IBS210: Tesla Marketing Problem and Growth Strategies

This report examines the marketing challenges faced by Tesla, specifically regarding the Model 3. The analysis identifies market saturation in the US and pricing issues as key problems. The report explores potential solutions, including price adjustments and market expansion strategies. It evaluates the advantages and disadvantages of each approach, considering factors like product quality, financial implications, and the uncertainty of new markets. The report also references relevant literature and provides a framework for understanding Tesla's strategic options in a competitive international business environment.

TESLA MARKETTING PROBLEM
-A HINDRANCE TO THE COMPANY
GROWTH

TESLA
• The American company producing electric vehicle
• A prosperous company because of their high quality
products and the good marketing strategy
• partnership with Panasonic with the aim of being
the largest producer
• Challenge is their for finding market for Model 3
• Apparently the market of US has been saturated

ANALYSIS OF THE PROBLEM
• Tesla finding it hard for finding market of Model 3
• Over price is considered to be an issue
• The loss of trend in the high price variants has
exhausted
• The company has no proper answer about cutting
the price or having any new strategy

PROBLEMS ARISING
• low revenue
• uncertainty about future of the product
• slashing price may make compromise to quality
• new market is uncertain
• no more eligible for the “7,500 dollar federal tax
credit for electric vehicles
• thus, cannot afford to have a sudden price slash
• supply chain has been expanded still no positive
response from the present market.

SOLUTION
• Vote for price slash?
• Advantages:
• 1. can be made affordable in the present
market.
• 2. the uncertainty about profit in the new
market can be avoided.
• 3. can target new segments also in the
present market.
• Disadvantages:
• 1. slashing of price may lead to
compromise with product quality.
• 2. giving lease on the model will make the
financials of the company look worse.
• 3. if the company has to keep both quality
and reduced price high chances are that
they will end up with huge loss.
• vote for market move?
• Advantages:
• 1. high demand in these new markets is
good for the company.
• 2. though Tesla has ruled out the concept of
reservation in US and promotes direct sales,
such is not the case in China or Europe. This
may earn them benefit (Duong 2017.).
• 3. exploring new markets can increase their
revenue streams.
• Disadvantages:
• 1. the Giga factory in China is a great threat
for Tesla.
• 2. there is always an uncertainty in moving
the market focus (Strebel 2018).

REFERENCE LIST
• Andersen, M., Dauner, T., Lang, N. and Palme, T., 2017. What Automakers
Can Learn from the Tesla Phenomenon. BCG Perspectives. URL: https://www.
bcgperspectives. com/content/articles/automotive-what-automakers-can-
learnfrom-tesla-phenomenon/Accessed, 17(11).
• Duong, V., 2017. Baidu SEO: Challenges and Intricacies of Marketing in
China. John Wiley & Sons.
• Dzamic, L. and Kirby, J., 2018. The Definitive Guide to Strategic Content
Marketing: Perspectives, Issues, Challenges and Solutions. Kogan Page
Publishers.
• https://www.tesla.com/
• Strebel, E., 2018. Challenges ahead for attorneys as vehicle technology
develops. Wisconsin Law Journal.
• Wu, L. and Yang, W., 2017. Tackling supply chain challenges of tesla model 3.