the company.
Furthermore, market competitiveness of the company can be studies through porter's five force
model however STP model helps in studying the targeting and positioning of the products and
services. It can also be analysed that there are various methods which can be adapted by the
organisation in order to expand their business in international market.

REFERENCES
Books and Journals
Rodríguez-Pinto, J., Carbonell, P. and Rodríguez-Escudero, A.I., 2011. Speed or quality? How
the order of market entry influences the relationship between market orientation and
new product performance. International Journal of Research in Marketing. 28(2).
pp.145-154.
Raff, H., Ryan, M. and Stähler, F., 2012. Firm productivity and the foreign‐market entry
decision. Journal of Economics & Management Strategy. 21(3). pp.849-871.
Henisz, W.J. and Zelner, B.A., 2012. Strategy and competition in the market and nonmarket
arenas. Academy of Management Perspectives. 26(3). pp.40-51.
De Beule, F., Elia, S. and Piscitello, L., 2014. Entry and access to competencies abroad:
Emerging market firms versus advanced market firms.Journal of International
Management. 20(2). pp.137-152.
Ulrich, A.M.D., Hollensen, S. and Boyd, B., 2014. Entry mode strategies into the Brazil, Russia,
India and China (BRIC) markets. Global Business Review. 15(3). pp.423-445.
Wood, E and et. al., 2011. Strategic commitment and timing of internationalization from
emerging markets: evidence from China, India, Mexico, and South Africa. Journal of
Small Business Management. 49(2). pp.252-282.
Javalgi, R. R. G and et. al., 2011. International market reentry: A review and research
framework. International Business Review. 20(4). pp.377-393.
Online
Tesla Info, 2019. [Online]. Available through<https://www.tesla.com/>.