In an era in which disruption is one of the most used words in business, Tesla Motors has been attracting media attention during the last few years, especially in North America and Europe, due to is innovative offering and the fresh air it has brought into the car manufacturing industry. This is the reason why we have decided to choose this company for our reflections on corporate strategy in the MBA.
Our methodology in this assignment will be to critically analyze Tesla’s current market approach as part of its global corporate strategy to be able to latter see how harmonized they both are and how likely they are to finally succeed given the current market conditions and competition. For this task we will firstly determine Tesla’s potential market and then we will use one of marketing’s most known tools, the SWOT analysis, divided up into an internal and external analysis of its strategic advantages and disadvantages, to get a clear picture of the company’s competing position. We will also comment Tesla’s pricing strategy using some of the pricing concepts reviewed during the MBA course syllabus. Lastly, we will adopt the role of a business analyst to make some forecasts on the company future development and recommendations based on the outcomes of our analysis.
Table of Contents
1. INTRODUCTION
2. THE COMPANY AND ITS PRODUCTS
3. MARKET DEFINITION AND POSITIONING
3.1. Customer
3.2. Market position
3.3. Competitors
4. EXTERNAL & INTERNAL ANALYSIS (SWOT ANALYSIS)
4.1. EXTERNAL
4.1.1. Opportunities
4.1.2. Threads
4.2. INTERNAL
4.2.1. Strengths
4.2.2. Weaknesses
5. CORPORATE STRATEGY
5.1. Price
5.2. Strategy
6. CONCLUSION
7. REFERENCES
8. INTERNET REFERENCES
Objectives & Core Themes
The primary objective of this assignment is to conduct a critical analysis of Tesla Motors' current market approach as a key component of its global corporate strategy. By evaluating the company's competitive standing through a SWOT analysis and examining its pricing and market positioning, the paper assesses how effectively Tesla's internal strategic advantages align with external market conditions and industry competition.
- Analysis of Tesla's market definition and customer segmentation.
- Evaluation of internal strengths and weaknesses versus external opportunities and threats.
- Assessment of Tesla’s hybrid pricing and Blue Ocean strategic positioning.
- Forecasts regarding Tesla’s transition from an exclusive niche brand to a mass-market player.
Excerpt from the Book
3.1. Customer
Tesla’s profile as premium car maker targets a middle-upper class customer of middle age and early adopter. Research had concluded that Tesla’s buyer profile is a male with with above-average earnings (>100.000$/year) and college education. This potential customer is concerned about the environment and takes it into account when making its purchasing decision.
However, with the recent presentation of Model 3 –not being sold yet- Tesla aims at gaining new customers among the traditional buyers of cars in the price middle range who could or would have never been able to access a Tesla before given its high price. With this strategic movement Tesla will gain new users in a lower price segment which in turn should allow the company to balance its business model from an exclusive high-price/low-quantities model to another based on lower-premium price/mass-production.
But those new customers targeted through the new Model 3 will also bring new demands and expectations which do not match with those in the luxury class. E.g. customers in the middle segment are used to go to the car retailer and see or even buy the car the same day. Given Tesla’s model in which cars are produced after receiving an order, there are many challenges for Tesla’s distribution and dealership networks which will need to be addressed in the near future to be able to successfully satisfy this new customer segment in which the company does not have any experience yet.
Summary of Chapters
1. INTRODUCTION: Outlines the scope of the study, which focuses on Tesla's innovative role in the automotive industry and the methodology used to analyze its strategic market approach.
2. THE COMPANY AND ITS PRODUCTS: Provides an overview of Tesla Motors' history, mission to accelerate sustainable energy, and its product evolution from the Roadster to the Model 3.
3. MARKET DEFINITION AND POSITIONING: Examines Tesla's target demographics, its market positioning within the luxury segment, and the competitive landscape including both premium and mass-market rivals.
4. EXTERNAL & INTERNAL ANALYSIS (SWOT ANALYSIS): Offers a detailed breakdown of Tesla’s internal strengths and weaknesses, contrasted with external market opportunities and potential threats.
5. CORPORATE STRATEGY: Analyzes Tesla's hybrid pricing strategy and its Blue Ocean strategic approach, emphasizing differentiation and focus in a niche market.
6. CONCLUSION: Discusses the future prospects for Tesla as it faces the challenges of mass-market entry and increasing competition from traditional industry giants.
7. REFERENCES: Lists the academic literature and management theories utilized throughout the analysis.
8. INTERNET REFERENCES: Compiles online sources and news articles providing data on Tesla's market performance and industry context.
Keywords
Tesla Motors, SWOT Analysis, Corporate Strategy, Blue Ocean Strategy, Electric Vehicles, Sustainable Energy, Market Positioning, Pricing Strategy, Mass Market, Innovation, Competitive Advantage, Automotive Industry, Differentiation, Model 3, Sustainability.
Frequently Asked Questions
What is the core subject of this paper?
The paper provides a comprehensive strategic analysis of Tesla Motors, focusing on its market approach, corporate strategy, and competitive positioning within the global automotive industry.
What are the primary thematic fields covered?
The study covers strategic management, marketing, market segmentation, competitive analysis (SWOT), and corporate finance aspects related to Tesla's business model.
What is the central research aim?
The primary aim is to analyze how Tesla's internal competitive advantages align with external market conditions to support its transition from a high-end niche player to a mass-market manufacturer.
Which scientific methodology is applied?
The author utilizes a SWOT analysis (strengths, weaknesses, opportunities, threats) and applies strategic management concepts, such as Blue Ocean Strategy and Porter’s generic strategies, to evaluate the company.
What does the main body explore?
The main body investigates Tesla's customer base, market position, competitive landscape, specific SWOT factors, and the strategic rationale behind its pricing and distribution models.
Which keywords best describe the work?
Key terms include Tesla Motors, SWOT Analysis, Blue Ocean Strategy, Corporate Strategy, Electric Vehicles, and Mass Market.
How does the introduction of the Model 3 impact Tesla's business model?
The Model 3 signifies a shift from an exclusive high-price/low-volume business model to a lower-premium price/mass-production model, aiming to reach a broader middle-segment customer base.
What role does Elon Musk play in the company's strategy?
Elon Musk is portrayed as a visionary leader who drives the company's innovative culture, though his micro-management style is noted as a potential leadership challenge.
What challenges does Tesla face regarding its distribution network?
Tesla faces the challenge of adapting its unique direct-sales and order-based model to meet the expectations of new mass-market customers who are accustomed to traditional dealership and retail experiences.
Why is the "Blue Ocean" strategy relevant to Tesla?
It is relevant because Tesla successfully created a new market space for 100% electric premium cars, effectively avoiding direct competition in the saturated gasoline vehicle market during its initial growth phase.
- Quote paper
- Santiago Mas Mas (Author), 2016, Tesla Motors. SWOT analysis and corporate strategy, Munich, GRIN Verlag, https://www.grin.com/document/437676
