Tesla Motors Overview: Market Expansion Analysis

Overview of the Company

Write an overview of the company Tesla Motors.

The purpose of this paper is to recommend a suitable market for expansion of the business of electronic cars of Tesla Motors. Inc. for the same purpose, it is important to evaluate the current situation of the electric vehicle industry worldwide. Understanding the opportunities for further expansion is also important. For this a detail analysis of the selected market will be done. Based on the analysis, certain recommendations will be made that are necessary for the company to evaluate, before entering the new market.

Tesla Motors, Inc. is an American automotive company that manufactures and designs electric cars and vehicles. Tesla Roadster was the first fully electric sports car that followed other electric sedan and luxury vehicles. The company has revenue of US$ 4.04 billion in the recent time (Teslamotors.com 2016). The company has wide market throughout the globe in major countries of America, Europe and Asia. Demand for sustainable and electronic vehicles is increasing and it automatically increases the opportunity of companies like Tesla to come up with better sustainability and innovative products. Tesla has better chances of expansion in the countries like India, Dubai, New Zealand and many other places as well. In fact, expansion of Tesla Motors in Dubai has been into the news since a long time and several approaches have already been taken by the company to operate in Dubai.

Analysis of the industry is very important before approaching for any kind of business expansion decision. Understanding both the internal and external factors that affect the business of the industry has to be understood before making any business plan.

Political	Political factors determine how the government interferes in the working of company. For electronic cars, good infrastructure and investment to improve the environmental condition is very important (Rothaermel 2015). Thus, investment in the R&D fosters certain positive effect on technology effect and e-cars industries. Political factors both in UK and Dubai are in favor of introduction of e-cars.
Economic	Electric vehicles are very costly. The cost for its energy consumption and its resulting costs are very essential. The cost also includes charging stations. Thus, only an economically forward country can afford such cars. Both the countries are economically prosperous to afford e-cars.
Social	Social factors affect the demand of the product. To increase the demand of e-cars, mobility is basic requirement. Space density of a country increases the concept of flexible vehicles (Ivanova 2015). Infrastructure and roads of Dubai and UK are supportive enough for e-car driving.
Technological	The most challenging technological factor for electronic cars is the manufacturing of its battery. Again, lightweight construction of the car also keeps great impact. Both the countries have good background with respect to their technological inventions.
Legal	Legal factors include the rules and regulations regarding the disposal of its lithium ion batteries. Satisfying the customers by its sustainability approach sometimes become really challenging for these manufacturers (Shende 2014). Legal factors are very strict regarding the disposal of such elements.
Environmental	With the declining condition of environment with increasing pollution, electric cars are gaining more attention than cars with combustible engines. Both the countries support any kind of approach that would make the environment sustainable.

Threat of new entrant	In case of e-cars, the threat is somehow low because other companies have their own niche products. However, companies like Apple as well are investing in the manufacturing of e-cars.
Bargaining power of buyers	Tesla remains largely depended on its partners like Daimler and Toyota. For the same reason, Tesla has to give a good amount of its share to these companies (Yilmaz and Ustaoglu 2013).
Threat of substitute	Automated e-cars are considerably low in the market because there are other vehicles such as cycles or e-bikes that are more preferable to vehicle users (Kang et al. 2016).
Bargaining power of suppliers	Tesla has over 200 suppliers including Panasonic as one of them. Their suppliers are reliant and working together with them has proved fruitful for the company.
Intensity of rivalry	Car industry is very competitive. For Tesla, major competitors like BMW, Audi, and Volkswagen can put great impact on the market of e-cars (Calegari, Sibley and Turner 2015). Apart from that inventions of alternatives such as eco-friendly cars like hybrid cars or cars operating with bio-fuel and turbo diesel are also increasing in recent time.

In the quest of creating a sustainable and suitable environment, major focus has been made on introducing environment friendly cars. Many manufactures are seeing the comeback of electronic cars in recent time as well. But, what particular technology will make sense remains an issue of debate. Along with the increasing demand of such cars globally, there are certain potential barriers as well that will not let the entry of cars be such a smooth process. Since, the cars manufactured by Tesla Motors are quiet expensive, it can only make good market in those countries, which are economically prosperous (Joung and Kim 2013). For instance, Middle-East countries like Dubai or Asian countries such as India or other countries like New Zealand might be good market for the company if they think of their business expansion.  

Industry Situation Analysis

Certain threats might persist. These are:

• Challenges regarding sustainable auto mobility
• Challenges regarding technological improvement
• Infrastructure of the roads

In this respect, it has to be mention that Middle-east countries have rich source of oil and petroleum. Thus, cost of fuel there is relatively less than other countries globally. So people have greater fascination towards fuel driving cars and not electronic cars (Fu, Hao and Chen 2015. This could be one of the important factors, which would create threat for the company to enter in the car market of Dubai.

New Zealand trusts in its own technology and is successful in the same. Thus, entering in such a market might not be fruitful. Again, India falls under developing nations. Many rich people can easily afford e-cars. But when it comes to selling a product in a foreign country, a huge demand for the product can only make the business operation successful. So it can be assumed that Dubai could be the best suitable market for Tesla to enter.

Recommended market for business expansion of Tesla Motors is Dubai. 12 Cs frameworks can explain the advantages of entering in the market of Dubai:

Customers	Knowing the customers and what they want will make a company successful in driving their business operation in international countries. People of Dubai are all luxury lovers and they usually owe more than one car. This could be one of the reasons that would help Tesla’s market to increase (Khan 2014).
Clients	Helping the customers to reach their goals by developing new and innovative ideas regarding design of the car or the technology used in it will definitely attract more clients and customers.
Competitors	There are big competitors such as Mercedes, BMW, and Volkswagen which deliver best suitable cars to car lovers (Hugstad  and Durr 2015). So Tesla needs to come up with such products that will fight with the top rivals otherwise the awakening will be very rude.
Customer experience	Experience of car lovers depends on the design, technology and the comfort that the car provides them. Thus, providing high comfort luxury cars could be one of the criterions that Tesla has to fulfill.
Content and tools	The product must have certain qualities that would differentiate it from the existing products (Vidaver-Cohen and Brønn 2015). For example, Tesla might come up with charging stations at different regions to support the car lovers experience unstoppable rides.
Commerce	The company has to invest a lot in developing a strong market in Dubai. Investing in marketing and promotion, e-commerce product sale, licensing revenue and others include in the list of things where the company has to invest.
Community	Community is never created but it is served. Being a good host in a community is always appreciated. Tesla has to understand the needs of the people of the community (Sun and Yin 2016). Everyone in Dubai is car lover which welcomes new and innovative car companies to enter in the market.
Connections	Connecting with the customers and suppliers is again important for a company that aims at entering a new market. Advertisement is a mode of connecting with people. Apart from that making corporate relationship with suppliers can also prove to be fruitful (Kumar et al. 2014).
Corporate	Keeping the right people at right place affect the business to a great extent. Thus, it is expected that only capable and reliable people are given are responsibility to look after the expansion procedure in the market of Dubai.
Core technology	People are highly advanced in terms of technology. There are cars with great technological features available. Coming up with better technology is an essential criteria. Cars with more comfort level or battery that has more power to drive the car are some of the essential technological factors that Tesla cars should provide (Engels and Jansson  2015).
Collaboration	One cannot consider its company to be an island. Collaborating with partners or other technological vendors can be can be really fruitful. Collaborating with existing companies like Volkswagen or BMW can bring prosperity to its business.
Care	Selling the product once and then forgetting about customer service is the worst plan that any company could make. It is evident that companies that serve customers at every instance receive better loyalty and response from the customers. So it is advisable that there must be a customer care service available for the Tesla e-car buyers.

The best suitable market entry strategy for Tesla in the market of Dubai could be direct entry without the means of collaboration or partnership. The company is a renowned and well established Car Company and has enough financial capital to support the expenses required for opening new showrooms in Dubai. It is an old policy of Tesco to sell cars online but in Dubai, Tesla might open few showrooms where the car will have physical appearance visible to the expected buyer.  People of Dubai have enough per capita capability to buy cars (Bhavani and Kukunuru 2016). If the purchaser finds it attractive or suitable for himself, there lies a higher probability that the person will buy the car.

Franchising or making partnership with other companies might not be a good idea of expansion because it will decline the already existing brand image of the company. Coupling with other companies might snatch away the distinct presence of the particular brand name of Tesla. Empowering as a single trader might prove to be expensive for the company but loans or other financial help can be easily acquired (Hickman, Desai and Potter 2014). Again, in order to lower the expenses, the company might open up their own manufacturing unit as well. The fact that the cost of the car will be increased does not hold any negative impact on the business because people in Dubai are rich and they are in fact fond of luxury and costly cars.  The announcement of the entry of the company can be made by the means of press conference.

Global Macro by the means of PESTLE framework

A recommended marketing mix can be framed using the 7Ps of marketing.

Product	The product is the electronic car that will run with the help of battery. The idea behind this concept is to reduce the use of fuel and make the environment more sustainable (Dobbs 2014).
Place	The recommended market for this product is Dubai. Expansion can be made in other middle east countries as well such as Oman and Qatar. The places which are economically strong should be made the targeted places for business expansion (Magretta 2013).
Promotion	The best means of promotion could be by directly reaching the targeted consumers. The company could use cookies to from the store information and directly promoting the products to the expected consumer. Apart from that direct calling and informing people about the launch of the product can also work. It has to be mentioned that television advertisement or social media advertisements might not be very fruitful because as commented by McLay (2014), people who have affinity towards luxury cars do not sit in front of television all the day. Advertisement in various newspaper dailies and magazines can draw attention of the target group of people.
Price	$40,321 could be the starting price of the cars offered by the company. The company should not be worried about pricing strategy and in fact the premium pricing of the cars could be one of the attracting factors for the target consumers. Depending on the manufacturing cost along with promotional activities or and expenses, the cost of the car could be fixed.
People	As already mentioned people of Dubai are luxury lovers and they prefer to lead a luxurious and comfortable life. Almost every single person owns a car of his own. In fact, people own more than one car. There are still the existences of king and princes who can never think of compromising with their life style (Hickman, Desai and Potter 2014). However, with the increasing concern about the sustainability of environment, people are looking for eco-friendly vehicles for their mobility. So, if the product affords good comfort and great luxury, people could buy them easily.
Process	The process of delivering the car can be both, by the means of selling the car directly from the physical showrooms, and by online selling as well. Tesla is well known for its online selling of cars. However, for the market of Dubai opening showroom and dealing with the expected customers directly seems to be a better idea (Magretta 2013).
Physical evidence	Tesla might offer free rides to target group of people to make a physical evidence of their car. The idea of establishing charging station could also mark the physical evidence of the car and the company as well.

Conclusion by SWOT analysis

Strengths	Weakness
ü  Innovative technology and design ü  Customers’ loyalty	ü  Cannot compete with fuel efficient cars ü  Limited market
Threats/challenges	Opportunities
ü  Other competitors like Mercedes and BMW ü  Opening of charging stations	ü  Economically rich market ü  People are concerned about environmental sustainability

Analyzing the strength, weakness, opportunities and threats of the company is can be said that Tesla motors designs best cars and they can easily compete with the other cars belonging to the same category. Electric vehicles by other companies are a combination of computer operated and a gasoline car engine. But, Tesla makes only electric operated cars that portray the best technological advancement in this field. Apart from this, its customer care service has brought customer loyalty to its company. The company is also supported with good team of staffs who are the backbone of the company’s success. The CEO or the engineers of the company have been supporting the business of the company since a long time in different parts of the world.

Tesla has great opportunity of expanding in the country like Dubai because of the wealthy population there and people’s affinity towards luxury and innovative car models. Among the minor crisis that the company has to face is a good CEO or operating manager who is capable enough to expand the business in an international forum like Dubai. Again, opening charging stations like gasoline or petroleum pumps could also be challenging for the company. There is also threat from other car manufacturing companies as well who have future plans in making electronic cars. However, it can be said without any doubt that expansion in the country of Dubai can never be flop idea for Tesla. 

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