Tesla's Bulgaria Market Entry: SOSTAC Marketing Strategy Report

This report analyzes the feasibility of Tesla's entry into the Bulgarian market, employing the SOSTAC framework. It begins with a situational analysis, including a PEST framework assessment of the political, economic, social, and technological factors in Bulgaria, as well as a comparison of cultural dimensions using the Hofstede model. The report defines specific objectives for Tesla's market share, operational efficiency, profitability, customer relations, and brand awareness. The strategy section outlines a differentiation strategy aligned with an Ansoff matrix market development approach, emphasizing a Greenfield investment market entry strategy and a value-based pricing model. Tactics include product selection (Model S, X, Y, and 3), inelastic and skimming pricing, and both online and in-store distribution. The action plan details implementation steps via a Gantt chart, while the control section proposes using company records, third-party reports, and market surveys to monitor performance against objectives. The conclusion highlights the increasing demand for electric vehicles in Bulgaria and supportive government policies.

Principles and Practices of
Marketing-PPM

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Situational Analysis.....................................................................................................................4
Objectives....................................................................................................................................6
Task 2...............................................................................................................................................6
Strategy........................................................................................................................................6
Tactics..........................................................................................................................................7
Action...........................................................................................................................................9
Control.......................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
This study aims at identifying viability of introducing Tesla in Bulgaria. Tesla is
American electric vehicle and clean energy company. It was founded in 2003 by Elon Musk and
is headquartered at Palo Alto, California, United States. For this SOSTAC framework will be
applied for planning expansion of Tesla in Bulgaria.
Figure 1 SOSTAC MODEL
TASK 1
Situational Analysis
PEST framework of Bulgaria
Political Factor- In Bulgaria there is parliamentary republic system in which people have right
over government and ministry. President represent state and have 5 year term and prime minister
lead the council of Ministers heading various agencies by members of ruling party (Mihailova,
2020). This means that political environment in Bulgaria is moderately stable which does not
cause much difficulty for Tesla to enter Bulgaria.
Economical Factor- GDP growth of Bulgaria was 3.1% in 2018 and 3.4% in 2019 and this have
reduced to -6.2% in 2020. Reduction in GDP growth is because of unpredictable circumstances
in country. Bulgaria is free market in which private sector is large and public sector is small.
Other than this, Bulgaria is upper-middle-income country. Bulgaria is also a country where there

is availability of skilled workforce in country. These reasons suggest that there are both positive
as well as negative elements when Tesla enters Bulgaria.
Social Factor- Bulgaria is culturally rich country in which culture is very important part of life
of people in Bulgaria and among these, majority of people in Bulgaria belongs to Christian
Orthodox culture. This means that when Tesla enters into Bulgaria, they are required to consider
that it does not function in opposition to culture and cultural values of Bulgaria. In addition to
this, functioning in relation with Bulgarian culture can also improve possibility of its success.
Technological Factor- In terms of technology, Bulgaria is continuously working towards
technological development. Bulgaria has high skilled workforce and companies are working
towards improving technology.
Hofstede model for Bulgaria and comparison with UK
Figure 2 Hofstede Model
Above figure outlines difference in dimensions in UK and Bulgaria. In UK there is low
power distance whereas it is high in Bulgaria, individualism in UK is high and is low in
Bulgaria, there is less uncertainty avoidance in UK and in Bulgaria, there is high uncertainty
avoidance and in terms of indulgence, there is very less indulgence in Bulgaria.

This means that in order to be successful in Bulgaria there are several elements that Tesla
needs to consider (COUNTRY COMPARISON, 2021). Such as decisions of individuals is
Bulgaria are likely to get affected by opinion of others because of collectivism and high risk
avoidance require that products are very safe and are of high quality.
Objectives
 To gain 10% market share in Bulgaria by 2022
 To develop operational efficiency within Tesla Bulgaria and ensuring half of the
workforce is local Bulgarian workforce by 2022
 To achieve break-even point for Tesla Bulgaria by 2021
 To develop strong customer relations team for Tesla Bulgaria by 2021
 To create strong 80% awareness about Tesla in Bulgaria by 2022
Task 2
Strategy
In terms of Porter’s generic strategies that are-
Cost leadership, Differentiation, Cost focus and Differentiation focus, Tesla will adopt
Differentiation strategy.
Differentiation Strategy- This strategy is one in which business aims to provide high quality
differentiated products. Differentiation includes additional features and exceptional quality of
product. Considering this strategy requires Tesla to maintain highest standards of quality, this is
a strategy that enables company to charge premium prices (Islami, Mustafa and Latkovikj, 2020).
Bulgaria is high middle income country and this is why premium price along with high quality
would be appropriate strategy for Tesla in Bulgaria.
Concerned with Ansoff Matrix strategy, introduction of Tesla in Bulgaria is Market
Development Strategy. In this company is offering its existing products in new market and
customers.

Market entry strategy for Tesla is Greenfield Investment in which Tesla requires to nature
investments and starts its manufacturing facility (Zhou and et.al., 2021). The reason behind
appropriateness of this strategy is that, Tesla will be able to have maximum control over its
operations in Bulgaria through this strategy. Along with this, Tesla will also be able to use
resources available at Bulgaria such as technology and manpower.
Pricing strategy to be used by Tesla in Bulgaria is Value-based price strategy. In this on
the basis of perceived value by customers and consumers, Tesla determine price of its products
in case of Tesla on the basis of quality perceived value is high and this lead company to
determine high prices for cars.
Positioning strategy for Tesla is Benefit Positioning, this is because Tesla offers electric
vehicles and there are several benefits associated with using electric vehicles and this is why
benefit positioning is appropriate (Iyer and et.al., 2019).
Tactics
Product- In terms of lifecycle of product, its products and electric vehicles are in stage of
growth. This is because demand of products of Tesla is increasing. In Bulgaria Tesla can offer its
Model S, this is because it is one of the best model and product of Tesla. This model can be a
product in Star category of Boston matrix for Tesla. Other than this, Model X, Model Y and
Model 3 can be offered by Tesla in Bulgaria.
Price- Inelastic price will be considered for products of Tesla in Bulgaria and along with this
price strategy of Tesla will remain skimming pricing (Soltani-Fesaghandis and Pooya, 2018).
This means that initially prices of products will be slightly high to communicate high quality of
product and later this will be reduced to attract customers. This will be used for promotion of
Tesla in Bulgaria.
Place- Tesla will offer both online as well as in-store so that customers can buy products of
Tesla as per their convenience.
Standardisation Adaptation Glocalization
Product Product of Tesla will be
standardisation because
Tesla’s products have a

very good image in terms
of quality and this is why
standardisation in
Bulgaria will enable it to
gain advantage of its
existing image quality.
Price
Price strategy in
Bulgaria will be
glocalized because
price strategy remains
same for global market
(Thabit and Raewf,
2018). However, this
will be adapted
according to changes in
cost of manufacturing
in Bulgaria.
Place
Place strategy adopted by
Tesla for Bulgaria is both
online and offline place
strategy, however
emphasis will be placed
on online place and
distribution, because in
Bulgaria online shopping
is preferred and internet is
widely used.

Action
Following Gantt Chart about how strategy for expansion of Tesla in Bulgaria will be
implemented and this involve planning for strategy and department that will lead strategic
actions (Nurre and Weir, 2017).
Activity Leading
department
4/2021 5/2021 6/2021 7/2021 8/2021 9/2021 10/2021 11/2021
Analysis of
environment
of countries
Marketing
department
Determination
of country for
expansion
Marketing
department
Determination
of method for
expansion
Marketing
department
Developing
goals and
objectives
Marketing
department
Planning for expansion
Preliminary
visit to
country
Marketing
department
with top
management
executives
Collecting
and
organising
resources
Finance,
HR, IT and
marketing
department

Hiring local
people
HR
department
Undertaking
and
completing
regulatory
requirements
Department
for legal
compliance
Preparing for
launch in
Bulgaria
Marketing
and
international
operations
department
Introducing
product in
Bulgaria
Marketing
and
international
operations
department
Control
In order to control performance of Tesla in Bulgaria and measure performance against set
objectives, data can be gathered from different sources and these sources are-
Company Records- On the basis of company records of sales and market performance,
performance of company against set objectives can be measured. This means that to measure
operational efficiency company records and performance of Tesla in terms of achieving
operational objectives can be determined. Other than this, company records for financial
performance of Tesla in Bulgaria can also be used for measuring performance of Tesla against its
objectives.
Third party report- There are certain agencies who undertake research and prepare reports
about performance of different companies in market (Al Shobaki and et.al., 2018). These reports

can be used by Tesla to measure its performance against set objectives. Such as market share of
Tesla, awareness of Tesla are certain elements and areas of objectives that Tesla can determine
from these third party reports.
Market Survey- This is also one of the ways to get data to measure performance of company
against set objectives. Market survey by Tesla will help company in identifying extent to which
it has been able to achieve its objective of increasing customer awareness. In there are different
types of survey methods that Tesla can adopt for the purpose of identifying its consumer
awareness.
CONCLUSION
On the basis of discussion, it can be said that there are several reasons because of which
Bulgaria and determination of Bulgaria have been done on the basis of several elements. In terms
of market size and electric cars in Bulgaria there were around 1100 electric cars in 2020 in
Bulgaria and this is a very fast growth because in 2018 there were only 194 EV were there in
Bulgaria. This suggests increasing demand of Electric vehicles and concerned with support from
government, there are no grants provided but road tax does not apply on EV and also parking in
central urban parking zone is free of charge. Other than this, higher middle income of citizens
make product affordable for them.

REFERENCES
Books and Journals
Al Shobaki, M.J and et.al., 2018. The Role of Measuring and Evaluating Performance in
Achieving Control Objectives-Case Study of" Islamic University".
Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). pp.1-15.
Iyer, P and et.al., 2019. Market orientation, positioning strategy and brand
performance. Industrial Marketing Management. 81. pp.16-29.
Mihailova, M., 2020. The state of agriculture in Bulgaria–PESTLE analysis. Bulgarian Journal
of Agricultural Science. 26(5). pp.935-943.
Nurre, S.G. and Weir, J.D., 2017. Interactive Excel-based Gantt chart schedule
builder. INFORMS Transactions on Education. 17(2). pp.49-57.
Soltani-Fesaghandis, G. and Pooya, A., 2018. Design of an artificial intelligence system for
predicting success of new product development and selecting proper market-product
strategy in the food industry. International Food and Agribusiness Management
Review. 21(1030-2019-593). pp.847-864.
Thabit, T. and Raewf, M., 2018. The evaluation of marketing mix elements: A case
study. International Journal of Social Sciences & Educational Studies. 4(4).
Zhou, K and et.al., 2021. The Economic Policy Uncertainty and the Choice of Entry Mode of
Outward Foreign Direct Investment: Cross-border M&A or Greenfield
Investment. Journal of Asian Economics. p.101306.
Online
COUNTRY COMPARISON. 2021. [Online]. Available Through: < https://www.hofstede-
insights.com/country-comparison/bulgaria,the-uk/>.