Analyzing Teslas Business Model and Marketing Strategy

Introduction

Background of the company

Tesla organization is based on development and manufacturing of electrical cars and vehicles for the better marketplace. A scalable clean energy is also used in the manufacturing of these vehicles for the better marketplace. Tesla believes in manufacturing cars that can help in running the business in an ethical manner, including the provision of business dissertation help. It is situated in California and does have self organized cars that are manufactured by the company. Encouraging the sustainable energy in the organization is generally seen by Tesla for their vehicles. Model S, X and 3 are one of the best manufactured vehicles by Tesla that gained a big name in the marketplace. Tesla business model is required to be focused in this study so that better marketing strategy and business model can be developed for Tesla in future. Tesla has multi operations and different assembly plants in America.

Digital business trends by Tesla

The adoption of latest technology and innovation is seen to be incorporated by them in their organization for the better production and manufacturing of new products. Tesla's business model and various digital aspects are being looked over in this study for better understanding. The three digital trends that can be used in Tesla are using autonomous driving, supply chain and improved manufacturing and traffic updates while driving. These three aspects are seen to be very useful for Tesla motors for the present era. But it can be impactful for the future for the people and for the whole world (Kester, J., 2019). It can be said that the rechargeable batteries are present at certain positions only and thus people may face problems in recharging their batteries.

The autonomous ridings are the futuristic part of the vehicle industries nowadays and are being used in the Tesla also. Good network connectivity can be seen to be one of the helpful aspects of this industry so that the automotive driving can be proceeded in an ethical manner. The use of artificial intelligence and new digital methods are helping this industry to grow and get a good name in the market. This affects the business and the. Battery degradation can also be a big problem for the future of Tesla vehicles. Tesla doesn't have its own battery and has to rely upon Panasonic organization to buy for the batteries and thus can be impactful if they don't have ample amounts of batteries or if any discrepancies occur in the friendship of Tesla and Panasonic. The other impact that can be seen here is of business and the market issue available. This energy is reducing day by day and after their extinction it would be impactful for the business of Tesla to manufacture cars like Tesla. Using technological aspects can also be impactful for the business of Tesla in future (Akademiabaru.com, 2019).

Target market

Tesla is focused to develop and manufacture the highly effective automobiles for the selected affluent customers in the market. Target market of Tesla is based on individuals that are high end cars and environment friendly. People that need particular features in the cars are to be looked out properly so that the mass market can be analyzed properly. The target market is divided and sub grouped into people with similar requirements and needs. The main focus here is on the primary target market for the selling and manufacturing of vehicles. In this primary target the age group of 20-40 is seen to be involved for the product to be sold. These targeted people are tech savvy and entry level buyers that are interested in getting innovative products. Another primary target can be attracting family members in which a large number of the population is observed to be seen as the target for the Tesla motors. Suppose Tesla motor S is seen to be coming with big space and is comfortable for the family holidays and trips (Xub.edu, 2019).

Fig 1: Demographics of Tesla owners

The Tesla demographics can be seen easily for the target market available the male female and the different age groups are being demonstrated here clearly.

Tesla is planning to sell the vehicles in half the price so that even the middle class families can be able to but the vehicles also. The segmentation of targeted markets can be done by the help of demographic, physiographic and geo demographic criteria that is available in the market. Geographic criteria consist of postal codes, neighborhoods, region states and nations. The primary target markets are seen to be having following demographics and psychographics for attracting a large number of people:

Demographics:

The age range that is required to be seen for selling the vehicle is 20-40s.

Mostly the upper middle class families are seen to be focused in attracting the product to be sold (Traum, 2019). The price is chosen strategically.

A household income of more than $80000 and more are seen to be targeted so that the right price for the product can be generated easily.

Asians and Americans are seen to be highly targeted populations for selling the vehicles available.

Physiographic

The consumption of gas and other renewable energies are seen to be of great concern in the manufacturing of these vehicles (Papers.ssrn, 2019).

A high safety value is to be seen involved in the vehicles so that can be beneficial for the security purpose in future.

Mostly the target is on eco friendly cars and sustainable energy consumption for the vehicles, so that less pollution is spread in the environment.

Geo demographics

Renewable energies are to be kept in concern so that it can be used in future aspects.

Application of new technology and new features can be helpful for the attraction of a large number of people towards the product.

Impact on Tesla business

Three digital impact

The trend discussed can have an impact in the upcoming future of the organization. The utilisation of internet connectivity and digital method in autonomous driving are an important part for the self driving. The availability of internet and connectivity is not possible every time and thus can be an issue in Tesla for their business. As a fuel can be impactful as the charging centers are not available in every place. The installation of charging spots is another risk and cost expansion for the upcoming future. Then the other risk that can be seen is the batteries are generally large in size and take up a large space in the vehicles. These batteries can end in the middle of the journey and no other option can be found for the charging of those batteries and may leave the customers in a disappointed state. The second trend that is using sustainable development strategy can be useful but in future these energies may get ended and even the companies have to invest in generating those energies. The third trend is using tools and technological aspects for the enhancement of features in vehicles (Dalton, S., 2016). The involvement of these technologies in vehicles requires a large amount of money so that can be used in the vehicles. This technology requires a lot of money for repairing. Moreover the maintenance cost can be high and may not be affordable for a lot of people available in the market (theverge.com, 2019).

Tesla respond

According to the new era and digital trend Tesla is required to improve in their business by the help of the new technology available in market. The impact of these technological aspects must be understood before its implementation and the features must be seen properly. It can be said that initiating new products and features is not an impactful method but analyzing the market and customers before might be a better method so that can be taken by Tesla. Tesla’s implementing these technologies in cars and even producing new trucks and other vehicles is attracting the number of customers towards their business (Ferreira, M., 2019). Strategy has been followed by Tesla so that the introduction of technology can be brought in the technological aspect and not every technological aspect is a negative one, while many of them are beneficial for the new profession also. Tesla is trying to install a number of charging spots in the countries and cities so that people may not face any problems while they end with the batteries. Moreover Tesla is preparing to invest in generating the technological aspect that will be used in their vehicles (Lapaas.com, 2020).

Strategic method to gain good position

Tesla is focused on increasing the marketing share that can be helpful in gaining a good marketing phase. The lower price EV is seen to be introduced in vehicles so that it can use resources most of the time. Mostly big sedan cars are seen to be manufactured so that the number of passengers can be adjusted in a car comfortably and mainly will be comfortable for the family members available. Around 5% marketing share is going to be set for the new vehicles to be introduced in the market. In order to gain the brand name and fame promotional strategy is highly required so that can reach to a number of people available (Falát, L. and Holubčík, M., 2017). The target that is set is required to be achieved properly so that the brand name can be enhanced and reach a lot of people available in the market. Pricing strategy is set above $40000 so that even middle class customers can also reach the vehicles and so that the brand can get a good name in the market (Thomas, 2019). A good communication strategy is to be set so that the consumer can be informed about new upcoming vehicles in the marketing with the new features and facilities.

Reaching out to the online customers and promotional media can be a useful method for the tesla motors to gain a good name in front of customers and become a renowned brand. An updating in websites and the promotion must be preceded in various countries and cities so that people must become aware of the new products that are to be launched by them. A loyalty program is an ethical method so that the market can be enhanced easily for the upcoming products of Tesla. The safe and secured drive test is provided in this loyalty test so that customers can believe in the product that is to be enhanced and brought to the new market. New features such as application of technological aspects can be beneficial one for the business and marketing value of vehicles. Features must be installed so that they can be upgradable in future without any extra expenses (Välikangas, L., 2018). Moreover the cost per phase required is to be followed by the middle class people and also following this method a lot of customers can be attracted to their products for Tesla motors.

Three impact for the targeted audience

The three trends discussed are very helpful for the primary targeted audience. These trends can attract a lot of customers available in the market. The first trend is using batteries for the vehicle that means they will be less or no expansion as there is any fuel part. Only the change of batteries or charging can be a small requirement that is to be preceded by the customers. This feature is beneficial for the upcoming future as it will contribute to decrease the amount of pollution in the environment. The most important thing that can attract the customers is these batteries can be fulfilled and the vehicles can run a long distance in an ample amount of battery level that is charged. The second trend is utilization of technological aspect for sustainable development and enhancement methods that are generally encouraged by them (Dibble, C., 2018). They contribute to removal of pollution as they utilise the digital mechanism available and these energies are seen to be available in ample amounts.

Customers are aware that these energies are present in ample amounts in environment and thus their consumption in Tesla motors can be beneficial one for attracting the customers towards them. The third trends that can be seen is of using new tools and technologies in the vehicles. These features are showing the traffic in the present area, autopilot, security and many others that is enough to drag the attention of customers towards their products. This trend is nowadays being used in many of the organizations and seen to be acceptable by the people. The use of artificial intelligence and various other technologies have proved beneficial one for the product to gain a good name in the market (Jenčová, S. 2019). Thus the sustainable development, consumption of batteries and using the future technological aspect is a good combination for the marketing purpose in and for the business aspect of Tesla. It is needed to be understood that the selected targeted audience here in this case are basically impacted in a positive way. The demographics and the population related to the targeted audience are also presented so that the proper impact can be seen here easily in the study (tesla.com, 2019).

Conclusion

Thus it can be said that the digital business model trend for Tesla is three types chosen and those are battery, sustainable development and technological aspect. These trends are helpful as well as come with few impacts that can be coming in the future.

Reference List

Journals

Traum, M.J. and Weiss, H.L., 2019. Tiny Tesla Turbine Analytical Performance Validation Via Dynamic Dynamometry. In E3S Web of Conferences (Vol. 113, p. 03024). EDP Sciences.

Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235, pp.653-663.

Välikangas, L., 2018. Forum on Tesla and the global automotive industry. Management and Organization Review, 14(3), pp.467-470.

Kester, J., Sovacool, B.K. and Heida, V., 2019. From Flying Cars to Tesla: Examining the Personal Automobile Preferences of Primary Schoolchildren in Denmark and the Netherlands. Energy Research & Social Science, 56, p.101204.

Ferreira, M., 2019. Tesla and the electric vehicle market in 2018 (Doctoral dissertation).

Falát, L. and Holubčík, M., 2017. The influence of marketing communication on financial situation of the company–a case from automobile industry. Procedia Engineering, 192, pp.148-153.

Dibble, C., 2018. Exploring the Potential of Environmental Impact Investing for Sustainable Development: The Cases of Dominion Energy and Tesla Motors.

Jenčová, S., Vašaničová, P. and Litavcová, E., 2019. FiNANCiAL iNdiCAToRS oF THE CoMPANY FRoM ELECTRiCAL ENGiNEERiNG iNdUSTRY: THE CASE STUdY oF TESLA, iNC. Serbian Journal of Management, 14(2).

Dalton, S., 2016. The impact of training on operational performance: the case of the customs service at Nikola Tesla airport in Belgrade. Serbian Journal of Management, 12(1).

Online Article

Akademiabaru.com, 2019, The Tesla Turbine Available at: –http://www.akademiabaru.com/doc/ARFMTSV62_N1_P122_137.pdf [Available on: 30.03.2020]

Xub.edu, 2019, Tesla: Disruptor or Sustaining Innovator Available at:

Lapaas.com, 2020,Tesla Business Model Available at:

Papers.ssrn, 2019,Tesla Motors, Inc.: Driving Digital Transformation and the Digital Ecosystem Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3053142 [Available on: 30.03.2020]

tesla.com, 2019, Model 3 Available at:

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