Tesla's Marketing Strategy: SWOT, STP, and Market Analysis

This report provides a comprehensive marketing strategy analysis of Tesla Inc., focusing on its operations in the UK market. It begins with an executive summary and an introduction to marketing strategy. The report delves into a situation analysis, utilizing PESTLE and SWOT frameworks to assess the external and internal environments, including the impact of Brexit on Tesla's business. The report further examines Tesla's competitive advantages and evaluates its current marketing strategies. The second part of the report focuses on market segmentation, targeting, and positioning (STP), along with setting goals and objectives. It concludes with recommendations on the marketing mix and a conclusion summarizing the key findings and insights. The analysis covers various aspects, from political and economic factors to social, technological, environmental, and legal considerations, providing a detailed understanding of Tesla's market position and strategic recommendations.

MARKETING
STRATEGY

TABLE OF CONTENTS
Executive Summary.....................................................................................................................3
INTRODUCTION...........................................................................................................................4
PART 1............................................................................................................................................4
Situation Analysis........................................................................................................................4
Threats of Brexit on business operations of Tesla (Swot Analysis)............................................7
Analysis competitive advantage..................................................................................................8
Evaluation of current marketing strategy..................................................................................10
PART 2..........................................................................................................................................12
Market segmentation, targeting and positioning.......................................................................12
Goals and Objectives.................................................................................................................13
Recommendation on Marketing Mix.........................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Executive Summary
This report would frame various marketing strategies which company can apply to fulfil
all it’s different goals and objectives. SMART objectives also would be projected to support
different market strategies. Pestle analysis model would use in respect of analysing internal and
external business environment of the company. It would also contain current marketing strategies
of the business, has applied STP tactics to target specific audience in respect of proposed
product.

INTRODUCTION
Marketing Strategy refers a game plan of business with strategic goal of gaining a
sustainable competitive advantage by understanding requirements and needs of customers(Key
and Czaplewski, 2017). Marketing managers plays significant role in this scenario such as
initially they conduct market research to understand users’ needs and expectations for the
products as well as analyse competitors’ actions in the market. then marketing professionals
develops strategies so that company enables to gain it’s framed goal within timeframe. To
understand role of market strategy has an example of Tesla Inc. It is an American electric vehicle
and clean energy company which is headquartered in Palo Alto, California, US. In this report
will discuss over marketing audit of internal and external environment of Tesla Inc. Furthermore,
it will provide understanding about competitive positioning of Tesla Inc. in it’s market through
STP framework and competitors analysis.
PART 1
Situation Analysis
Situation analysis is the systematic approach of accessing current situation of the business
in which it operates. Tesla is a US-based electric vehicle company which offers it’s car product
services worldwide. It has wide product line i.e. electric vehicles, Tesla batteries, solar panels
and roofs. It has ranked as world’s best selling and batter electric car manufacture of 2019. Pestle
analysis is the best strategic analytical tool in order to analyse external environment of business.
Tesla Inc. conducts situational analysis in its business to examine external business environment
through analytical model. There is a reason to conduct situational analysis such as company has
goal to launch new electrical vehicle in the UK’s market so this framework will support to
understand impact of external forces on company’s decision-making process.
Pestle Analysis
Pestle analysis is a strategic analytical frame work that directly impacts on business
operations. It comprises various external forces i.e. political, economic, socio-cultural,
technological, legal and environmental factors which directly impacts on Tesla’s business

activities, productivity and decision-making process (Kennedy, Kemper and Parsons, 2018). This
pestle analysis helps in situational analysis of Tesla Inc. by identifying negative and positive
impact of different external forces like demographical changes, emerging technology and others.
External forces are mentioned below:
Political factors
Political factor plays significant role in business success because it directly impacts on it’s
business operation, performance and productivity. From past few years automobile sector has
considered one of the major sectors in the country’s economy. So, Brexit has taken stance to
increase the development of electric and hybrid engines cars and UK’s government qualify
specific tax credits for purchasing electrical vehicles. Such change has led huge loss for
automobile sector because most of the automobile companies sells gasoline cars. But Tesla has
achieved financial benefits from Brexit’s regulation because it manufactures both type vehicles
i.e. electrical and gas cars so it does not have to face financial loss like others (Gürel and Tat,
2017). However, company has faced difficulties due to Brexit such as company can sell its
product and services in multiple countries but they have to pay extra tax if they buy raw material
from nearby countries. Thus, operational cost of the electric cars has increased that ultimately
increase selling costs of vehicle. That’s why Tesla Inc. unable to generate profit margin on its
electrical vehicles.
Economic factors
It is another external business force that impacts on business operations of Tesla. This
factor comprises various element i.e. currency exchange rate, unemployment rate, growth rate of
automobile sector in UK, disposable income of people and other economical aspects. Brexit has
led various change in political policy, inflation trade policy etc. due to this unemployment rate
has increased too much. This factor gives positive impact on organization’s performance. The
reason behind is that Tesla gets large number of skilled employees as suppliers who willing to
work at lower wages. Thus, company enables to gain high quality raw material at lower cost
which directly reduces operational cost of final products as resulted gains financial benefits.
Inflation is also considered economical factor that increases selling capacity of the potential
customers of the Tesla Inc. but inflation decreases buying behaviour of users that directly impact

on sales of business. Currently, Tesla faces more difficulties due to pandemic because
government all across global have imposed rule of social distancing which impact on supply
chain of the company negatively. Even people also avoid to go out from their houses that
decreases demand of Tesla’s vehicles.
Social factor:
Demographical changes are considered one of the major social factor that also impact on
company’s operation. In last few years lots of UK’s people has become highly updated for the
eco-friendly products and services. In other word, increasing trends of low carbon emission
vehicles or carbon free vehicles like hybrid car and electric cars in customers because these are
cost-effective rather than traditional cars in respect of maintenance and running cost. While Tesla
Inc. gets positive impact from the social factor because it manufactures environmentally
sustainable vehicles (Kingsnorth, 2019). So, it has enabled to increase buying behaviour in UK’s
customers and generate high profit margin on it’s electrical vehicle products.
Technological factor
Technological factor is one of the major elements of pestle analysis that directly impact
on the product development activities of Tesla Inc. It has deal with a strategic involvement of all
technological advancement in United Kingdom. It also puts high funds on R&D department in
order to improve technology of the business for it’s activities. Government all around the world
has invested and supported technological development and advancement which has further
assisted the Tesla Inc. in developing and advancing existing technology of the firm (Phadermrod,
Crowder and Wills, 2019). However, this factor has given negative impact on economical scale
of Tesla such as it constantly adapts new emerging technology in its firm to fulfil needs of new
trend customers. In addition, constant adaption of new technologies puts high pressure on staff as
well because they have to learn new technology again and again.
Environmental factor
It is another essential factor of the business environment that influences sales of the
company in it’s sector. For example, in recent period UK’s people has become highly updated
about use of eco-friendly products. people seek towards electrical cars and buy them earlier that

has created huge scope for the Tesla Inc to increase its business growth in UK. Even government
has imposed rule of producing eco-friendly products in order to decline environmental issues.
Tesla has engaged in corporate social responsibility (CSR) operation in UK through which HR
department and operation management enabled to take sustainable practice in daily operations.
This initiative has drastically stimulated business operations of the firm.
Legal factor
This factor involves various laws and legislation that are applicable over the Tesla Inc.
Laws i.e. data protection, equality act, wages act, licensing act and other legislations are
appropriate over firm (PESTLE Analysis of Tesla Inc.: The growth of the eco-friendly electric
car, 2019). Tesla Inc. comply will all imposed rules and legislation in order to conduct different
business operations into multiple countries. Legal factor is key business environment factor that
is essential for the Tesla inc. to utilize the legal factor well in the favour of the business activities
of firm.
From the above discussion over external forces can be analysed that all key forces of
pestle analysis increase business operations of Tesla Inc in effective manner.
Threats of Brexit on business operations of Tesla (Swot Analysis)
Swot analysis is a strategic planning tool that uses to determine internal and external factors,
impacts that impacts on functioning of business (Vallati and Grassi, 2019). Strengths and
weaknesses are internal factors while threats and opportunity are the external factors. This model
is used for the Tesla Inc. in order to determine threats of Brexit on it’s business operations.
Strengths
 Tesla Inc. has strong global presence in the automobile sector due to its sustainable eco-
friendly vehicle products. It has high supports from the government all cross global
because it manufactures carbon free vehicles without harming environment.
 However, Tesla has gained various benefits from environmental concern policies which
have formulated by Brexit and imposed by UK’s government to reduce pollution from
the country. As resulted, it enabled to increase awareness in people about benefits of
electric vehicles.

Weaknesses
 Tesla Inc. designs and manufactures sustainable vehicles that are essential for the
environment in respect of pollution free angle.
 Vehicle manufacturing plant of the Tesla is located only in California wherein it has
capacity to manufacture around 500,000 vehicles which highlights that production is too
limited. Due to this company unable to target high volume of customers for the particular
product segment. Another is that Tesla operates in multiple countries across the world so
it has to pay high tax while supplying final products to different countries that directly
impact on organization’s financial performance. It is one of the major threat for the Tesla
Inc.
Opportunities
 Tesla has in house battery production technology that supports company in improving
manufacturing rate and decline production costs.
 As it manufactures eco-friendly sustainability vehicles so, government all across global
offers company different facilities like incentives on buying electric cars etc. to do so.
Threats
 The major threat for the Tesla is to high level of competition from both type vehicles i.e.
fuel vehicle and automated-driving technology that are offered by Toyota, Ford etc.
 Brexit is also one of the key threats for the firm because it has brough various changes in
UK such as variation in disposable income, political changes, economic stability and
others. These factors restrict buying behaviour of customers that negatively impact over
sales of business.
 Most of the time, this product segment is unattractive for the young generation because
they like to drive fuel-driven sport vehicles due to their unique features.
Analysis competitive advantage
Tesla has been established strong global presence in it’s market for it’s innovation and
technology development. It is considered one of the most competent competitors in it’s sector
due to several reasons such as bargaining power of customers is moderate in UK’s market

because sustainable product segment is rarely available in the market (Hoelzlhammer, 2018). this
force decreases switching costs of the product which is beneficial opportunity for the Tesla Inc.
The reason behind is that low switching cost and high-quality product segment supports
company to build large customer base that automatically reduces bargaining power of the
customer. Threat of substitutes is too high in the automobile sector because lots of giant
automobile companies like Ford, Toyota etc. have invested high capital on R&D department to
lead advancement in existing vehicles instead of launching similar cars (Tesla, Inc. Porter Five
Forces Analysis, 2018). In this state, Tesla Inc can get negative impact on it’s selling revenue
through it’s competitors. Management of Tesla has always concentrated over innovation in
product development operations. Electrical vehicles are the key segment of the Tesla that can be
framed as the USP for the firm and it’s brand leverage in electric product segment.
Threat of new entrants is too low in the domestic market because there are giant
automobile companies like Ford, Toyota etc. already have captured large market share over it’s
existing product segments in the UK’s market. Even Tesla Inc. manufactures futurists electric
vehicles and sells them across the world. So, there is no chance of entering any new entrants. It
usage strategy to increase growth of it’s product segment such as customers can add to cart on
company’s software application through internet. It is considered another USP that works for the
business. With this strategy company attracts wide number of customers across the world
(Kanten and Darma, 2017). Low availability of potential suppliers in the UK’s market has
increased bargaining power of suppliers because company requires such suppliers in it’s business
who can provide raw material at lower cost with standard quality. So, Tesla Inc. unable to gain
profit margin on it’s final product because it has to pay high cost to the supplier. Tesla has to
face tough competition in its sector because there are some potential competitors like Toyota,
Ford etc. operates in similar sector and sells highly advanced automated-driven vehicles. Due to
this, young generation often attract to buy fuel-based cars instead of electrical vehicles of Tesla
Inc. Tesla usage numerous marketing and promotional channels to increase awareness in people
about it’s futurist product segment. In addition, it runs marketing campaign over different digital
platforms like Amazon Prime, Snapchat, YouTube etc. this tactic helps company in achieving
competitive advantage and put pressure on existing competitors. These strategies apply by
company that has also become USP for the Tesla. Management of the Tesla Inc. has priorities
comfort in innovation that has assisted company in designing and manufacturing luxury modern

cars which have established highly reputable brand image in front of customers. Thus, different
strategies help company to build large customer base and influence leverage of brand in global
market.
Evaluation of current marketing strategy
There is various marketing strategy of Tesla Inc. that can be analysed and evaluated with
the help of marketing mix elements.
Product
Tesla is worldwide famous for its electric automobile segment and it deals with different
product segments like batteries, solar panels, electric vehicles and roofs. All products posses’
high quality that can help in improving best user’s experience (Gafarov, 2019). Tesla Inc. has
ranked as world’s best-selling plug in and battery electric passenger car manufacturer because it
has captured 17% market share over plug in segment and 23% market share has achieved over
electric car segment. It denotes that company has achieved huge success and growth globally in
short span time.
Price
It is another element of marketing mix that plays significant role in product selling. Tesla
sells different products at the best price as much as possible. Competitive pricing strategy has
followed by company to sell its different product segments as resulted it enables to receive high
competitive advantage from its existing competitors. The reason behind is that young generation
has become highly concern for the environmental issue so they also prefer to buy eco-friendly
products. However, eco-friendly electrical vehicles are quite expensive as compared fuel-driven
vehicle but after that customers are willing to pay extra cost to the company. Just because of this,
Tesla has enabled to captured large market share on it’s product segment in 2019.
Place:
It runs it’s business into multiple countries across the world so it has become global brand in its
sector. Global expansion of business permits organization to meet different needs and
expectation of global customers effectively. Distribution strategy has followed by Tesla Inc. to
keep optimum product segment availability in each subsidiary across the world.

Promotion:
It uses different marketing channels i.e. social media, digital platform, radio, television
and other promotional channels in order to promote Tesla’s products. Promotional mix strategy
is the key reason behind the advanced success of company in such minimum time. It highlights
all the specifications and attractive features in different promotional campaigns which has
supported company to build trust of customers on it’ brand and product.
People
This element is one of the most essential elements in the marketing mix because it helps
company to gain its framed objectives and leads success in business. Upper-Middle economic
class and potential customers across the world are the targeted customers of the company. Tesla
runs its business into multiple countries around the world which highlights that potential
customers are spread all over the world. That’s why company has generated high profit margin
on it’s product segment.
Physical evidence
Physical evidence is another attracting factor of the marketing mix that also plays crucial role in
attracting customers. For example, Tesla Inc. always focuses on it’s product segment quality and
design which automatically attracts customers to visit showroom and buy electric cars. Physical
evidence is not primary but important because it attracts potential customers all across the global
towards buying electrical vehicles.
Process
Tesla follows various processes in different operations like production, marketing,
selling, customer reviews and many other functional activities associated with business. This
process element allows organization to gain high success over it’s product segment and key
functional activities.

PART 2
Market segmentation, targeting and positioning
Tesla has goal to gain sales growth up to 35% over new electric vehicle i.e. Cybertrucks.
Marketing team at Tesla Inc. implements segmentation, targeting and positioning process of the
for channelizing the promotion of the business.
Segmentation
Behavioural segment is targeted by Tesla company through marketing segmentation
strategy for its marketing campaign. Behavioural segment process uses to classify customers
based on their attitude, spending behaviour, preferences and others (Olson and et.al., 2018).
There is a major reason to select this market segment such as these targeted segments customer
like to buy such vehicles which improves their society status and gives them new experience
while driving. To get such high-quality vehicles with advanced technology features, customers
are ready to pay extra. That’s why, company targets this behavioural market segment for the
particular product segment.
Targeting
It adapts niche marketing strategy for it’s all promotional and marketing functions. As the
proposed product segment i.e. Cybertrucks offers by company which are affiliated with high cost
so, Tesla requires to target only specific customers who can potentially afford proposed product
segment. Company targets high disposable income customers such as car racers so that it can
generate high profit margin over it’s specified product segment.
Positioning
Tesla already has established strong global presence in the automobile sector due to it’s
high quality with environmentally sustainable vehicles. So, it become easy for the company to
gain trust of targeted audience over its brand (Perera, 2017). With good brand image and
marketing campaign strategy company can easily attract targeted customers to buy it’s proposed
product segment effectively. However, Tesla Inc. has implemented product positioning strategy
to promote it’s product in global market and attracts targeted audience towards proposed product.