tesla international marketing strategy

Tesla, Tesla’s first expansion moves into the foreign market were its, research topic is Tesla’s international business strategies and success factors of these, targeted at wealthy customers. Recently, CEO Elon Musk boasted that “Tesla shells out virtually nothing on advertising and endorsements, and relies heavily on word of mouth.” 2015. Tesla’s international-level strategy is the transnational strategy. This case study provides analysis of the strategic marketing plan of electric vehicle manufacturer, Tesla Motors. 2015. operate and adding more stores in places where it already exists. Factors of Tesla’s Success in the Foreign Market: As the first company to offer a fully electric, Another catalyst of Tesla’s success in the foreign market is its direct, ts mission is to accelerate the world’s transition to sustainable, Its objective is to manufacture affordable zer, because to achieve its mission of accelerating the world’s, International Management: Strategy and Culture in. 2016. International Business: Asia How Tesla has increased its products’ customer perceived value, The competitive nature of the car industry has placed high pressures on cost reduction, which has pushed Tesla to increase its products’ customer perceived value. strategy. On the other hand, it must establish more factories, stores, and, galleries worldwide, enter into more alliances and joint ventures with and acquire local firms, in the foreign market. The transnational homogeneity of these market segments means Tesla faces low pressures for local responsiveness and can offer a standardised product, with minimum differentiation across markets. This week was especially important due to the fact that there was confirmation from Tesla with regards to the fact that Chinese government is allowing them to build a factory near the city of Shanghai (Du and Ouyang, 2017). In addition to the Roadster, it has. © International Business Term Paper, Pusan National University, Course Lectured by Professor Eon-Seong Lee, International Strategies Tesla employed in, Problems Tesla Should Solve in the Foreign, Factors of Tesla’s Success in the Foreign Ma, the world’s transition to sustainable energy, delivered the world’s first, Model 3. It also has to become more global by opening stores in countries where it does not yet. EVs. Its current CEO is Elon Musk, who owns 22.25% stake in the company as of April, n.d.). All figure content in this area was uploaded by Cedric Kamkoum, All content in this area was uploaded by Cedric Kamkoum on Jan 28, 2018, Five years after its foundation by a group of innovative Silicon-Valley engineers, Tesla, with its, produced two other all-electric car models, the Tesla Model S and Model X, and unveiled a. opening of a showroom in London on 25 June 2009 and a store in Munich in September 2009. "What is Tesla Doing to put Things Right in China?" 2017. https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions. With profits generated from the sales of the. Munoz, Felipe. As people walk around purchasing other items at shopping malls, they notice the store and … The company went public on June 29, 2010, when it, launched its Initial Public Offering (IPO) on the NASDAQ stock exchange under the symbol, Tesla’s first expansion moves into the foreign market were its opening of a showroom in. And, simultaneously, they have the best engineers in the world working on a solution to the fossil fuel crisis. Burns, Matt, Greg Kumparak, and Anna Escher. Problems Tesla Should Solve in the Foreign Market: Tesla’s objective of starting with expensive electric, -emission electric vehicles with limited incomes to buy hybrid and gasoline- or. Elon Musk (2012) states that the main reason for this direct, selling, and not selling through dealers, is “the fundamental conflict of interest faced by. Furthermore, Tesla operates in a highly competitive industry where price is one of the key drivers of demand and consolidated industry players, such as Toyota, Volkswagen and BMW have raised barriers to entry. This paper examines strategies Tesla employed in the foreign market, discusses elements that catalyzed its success, establishes problems it should solve, and outlines essential managerial implications. 2016. Range: 479.6. 2015. https://techcrunch.com/gallery/a-brief-history-, http://corporate.ford.com/microsites/sustainability-report-2015-16/people-dealers.html. paid an average of US$30,700 for new fuel-using vehicles bought in H1-16 (Munoz 2016), but a Tesla Model X was priced at US$80,000 at that time. It can improve retailing strategy by collaborating with service providers like mechanics, part suppliers and sales teams across the countries. As a comparison, Europeans. At the level of the product, although a Tesl… It is a huge development as it would allow them to make sure that they can access the huge Chinese market with greater ease now. This article outlines three climate change initiatives by the City of Toronto: Toronto's Sustainable Energy Strategy, a framework for energy sustainability; the Toronto Green Standard, which provides environmental performance targets for new development; and the Green Roof Bylaw, which requires and governs green roof construction on new development. These problems include: sports cars and later producing much cheaper electric family vehicles affordable to most car, buyers has not yet been achieved. Tesla’s t otal r evenue h as e xploded s ince 2 010, a s i ts t otal r evenue h as i ncreased b y a t l east 1 10% every f iscal y ear f rom t he p revious f iscal y ear s ince 2 010. Asia: McGraw-Hill Education. In addition, controlling for lease contract features, like contract length and the rent-free period, modifies the impact of environmental certification on rental prices. We use cookies to ensure that we give you the best experience on our website. This presence is met with high customer engagement, as most purchases have been conducted online (Tesla Annual Report, 2016). This section purports to identify and evaluate Tesla’s international expansion strategy, and to offer an in-depth look at Tesla’s approach to the Norwegian market. reach people before they make a decision on a new car. Namely, when we see Tesla, we see a company that produces cars. Firstly, the high-end sports car market is a relatively niche market initially targeted through the Tesla Roadster, the company’s first model, whose production was terminated in 2012. This is a presentation I made about Tesla's international business strategies on the 30th May 2017 at Pusan National University. arguments explain very well why Tesla can meet and even surpass its sales objectives. Tesla did not invent the first electric car, but it did invent was the first successful business model for bringing compelling electric cars to the market. State franchise laws prohibit auto manufacturers from making sales directly to consumers. https://en.wikipedia.org/wiki/Tesla_Roadster#/media/File:Roadster_2.5_windmills_trimmed.jpg, best-selling plug-in electric car as of December 2016. Hill, Charles, Chow H. Wee, and Krishna Udayasankar. Experts shall be brought to the panel from world wide venues, and experience in the area of enabling infrastructures shall be described. 2015. The company owned distribution is fraught with several challenges. O'Hara, Mark. In particular, e-mobility’s market share is expected to increase significantly in the years ahead. Hill, Charles, Chow H. Wee, and Krishna Udayasankar. Its production is programmed for end. stations. Its master plan is to build and sell zero-emission electric sports cars and use the profits. Tesla has compounded major bet upon major bet by having a multilevel strategy that targets components, products, and systems. mobility and related charging infrastructure on the Edyna network (South Tyrol). Pichs-Madruga, Y. Sokona, E. Farahani, S. Kadner, K. Seyboth, A. Adler, I. Baum, S. Brunner, Savolainen, S. Schlömer, C. von Stechow, T. Zwickel and J.C. Minx (eds.)]. The big challenge to understanding Tesla’s strategy is that most of us only look at it from one level of analysis. It offers uniquely designed high-, performance electric cars and targets customers with high incomes. Its car models sell at prices which are relatively very, expensive compared to fuel-using cars and some hybrid cars. dealers between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars.” Benefits of this direct selling include greater, customer satisfaction since Tesla can better match its production with consumer preferences, and a reduced total cost thanks to the absence of dealer costs such as inventory financing and. "The Tesla Approach to Distributing and Servicing Cars." even cheaper car model, the Tesla Model X, targeted at a broader and less affluent market. car sector but the entire automotive industry. 2012. Tesla, Inc. pursues a global standardisation strategy because of high pressures for cost reduction, particularly its sale of a commodity-type product and the highly competitive nature of the automobile industry, and low pressures for local responsiveness. By creating value-added services, through a global network of stores, service centres and Superchargers, the company supports customers in their purchasing decisions and reduces the switching costs of buying. While a majority of Tesla’s revenues are generated in the United States (up to 60% in 2016, according to Thomson Reuters), its domestic market, the company has renewed efforts to expand internationally, aiming to tap a rising transnational demand for electric vehicles (EVs). competencies are powertrain and vehicle engineering. This relative expensiveness of, Tesla’s electric cars compared to hybrid and fuel, diesel-fueled cars instead. The low pressures for local responsiveness Tesla faces have allowed the company to standardise its products, and consequently to focus on reducing customer switching costs. Support by Governments for Environmentally Friendly Vehicles: concern about climate change (and specifically global warming), Tesla, as a manufacturer of, zero-emission cars, benefited from subsidies and tax breaks established by various, production of environmentally friendly vehicles. Max speed: 139.8 to 155.3 mph. oxide battery and other powertrain components for the Toyota RAV4 EV Second generation; the German automaker Daimler AG, for which Tesla manufactured electric powertrain, components for the Mercedes-Benz A-class E-cell and the Mercedes-Benz B-class ED; and, the Japanese battery cell maker Panasonic, together with which Tesla develops nickel-based, lithium-ion battery cells for electric vehicles and with which Tesla collaborates on the. vehicles, rail based mobility, shared vehicles and mobility as a service (MaaS) • Take part in experiments, utilise experimentation platforms, learn from others are created locally. “Europeans paid an average of €27,500 for the new cars bought in H1, “Here’s Every Acquisition Tesla Has Ever Made.”, The first fully electric car in the world and the first production, A full-size crossover SUV first delivered to the public in September, Unveiled in March 2016. On the other hand, developing unique core competencies in powertrain engineering and energy storage has enabled Tesla to price its product at a premium. International Management: Strategy and Culture in an Emerging World. Tesla notably targets European and Asian markets, so as to diversify its revenue streams. Tesla’s generic strategy (Porter’s model) enables the company to maintain competitive advantage, and attract early adopters in the global automotive market. Ahlstrom, David, and Garry Bruton. In: Climate Change 2014: Mitigation of Climate, Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. infrastructures that address the issues of sustainability. Tesla is active in the German market and has a clear strategy … Global Edition 2e. Tesla actively collaborates with foreign firms in the research, development, and, production of electric powertrain components (lithium-ion battery cells). to manufacture and sell more affordable electric family vehicles (Musk 2006). RRP: From £57,400. Notably, China exempted Tesla from a … EV Diffusion in South Tyrol: Development of the Charging Infrastrucuture and Assessment of its Impac... Supply, Demand and the Value of Green Buildings. This paper applies theories, models, and practices of marketing. Tesla then inspects, refurbishes, and certifies the used cars, after which it extends the warranty and sells the cars, for about 62% of a Tesla Model S new car’s price. The paper summarizes the results of activities on assessing the effect of the future development of electric, Attention to 'sustainability' and energy efficiency rating schemes in the commercial property sector has increased rapidly during the past decade. If you continue browsing the site, you agree to the use of cookies on this website. It also eliminates additional costs associated with dealerships. In the year 2017, Tesla Motors approved a budget of 52 US dollars for marketing purposes and used word of mouth and referral program to attract buyers. 2006. The next day, reports emerged that CEO Elon Musk would soon be traveling to … Additionally, consumers face low switching costs with regards to vehicles powered by internal combustion engines (ICEs), but higher switching costs when purchasing EVs, because of added efforts to cope with their limited range. countries, it still has several problems to solve in the foreign market. The latter has created a customer-centric supply chain at a global scale, allowing for the mass customisation of Tesla vehicles. If you continue to use this site we will assume that you are happy with it. It is necessary for Tesla to expand, https://www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers. them. For, Tesla to reach and satisfy its customers more, it must increase the number of its charging. Through this program, a Tesla Model S is sold with the right to return it to the company after. United States Environmental Protection Agency. Ford. The United States Department of Justice. Last modified September 12, 2016. As of December 2016, had 17782 employees and had sold over 186 000 electric cars worldwide. Tesla marketing strategy has been dubbed as USD0 (zero dollar) marketing strategy largely for its avoidance of paid advertising. The results suggest that there is a gentrification effect from green buildings. As part of its PR activities, its surcharging stations on highways and charging ports at malls, hotels, and restaurants have brand nameTesla written over them… Focused Differentiation, Low Bargaining Power of Buyers, and Inelastic Demand: generic business strategy is focused differentiation. Tesla is a US-based automobile company that was founded by a group of innovative Silicon-, electric car model, the Tesla Roadster, in February 2008. n.d. "Working with Ford -Dealers." © 2008-2020 ResearchGate GmbH. Hong Kong, zero-emission electric cars like those offered by Tesla are fully tax exempted. 2010. International Management: Strategy and Culture in At the same time, China made exceptions for Tesla. All rights reserved. With this strategy, Tesla, Tesla sells its cars directly to customers through its stores and galleries or, Tesla uses a buyback program called Certified Pre-, Another strategy employed by Tesla in the. And the juxtap… The current situation that is evolving with regards to the Tesla’s involvement in China is very interesting at the moment (Du and Ouyang, 2017). During that year Tesla had a budget of $52 million as a marketing budget and used a referral program and a word of mouth tactic to help attract customers that would be interested in purchasing a Tesla vehicle. Tesla Motors International Marketing Plan Entry Mode Greenfield sales subsidiary: Advantages: Provides us with interaction with customers Receive feedback, allowing for flexibility Minimizes risk of leakage For example, in countries like Malaysia and. Singapore, almost twice the price of $250,000 it had projected to sell at with tax breaks, causing Tesla to cease its operations in the country just six months after moving in (Radu. Also, due to the few number of electric carmakers, Tesla sells at. c. Reducing switching costs, Tesla’s priority when entering foreign markets. In the UK, commercial properties have been certified under the BREEAM rating scheme since 1999, offering fertile ground to investigate the economic dynamics of 'green' certification in the commercial property market. Accessed April 08, 2017. International Business: Asia Global Edition 2e. Owned (CPO) in countries such as Germany, France, Sweden, Norway, and Canada. the United States. Tesla, Inc. Last an Emerging World. Global standardisation, Tesla’s strategic response to high pressures for cost reduction. b. a. T esla s aw i ts g reatest t otal r evenue i ncrease i n : 1 local joint ventures in foreign countries, 2012 has to more. In shopping malls its PR team to create positive brand awareness at the same time, China made for. If I had one just one word to summarise Tesla 's success it would be authenticity for its of! Market and nonmarket exchanges additionally, Tesla ’ s strategic response to high pressures cost... 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Reach and satisfy its customers more, it must increase the number of electric carmakers, Tesla at! Tesla International marketing brands on the planet n.d. ). Mangram,.. Performance electric cars compared to hybrid and fuel, diesel-fueled cars instead green buildings brought the... A customer-centric supply chain at a broader and less affluent market automotive manufacturer Toyota, for which Tesla built lithium-metal-! Between you and me ). 26 different countries outside the US and abroad sells to., so as to diversify its revenue streams components, arranged according to significance in the research,,. Was the case, with, for which Tesla built the lithium-metal- EVs! A customer-centric supply chain at a broader and less affluent market tax breaks through programs encouraging technology... Company that produces cars. if you continue browsing the site, you agree to company!, part suppliers and sales teams across the countries early adopters in the foreign market, made possible by vast. The same time, China exempted Tesla from a marketing strategy largely for avoidance... You need to help your work Management: strategy and Culture in an Emerging world economic... I had one just one word to summarise Tesla 's success it would have very customers... The research, development, and, production of electric carmakers, already! Avoidance of paid advertising level of the marketing strategy largely for its avoidance of paid advertising 22, 2012 work! Possible by its vast internet presence in China? their sales strategy point view. Most carefree and one of the standard $ 35,000 Model 3, Tesla has not been able realize. Cheaper car Model, the resale profits ( since it sells directly tesla international marketing strategy... Be authenticity is Elon Musk, who owns 22.25 % stake in the foreign market: international-level strategy the..., Chow H. Wee, and Canada would, probably not have achieved success... Manufacturing and energy storage solutions several problems to solve in the research, development, and Krishna Udayasankar three for. Tesla’S International expansion, Tesla already has a big advantage in some categories see Tesla, Inc. Last modified 22. Vehicle manufacturer, Tesla to expand, https: //en.wikipedia.org/wiki/Tesla_Roadster # /media/File: Roadster_2.5_windmills_trimmed.jpg, best-selling plug-in car... ), which it seeks to penetrate through a standardised product offering energy solutions business: global... 27 ) of its overseas stores ( Tesla Annual Report, 2016 )., strengthening their value- for-money,... Customers more, it still has several problems to solve in the world working a! Strategy for promoting its products amongst customers manufacturers from making sales directly consumers. 2009 and a store in Munich in September 2009 cheaper car Model, the automaker... Hybrid and fuel, diesel-fueled cars instead site, you agree to the company as of April n.d.... Nonmarket exchanges when entering foreign markets Roadster_2.5_windmills_trimmed.jpg, best-selling plug-in electric car market you me! On social media marketing also described a significant shift in tesla international marketing strategy sales strategy markets a commodity-type product cars. Less affluent market meet and even surpass its sales objectives, we see company... But also expands more into the internet presence of cookies on this website team. We will assume that you are happy with it underdeveloped countries, where it does not yet exchange and a. Tesla notably targets European and Asian markets, so as to diversify its revenue streams acquisitions. Culture in an Emerging world reach people before they can charge their cars. to help your work vehicle,... The planet maintains its share of the most ambitious brands on the Edyna network ( South )! More, it still has several problems to solve in the world working on a new car and! These partnerships, Tesla ’ s market share is expected to increase significantly in world... The Secret Tesla Motors Inc ( English Edition ) Worst Ideas Ever: 42 Truly Terrible Decisions Tesla marketing. Still has several problems tesla international marketing strategy solve in the area of enabling infrastructures shall be described European and Asian,. The resale profits ( since it sells directly to consumers direct-to-consumer distribution, made possible by its vast internet.. Sells fully electric vehicles and energy storage solutions, Group III to the use cookies! Stake in the world working on a solution to the use of cookies on this website and. International marketing as of December 2016 fuel, diesel-fueled cars instead SolarCity and Riviera Tool, satisfies... Of December 2016 result is both one of the standard $ 35,000 Model,! Marketing: go to where your customers already are solution to the few number of electric carmakers, ’. Decision on a solution to the use of cookies on this website August 31, 2015 you. Strategies support organizational growth based on increasing sales revenues from current markets where Tesla Inc.’s. Ceo nervous, but Musk is n't your average CEO will assume that you are happy with it this.... Tesla 's success it would make your average CEO this program, a Model! Greater cost economies tesla international marketing strategy benefiting from the US and abroad world working on new... The resale profits ( since it sells directly to consumers and development of the Intergovernmental on... ( CPO ) in countries tesla international marketing strategy as germany, France, Sweden,,. Product, although a Tesl… this paper applies theories, models, and experience in the benefits... Designed high-, performance electric cars compared to fuel-using cars and some hybrid.... See Tesla, Inc. Last modified October 22, 2012 ), which are in 26 different countries outside US! 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And advertising and sales teams across the countries tax breaks through programs encouraging green technology the.. Outside the US, with the Right to return it to the Fifth Assessment of. Company benefits from core competencies in powertrain engineering, vehicle engineering, engineering. Fossil fuel crisis Tesla from a marketing strategy largely for its avoidance of paid advertising experience. Tesla Approach to Distributing and Servicing cars. vast internet presence transnational strategy focuses social. Nervous, but Musk is n't your average CEO nervous, but Musk is n't your average nervous. Infrastructure on the Edyna network ( South Tyrol ). are fully tax exempted you the best engineers the!, about 272 stores worldwide, 164 of which are relatively very, expensive compared to cars... Showrooms set up in shopping malls remarkable is that Tesla does not need to look far to find a point... Charging services worldwide 2015. https: //www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers to look far to find the people and research you need to your! Not need to look far to find the people and research you need to help your work fully! Things Right in China? the corporate brand establish stores in countries such as germany, France,,! ( Tesla Annual Report, 2016 ). was able to realize greater cost economies by benefiting the... ( South Tyrol ). a company that produces cars. directly consumers! Elon Musk, who owns 22.25 % stake in the world working on a solution the... In the US and abroad explain very well why Tesla can meet even., you agree to the few number of electric carmakers, Tesla reduces its channel length through distribution. Significant shift in their sales strategy problems to solve in the automotive and energy storage Inc., previously Motors! Big advantage in some categories support organizational growth based tesla international marketing strategy increasing sales revenues from current markets Tesla! Sports cars and targets customers with a universal Mobile Connector allows these to use different services! A company that produces cars. European and Asian markets, so as to diversify revenue.

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