Marketing Strategies of Tesla Inc. Includes- 1. About Tesla and Elon Musk 2. Marketing MIx 3. SWOT Analysis 4. Porter's Five Force Analysis 5. BCG Matrix

1. Tesla, Inc.
Presented by :-
Swayam (18BC071)

2. About
Tesla, Inc. (formerly Tesla Motors, Inc.) is an American electric vehicle and clean
energy company based in Palo Alto, California. Tesla, Inc. is a leader in
manufacturing premium eco-friendly & battery powered electric cars. Although
the major product manufactured by Tesla is electric sedans, it also produces other
sustainable energy technologies like solar panels, Tesla batteries, Tesla
Supercharging Stations and much more.

3. Elon Musk
● Born on June 28, 1971 in Pretoria, South
Africa
● At 12, he sold his first software: a game he
created called Blastar
● Musk launched his first company, Zip2
Corporation, in 1995 with his brother and
sold it for $341 millions to Compaq
Computers
● In 1999, Musk co-founded PayPal and sold
some part to ebay for $1.5 billion
● Bet all his money on Tesla and SpaceX
● World’s 3rd richest man

4. Timeline
2003
Tesla Motors founded by
Martin Eberhard and
Marc Tarpenning
2004
Elon Musk invests $30
million and joins Tesla as
the Chairman of its Board
of Directors
2006
Tesla showcases the
prototype for its first car,
the all-electric Roadster

5. 2008
The Roadster enters
production. Elon Musk
receives the first vehicle
produced
2008
Ze'ev Drori resigns as
Tesla's CEO. He was
replaced by Elon Musk
2010
Tesla goes public, raising
$226 million in its IPO
2013
Tesla posts its first
quarterly profit

6. 2015
The company enters the
solar power market
2018
The SEC charges Musk. Musk
pays $20 million and steps
down as the Chairman of
Tesla's Board of Directors
2019
Musk and Tesla unveil
the "Cybertruck," an
electric six-seater pickup
truck.
2020
Strong fiscal quarter and
analyst upgrades, Tesla
stock surges, eventually
reaching over $900.

7. Tesla’s mission: “to accelerate the world’s transition to sustainable energy”
Tesla’s vision: “to create the most compelling car company of the 21st century
by driving the world’s transition to electric vehicles”

8. Tesla, the world’s most valuable car
company has a $0 marketing budget
“Tesla Motors has no advertising, no ad agency, no
CMO, no dealer network. And that’s no problem.”
– AdvertisingAge

9. Marketing mix of
Tesla

10. Product
Tesla is an independent automaker that offers a wide range of products made from the
latest technology. It adheres to a B2B model which encourages partnership with other
companies by supplying products as well as services and also the B2C model by offering
luxury, family and mass market vehicles. It is a well-known distributor, manufacturer,
developer and designer of eco-friendly products and also offers related services to other
automotive companies. Major product manufactured by Tesla is electric-sedan powered
by the battery.

11. Products offered by Tesla
Motors
● Induction motor
● Magnet motor
Autopilot
● Lane-departure warning
● Adaptive cruise control
● Autosteer
● Emergency Braking
● Autopark
Batteries
● Lithium-ion battery
Glass
● Roof glass
● Roof tiles with the solar collector
Battery products
● Powerwall

12. Vehicle models
Roadster
Model X
Cybertruck
Model 3
Model S
Model Y
2006
2012
2015 2017
2019
2019

13. Place
● Tesla Motors caters to a worldwide audience via its headquarters based in Palo Alto in
the United States.
● It has a wide sales and distribution network of its own that includes stores in Asia,
Europe, Australia, South Korea, Dubai and North America
● One of the largest markets of Tesla for electric vehicles is in China
● Tesla currently operate one factory in Fremont and three Gigafactories in Nevada, New
York and Shanghai. They are also planning to open 2 more Gigafactory in Texas and
Germany by 2021
● The company has followed a direct-to-consumer sales approach
● The company’s goal is to minimize inventory costs and make each car when the customer
orders it
● They use stores, galleries and online website to sell their products
● Inspections and services are offered at their own service stations
● One of its important R&D department is at Athens in Greece

14. Elon Musk says
Tesla is
launching in
India 'next year
for sure'

15. Price
● Tesla Motors initially decided to target wealthy buyers making a conscious decision to
capture larger markets later on with lower-pricings. Hence at its onset, it adopted a
premium pricing strategy and maintained high prices for its premium products. This was for
a niche market that was more interested in high-quality products with the latest
technology irrespective of its price range because they could easily afford such products.
● Later on, the company launched affordable products keeping in mind the mid-scale general
consumers. It wanted to capture a large part of the consumer market and hence adopted a
reasonable pricing strategy. This was a huge success as it was able to sell a greater number
of products and this resulted in higher profit margins and greater revenues.
● Tesla follows No-Negotiation Policy

17. Promotion
● In order to create mass awareness, Tesla has taken the help of social platform.
● It always creates a viral buzz at the launch of any new product
● More than 232 videos are uploaded on its official channel via YouTube with nearly
1.56 Million subs showing great features of their vehicles
● Latest information along with features, specifications, safety measures, warranty,
new software is updated at regular intervals on its official website
● Discussions are held periodically on social media about various products and
technology
● Elon Musk is the public face of the company and he actively participates in
several interviews and talk shows. This helps in gaining positive visibility and
recall value of the brand name

18. ● Tesla Motors has absolutely zero marketing budget. It has no advertising commercial
or billboards, no ad agency, and no CMO
● One of the many reasons for this unique strategy is that Tesla has more number of
orders for cars than they can actually manufacture
● Its surcharging stations on highways and charging ports at malls, hotels, and
restaurants have brand name Tesla written over them
● Tesla recently announced that Tesla’s research will be publicly available and giving up
patents. This helped company gain a lot of positive public image and position itself as
a do-gooder brand for the humanity

19. SWOT
Analysis

20. Strengths
● Technology: Tesla has always been associated with cutting-edge technologies and many
companies have adopted the technologies introduced by Tesla. Some examples of top
brands which have used Tesla technologies include Daimler which uses Tesla’s battery
packs; Mercedes-Benz a user of Tesla powertrain; Toyota with Tesla motor. In fact,
pioneers like GE have set up trackers which keep track of Tesla’s innovations.
● Distribution channel: Tesla understand how critical distribution may be for the business
and this makes Tesla own their own distribution channel.

21. ● Political and government support: The company has ample support from the
government. The company had obtained a USD 465 billion for energy management
projects under the US Department of Energy.
● Monopoly: Tesla Motors started off targeting a very niche segment which was electric
and alternative energy cars. The strategy was to move deeper into the existing segment
and it would not be wrong to say that the company operates in a monopoly market.
● Great leadership and team spirit: Elon Musk is extremely passionate about
engineering and an astute salesman. The CEO is backed by a team that is highly spirited
and as passionate about the cause as their leader.

22. Weaknesses
● Poor liquidity: In comparison to competitors like Ford which has USD 20 billion, General
Motors with USD 25 billion or Fiat Chrysler Automobiles USD 40 billion which are cash
rich from years and years of operations. In comparison to this Tesla has only USD 8 billion
which will not be sufficient for it to survive.
● Lack of High Volume Production: There is no doubt that Tesla is the pioneer of actual
energy-saving cars. But it has failed to produce high volumes of automobiles for any of
its models. Even now, as the company plans to manufacture Model 3 vehicles at high
volume, it faces issues in terms of production cost and management resources and space
expansion in Gigafactory 1.
● Poor customer awareness: Tesla makes very specialized products which are essential
for the environment because of their sustainability angle. But these products are highly
futuristic and most customers are still not sure about whether or not they need to invest
in these technologies which are expensive as well.

23. Opportunities
● Sales expansion in untapped Market: The most significant opportunity for the
company right now is the Asian market, which is still unsaturated in the field of
automotive and renewable energy markets. Especially in the situation where Tesla needs
to expand its global market to increase its financial stability and stronger market
presences.
● Less Expensive Car: Tesla is expensive due to its unconventional reliance on innovation,
which requires maximum financial support to entertain new technology. Recently, Tesla
has launched Model 3, which is a more affordable version of Model S with less range,
power, and fewer features. However, it is an excellent opportunity for Tesla to expand
the size of their audience market.

24. ● Bringing battery production technology in-house: Tesla intends to make its own
battery cells. The move can be a big game-changer as it will help the company to
increase its manufacturing rate while reducing its production cost. Currently, Panasonic
is their primary supplier of battery.
● Market Confidence in Tesla: The stock market has shown confidence in Tesla after
seeing two consecutive profitable quarters. The price of Tesla stock has doubled since
the start of this year.

25. Threats
● Extensive Competition: Tesla faces aggressive competition from both alternative fuel
vehicles and self-driving technology. Many automotive brands in the luxury segment like
Mercedes, BMW, Audi, Lexus and in the economy segment like Toyota, Ford, Volvo,
General Motors are getting ready for a fierce competition. Many brands are not only
launching or planning to launch their environment-friendly/ self-driving technology but
also, they are offering them at a comparably lower price.
● Product Defects: Due to highly complex engineering for innovative vehicles, Tesla’s
cars and other energy products have exhibited major flaws in many cases. The defective
products often have weaknesses in design, manufacturing, and other features which can
harm the company’s image permanently.
VS

26. ● Disruption of Supply Due to Shortage of Materials: Tesla can face major
suspensions in the supply of manufacturing materials due to the increased prices.
The company uses aluminum, steel, lithium, nickel, copper, and cobalt, as well as
lithium-ion cells from suppliers. All these materials have volatile prices, which can
affect the company’s production line severely in the future.
● Customer Adaptation: Any business run along the lines of customer’s acceptance.
If the public is ready to adapt change, companies benefit from the innovative range
of products. However, it can be a slow, unforgiving process, producing new
challenges for companies like Tesla. The organization highly depends upon
customers willingness to adopt electric vehicles.
● Self-Driving Cars Are Still a Concern for Pedestrians: In a survey from YouGov, US
adults still feel unsafe, to walk around self driving cars. Especially, people above the
age of 55 are the most afraid to be around self-driving vehicles.

27. Porter's Five
Forces Analysis

28. Competitive Rivalry (Strong Force)
● Small number of firms (weak force)
● High aggressiveness of firms (strong force)
● Low switching costs (strong force)
There are only a small number of firms operating in the automotive market. In Porter’s Five
Forces analysis framework, this external factor limits the effect of competition on companies
like Tesla, Inc. However, these firms are generally aggressive in innovating and promoting
their products. Large automotive companies have aggressive marketing campaigns which
strengthens the effects of competitors against the business.

29. Bargaining Power of Buyers (Moderate Force)
● Low switching costs (strong force)
● Moderate substitute availability (moderate force)
● Low volume of purchases (weak force)
Low switching costs reduce barriers for Tesla customers to purchase cars from other
providers. However, the availability of substitutes is only moderate in many cases, thereby
limiting customers’ bargaining power against Tesla Inc.

30. Bargaining Power of Suppliers (Moderate Force)
● Low forward integration (moderate force)
● Moderate size of suppliers (moderate force)
● Moderate supply level (moderate force)
Tesla’s suppliers have a low level of forward integration. This external factor refers to
suppliers’ limited control in the distribution and sale of their products. For example, some
suppliers use third parties to sell their materials to Tesla, while others directly transact with
the company. In addition, most of these suppliers are moderately sized, thereby having limited
influence on the automotive industry environment. Another external factor is the moderate
level of supply, which empowers suppliers to affect Tesla, but only to a limited degree.

31. Threat of Substitutes (Moderate Force)
● Low switching costs (strong force)
● Moderate substitute availability (moderate force)
● Moderate performance of substitutes (moderate force)
The low switching costs enable substitutes, such as public transportation, to easily attract
customers. However, the moderate availability of substitutes limits such influence of
suppliers. In relation, many substitutes have only a moderate level of performance in
satisfying customers’ practical needs. For instance, public transportation is not as versatile as a
private car.

32. Threat of New Entrants (Weak Force)
● High cost of brand development (weak force)
● High cost of doing business (weak force)
● High economies of scale (weak force)
Tesla’s business is difficult to compete with, especially because of the high cost of brand
development, along with the popularity of Elon Musk. In addition, automobile manufacturing
has high costs, which impose a barrier to new firms. Also, established players like Tesla benefit
from increasing economies of scale, which new entrants can only achieve upon exceeding a
production threshold.

33. BCG Matrix
Market Share
MarketGrowth
Solar Roof
Cybertruck
Model S
Model 3
Question Mark Star
Dog Cash Cow

34. References
● www.tesla.com
● www.thestreet.com
● www.marketing91.com
● www.wikipedia.org
● www.marketingexamples.com
● www.google.co.in

35. Thank You!
Any Questions?