Tesla Inc Strategic Marketing: Sustainable Advantage and Future

This report provides a comprehensive analysis of Tesla Inc.'s strategic marketing approach, focusing on its sustainable competitive advantages, resource allocation, and marketing plan. It highlights Tesla's commitment to sustainable growth and disruptive innovations in the electric vehicle and energy sectors. The report examines how Tesla's strategies align with its target market of environmentalists and tech-savvy consumers, and it assesses the company's resource allocation in research and development. Furthermore, the report identifies future challenges and potential solutions for Tesla, emphasizing the importance of innovation in both product development and business processes. The analysis draws upon Porter's generic framework to categorize Tesla's competitive strategy as differentiation focus, and the report concludes by summarizing the key factors contributing to Tesla's success and its ongoing efforts to drive sustainable transportation and energy solutions.

Running head: STRATEGIC MARKETING
Strategic Marketing: Tesla Inc
Name of the Student
Name of the University
Author’s note

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Executive summary
The purpose of the assignment is to understand the strategies and policies devised by Tesla Inc.
Tesla is an organisation that is established with a view of providing a fuel efficient and energy
efficient solution to the society. There are three sections to the assignment: firstly, sustainable
competitive advantage strategies that are taken by the company, analysis of the resources and
capabilities of the company and the marketing plan that the company employees in order to reach
out and gather the attention of the target market. It is observed form the analysis that innovation
plays an important role in the business model of the company. However, the company just
focuses on the innovation and development of products. In order to combat the challenges the
company has to invest in the innovation of the process of business as well.

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Table of Contents
Introduction......................................................................................................................................3
PART 1: Sustainable Competitive Advantage.................................................................................4
Innovations of Tesla....................................................................................................................7
Offensive and defensive strategy...............................................................................................13
PART 2: Resource analysis/allocation..........................................................................................15
Resources Allocation for the strategies.....................................................................................15
Most Critical Resources.............................................................................................................18
Marketing assets........................................................................................................................20
PART 3: Strategic marketing plan.................................................................................................22
Success factor of Tesla..............................................................................................................22
Future challenges and solutions.................................................................................................24
Conclusion.....................................................................................................................................25
Reference List................................................................................................................................26

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Introduction
The organization that has been selected to conduct the study is Tesla Inc. The company is
headed by the dynamic leader Elon Musk as the CEO of the company (Rains, 2018). The focus
of the company as pointed out in Assignment 1 is to accelerate and power the world by the use of
eco-friendly and sustainable energy. Over the years of operation the company has faced a
number of ups and downs however; with strategic planning and organisation of the policies
according to the business environments the company has successfully established itself in the
market. With some of the ground breaking achievements in innovation Tesla Inc is making some
ground breaking development in the mobility and energy industry (Tesla.com, 2018).
The company has been focusing on the issue of increasing price of oil and thus
developing electric cars and marketing it in the mainstream market. This has enabled the
company to gather the attention of the target market on an international scale (Tesla.com, 2018).
The main competition of the company is are Ford motor company and Honda Motors Company.
From assignment it can be summarized that the factors that add to the success of the company
are the innovation in technology, correct timing and having dedicated and experienced team.
Tesla has two customers segments: environmentalists and people who are looking for investing
in technology that will help them save money in the future, therefore the income group is in
between medium and upper medium.
This report will focus on three parts: Sustainable Competitive Advantage strategies that
are taken by the company, analysis of the resources and capabilities of the company and the
marketing plan that the company employees in order to reach out and gather the attention of the
target market.

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PART 1: Sustainable Competitive Advantage
Schilke (2014), state that competitive advantage is the strategy that an organisation
employees in order to gain an edge over the other players in the market. The management of the
company analyses the micro and macro environmental factors in order to determine the strategies
which will make the company stand out from the rest of the competition in the market (Saeidi,
Sofian, Saeidi, Saeidi & Saaeidi, 2015). Sustainable competitive advantage is the long term
strategies that will help the company maintain the position at the top of the market (Liu, 2013).
The first competitive advantage that the company has over the other players in
the market is that the company focuses in sustainable growth and development and in doing so
the strategy is to concentrate on developing products and services which serve as a solution to
some of the major environmental issues that the world is facing in today’s time (Sperling, 2018).
The company is a forerunner in the renewable energy department. This strategy adds to the value
and supports the mission to accelerate and power the world by the use of eco-friendly and
sustainable energy. This is in sync with target market of the company as well. It has been
established in assignment 1 that one of the target market of the company are environmentalists,
thus it is appropriate for the company to invest in technology and research for sustainable future.
The strategy of sustainability of Tesla Inc goes beyond automobile, rather the recently release
corporate strategy of the company indicate towards additional business ventures (Tesla.com,
2018). The CEO has announced to come up with a pickup truck, battery-SUV, an electric semi-
truck and commercial battery bus. Furthermore the focus will also be on sharing of vehicles and
will also merge with solar panel maker SolarCity in order to broaden the sustainability horizon
(Eisenstein, 2016). Tesla is an organisation that is focused on the big picture with the visionary
leadership of Elon Musk the company concentrates on long term objectives as that is what is

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required to ensure that the company is true to its value of sustainability. There are two main
environmental factors that the company is focusing the strategies upon, these are: the change to a
carbon neutral economy and the urgent need for a new sustainable business model for the
transportation industry based on zero emissions (Tesla.com, 2018).
The second competitive strategy of the company is to invest in research and development
and to come up with disruptive innovations. Innovation is the process of developing an idea, an
innovation is called disruptive when the idea is one of a kind in the market and challenges the
similar services already existing (Christensen, Raynor & McDonald, 2015). With the help of
disruptive innovations the company is not only capturing the attention of the target market but is
also attracting the media and the press (Nagy, Schuessler & Dubinsky, 2016). The breakthrough
innovations that are incorporated by Tesla are a threat to some of the most established
organisations in the industry (Sperling, 2018). With their mainstream electric car the company
has gathered a lot of goodwill and reputation among the stakeholders (Sperling, 2018).
Following are some of the disruptive strategies that the company has been incorporating the
business:
 The game changer for the transportation and automobile industry is the Tesla EV; the
electric cars have efficient batteries that enable the customers a longer driving range
which is a cost advantage in energy storage density, and lower cost per mile transport and
vehicle ownership.
 The battery efficiency of the EV is one of the performance benchmarks and energy
storage markets (Tesla.com, 2018).
 The company is investing in new technologies in the DER Distributed Energy Resources
market GridLogic system is crucial to expand utility Distributed Energy Resource market

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this helps in integrating energy storage with energy generation. This includes solar and
wind energy with electric grid intelligence and equipment control (Tesla.com, 2018).
Thus, it can be said that the company has its competitive advantage aligned with the target
market that has been indicated as well as increase the value of the organisation among the
stakeholders.
With the help of Porter’s generic framework the strategies that the company has undertaken
can be analyzed. Michel porter has explained three strategies with which a company can ensure
competitive advantage (Tansey, Spillane & Meng, 2014). The strategies that Porter has described
are: cost leadership, differentiation and focus; and by examining the two competitive advantages
of Tesla it can be said that the company has undertaken the strategy of differentiation focus
(Tanwar, 2013).

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Cost
Leadership
Cost Focus Differentiation
Focus
Differentiation
Broad Narrow
Scope
Figure: Porter’s Generic Strategy, Source of competitive advantage
Source: (Tanwar, 2013)
The strategies of Tesla are focused on a particular market and the company has developed
the products based on the understanding of the dynamics of that market (Tanwar, 2013). By
recognizing the needs and trends among the customers Tesla has successfully developed a
technologically advanced products and services for the market. Furthermore, the company has
also successfully aligned the objective of the business with the requirements of the target market.
Innovations of Tesla
Innovation plays an important role in the competitive advantage of the company as the
Electric car technology innovations and the energy technologies developed by the company are
the ones which set the products and the services of the company aside. The establishment of the

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company was on the basis of innovating on the idea of making electric car not only a concept but
a fun and mainstream vehicle (Urbancova, 2013). Being energy efficient is one of the major
objectives of the company and in order to do so a large part of investment is focused on
innovation as most of the companies are focusing on profitability by providing the customers
with what they want. However, Tesla is a company that makes the customer realize the future of
transportation and the responsibility the company has towards the environment and society
(Hardman, Shiu & Steinberger-Wilckens, 2015). The company does not have a large number car
models rather they focus on the improving and developing the models that are existing. There are
four cars models: MODEL S, MODEL X, MODEL 3 and ROADSTER (Tesla.com, 2018).
Apart from the vehicles being eco-friendly and running on electricity, there are also other
advance technologies used to serve a number of purposes. One of the major aspects that a
customer looks forward to while buying an automobile is security. Model S and Model X of
Tesla are claimed by the company to be the safest car; Model S is a sedan whereas Model X is an
SUV and is the safest car in the category. Model S has received the highest safety rating of any
car ever tested. Side collision warning and emergency braking are some of the innovation that is
installed in the security system. Front and side impact protection along with lowest rollover risks
are some of the added advantage of the car.

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Safety innovation is taken to another level with the Model 3 car where the body is built
combination of aluminum and steel, for maximum strength. The glass roof of the car has been
tested positive with a mass which is four times its own. Furthermore all the above stated features
are also present in this model. The Model 3 is marketed by the company as a low-priced, high-
volume electric car.
Tesla Roadster is said to be the quickest car in the world with the record of 0-60 mph in 1.9 sec.
Base Specs
Acceleration 0-60 mph 1.9 sec
Acceleration 0-100 mph 4.2 sec
Acceleration 1/4 mile 8.8 sec
Top Speed Over 250 mph
Wheel Torque 10,000 Nm
Mile Range 620 Miles
Seating 4
Drive All-Wheel Drive
Base Price $200,000
Base Reservation $50,000
Founders Series Price $250,000
Founders Series Reservation
(1,000 reservations available)
$250,000
Figure: Base Specs of Roadster

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(Source: Tesla.com/roadster, 2018)
Roadster is marketed by the company as an all-electric supercar; the company is segmented
in the sport car genre ensuring a breakthrough innovation by its all around performance
efficiency. The car maximizes the potential of aerodynamic engineering—with record-setting
performance and efficiency the car has a highway range of 620 miles which is again a record for
any electric car. According to the CEO of the company the idea of building the new roadster is to
leave the idea of gasoline cars behind. The car is packed with features which are technological
innovations like the battery pack of 200 kWh and 3 motors combination. The company unveiled
the car on November 2017 and is set to be available in the market in 2020 (Tesla.com/roadster,
2018).
Tesla Semi is claimed by the company to be the safest and the most comfortable truck. The
truck features four independent motors which provide maximum power and acceleration. From
the design of the vehicle to the fact that it has the lowest energy cost, Semi is another ground
breaking innovation in the pickup truck segment. This would be one of a kind vehicle that runs
on battery (Nykvist & Nilsson, 2015).
Base Specs
Acceleration 0-60 mph with 80k lb 20 sec
Speed up a 5% Grade 60 mph
Mile Range 300 or 500 miles
Powertrain 4 Independent Motors on Rear Axles
Energy Consumption Less than 2 kWh per mile
Fuel Savings $200,000+

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Expected Base Price
(300 mile range)
$150,000
Expected Base Price
(500 mile range)
$180,000
Base Reservation $20,000
Expected Founders Series Price $20 0,000
Founders Series Reservation $200,000
Figure: Specification of Tesla Semi
(Source: Tesla.com/semi, 2018)
Tesla with the technological innovation in the electric car category has made some of the
prominent automobile industry change their perspective and their competitive advantage
strategy. Tesla is focusing on pioneering in the technology of energy efficiency in automobiles,
the company has also improved and developed the solar conservation technology in household
(Meihami & Meihami, 2014). Tesla is a company that allows the employees to have a creative
space in order to come up with ideas and innovations which make the company stand out from
the rest. The leaders of the organisation agree that the employees are the back bone of the
success of the company.
Offensive and defensive strategy
Competitive advantage strategy can be divided in to two segments offensive and
defensive. The strategy is said to be offensive when it is directly targeted to the competitors in