Social, Ethical, and Legal implications

Tesla

Tesla Motors was established in 2003, it's currently the leading company in the manufacture of electric automotive and luxury automobile cars such as Model S and Model X. Its operation in the production of electric automobiles has revolutionized the automotive industry to incorporate the element of using renewable energy sources. Its competitive advantage can be attributed to its mission and vision statement which enable the company's management to make informed decisions that are in line with the company's sole purpose for existence.

Vision, Mission, strategic objective, values

The company's vision statement is built upon the company's mission statement which states that the company's main purpose of the operation is to accelerate the world's transition in using more sustainable energy sources which are environmentally friendly. This mission statement is a reflection of the numerous campaigns on using renewable sources of energy that minimize the release of carbon dioxide in the environment; as a result the organization is getting a lot of support from consumers and the government, this has enabled them to build brands that have enabled them to gain a competitive advantage over other market players. Secondly, their mission statement is to accelerate the world's transition, this clearly indicates that they are directing all their efforts towards gaining global dominance through the sale of their products, thus this directly supports the company's vision of venturing into the global market by accelerating the industry towards the use of renewable source of energy in the automotive industry. Tesla aims to be the producer of compelling cars of the 21st century through its electric vehicle models.

The company's strategic goal is to deliver cars without any compromise to the world, this narrows is strategic objectives to; expanding their operations beyond the United States borders and increasing their market share through generation of vehicles that are more affordable than its predecessors; making strategic alliances through partnership with their suppliers, for instance, in 2017 they entered into a partnership with Panasonic with an aim of building a factory for car assembling. Lastly, they are aiming at increasing their sales to 500,000 by 2018, this was their initial goal for 2020, however, it was revised it to accommodate a small time frame (Cheong & Hu, 2016).

Tesla Strengths and Weaknesses

The company's strengths are its good and quality brands, business model and its market niche. Tesla's business model is firmly owned from with, from its supply chain to its delivery points Tesla controls all activities from a central pint this enables them to have full control of the brand image, customer service and product reputation. As a result, they have been able to eliminate the risks of having product boycott due to malpractices in the supply chain. Secondly, Tesla understands their market niche and their prospective customers, as a result, they have been able to build on their competitive edge by ensuring they offer well-differentiated products whose prices reflect the intrinsic value of the luxury car models, these provides brand acceptance and faster uptake of the new models.

Tesla weakness is; the company only produces limited car models that are Model S and Model X only, to solve this they should have a wider product range of product lines that will cater for the needs of a vast market.

Brand image

Tesla's product and pricing strategy entail the branding strategy that enables the consumers to have a mutual bond with the company and the products they purchase. To ensure that they retain their brand image and customer loyalty, Tesla has focused more on its product pricing, positioning, the distribution channels and their marketing strategies. First, to create a brand image, Tesla uses point of difference whereby they incorporate an element of differentiation, whereby they incorporate attributes such as shape, model size and external features of the cars that consumers strongly like to be associated with. According to (Kotler and Keller, 2012) point of difference helps in differentiating from competitors through the unique features and desirability that the consumers derive from the products.

Branding Concerns

Tesla usually uses zero distribution channels, this has been effective in eliminating risks of malfunctions and cloning of the brands, however, it presents the following branding concerns for Tesla's products; first, the company uses just in time production which begins which paying deposit for a product before its manufactured, in cases there are many orders to be processed then it results in delay in manufacturing and in the delivery schedules since the customers have to wait for a longer time. This is a gap that needs to be addressed since if the waiting period exceeds the customer's expectation then the company is likely to have a smaller customer base since the customers will diminish in number each time the company fails to deliver on schedule thus leading to customer dissatisfaction. Secondly, there have been cases of failure of the electric automobile to perform as per the customers' expectations, this technical error rises brand concerns that have to be addressed to ensure that the products produced meet the consumers' expectations in terms of functionality and desirability.

Integrated marketing communication

To reach out to a wider market and create product awareness Tesla uses print media as well as advertisement through trade shows, word of mouth and through their website. In most cases they usually organize trade shows where consumers are invited to view the current product models, their functionality and the advanced technology used, while, the website is usually used to connect with the consumers at a personal level by answering questions pertaining product prices and available delivery points where customers can view the products in a showroom based on their location. This strategy is holistic in nature, it has enabled Tesla to be able to establish a more personal connection with the consumers hence they are able to get consumer perspective about their products and what changes need to be incorporated.

Customer loyalty and retention

Tesla engages customers in after-sales services where they educate the customers on environmentally safe batteries that they can use for their car models. Through awareness creation and after sales services Tesla has been able to increase their customer retention levels.

To measure customer loyalty Tesla uses their customer database from the ordering stage, to determine customer loyalty levels the company analysis the number of repeat customers. This can also be used as a price reference point since the customer loyalty can be used to depict the price that was more affordable and attractive to more consumers hence encouraging repurchases.

Cheong, T & Hu, C. (2016). Strategic alliance with competitors in the electric vehicle market: Tesla Motor’s Case. doi:10.1155/2016/7210767

Gifford, L. (2016). Tesla Motors (TSLA) Model 3 will attract smart, value focused EV buyers.  http://learnbonds.com/127583/tesla-model-3 smart-value-focused-buyers/

Tesla, Inc. – Form 10-K.

Kotler, P.T. & Keller, K.L. (2012). Marketing management (14th Ed). Upper Saddle River: Pearson Hall.