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Running Head: MARKETING PLAN

Introduction

Tesla Incorporated is an American company that deals in the manufacture of electric vehicles. It is based in Palo Alto in California. It also specializes in the manufacture of solar panels and roof tiles to facilitate home storage of battery energy. It was formed in July 2003 under the name Tesla Motors, Inc. but later shortened its name to Tesla Inc. in February 2017. It was ranked as the best manufacturer of plug-in passenger cars globally in 2018, both as an automotive group and as a brand. It sold 245,240 units which represented a market share of 12% of the number of cars sold worldwide in 2018 (Bao, 2018). In 2019, Tesla also emerged as the leading producer in the electric vehicle industry and made deliveries of between 367,000 and 368,000 units. Tesla’s Model 3 happens to be the best-selling plug-in electric vehicle model. Deliveries of this model constituted more than 80% of sales revenue by product, duping its other models, which are models S and X products (Huang, 2019).

Tesla uses an e-commerce sales strategy that enables its customers to order vehicles online. It couples this distribution strategy with the use of its stores. It, however, sells its products online to take advantage of reduced selling costs and only uses its 17 stores worldwide as showrooms and platforms for meeting potential clients. Tesla has also invested in building its brand other than just selling cars which is a result of good and responsive leadership. Its brand equity is, therefore, a very great asset in its marketing strategy. It uses social media mostly to promote its products with its strong brand identity requiring less advertising and promotion (Zhang & Wang, 2019).

Despite the good performance, however, Tesla Inc. continues to experience challenges in customer service. According to a Bernstein survey carried out in 2019, only a small percentage of customers described their services as excellent with a majority expressing concern about wait times for appointments being longer and service visits fewer. It also experiences challenges in the distribution of its products. This was witnessed in the first two quarters of 2019 whereby its production exceeded by far the demand for its products. The company also faces competition from other players in the electric vehicle market such as Volkswagen and Mercedes which are planning to introduce new models of electric cars worldwide soon (Thomas & Maine, 2019).

Situational Analysis

This section entails an analysis of Tesla's environment, both internal and external. The analysis uses the SWOT tool. It evaluates the strengths and weaknesses of the company which is part of the company's internal environment as well as the threats and opportunities in its external environment. The aspect of competition which is very key in this case is under threats to the company (Mas, 2018).

Tesla’s Strengths

This company is highly innovative as noted in the introduction of the first-ever electric sports car. As earlier mentioned, the company also has a strong brand identity that enables it to attract and maintain new customers for its products. The company also has strong control over its production processes since it does the production of its automobiles together with its components and therefore rarely involves third parties (Thomas & Maine, 2019).

Tesla’s Weaknesses

The market presence of this company is mostly limited to the United States with only little presence in China and third world countries. It, therefore, does not benefit from rapid economic growth in oversea markets. Tesla's products also tend to be more expensive compared to similar ones by competitors. This leads to an inability to attract customers and grow its market share faster. The company's supply chain tends to also be very limited (Zhang & Wang, 2019).

Opportunities available for Tesla Inc.

Based on its weaknesses above, Tesla Inc. should consider expanding its operations into markets in which it has an insignificant presence. Examples are the Asian renewable energy and automotive markets. It should also consider expanding its supply chain to have its operations done worldwide. It could also consider diversifying its operations through the acquisition of other firms in the industry to reduce the level of risk exposure involved in the automotive market (Thomas & Maine, 2019).

Threats to Tesla Inc.

The company is facing a lot of competition from other firms in the industries that have undertaken to produce electric vehicles. The firms are very aggressive in ensuring they innovate and promote their products. Tesla, on the other hand, depends on its strong brand and does not promote its products aggressively. This strengthens their impact on the company. The cost of substituting its products with those of other companies makes competition a bit tougher too. The prices for lithium, which is one of the materials it uses in its energy storage products, are known to keep fluctuating. As earlier mentioned, the company sells its products directly to its customers. As a result of dealership regulations in states such as Texas and Virginia, its competitive advantage may be at stake (Mas, 2018).

References

Bao, B. (2018, November). Tesla: A good company to invest in? In 2018 International Conference on Economics, Business, Management and Corporate Social Responsibility (EBMCSR 2018). Atlantis Press.

Huang, Y. (2019, February). A Potential Company or Not: The Analysis of Tesla. In 2019 4th International Conference on Financial Innovation and Economic Development (ICFIED 2019). Atlantis Press.

Zhang, J., & Wang, R. (2019). Research on the Marketing Strategy of New Energy Vehicles in SL Company. American Journal of Industrial and Business Management, 9(2), 306-314.

Thomas, V. J., & Maine, E. (2019). Market entry strategies for electric vehicle start-ups in the automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235, 653-663.

Mas, S. M. (2018). Tesla Motors. SWOT analysis and corporate strategy. GRIN Verlag.