SWOT

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Milestone Three Assignment Amy Richard Southern New Hampshire University MKT 500: Marketing Strategies Professor Tina Brown October 6, 2023

Tesla’s Model F brings several strengths to the market. One of these strengths includes the needless expense of gasoline. Where the Model F runs off friction, customers will never need to worry about purchasing gas again. Customers will also never stress about having to charge their vehicles again. The convenience, luxury, and innovation of the Model F is what will generate most of its sales. Another strength of the Model F is the impact it will have on the environment. By minimizing the carbon dioxide fumes released into the air, the threat of global warming is reduced. The Model F is ideal for those who are ecofriendly. “According to a survey from McKinsey & Co., 66% of all respondents and 75% of millennial respondents say that they consider sustainability when they make a purchase. Customers now align themselves with brands that are compatible with their values and priorities” (Martins, 2023). A weakness of Tesla’s Model F is its price. Our product’s starting price is $74,500. To many, this is viewed as an enormous expense. The average American worker brings home an income of $54,132 per year (Russo, 2022). As of March 2023, the average price of a new vehicle is $48,008, which is around $26,000 less than Tesla’s Model F (Cruz, 2023). This undesirable expense may give the upper hand to our competitors who sell vehicles for less. Another weakness of the Model F is the cost of its replacement parts. For example, if a bird were to fly into your windshield and crack it, the cost to replace a windshield for a Model F can range from $800 to $2,000. In comparison, the cost to fix a windshield of most gas-powered vehicles ranges from $350 to $550 (Kazmierski, 2023). Once again, this cost is more than the average American can afford. I am aware that these weaknesses must be addressed, as our competition will likely exploit them. With today’s economy, Tesla may view the increased prices as an opportunity. The economy has caused everything to rise in price, especially gasoline. The cost of gasoline is often

a quick indicator as to how well or poor the economy is performing. Today, the national average price of gasoline is $3.89 per gallon (Laycock, 2023). For a large vehicle like a Ford F-150 with a 26-gallon tank, it will cost owners around $100 to fill up. If the economy does not recover, gas prices will continue to rise. The scare of the poor economy may drive the target market towards purchasing the Model F instead of a gasoline-powered vehicle. The scare of global warming can also be seen as an opportunity for Tesla. With so many vehicles running off gas, harmful toxins and fumes are being released into the air. These fumes are damaging are ozone layer and causing a global increase in temperature. If we continue to damage Earth’s ozone layer, all that we love and know will someday be extinct. Where there are opportunities, there are threats. General Motors and Ford Motors Co. are Tesla’s main competitors. These companies are considered Tesla’s top competitors because they offer something that Tesla does not, a cheaper form of transportation. Although gas is an undesirable expense for everyone, gasoline-powered vehicles can be excessively cheaper than the products sold by Tesla. I have chosen these two competitors and label them as “threats” for this exact reason. These competitors generate the largest amount of profit annually for automotive companies. In 2022, General Motors full-year revenue was $156.7 billion (GM Releases 2022 Fourth-Quarter and Full-Year Results, and 2023 Guidance, 2023). During this same year, Ford Motor profited $158.1 billion (Ford Motor Revenue 2010-2023 | F, n.d.). General Motors is an American automotive company that sells many of the vehicles we see on the road today. Chevrolet, Buick, GMC, and Cadillac are all car brands that are designed and sold by General Motors. The company’s headquarters resides within Detroit, Michigan (General Motors, n.d.). In 2022, General Motors shared a hefty percentage of the market. Their market share for that year was 17.1% (Carlier, 2023). Although 17.1% of the market is a large

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share, it is much less than their market share nineteen years ago. Their market share once stood at 28 percent (Carlier, 2023). This could be a result of Tesla and the increased interest in electric cars. Unlike Tesla, General Motors target market is mostly middle-class consumers (Levin, 2022). This is an advantage General Motors has over Tesla. Ford Motor is another company in the automotive industry. Ford is an American company located in Dearborn, Michigan. In 2022, Ford Motor’s market share was 13.9%. Unlike General Motors, Ford Motor has been able to maintain a steady share of the market. For the past seven years, Ford Motor target share has been around 14% (Carlier, 2023). Like General Motors, Ford Motors target market is mostly middle-class families (Levin, 2022). Many automotive companies whose target market is the middle-class often find it easier to produce more sales. With General Motors and Ford Motor, Co being considered Tesla’s top competitors, it is vital that I stress the positive impact Tesla’s Model F will have on the economy and environment. The Model F will differentiate from any vehicle seen in General Motors and Ford Motor. The Model F’s style will be clean, sleek, and trendy. The Model F is equipped with many new, fun features that most cars do not have. Tesla’s Model F has a single touchscreen that controls everything in the car from climate control, traffic updates, videogames, surround sound, and even hands-free driving. As well as lane change assistance, Tesla’s Model F can self-parallel park. These are just some of the many features of the Model F. All these features offer customers luxury, convenience, and safety while driving. Because of this, my target market will be more likely to select my offering instead of the competitions. My target market will see what Tesla’s Model F offers and be less attracted to our competitor’s products. Below is a table of the strengths, weaknesses, opportunities, and threats of Tesla’s Model F:

Strengths (Internal)  The Model F will have a positive impact on the economy.  The Model F will also have a positive impact on the environment. Weaknesses (Internal)  The Model F is more expensive (about $27,000 more than the average price of a gasoline-powered car).  The cost of repairs for the Model F is pricier than others. Opportunities (External)  The scare of global warming may generate more sales.  The undesirable expense of gas and the fear of increased gas prices may generate more sales. Threats (External)  General Motors- GM offers cheaper products and profited $156.7 billion in 2022. Their market share for 2022 was 17.1%.  Ford Motor- Ford Motor also offers cheaper products and profited $158.1 billion in 2022. Their market share for 2022 was 13.9%.

References Carlier, M. (2023, January 11). Ford Motor Company's vehicle sales market share in the United States from 2015 to 2022. Statista. https://www.statista.com/statistics/239614/vehicle- sales-market-share-of-ford-in-the-united-states/#:~:text=In%202022%2C%20Ford %E2%80%99s%20U.S.%20market%20share%20was%20around,13.9%20percent%2C %20trailing%20General%20Motors%20and%20Toyota%20Motor. Carlier, M. (2023, January 11). General Motors' market share in the United States from 2015 to 2022, based on vehicle sales. Statista. https://www.statista.com/statistics/239607/vehicle-sales-market-share-of-general-motors-in-the- united-states/ Cruz, A. (2023, June 29). How Much Does a New Car Cost?. MoneyGeek. https://www.moneygeek.com/insurance/auto/average-price-of-a-new-car/#:~:text=1%20As %20of%20March%202023%2C%20the%20average%20price,still%2027.8%25%20higher %20than%20pre-pandemic%20prices.%20More%20items Ford Motor Revenue 2010-2023 | F. (n.d.). Macrotrends. https://www.macrotrends.net/stocks/charts/F/ford-motor/revenue General Motors. (n.d.). Forbes. https://www.forbes.com/companies/general-motors/? sh=2c38c0934e09 GM Releases 2022 Fourth-Quarter and Full-Year Results, and 2023 Guidance. (2023, January 31). General Motors Company. https://investor.gm.com/news-releases/news-release- details/gm-releases-2022-fourth-quarter-and-full-year-results-and-2023

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Laycock, R. (2023, October 5). US gas prices: 2018 to October 2023. Finder.com. https://www.finder.com/gas-prices Levin. (2022, November 5). The Changing Target Market Of General Motors. WoodWard Avenue. https://woodwardavenue.org/the-changing-target-market-of-general-motors/ Levin. (2022, October 16). What Is Ford’s Target Market. WoodWard Avenue. https://woodwardavenue.org/what-is-fords-target-market/#:~:text=Ford%E2%80%99s%20target %20market%20is%20a%20group%20of%20consumers,target%20market%20is%20primarily %20composed%20of%20middle-class%20families. Russo, F. (2022, December 7). How much does the average American make in 2022? First Republic. https://www.firstrepublic.com/insights-education/how-much-does-the-average- american-make

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