Tesla company market analysis.edited

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1 Tesla Company Market Analysis Student’s Name Institutional Affiliation Course Date

2 Table of Contents Executive Summary ..................................................................................................... 2 Tesla Company Market Analysis ................................................................................ 4 Introduction .................................................................................................................. 4 Traditional Global/International Marketing Methods ............................................. 4 Tesla Target Audience ................................................................................................... 4 Digital Global/International Marketing Methods ..................................................... 5 Tesla Marketing Channels .............................................................................................. 5 Tesla’s Digital Marketing Strategy ................................................................................ 5 Example of adaptations Tesla has done in different Consumer Markets and Countries to consider market conditions and Cultural contexts ............................. 6 Cultural Distance ............................................................................................................ 6 German Markets ............................................................................................................. 6 Long Term Orientation ................................................................................................... 6 Canadian Market ............................................................................................................ 7 Technological considerations for Tesla to operate Successfully in the Global Marketplace .................................................................................................................. 8 Technological Environment ........................................................................................... 8 Manufacturing improvements using large scale die casting .......................................... 8 Tesla's self-driving technology ....................................................................................... 9 Battery Innovation ........................................................................................................ 10 Corporate social responsibility (CSR) for Tesla in the International Marketplace ...................................................................................................................................... 11 References ................................................................................................................... 13

3 Executive Summary Tesla was established in 2003 by Jeffrey Straubel and Elon Musk. It creates and markets energy storage technologies and electric automobiles (EVs). Tesla does not provide franchises but always communicates honestly and openly with its customers about its goals. The brand is present in the market as a result of its launch activities, which included actual autotests and online audience involvement. Tesla differs from other traditional automakers in terms of how it conducts business. To manage sales and customer service, they have established up sales centers. Franchise owners receive fewer performance-based incentives because Tesla handles these locations. To help people comprehend the culture and relate their behaviour, Geert Hofstede created the most well-known framework, the Hofstede Model of Cultural Dimensions. Power distance, individuality, masculinity, uncertainty avoidance, long-term orientation, indulgence, and monumentalism are the seven characteristics of the Model that provide cultural comparisons and contrasts. This write up analyzes the German and Canadian markets following tried-and-true principles. Additionally, it highlights the various t echnological considerations Tesla has taken to operate s uccessfully in the g lobal m arketplace while also carrying out its corporate social responsibility.

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4 Tesla Company Market Analysis Introduction Tesla creates and markets energy storage technologies and electric automobiles (EVs). It was established in 2003 by Jeffrey Straubel and Elon Musk. Tesla wants to aid in the global switch to renewable energy. Reuters reports that the company's home market, the United States of America, generates more than 60% of Tesla's revenues ( Sull and Reavis, 2019) . However, the business has grown abroad because it thinks there is a rising need for electric vehicles on a global scale. Tesla wants to boost and broaden its revenue sources in the European and Asian markets (Lugtu, 2019). This article will examine Tesla's current global presence, highlight adaptations made in various consumer markets and countries, and make recommendations regarding the company's corporate social responsibility. Traditional Global/International Marketing Methods Tesla Target Audience The marketing mix's four Ps that promote growth are Product, Price, Place, and Promotion. Sharp minds are complex at work in the background at Tesla to keep the company profitable (Amad and Khan, 2020). This is also Tesla's marketing strategy. By integrating solar-powered technology into its key energy frameworks, this company is greatly enhancing its ability to produce better products and deliver greater performance (GS and LR, 2020).

5 Tesla does not provide franchises. This brand eliminated the support mechanism for third-party contact by claiming storefronts through its online-based organization (Jiang, 2022). Tesla always communicates honestly and openly with its customers about its goals (Waller, 2020). The brand is present in the market as a result of its launch activities, which included actual autotests and online audience involvement. Digital Global/International Marketing Methods Tesla Marketing Channels According to Falát and Holubčík (2017), Tesla, unlike other automakers, sells directly to customers rather than through franchised dealerships. The majority of the company's showrooms and galleries are located in a large network of well-known urban centers (Moaheng, 2018). As a result, under their freshly developed retail model, Service Plus, they have combined their direct sales strategy with service centers. Tesla differs from other traditional automakers in terms of how it conducts business. It does not sell franchises to investors (Ivanchenko, 2017). To manage sales and customer service, they have established up sales centers. Franchise owners receive fewer performance-based incentives because Tesla handles these locations (Amad and Khan, 2020). Some franchisees work more to obtain their rewards than to market the business. Tesla’s Digital Marketing Strategy The robust social media presence of Tesla will eventually assist with marketing. Online hype has previously piqued Elon Musk's curiosity. His most recent media appearance was to test the newly introduced cyber truck's window glass, which produced much buzz even though it was not meant to break and helped Tesla

6 advertise the car (Pathak et al., 2023). Tesla operates differently from other established automakers. Investors are not offered franchises by it. Tesla has sales centers where both sales and customer service are done at the same time (Ferrell et al., 2021). Example of adaptations Tesla has done in different Consumer Markets and Countries to consider market conditions and Cultural contexts Cultural Distance To help people comprehend the culture and relate their behaviour, Geert Hofstede created the most well-known framework, the Hofstede Model of Cultural Dimensions ( Gallego and Pucheta , 2021). Power distance, individuality, masculinity, uncertainty avoidance, long-term orientation, indulgence, and monumentalism are the seven characteristics of the Model that provide cultural comparisons and contrasts (Minkov and Kaasa, 2021) Additionally, Ugrin, Pearson, and Nickle (2018), looked into how employees' cultural differences and workplace preferences vary using the Hofstede Model of Cultural Dimensions. As a result, I decided to analyze the German and Canadian markets following tried-and-true principles. German Markets Long Term Orientation Germany has a high pragmatic score of 83 out of 100, according to Hofstede Insights, 2022), where individuals are adaptable to change and believe that time, circumstance, and context are interconnected. Additionally, they tend to save and invest money. They typically advocate using this realistic perspective to be thrifty when making plans (Hofstede Insights, 2022). As a result, Tesla will be able to sell more vehicles in the German market if customers can adapt to the change.

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7 Individualism With a score of 67, German society is categorized as individualist ( Jourabchi , 2022). People appreciate the relationship between parents and children and prefer small families. They consider telling the truth the most crucial component of communication, even when it hurts. The US also calculated 91 separate scores (Hofstede Insights, 2022). As a result, US-based automaker Tesla does not employ the same marketing approach in Germany as in the US market. Canadian Market Power Distance Canadian culture, which scored 39 in this category, is distinguished by citizen interdependence and an emphasis on egalitarianism (Cotabe and Helsen, 2022). The lack of overt status and class distinctions in society also reflects this. Tesla employees frequently consult with one another and freely exchange information. Because Canadians value a simple exchange of information, Tesla ensures that its communication is always up to these standards (Chen et al., 2022). Individualism Canada has an Individualist culture, earning an 80 on this scale (its highest dimension score) (Cotabe and Helsen, 2022). This translates into a loosely knit culture in which people are expected to look out for themselves and their immediate families, similar to its southern American neighbour. Miller, (2019) states that, for Tesla, a US- based automaker, to succeed in the Canadian market, it employs the same strategy it employs in the US market. Uncertainty Avoidance The Canadian culture is more "accepting of uncertainty," with a score of 48 in this category (Cotabe and Helsen, 2022). This demonstrates a willingness to try

8 something new or different, whether it relates to technology, such as electric automobiles, indicating the ease with which new concepts, innovative goods, and ideas are accepted. Because Tesla vehicles are unquestionably the most popular electric vehicles in Canada, the company has capitalized on this culture (Kim, 2020) . Despite the small market share of electric vehicles in Canada, Tesla could sell them reasonably well. Technological considerations for Tesla to operate Successfully in the Global Marketplace. Technological Environment Manufacturing improvements using large scale die casting A car's structure is constructed of hundreds of parts that must be manufactured and put together. Workers or machines typically produce parts: think castings, rivets, welding, bolting, bonding (Amein, 2022). This is how cars have been constructed for more than 50 years. Contrarily, Tesla is altering that. They have the rights to some of the most advanced die-casting machinery ever created, and Tesla's California production facility currently employs it (Ajitha and Nagra, 2022). Instead of employing several pieces, the machine intends to construct a sizable percentage of the car construction in a single piece. This integration will benefit Tesla technologically in several ways, including: 1. Manufacturing costs and build time have been reduced. 2. Product reliability improved (fewer parts to break or wear out), and factory equipment and tooling costs were reduced. In the factory, less assembly space is required.

9 3. Cost savings could be passed on to customers. As a disruptor, Elon Musk immediately comes to mind. He has no qualms about coming up with novel manufacturing ideas ( Daum, 2022). He has attempted to recreate the assembly line on several occasions over the last 15 years, but he has never given up. Although his manufacturing innovations may benefit his company, he immediately challenges traditional manufacturing methods with new ideas (Ajitha and Nagra, 2022). Tesla's self-driving technology According to Hensmans, (2021) , despite being a technology firm with a range of products in its portfolio, from cars to rockets, Tesla is best recognized for making cars. They lead the way in developing new technologies in addition to their vehicles and engines, demonstrating this ( Gillmore and Tenhundfeld, 2020 ). They developed artificial intelligence and machine learning technologies for driverless vehicles (AI). This is a source of income for Tesla and a crucial differentiator. Despite critics and doubters, Tesla has established itself as the top EV producer, vying for EV technology with General Motors and other automakers ( Niedermeyer, 2019). Their competitors did not take them seriously and were unaware of the cutting-edge technology that Tesla had incorporated into their vehicles. Regardless of what his rivals do, Musk is committed to achieving "Level Five," the industry name for fully functional and secure self-driving vehicles on the market (Khan, 2021). Tesla has what it takes to take this technology that far, even though they still have a long way to go. In addition, they are motivated by the potential benefits that this EV technology might offer them, such as:

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10 1. A clear benefit for luring new clients to the brand is increased post-sale software revenue from software-equipped automobiles and over-the-air upgrades. 2. Control will be obtained by owning their computer hardware and software supply chain. 3. Would firms like Uber and Lyft be keen to enter the new market? 4. The intended but unbuilt Tesla Semi Truck is a crucial element. Battery Innovation Given the potential and ongoing development of electric cars, the importance of battery technology, sometimes known as "battery chemistry," cannot be overstated. Tesla has made a lot of advancements, including changes to battery composition, safety, and charging speed (Ajitha and Nagra, 2022). The two most important factors for buyers are range and lifetime. Tesla has been a pioneer in these fields, but as it strives to make EVs more widely available and affordable, cutting the price of batteries has taken primacy. The Tesla Powerpack, a commercial electricity initiative in South Australia that uses battery power to stabilize the area's commercial power grid, is one example of their innovative work (Akapo et al., 2019). It was hailed as a victory for renewable energy after saving almost $40 million in its first year (Grifith, 2022). Tesla will and can use battery power in various ways, such as this. On September 22, Tesla held its annual Battery Day, illustrating how its batteries are progressing. As only Tesla can do, there were some surprises mixed in with the information regarding more reasonably priced EV batteries to keep everyone on their toes. These technological interventions Relate to the 7 Ps of marketing. For product, the fact that the company is producing high-quality products gives the company a competitive edge ( Kryscynski, et al., 2021). High-quality people in the USA have a

11 high urge for quality regardless of its price. As seen above, the advanced technology on the Tesla cars will push its sales high each financial year. For pricing, Tesla is relatively higher than its competitors, but the price is still affordable (Liu, 2021). The price is high because Tesla offers more features for its vehicle. Using more advanced technology will increase product prices to cater to production costs. When it comes to 'Place', two marketing channels are used for advertising Tesla's products. The first is when it makes direct online sales to clients. The second is the wholesale market, from which it sells to merchants all around the country. Customers are subsequently sold these. Technology has led to a high marketing rate through social media and online marketing, which has boosted the company's sales in the host country each year; this has also contributed to the promotions part of the marketing sector. Tesla's sales staff includes professionals essential to the company's marketing initiatives. These individuals have received training in persuasive strategies and how to interact with clients based on their preferences respectfully (Kent, 2022) . Technology has made it easier to train these people and to evaluate and reward their work. As a result, there has been less employee turnover. Technology has made it easier to train these people and to evaluate and reward their work. Employee turnover has decreased as a result. Regarding tangible proof, in addition to clearly marked stores, Tesla has an easy-to-use website that enables customers to inspect its items in high-quality photos taken from various angles (Pichier, 2022) . This has increased website traffic from potential customers and more purchases each fiscal year. Corporate social responsibility (CSR) for Tesla in the International Marketplace Tesla Inc.'s CSR strategy is based on the business's nature and products. For instance, the company's electric cars are frequently cited as a remedy for internal

12 combustion engines' drawbacks ( Poliienko, 2022) . In this sense, corporate citizenship is essential in business. This circumstance makes it simpler for the business to carry out its corporate duties. I feel that Tesla should adopt the following initiatives in its CSR: Reducing carbon footprints, improving labour laws, engaging in fair trade, promoting diversity, equity, and inclusion, and increasing charitable contributions globally, Community and online volunteerism, Corporate environmental policy and environmentally and socially responsible investments.

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13 References Ahmad, S., & Khan, M. (2019). Tesla: Disruptor or Sustaining Innovator. Journal of Case Research , 10 (1). Akakpo, A., Gyasi, E. A., Oduro, B., & Akpabot, S. (2019). Foresight, organization policies and management strategies in electric vehicle technology advances at tesla. In Futures Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham. Ameln, C. (2022). Claus-Enabling last-mile delivery in urban environments with limited mobility access. Chen, C. J., Guo, R. S., Wang, S. H., & Lin, Y. H. (2022). Power distance diversification, ownership structure, and business group performance. Journal of Business Research , 151 , 70-85. Daum, T. (2022). Agile Methods on the Shop Floor: Towards a" Tesla Production System"?. Falát, L., & Holubčík, M. (2017). The influence of marketing communication on financial situation of the company–a case from automobile industry. Procedia engineering , 192 , 148-153. Ferrell, O. C., Hartline, M., & Hochstein, B. W. (2021). Marketing strategy . Cengage Learning.

14 Gallego-Álvarez, I., & Pucheta-Martínez, M. C. (2021). Hofstede’s cultural dimensions and R&D intensity as an innovation strategy: a view from different institutional contexts. Eurasian Business Review , 11 (2), 191-220. Gillmore, S. C., & Tenhundfeld, N. L. (2020, December). The good, the bad, and the ugly: Evaluating tesla’s human factors in the wild west of self-driving cars. In Proceedings of the Human Factors and Ergonomics Society Annual Meeting (Vol. 64, No. 1, pp. 67-71). Sage CA: Los Angeles, CA: SAGE Publications. Griffith, S. (2022). Electrify: an optimist’s playbook for our clean energy future . MIT Press. GS, D., & LS, M. R. (2020). Customer perception towards tesla electric car’s innovative features. Journal of Contemporary Issues in Business and Government , 26 (2), 521-527. Hensmans, M. (2021). The innovation pyramid: five approaches to strategic decision- making. Journal of Business Strategy . Hofstede Insights , (2022) . Organisational Culture Ivanchenko, N. (2017). Tesla, Inc.: The Automotive Business Analysis (Doctoral dissertation, Brandeis University, College of Arts and Sciences). Jiang, T. (2022, March). A Business Model to Analyze the Tesla Based on SWOT Analysis and POCD. In 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022) (pp. 2896-2899). Atlantis Press. Jourabchi Amirkhizi, P., Pourtalebi, S., & Anzabi, N. (2022). Emotional Effects of Product Form in Individualist and Collectivist Cultures. Journal of Marketing Communications , 1-15.

15 Khan, M. (2021). A critical analysis of Elon Musk’s leadership in Tesla motors. Journal of Global Entrepreneurship Research , 1-10. Kim, H. (2020). Analysis of How Tesla Creates Core Innovation Capability. International Journal of Business and Management , 15 (6), 42-61. Kotabe, M. M., & Helsen, K. (2022). Global marketing management . John Wiley & Sons. Kryscynski, D., Coff, R., & Campbell, B. (2021). Charting a path between firm‐ specific incentives and human capital‐based competitive advantage. Strategic Management Journal , 42 (2), 386-412. Liu, S. (2021, March). Competition and valuation: a case study of Tesla Motors. In IOP Conference Series: Earth and Environmental Science (Vol. 692, No. 2, p. 022103). IOP Publishing. Lugtu Jr, R. C. (2019). Tesla: Testing a Business Model at its (R) Evolutionary Best (Doctoral dissertation, DE LA SALLE UNIVERSITY-MANILA). Maoheng, W. (2018). Research on the brand marketing of Tesla Electric Vehicle (Doctoral dissertation, SIAM UNIVERSITY). Miller, I. (2019). Has Tesla influenced consumer perceptions of electric vehicles? Insights from a survey of Canadian car buyers. Minkov, M., & Kaasa, A. (2021). A test of the revised Minkov-Hofstede model of culture: Mirror images of subjective and objective culture across nations and the 50 US states. Cross-Cultural Research , 55 (2-3), 230-281. Niedermeyer, E. (2019). Ludicrous: The Unvarnished Story of Tesla Motors . BenBella Books.

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16 Pathak, P., Yadav, V., Pillai, S., Das, S., & Kansal, G. (2023). Unveiling the Success Behind Tesla’s Digital Marketing Strategy. In Emerging Technologies in Data Mining and Information Security (pp. 251-260). Springer, Singapore. Pichler, R. (2022). Strategize: product strategy and product roadmap practices for the digital age (Vol. 2). Pichler Consulting. Poliienko, M. A. (2022). Modern Trends of Corporate Social Responsibility in American Business. Saxena, N., & Vibhandik, S. (2021). Tesla's Competitive Strategies and Emerging Markets Challenges. IUP Journal of Brand Management , 18 (3). Sull, D., & Reavis, C. (2019). Tesla’s Entry into the US Auto Industry. Ugrin.H, Pearson. D & Nickle. G. (2018) . Millennial’s perception on cyberloafing: workplace deviance or cultural norm?. Behaviour & Information Technology , 1- 18. Waller, T. (2020). Discovering Your Target Audience. In Personal Brand Management (pp. 37-49). Springer, Cham.

Tesla company market analysis.edited

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