Strategy_tesla Inc.docx - GROUP NO. 4 Strategy of Tesla...

GROUP NO. 4
Strategy of Tesla INc.
The Beginning
According to the About Tesla page, Tesla’s mission is to accelerate the world’s
transition to sustainable energy. In 2008, Tesla introduced its very first cutting- high-
performance electric sports car . The Tesla Roadster. Elon Musk, the CEO of Tesla Motors and
Co-Founder, stated that “Tesla Motors is to help expedite the move from a mine-and-burn
hydrocarbon economy towards a solar electric economy, which I believe to be the primary,
but not exclusive, sustainable solution”(Musk, 2006). The Roadster was based on the Lotus
Elise. It can reach 393 km on a single charge with its lithium-ion battery pack. Tesla was first
introduced into the automobile market by targeting high-tech car segments as a Niche
Differentiator, with its sustainable competitive advantage to distinguish itself from the
traditional automobile makers with sustainable, eco-friendly electric cars .”.
Next Stage
When Tesla finished establishing its brand and started producing more and more cars for its
buyers, and established its costumer base, thats when it started reinforcing its business
model. Teslas business model is based on three parts.
1. Direct sales : Unlike other car manufacturers who sell through franchised dealerships,
Tesla uses direct sales. It has created an international network of company-owned
showrooms and galleries, mostly in prominent urban centers around the world. By
owning the sales channel, Tesla believes it can gain an advantage in the speed of its
product development. But more importantly, it also creates a better customer buying
experience. Unlike car dealerships, Tesla showrooms have no conflict of interest.
Also, customers only deal with Tesla-employed sales and service staff. Including the
showrooms, Service Plus centers (a combination of retail and service center), and
service facilities, Tesla has 429 locations around the world as of the end of Q4
2019. Tesla has also made use of Internet sales—consumers can customize and
purchase a Tesla online.
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2. Service : Tesla has combined many sales centers with service centers. They believe
that opening a service center in a new area corresponds with increased customer
demand. Customers can charge or service their vehicles at the service centers or the
Service Plus locations. Also, in certain areas, Tesla employs what it calls Tesla Rangers
– mobile technicians who can service vehicles from your house. Sometimes, no
onsite technician is required at all. The Model S can wirelessly upload data so
technicians can view and fix some problems online without ever needing to
physically touch the car.