Tesla case study

Tesla Strategy/ Porter's 5F / SWOT/ Why no marketing / why no dealer / Why 70years no car company in US / why Tesla successful / Why moving from high end to low end/

1. Case Study
Prepared by:
Subrat Kumar Dash

2. Mission and Vision Statement
•
To accelerate the world’s transition to
sustainable energy-Mission
•
To create the most compelling car company
of the 21st century by driving the world’s
transition to electric vehicles-Vision
•
Complete focus Electric Vehicle without
finding a niche space in existing automobile
industry and Created a new industry, that is
in growth phase.

3. PORTER’S 5F
COMPETIT
IVE
RIVALRY
IS
NOT FIERCE
BUYER HAS LOW POWER
Customer has low bargain power as
less option in EV and Sell directly to
customer.
Tesla command 80% on EV market
share.
Model 3 product for Mass market
Govt subsidy is helping Tesla
SUPPLIER HAS LESS
POWER
Vertically integrated in house
producer.
Bargaining power will more
improve when production in scale
.
IC VEHICLE GROWTH
SLOWING DOWN
IC Vehicle demand slowing down.
EV demand is peaking up with additional
infrastructure and innovation.
Hydrogen is not yet ready for vehicle use.
MAJOR IC COMPANY
PLANNED ENTERING EV
They are behind the learning curve.
Meanwhile rapid growth in EV can
accommodate all competitor
.
SUPPLIER
POWER
BUYER POWER
THREAT OF
SUBSTITUTION
THREAT OF NEW
ENTRY

4. S W
O T
WEAKNESSES
•Rapid growth with cash burn
•Elon Musk divided attention
THREATS
•Upgrade the existing IC
to EV
•Slower transition From
IC
•Entry of competitors
•Tax incentive goes away
STRENGTHS
•Strong Brand
•First Mover
•Innovator spirit
•Aesthetical design
•Biggest battery producer
•Autopilot feature
•Supercharge Network
•Made Patents open source
OPPORTUNITIES
•Future of transport
•Range of product (car, battery)
•Economy of scale
•Factory automation
SWOT
SWOT

5. Last 70year No New Entrant
•
Due to Capital Intensive, it makes entry barrier high.
•
Due to 2 of 3 US car maker are bankrupted, it created an –veimage for
company to venture into.
•
Due to Disruptive innovation, it make import car cheaper.
•
Due to lot of competition. it make unviable for accelerated growth.

6. Why Tesla Successful
•
First mover advantage customer loyalty
•
Experienced in building Electric car
•
Auto pilot feature and collect the data for machine learning as no one has
more data than tesla.
•
Aesthetically build product and software product build in house
•
Branding and outstanding marketing
•
Own chain of store to sell the product
•
Competitive strategy is Differentiation , for which it has high quality
products and premium brand positioning.

7. Technology

8. Finance

9. Vertical Integration

10. Tesla Positioning Statement
ForCar Buyer whowant long range luxury electric vehicle with high quality material ,
sustainable technology, innovative feature to differentiate them from others
Tesla is apowerful Premium Electric Vehicle
Thatprovides a 405+ miles on a single charge, 0-60 mph acceleration of 3.8 with Top
Speed 150mph , ultra big touch screen dashboard with electronic integration with each
part , auto update feature and autopilot feature
Unlikepure IC vehicle manufacture
Our productbridges the gap between sustainability energy and most advance car
holistically

11. Geography

12. Tesla Marketing Strategy
Earlier Automobile companies spend massive
marketing expense, so Tesla used below
approach to expand.
1.
Create own brand with High Satisfaction
score from consumer. (Rank 1)
2.
Referral program creates awareness and
word of mouth.
3.
Using CEO for influence.
4.
In house show room experience is never
seen before.
5.
Created a two-way communication channel
with customer.

13. Why begin at High end and go down
•
It is following differentiate strategy where it is solving the problem differently , so its
command uses premium pricing strategy.
•
Demand is overtripping supply.
•
Battery Technology is expensive and will cheaper as on demand grows more.
•
Electric vehicle need eco system and pricing higher provide enough leverage to create
the eco system.
•
Build sports car Use that money to build an affordable car Use that money to build
an even more affordable car
•
While doing above, also provide zero emission electric power generation options

14. Why high-end customer
Tesla products are expensive for average consumers and thus, the target
customer segment for the company is wealthy individuals and households.

15. Why California?
•
California’s zero emission vehicle policies and programs, used govt
subsidies to grow
•
Got used manufacturing unit in lesser price.
•
Technology company need good technology resource pool.

16. Why no Dealer
•
Conflict of Interest.
•
Technology is different, car is different, and, as a result, stores are intentionally
different.
•
Deliberately positioning our store and gallery locations in high foot traffic, to
educate customer which car to buy. Stores are designed to be informative and
interactive in a delightful way.
•
Replaced Salesperson with Product Specialists.
•
As customer service is non-compromised , So it can’t be passed over to dealer to do.

17. Why no Hybrid
•
Lower Performance:Since the main motive is to increase the fuel
efficiency or range of the hybrid car, the power or acceleration can lag a
conventional internal combustion engine car.
•
Expensive to Buy:Although car companies are trying to bridge the gap in
pricing between a conventional vehicle and hybrid, hybrids continue to
demand higher costs.
•
High Maintenance Cost:With several mechanical parts in the cars and
with two sets of engines powering the hybrids, the maintenance continues
to be on the higher side. Also, not all mechanics are trained to repair a
hybrid car.

18. Aggressive talk
Porsche/BMW claimed that all-electric powertrains didn’t offer enough
performance to reach the level that their customers expect from the
premium German brand and Tesla proved them wrong.

19. Thank You
Subrat Kumar Dash