Tesla Motors

...

Market Opportunities

This Silicon Valley bases organization primarily designs, produces., markets and sells the Tesla Roadster and Tesla model S all electric cars as well as electric automotive power-train components. The organizations core business operations are split into two distinct segments power-train development services and sale of Tesla products (Ohnsman, 2013). It is important to note that the organizations main source of revenue comes from electric vehicle sales and translate to 90% of Tesla Motors revenues. The electric car sales operations is further subdivided into electric cars, options and related sales wing and the other which is the electric car power-train components and related sales wing.

Tesla Motors second business segment is concerned with business development services. The organization develops electric power-train systems for other motor vehicle manufacturers, namely Daimler and Toyota (Bullis, 2012). Tesla Motors is in a strategic partnership agreement with the two global leaders in the automobile manufacturing industry to develop, manufacture and sell Tesla based electric power-train systems for their own all electric vehicle versions to rival Tesla models in the near future (US manufacturing competitiveness initiative 2012).

Tesla Motors is strategically well positioned in the global electric vehicle market segment as a high end EV manufacturer and dealer. Tesla Motors has over the past few years managed to phenomenally gain a competitive edge over other all other incumbents who have been in the industry for much longer through Tesla Motors' direct-to-consumer sales strategy which also incorporates, stores and service centers strategically located in North America, Asia and Europe, innovative consumer financing options, and unparalleled technological innovations (Bullis, 2012).

Tesla Motors' direct-to-consumer all electric car sales are in a strategic vantage point and they hold a sizable degree of advantage over other conventional motor vehicle dealerships. Nearly all other automobile manufacturers are expected by state law to ensure they sell their cars through franchised car dealerships (Bullis, 2012). Tesla Motors is considered to be the first company able to sell their products directly to their targeted consumer base since it a relatively young company and as yet has no franchised dealers. Tesla Motors sells its electric cars directly to its customers via strategically located showrooms of which the organization fully owns and operates (Ohnsman, 2013). Tesla Motors showrooms and galleries “are highly visible, premium outlets in major metropolitan markets some of which combine retail sales and services”. Tesla Motors sales strategy has been likened to Apple Inc.'s sales strategy as stores for both organizations are present a rich aesthetic appeal and allow for the organizations to create unique and memorable buying experiences. Tesla Motors' showrooms have essentially served to redefine the entire conventional car buying experience. It has essentially eliminated the economic incentive for buyer and seller to allow market forces to determine on how to compete for a price that is accepted by both parties. Furthermore, Tesla Motors' showrooms have gone the extra mile allowing for the organization to achieve commendable operating efficiencies, realize high sales targets and enhanced after sales service revenues that the conventional fossil fuel based automobile manufacturers have no access to due to state law limitations.

Organizational objectives, accomplishments and SBU's

Tesla motors plans to grow organically in the near future by expanding its product range making products more affordable by introducing mass market oriented cars as well as introducing more innovative products and expanding worldwide. Tesla has ideally only produced two products over its short lifetime, the Tesla Roadster and the Model S. Tesla intends to start production of the new Model X, an electric cross-over vehicle this year with the intent to introduce it into the market in 2015 (Ohnsman, 2013). Research and development is a large and critical part of Tesla Motors core business operations and thus, it is expected to consistently stay a step ahead of new and emerging green energy technologies from its competitors. It has to incorporate new technologies or stay well ahead of the competitors introducing such innovations in non fossil fuel based vehicle technologies (Bullis, 2012). Tesla Motors is expected to stay well ahead of its competition as its current CEO, Elon Musk, is considered as an extremely successful entrepreneur with the necessary skills, talent and experience to able to keep Tesla Motors profitable and competitive.

Tesla Motors as a cash cow

Tesla management has provided that they plan to introduce into the market a low priced version of the Model S. This can only happen after it has began selling units for it proposed cross over electric car. Tesla Motors intends to use revenues from the previous models to design and manufacture lower prices versions of the Model S for the mass markets and can thus be considered as a cash cow (Graham, 2013). This will enable the organization gain a bigger market share globally. The company harvested in 2013 following continues sales growth from both its core business operations.

Organizational growth strategy

Going forward, the firm will need to continue to bring innovative products to the market. Tesla is a leader in bringing innovative products to the car market. Outside of the fact that they have created an all-electric car which accelerates from 0-60 in 4.2 seconds, the technology inside the car is spectacular. In the future, the company plans to continue to improve product offerings by creating innovative cars that will definitely alter the nature of the conventional automobile industry (Bullis, 2012). One such change will be to increase the range that their cars can go in a single charge (Graham, 2013). In 2013 Tesla opened stores in Europe and Asia/Pacific. Expanding the business overseas increased business significantly. Currently the firm has Model S cars displayed in stores overseas, with nearly 25% of reservations for Model S being from outside of North America (Bullis, 2012). The company intends to increase it’s improve its market objectives by increasing both the sales volumes and market share in the US and globally.

Elements of the Market plan

Tesla's Motors long term goals are not clear. However it is understood that the company's short term strategies are to ensure that it open up more show rooms

...