Tesla's Strategies: Analysis, Success, and Recommendations Report

This report provides a comprehensive analysis of Tesla's current business strategies. It explores key strategies such as direct selling, service centers, the high-end market approach, charger network development, and financial service offerings. The report delves into the success and potential failures of these strategies, examining their impact on market share and customer satisfaction. Furthermore, the report offers recommendations for Tesla to enhance its market position and future growth, including a focus on research and development, product innovation, supply chain diversification, and expansion into foreign markets. The analysis is supported by references to relevant academic research and industry sources, providing a well-rounded perspective on Tesla's strategic initiatives.

Tesla

Tesla
Table of Contents
Background of the firm....................................................................................................................2
Current strategies considered by Tesla............................................................................................2
1. Direct selling strategy...........................................................................................................2
2. Service strategy.....................................................................................................................3
3. High end market strategy......................................................................................................3
4. Charger’s network strategy..................................................................................................3
5. Financial service strategy.....................................................................................................4
How this intent is success or fail.....................................................................................................4
Recommendation.............................................................................................................................5
References........................................................................................................................................6
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Background of the firm
Tesla is one of the largest American automotive industry and Energy Company. The company is
based in Palo Alto, California. It has been examined that company has specialization in electric
car manufacturing and also have its Solar City Subsidiary and sola panel manufacturing. The
CEO of the company was Elon Musk and there are different subsidiaries of the company such as
Tesla Factory and Solar city. The mission of the Tesla Company is to accelerate the world’s
transition to the sustainable energy. The mission statement of the company “is to accelerate the
overall transition of the world into the sustainable energy”. The company believes that the world
can stop to rely on the fossil fuels and will move towards a zero Emission future. In Tesla, there
are more than 45,000 employees in 2018 and the total equity is of US $4.923 Billion in 2018.
The company sold the Roadster model over 186,000 electric cars and also known as one off the
second largest selling manufacturer of the lug in electric cars in 2015 and 2016. Tesla has also
provided the network to its customers in relation to the high powered supercharges across North
America, Asia and Europe (Tesla, 2019).
Current strategies considered by Tesla
There are various different strategies that are considered by the company to sustain into the high
level of competitive market.
1. Direct selling strategy
One of the strategies considered by Tesla is direct sales. The company never focused on the
approach of adopting the franchise dealership but they are emphasizing on the personal selling.
The motive of the company is to sell the products directly to the customers through the self
owned showrooms that are located in the different urban centers across the world (Musonera and
Cagle, 2019). The company believes that the technique of selling can be one of the effective
strategies as it can help in developing the sales of the products. The company strategizes to open
different showrooms so that it could be easy to maintain the customer base. Although, Tesla has
different showrooms and service plus centers and also the service facilities are offered in an
effective manner. The company considered to boost thee sales by considering the internet
platform (Chen and Perez, 2018).
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2. Service strategy
The current strategy considered by the company relates with combining the sales with the service
centers. The company opened service centers so that it could be easy to positively affect the
demand of the customers. The service centers that are opened by the company can be named as
“Service plus”. The customers can avail the service at the Service plus locations. There are
mobile technicians who are appointed and they come to the home to offer them the service
facility. They are known as the Tesla Rangers. By considering the model X, the customers can
upload the information of the issue online without having the physical touch of the car. This
helps to fix the certain problems and also provide platform to the customers to solve their queries
(Brandenburger, 2017).
3. High end market strategy
The company considered this strategy in relation to the high end market and this has worked well
for the lower end of the market. In this strategy the emphasis is on the “building the sports car”
and to use the money to create affordable cars. The company states that the company should be
used to purchase the cars that are affordable. It can be stated that this strategy has mitigate the
high cost and also they emphasizes on wealthy early adopters. Tesla considered the master plan
in which the sports car Roadster for around $100000 was introduced then focus was given on the
Model S of $74,500 and Model X now starts with $79,500. The company emphasized on the
Model 3 that has the low price as 35,000 and the company focused on entering into the
affordable family car market (Dutta, 2019).
4. Charger’s network strategy
It is also one of the best strategies considered by the company. It has been seen that Tesla
focused on maintaining the wide customer base by offering them a chance to charge their
vehicles. Supercharger stations are introduced by the company as it can be seen as the place
where the customers can easily charge their vehicles in less than 30 minutes. This service is also
offered to the customer for free of cost. It is the belief of the company that will assist in boosting
the rate of product adoption by the customers. It is one of the best services that are offered by the
company and it has helped in enhancing the demand of the products in the competitive market.
This strategy has also boosted the customer base and assisted them to generate high satisfaction
level among the customers in the highly competitive market (Guo et al., 2018).
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5. Financial service strategy
The company also offered the financial services to the customers so that it could be easy to
enhance the demand of the products in the market. It is the best strategy that can help in boosting
the market share of the company. The financial services are provided to the customers such as
granting of the loans and leases. In this, if the customer wants to resell the vehicle then company
designed as a loan program in which resale guarantee is offered to the customers this has secured
the value of the vehicles. It can be also the effective service that has assisted the customers to
avail the new services that exist in the market. The company also emphasized on considering the
customer deposits up front for a year, two years and also three years in advance in relation to the
production and delivery of the cars (Akakpo et al., 2019).
How this intent is success or fail
It has been observed that the strategies considered by the company have boosted the market
share of the company and provided a platform to customers to avail different services at the time
of purchasing the products. The financial strategy service can be successful as in the present
scenario, people prefer to take loans at the time of purchasing the products of high cost So, by
offering loans it is easy for the company to maintain the customer base and also this strategy has
attracted the loan buyers towards the services or the products offered to the customers. This
strategy has helped the company to attain success as mostly people prefer to take loans from
banks or from the other sources at the time of purchasing the cars (García-Villalobos et al.,
2016).
The charger network strategy is also beneficial and helped to attain success in the competitive
market. In the recent era, the customer prefers to consider the products that provide comfort and
incur less cost. So, it can be seen that the company provided the facility of supercharger stations
in which the customers can easily charge the vehicles in less than 30 minutes. Also, the facility
that can be availed by the customer is free of cost. So, this strategy has helped the company in
boosting the product adoption by the customers as it saves time as well as money of the
customers. It can be considered as one of the cost effective method that has boosted the demand
of the products and services in the market (Habib et al., 2018). So, these are the strategies that
helped the company to attain success but also it has boosted the overall cost of the company.
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Recommendation
It is recommended that as the company has considered effective strategies with the aim of
boosting the sales, it is important for the company to focus more on research and development so
that it could be easy to produce more technologically advanced products in the market. This can
help the company in maintaining the large market share and will also boost the profits. In
product innovation the company should invest more as the resent generation demands the
products that are innovative in nature. Product innovation can help to compete with the
competitors that are present in the market and can also help to attain the competitive advantage.
It is important for Tesla to emphasize on diversification of the supply chain so that it could be
easy to reduce the supply side risks. If this recommendation is considered by the company then it
would be easy for them to reduce the high risk in context to the supply side. This can assist the
company in maintaining the large customer base which will directly boost the market share of
Tesla in the highly competitive market.
It is recommended that emphasis should also be given on expanding the activities in the foreign
markets so that it could be easy to maintain the global growth in relation to the renewable energy
industry. It will assist the company in boosting the brand image on the global platform which
will at last result in the enhancement of the profits in context to high level of the competition that
exist in the market. Therefore, it can be stated that these recommendations should be followed by
the company so that it could be easy to boost the sales in the market.
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References
Akakpo, A., Gyasi, E.A., Oduro, B. and Akpabot, S., 2019. Foresight, organization policies and
management strategies in electric vehicle technology advances at Tesla. In Futures Thinking and
Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham.
Brandenburger, A., 2017. Where do great strategies really come from?. Strategy Science, 2(4),
pp.220-225.
Chen, Y. and Perez, Y., 2018. Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Dutta, A., 2019.A Deep Dive Into Tesla Business Strategy. [Online] Available at:
https://www.feedough.com/tesla-business-strategy-and-business-model/ [Accessed 6 April
2019].
García-Villalobos, J., Zamora, I., Knezović, K. and Marinelli, M., 2016. Multi-objective
optimization control of plug-in electric vehicles in low voltage distribution networks. Applied
energy, 180, pp.155-168.
Guo, Z., Ou, D., Xie, W. and Tan, Z., 2018, September. Analysis and Optimization to the Final
Network of Charging Stations. In 2018 IEEE 3rd Optoelectronics Global Conference
(OGC) (pp. 209-213). IEEE.
Habib, S., Khan, M.M., Abbas, F. and Tang, H., 2018. Assessment of electric vehicles
concerning impacts, charging infrastructure with unidirectional and bidirectional chargers, and
power flow comparisons. International Journal of Energy Research, 42(11), pp.3416-3441.
Musonera, E. and Cagle, C., 2019. Electric Car Brand Positioning in the Automotive Industry:
Recommendations for Sustainable and Innovative Marketing Strategies. Journal of Strategic
Innovation and Sustainability, 14(1),pp.76.
Tesla, 2019. About Tesla. [Online] Available at: https://www.tesla.com/about [Accessed 6 April
2019].
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