Communication & Supportive PracticesJanuary 15, 2021
International Business – MattelJanuary 15, 2021
This study aims to analyze the company Tesla Inc, with a particular focus on the tesla Ansoff Matrix, which is a marketing strategy incorporated by the company. Tesla Inc is a leading electric vehicle (cars) manufacturer and a clean energy company.
The diagram below elaborated the Tesla Ansoff Matrix Tool;
The Ansoff Model
“To accelerate the world’s transition to sustainable energy”
The mission statement of the company was changed in 2016 by Elon musk where the statement shifted the slight direction of the company where the company not only focuses on sustainable transfer, rather would opt to create sustainable energy for different purposes.
“To create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles”
The vision statement of the organization indicates that the company wants to be the market leader in electric vehicles.
The long-term objective of the company includes creating newer opportunities in the market in terms of providing sustainable or renewable energy which may include powering buildings, houses, events and vehicles, whereas, the company also aims to be the market leader of the electric car industry.
The model below illustrates the different techniques for effective planning in organizations.
Effective Strategy Planning (Yüksel, 2012).
The first technique to make strategic planning can be made effective is continual attention (Huang, Cheng and Tzeng, 2010; Varadarajan, 2010). Often there are times when companies may create long strategies after which the company works accordingly, however, through time, there is a different factor that is constantly changing thus it is important for Tesla inc to conduct a periodic review of the strategies.
The second technique is creativity, according to Karl Marx, the strategies created in companies are directed towards making their processes efficient, however, the company must focus on using creativity to do things differently from others to differentiate them from competitors and create their own strengths (Bryson, 2018).
Therefore Tesla Inc focuses on creating strategies that can create differentiation in their product and services. The third technique relates to the management committee where the company plans how the management of the company will implement new strategies in the organization and the measures are taken to analyse how the company is performing according to the strategies developed.
Due to these dynamic requirements, Tesla Inc utilises the Ansoff Matrix Tehncique which integrates all these 3 strategies as detailed in the Ansoff Model image above.
There are different forms of techniques that can be used by organizations to analyse their macro environment which may include the stakeholders of the organization and the market of the company (Yüksel, 2012). In order to analyze and develop the strategies of the stakeholders, Tesla Inc must use the stakeholder mapping techniques in order to determine the strategy, the model below illustrates the stakeholder mapping of the organization
Stakeholder analysis model (Yüksel, 2012).
Tesla Inc needs to first analyse the power of the stakeholders of the organization and the level of their interest in the operations and strategies of the business. If the power and interest of the stakeholders are high then they can be considered as key players where the company needs to engage with the stakeholders and consult with them for making the strategic decisions. Where if the interest is high and power is low then the company must communicate with the stakeholders consistently while informing them about the business.
If the interest and power of the stakeholders are low then the company can send information to the stakeholders in form of newsletters, emails where the focus of the company must be towards developing the interest of the organization. If the power is high and interest is low the company must focus on increasing the interest of the stakeholders. In the case of Tesla, the stakeholders of the company seem to have an interest in the organization, however, they may not have the power to make strategic decisions for the company.
Pestle Environment Analysis
The political environment of Tesla mainly includes the political environment of the USA, the internal political nowadays in America is considered to be stable however there is an evident division of people who oppose the president of the United States while there are also people who are in favour of the policies and governance of the president.
The rising economic activity in the world has also increased the employment rate globally which has led people to spend more on goods. In the case of automotive, the demands for luxury SUVs are rising. Whereas the spending power of the working class is also rising if Tesla wishes to target the working class then they need to focus on lower-cost models of the company which includes model 3.1.
The focuses of the people are not shifting towards sustainability due to which demand for sustainable products has been increasing globally. Therefore companies are now investing in developing products that ensure environmental stability. Tesla Inc can be considered to have an advantage over others since the business is involved in making renewable energy products (Ayala, 2016). This also increases the brand image of the company in the minds of the consumers and customers
Technology in the current world is one of the major drivers of the company towards success. The business of Tesla is highly dependent on technology and innovation due to which they have managed to increase their sales very rapidly in the year 2015 to 2016. Technology can be very important in terms of sales for the organization along with its growth (Ayala, 2016).
It has been mentioned earlier in the social environment context that products and services that ensure natural sustainability is more likely to gain popularity in consumers. Tesla has built a good reputation in being an environmentally friendly organization where the electric cars manufactured by the organization saves energy while other products of Tesla also includes saving power and energy for their customers.
Porters five forces model is a technique or model which can be used by the company to determine the level of competition prevailing in the environment. The figure below illustrates the Porters analysis for Tesla Inc.
Tesla Five forces analysis (Hoffmann, 2013)
Ansoff matrix is a tool devised for top management of the company and the marketers to develop a strategy for their company growth. The Ansoff matrix model uses characteristics of markets and the product to draw out an effective strategy for the company (Stephens et al, 2010)
For Tesla, since it was indicated above that the market for sustainable products and cars is new whereas there are many products developed by the company, therefore, the company must continue to focus on market development according to the Ansoff matrix.
· Unique Position in the Auto Market
· Robust Sales Growth
· Burning Through Cash due to research investment
· High debt load
· A new lower-priced car called model 3
· Cost-Reduction Initiatives
· Inability to fund production
· Development of competitions
(Source: Hoffmann, 2013)
High-Quality low-cost Electric cars
The company is able to produce a wide range of luxury electric cars where they have plans to develop new economical cars
New Product Development
The company has been developing new vehicles such as trucks and electric vans which has not been tapped into by the competitors
Energy Saving products
The use of Devices to create renewable energy for powering buildings and events could be the factor that can provide the company with the competitive advantage that they intend to achieve
Tesla Inc has built a reputation of being one of the most advanced companies in the world producing luxury electric vehicles and solutions for renewable energy. However, the company faces several challenges in the environment to which the company needs effective strategies that can lead the company towards a competitive advantage in the market. The company can use the Ansoff Matrix as a marketing tool along with other techniques for continual attention, creativity and commitment to ensure the strategies made by the company are effective. It was also identified that the stakeholders of the organization have a high interest in the strategies of the company however they lack control over it, thus Tesla can use the approach of giving considerations to their stakeholders. Pestle analysis of the company indicated that different environmental conditions are favourable for the company.
Ayala, R., 2016. Lowering Global Consumption of Petroleum, While Increasing Profit: Tesla Motors Ridesharing (Doctoral dissertation, Cardinal Stritch University).
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
Huang, C.Y., Cheng, Y.L. and Tzeng, G.H., 2010. Multiple Generation Product Life Cycle Based Marketing Promotion Mix Strategy Definitions by Hybrid MCDM Methods. International Journal of Information System for Logistics and Management, 6(1), pp.55-71.
Parekh, D., Wang, S.Q., Thakre, M., Luo, S., Kovacs, J. and Rangarajan, V., STRATEGIC MANAGEMENT ANALYSIS.
Stephens, S., Gabriela Balan, C. and Callaghan, S., 2010. Theory and practice: the experience of marketing graduates. Education+ Training, 52(6/7), pp.552-560.
Stringham, E.P., Miller, J.K. and Clark, J.R., 2015. Overcoming barriers to entry in an established industry: Tesla Motors. California Management Review, 57(4), pp.85-103.
Hoffmann, J., 2013. On Luxury Strategizing. In Global Luxury Trends (pp. 6-22). Palgrave Macmillan, London.
Varadarajan, R., 2010. Strategic marketing and marketing strategy: domain, definition, fundamental issues and foundational premises. Journal of the Academy of Marketing Science, 38(2), pp.119-140.
Yüksel, I., 2012. Developing a multi-criteria decision-making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.52.
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