Case Study Of Tesla's Company Strategy

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3.Company Strategy
For a company like Tesla, or any other company, having a defined and attainable strategy for the future can determine its success or its failure. Tesla’s strategy has been to emulate typical technological-technological products life cycles and initially enter automotive market with an expensive, high-end product targeted at affluent buyers. As the company, its products, and costumer’s acceptance matured, it is moving into a larger, more competitive markets at lower price points. Musk constantly maintained from then beginning that “Tesla’s long term strategic goal was to create affordable mass market electric vehicles” (Fehrenbacker).
One innovative element of Tesla’s strategy is its distribution methods. Tesla business model …show more content…

The program promises to buy back the cars after three years, and to pay 47% to 50% of its initial price. This method aims to match what other German luxury cars are valued for trade-in. In May 2015, Tesla started selling refurbished Model S cars in the USA. By end of month, company had sold 1500 cars to younger, less wealthy buyers (Caldwell 2015). The CPO program is import for Tesla’s growth, since it will enable the company to grow even more and bring more revenues. When Tesla implements the CPO program globally, the company will be able to reach even bigger shares of the international market, by allowing younger and less affluent costumers to obtain on of its used vehicles. By allowing less affluent costumers to obtain a used car, Tesla is building costumer loyalty to the brand and in the long run that loyalty may be reflected on increase sales of future -more affordable- …show more content…

As the company prepares to start producing high volume of Model X, and Model 3 vehicles, the supply for batteries will be crucial for the growth of the company and the growth if its market share. The company has responded to this problem by starting the construction of its own battery production plant, the “Gigafactory”, to be located near Reno, Nevada. This plant is expected to start producing batteries in 2016 (Tesla Motors). By producing its own batteries, Tesla will depend less from other independent suppliers, at the same time the company will reduce its cost of production and will guarantee the quality of its products and the preservation of the brand’s prestige. Exclusive focus on electric vehicles and electric vehicle components, as well as its history of vehicles development and production, however, “are the basis on which we can compete in the global automotive market in spite of the challenges posed by our competitors” (Tesla Motors,

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