Introduction
Tesla Motors is one of the leading innovative manufacturers of automotive. The company deals in electric cars and other extensive designs. The strategic strength of the company lies in its ability to engage the customers through a refined marketing strategy. Through a compelling social media profile, Tesla emerges as a company that maintains an active social media presence. The outcome of this is increased engagement between the customers and the Tesla brand.
Social Media Profile
Tesla’s critical metrics on its social media performance show its reliance on social media to drive its marketing objectives. The company, led by its founder, engages in regular tweets and other hashtag concentrations. Tesla has managed to grow through the organic reach of social media. Tesla uses social media managers to engage with the market, utilize direct marketing campaigns, and announces launches to a larger social media audience (Folschette para.5). Twitter mentions of Tesla and Elon Musk follows a growing pattern as the company spikes its brands when the CEO tweets and engages the customers for the brand. In 2020, the social media profile for Tesla grew to deliver over 50,000 cars irrespective of the CVID 19 pandemic and the economic hardships.
Tesla has become a leading company with social media presence. It creates new innovative products and uses the CE to drive the marketing approach. Elon Musk is a public figure who tweets and engages people on Twitter. Tesla’s social media profile depends on the engaging nature of Elon Musk. The CEO posts diverse content for Tesla and respond to various inquires from the customer. The CEO utilizes cross-promotional strategies on social media (Ku para.13). Therefore, Tesla has a zero dollar marketing budget which the CEOs influence, forming one of the principles of successful marketing.
SWOT Analysis
Strengths
Tesla has a recognized brand image and an established distribution channel, patents, and business location. With high innovative processes and strong controls on its production process, Tesla has continued to edge competitively in the market. Tesla’s electric cars are of high quality hence more durable than other models like Toyota Prius and BMW i-series (Kim p.15). The company has invested in continued research and development; thus, they can capture the customer needs.
Weakness
Tesla’s main weakness is that it suffers from a lack of a big market. The firm generates its production for the U.S market and a small market segment in China and the rest of the world. The small target market limits the growth prospects and the expansion in the overseas markets (Atkinson p.6). Also, the pricing strategy for Tesla is high. The products for the company retails at high prices in comparison with its competitors. The high prices limit Tesla’s plan to increase its market share.
Opportunities
Opportunities are the industry or market developments that the organization can capitalize on to achieve a competitive advantage. These include partnerships, agencies, new markets, industry and lifestyle changes, and technological developments. Tesla can consider consolidating the global market through an expansion strategy. The company can also diversify its products by establishing new businesses and reduce its exposure to different risks. Opportunities allow the company to increase profits by widening the customer base and scaling down costs (Atkinson p.11). The external opportunities may come from legal, cultural, and political developments in the market.
Threats
Tesla Company faces tremendous competitive rivalry in the car market. The competition is increasing every day, with new entrants coming into the market from China, Japan, South Korea, and Germany for electric cars and gasoline automobiles. The economic slowdown and recent COVID 19 shutdowns are other challenges for the company. The prices of raw materials like steel and rubber have escalated, and hence the profit margins have been forced to decline. The government legislation is another threat to the company because the companies in the United States are required to actively preserve the natural environment by focusing on alternative fuel technologies.
Industry Analysis
Completive Rivalry
Tesla operates in a highly competitive and value-driven industry. The company maintains its profitability through strategic approaches that help it to address its competitive challenges. Given that the industry is highly competitive, Tesla has an intense competitive rivalry (Mangram p.294). The trends in energy solutions, electric cars, and value-added innovation have made Tesla operate in an industry with a low switching cost, highly aggressive automotive firms, and a small number of companies operating in the electric car market.
Tesla competitors have not designed a futuristic car model with performance such as Tesla’s. The primary competitors for Tesla include General Motors’ hybrid electric Chevy Volt, Toyotas Prius, BMW i- series, and Mercedes Benz B class electric drive. Also, no competitor has a network of over 20000 charging states for charging its electric cars across the world (Mangram p.299). Tesla points to the competitive rivalry through its strategic management. The intense competitive rivalry is a high-priority consideration in the electric car industry.
Bargaining Power of Buyers
The bargaining power of buyers is low. Customers moderately influence firms in the automobile industry with solar panel and battery accounting to moderate buying powers. The cost of assembling solar charging stations is high. Customers form a direct factor determining the sales of the company and its revenue. Therefore, low switching costs reduce the barrier for customers to buy cars from other manufacturers.
Bargaining Power of Suppliers
The bargaining power of suppliers is moderate. The business in Tesla depends on the extent to which suppliers are reliable. The industry relies on suppliers to provide raw materials for the manufacture of cars. The intensity of external factors creates moderate forward integration forces, supply levels, and the size of suppliers to the bargaining power of suppliers.
Threats of Substitutes
The threat of substitutes is moderate. The company experiences a low impact of substitutes in the automotive and energy solution industry (Mangram p.294). The availability of electric cars is low, which renders the substitute for Tesla’s products moderate. Tesla has enabled competition due to low switching costs of elements such as efficient public transportation in the U.S market. The availability of these substitutes limits other players in entering the already saturated market.
Thereat of New Entrants
The threat of new entrants is low. The industry is capital intensive and highly competitive. This determines the performance of companies like Tesla with the high cost of production, high cost of business processes, and the need for high economics of scale. For this reason, Tesla needs to compete with the high cost of brand development.
Recommendations
- Considering Tesla SWOT analysis and industrial analysis, the company needs to expand its operations in the foreign market. For this reason, the company will exploit the global demands for renewable energy and tap into the market for electric cars.
- Tesla should also diversify its supply chain to decrease the uncertain supply chain disruptions.
- Tesla can increase its investment in research and development to achieve high innovation and remain competitive in the market.
Works Cited
Atkinson, Paul, et al. “Marketing Plan: TESLA Powerwall.” (2015)
Folschete, Christopher. “Tesla’s marketing strategy shows that it’s time for CEOs to get social”. https://www.talkwalker.com/blog/tesla-marketing-strategy-social-ceo. Accesed 20 April 2021
Kim, Hyeonjoo. “Analysis of how Tesla Creating Core Innovation Capability.” International Journal of Business and Management 15.6 (2020).
Ku, Daniel. “Why Tesla’s Social Media Strategy Shows Us It’s Time Executives Get Online”. https://www.postbeyond.com/blog/tesla-social-media-marketing/. Accessed 20 Apr. 2021.
Mangram, Myles Edwin. “The globalization of Tesla Motors: a strategic marketing plan analysis.” Journal of Strategic Marketing 20.4 (2012): 289-312.
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