Management 306

Running head: MARKET PLAN

MARKET PLAN

Market plan

Miao Zhang

CSUSB

EXECUTIVE SUMMARY

This paper focuses on Tesla Inc. in developing a marketing plan. It will examine the company situation analysis by conducting a SWOT analysis, perform market research, target market and positioning of the company, and finally examine the market strategy and competitive advantage of the company. This marketing plan is intended to be implemented in a period of six months and it is expected to have positive impacts on the sales and revenues of the company.

COMPANY SITUATION ANALYSIS

Tesla Inc. is one of the most popular retailer companies when it comes to the automobile industry. Formerly known as Tesla motors, the company has been in the spotlight for quite some time since it is the leading electric automobile manufacturer in America and the world. Founded in 2003, Tesla Inc. is a public traded company whose main objective is to be the leading manufacturer of electric vehicles among other commodities. The company has since grown since its conception and is known for its development of various models of electric vehicles in America and Europe. (Hoffman, A. N. 2011) In the automobile industry, its major competitors are companies such as Audi, BMW, Lexus, Mercedes, Honda, Toyota, Daimler, Nissan, Fiat, Ford, General Motors, Mitsubishi, AES Energy Storage, LG Chem, Samsung, Vivint Solar Inc., Sunrun Inc., Trinity Solar and Sungevity Inc. As at 2017, Renault-Nissan dominated the automotive industry after selling more than 5,268,079 vehicles in the first half of 2017. This was followed closely by the longtime largest retailer General motors that has since dominated the market. The company has its largest market in United States of America and Europe. (Hoffman, A. N. 2011)

Having introduced the company, it would be necessary to examine and analyze its situation in the market. In order to achieve this, this segment of the paper will therefore conduct a SWOT analysis of Tesla Inc. To begin with the company’s strengths, it is a fact that the company finds its strength in its ability of producing quality brands which have managed to become part of consumer preference. This means that through the company’s possession of unique, strong and quality brands of electric vehicles, it has been able to maintain its position in the market place which is a positive factor in determining the sales of its commodities. (Hoffman, A. N. 2011)

Another strength of the company relies in the fact that the company has high rates of innovation which has seen it to be the first ever company in the whole world to manufacture and develop electric vehicles. Tesla Inc. also bases its strength in its ability to have strong control over its processes of production and takes care of its customers’ needs through the provision of free services such as the use of their recharging stations. This has not only seen them maintain their customers but has also seen them acquire more customers for their products and electric vehicles.

When it comes to the weaknesses of the company, Tesla Inc. has a weakness when it comes to the high pricing and expensive goods. In as much as the company produces unique electric vehicles, expensive pricing tend to limit the number of customers who can afford the cars therefore decreasing the sales of the commodities. Another weakness of the company lies in the company’s limited market presence in other parts of the world such as China and other developing countries. Limited market presence is a weakness which limits business growth and expansion into the international market. In addition to the list of weaknesses, the company also has limited supply chain which is probably the reason as to why it has limited international market presence. (Hoffman, A. N. 2011)

When it comes to analyzing the company’s opportunities, Tesla Inc. has opportunities such as global expansions into the international market that is wide and include even the developing countries. This opportunity will not only increase its production rate but also generate more revenues and income for the company. Another opportunity that would enhance the growth of Tesla Inc. is increase in global supply chain expansion and embracing business diversification in the international market.

In regards to the threats that Tesla Inc. faces, it is a fact that the company faces aggressive competition from other automotive firms. This therefore threatens its performance in the market and the company has to work hard in order to maintain its position in the market. Also Tesla Inc. faces the threat of fluctuation of prices especially those of raw materials. Such prices fluctuation in commodities such as lithium makes it unpredictable for the company when it comes to realizing profits. Another threat is government regulations on dealerships in some states such as Texas and Virginia. In these states, it has become mandatory that all company sales must undergo dealerships thereby limiting the number of direct sales which can take place since companies which do not comply with such regulations are prohibited from any type of transactions in those states. This is a threat to the business since it limits the number of transactions with some companies hence limiting business growth. (Hoffman, A. N. 2011)

MARKET RESEARCH

According to the market research of Tesla Inc., it has been proven that the demand for electric cars have increased with time therefore positively impacting on the company’s sales. The major reason for this increase in demand lies in the company’s strength of being the only company that is actively involved in the production of pure electric cars together with superchargers and some of the best battery components compared to other automobile companies. According to latest research, the company has sold an average of 125000 electric cars since 2008. Market research has also revealed that the most demanded car from the company is Model S, followed by model X and then the roadster. The information that will lead to making of better decisions for the company in this case Tesla Inc. is its position in the market and their increasing demand from the consumers. Such information can be collected through engaging in customer feedback and putting their interest as priority.

TARGET MARKET AND POSITIONING

The main Target market for Tesla Inc. are people who are earning an average income and have some spare cash to spend on luxury. As part of its goals also, Tesla Inc. lists other automotive industries as part of its target segment by declaring that it would want to sell their electric components and their powertrain to other automotive companies. When it comes to positioning itself in the market, Tesla has a pricing strategy that may appear to be quite expensive to the ordinary citizen. It therefore uses a quite expensive pricing strategy to ensure that it makes profits from its luxurious merchandises. For promotion purposes, Tesla Inc. uses incentives and after sales services such as free recharging services to their customers in order to promote their products. In regards to their products, tesla Inc. ensures that it manufactures strong brands with highest quality in the market. In terms of places and distribution, Tesla Inc. focuses on distributing its products in America and parts of Europe.

MARKET STRATEGY AND COMPETITIVE ADVANTAGE

In contrast with its close competitors, Tesla Inc. has adopted quite unique market strategy which has given it competitive advantage in the market. For example where as its close competitor General Motors concentrates on the ‘’buying back of the company stock using all its shareholders cash, Tesla Inc. is using its capital to invest in the future by building the Gigafactory which they believe that it will dramatically lower the price of electric vehicle batteries and help them in the production of their model 3 at scale.’’ (Bryson, J. M., et al 2011) This is a competitive advantage that the company has over its competitors since instead of only focusing on stock buybacks, it has its future interest at hand. Tesla Inc. will adopt a focused differentiation strategy where it will target a small group of customers with its differentiated products. (Bryson, J. M., et al 2011) This is because of its target market segment which is inclusive of people who earn an average income and can afford luxurious merchandises.

REFERENCES

Bryson, J. M., Anderson, S. R., & Alston, F. K. (2011). Implementing and Sustaining Your Strategic Plan: A Workbook for Public and Nonprofit Organizations. Chichester: John Wiley & Sons.

Hoffman, A. N. (2011). Tesla Motors, Inc: The first U.S. car company IPO since 1956.

7