UC B e r k e l e y
S t x a te g i s i o r k e t i n g
E r t en c Ma n

- P r o f e s s o r Jim

P r o s t

B y r o n P i t t a m / L a u r a D e l l a G u a r d i a /
L i s a n d r a Maioli / R y a n Shi / S v e t l a n a F e d o r o v a

A u g u s t 2 8
2 0 1 3

t h

,

I n t r o d u c t i o n

Tesla Motors is an automobile

company that strives to ween the
industry off oil-‐based
combus3on engines.
They seek to create cars that
are fun, environmentally
friendly, inspire others to
do the same and drive the car
industry forward.

2- 2 8

P e r E l o n M u s k
So, in short, the master plan is:Build sports caraffordable car

Use that money to build anUse that money to build an even
more affordable car
While doing above, also provide
zero emission electric power
generaEon opEons
D n't tell anyone.
o

h9 p ://www.teslamotors.com/blog/secret-‐tesla-‐motors‐master- lan- st-‐ etween-you-nd‐me
p j‐ b
‐ u
‐ a ‐

3- 2 8

C o r p o r a t e S t r a t e g y
 More EV’S!

 Company-owned dealerships

‐
 License electric powertrain components

 Inspire other car manufacturers

 Pe
 r mium product (Roadster)
 Trickle
‐down technology
 Use of early
‐adopters (Silicon Valley)
 Take it to the mass market!

 SUV-crossover and mini
‐
‐vans
 Cargo vans for commercial &

government use.
 $30k target model

4- 2 8

M i l e s t o n e s

2 0 0
3Founded

2 0 0
6

 Prototypes of the

Roadster introduced
to the public
 Global Green

product Design
Award for Roadster
 RecogniEon by

Time Magazine -‐
“Best
InvenEons -‐
TransportaEon

2 0 0
7

2 0 0
8

 Index Design

Award for Roadster
 Two batches of

100
Roadsters sell out
fast

 Full producEon

begins on the
Roadster
 December 
‐100th
Roadster delivered
 O
 pened first retail
store in Los
Angeles, second in
Menlo Park

2 0 0
9

 Unveiled the

Model S, March 26,
base price $57k
 Opened European

showrooms; London,
Munich, Monaco

5- 2 8

m i l e s t o n e s

2 0 1
0
 Strategic Partnership
 announced with
Toyota

 IniEal Public Offering
 Opened Japan &Australia showroom
showrooms in
ConEnued with
 Zurich,
 Copenhagen, Paris,
European
Milan

2 0 1
1
 Stopped taking
 Roadster orders
Opened Hong Kongshowroom

2 0 1
2
 Commercial
 deliveries of
the Model S
begin
 Unveiled Model X
 Began buildingSupercharger
announced for
staEons
Model S
 Small price increase2 0 1
3

2 0 1
4

Model S wins

 Model X will

enter producEon
 80% of US

populaEon covered
by Supercharger
staEons Motor Trend Car of

the Year
 Automobile

Magazine’s Car of
the Year
 Time Magazine’s

Best 25 InvenEons of
2012

 Push to be

profitable...SUCCESS!
 M sk promises US to
 u
be covered with
Supercharger
staEons (18 today)
 F parEal recall
 irst

6- 2 8

O t h e r E l e c t r i c C a r s
20 total models of highway capable EVs
 C
 hevrolet Volt
 Nissan Leaf

 Mt bh Mi V
 su s i- E
i i i‐
 H n ait EV
 o dF
 RAV4 EV

 Renault Zoe

 R
 oewe E50
 Scion iQ EV

 C
 hevrolet Spark EV
 Smart ED

 Tesla7- 2 8

O t h e r E l e c t r i c C a r s
More than 150,000 total vehicles have been sold since 2008
TOP S e l l i n gC
hevrolet VoltNissan Leaf (75,000 as of August 2013)Mt bh Mi V(30,000 as of June 2013)
su s i- E
i i i‐H n ait EV
o dFRAV4 EV
8- 2 8

TOP M a r k e t s

Norway
7%

USA
26%

Fr a n c e
11%

Japan
28%
China 16%

9- 2 8

Te s l a Fi n a n c i a l s
 $20 billion market capitalizaEon, August 2013

 10 year old company is worth more than Mazda, Suzuki and Fiat1 0 - 2 8

Ta r g e t A u d i e n c e

 Wealthy and trendy early adopters,

 S
 uccessful professionals/entrepreneurs,
 Upper middle class city- wellers,

d
‐
 Tech- avvy and green- riendly

s
‐
f
‐
(eco-‐hipsters)
"For that target audience (wealthy and tech-avvy
s
‐
niche group), the more exclusive, the more
expensive, the more exo; c, the be= er,"
Phil Go9, senior director of long range planning
for IHS AutomoEve.
h9 p ://news.naEonalgeographic.com/news/energy/2013/05/130522‐tesla-‐motors-uccess/
s
‐

1 1- 2 8

Ta r g e t A u d i e n c e
Pe r s o n a :

Mark, 27 years old, lives in the Silicon Valley, where
created his own start-‐ when he was just 21.
up
He makes a bunch of money with his Tech business,
loves luxury brands, he buys products by its
performance and design and is constantly a= en; ve
to the new launchings in the tech area and is always
the first person in his group buying the cuK n g -edge
‐
products. He is also concerned about having a
healthy life and being green.

1 2- 2 8

P e n e t r a t i o n S t r a t e g y

“Tesla's strategy is similar to that pursued by
cell- h ne and flat-‐ creen TV makers, which
po
‐
s
started off selling their products to wealthy
early adopters then cut prices to mainstream
levels as the technology developed.”

Rachel Konrad , Tesla's spokeswoman

h9 p ://www.nbcbayarea.com/the-scene/shopping/Abu- h bi‐Joins- eds-s‐
Da‐
F aT
‐
‐ ‐esla-‐ vestor.html
In

1 3 - 2 8

P r o d u c t a t t r i b u t e s“Design- erformance-energy
p
‐
‐
efficiency”No dealers (the price is
the price: no negoEaEon) or
commissioned sales personTransacEons being
conducted online
1 4- 2 8

M o d e l s

1 5- 2 8

M o d e l x

1 6- 2 8

Positioning
L u x u r y
C a r s

Burning Fuel Cars

Electric Cars

 Tesla is posiEoned as

a high-end green
‐
electrical car's
company in a luxury
market with a unique
customer experience

V a l u e a b l e
C a r s

1 7- 2 8

P r o d u c t a t t r i b u t e s

“More than any other company, Tesla has helped
transform the popular image of electric cars as nerdy golf
carts for do- ooder greens to something that can be fun and
g
‐
luxurious and packed with cuK n g -edge technology. It
‐
pioneered a new genera; o n o f electric cars. Whether
Tesla can rally mainstream consumers to the world of
electric mobility, however, remains to be seen.”
by Josie Garthwaite for NaEonal Geographic

h9 p ://news.naEonalgeographic.com/news/energy/2013/05/130522-tesla-‐motors-uccess/
‐
s
‐

1 8- 2 8

K S F
f o r A u t o m o b i l e I n d u s t r y

 Quality and design of the cars;

 Company operaEonal efficiency and

costs;
 S p ly and distribuEon chain efficiency;
 up
 F
 lexibility;
 MarkeEng;

 Compliance.1 9- 2 8

SCA’s

 Technology

 Ecosystem

 Excellent Performing

Car

2 0 - 2 8

P r o m o t i o n

“Tesla

Motors

has

no

adver; s i n g , no ad agency, no
CMO, no dealer network. And
that's no problem.”
Michael McCarthy, AdverEsing Age

2 1- 2 8

P r o m o t i o n a l a c t i v i t i e sSocial media;
Word of the mouth;
Website;
Trade/auto/motor shows;
Tesla brand communiEes;
Product reviews;
Customer events;
Blogs, forums;
Email newsle9 ers;
Press releases;
CelebriEes.
2 2- 2 8

SWOT A n a l y s i s
We a k n e s s e s

S t r e n g t h s
 Well known CEO with good track recordUses Tesla Stores instead of
tradiEonal distribuEon through
dealers1st company to produce a fully
electric luxury car
 Proprietary technology

 Based in SF Bay AreaPopular in younger age groups
who are likely to use social media

 COao E / T oS
 E sl COCO fpaceX
isI frastructure not yet developed for
n
electric carsC somers are sEll wary of such
ut
new innovaEons
 PriceT h r e a t s
O p p o r t u n i t i e s
I creasing awareness and
n
support for environmentalism
 Large internaEonal market potenEalNew lower-‐ rice models appealing
p
to a wider range of customersAdvances in tech may increaseC
ompeEEon from established
auto companies
 Lawsuits could inhibit/delay

innovaEonsL so government subsidies will drive
os f
up prices2 3- 2 8

M a r k e t i n g S t r a t e g y
Te s l a t h e ‘ C h a l l e n g e r and R u l e
B r e a ke r ’

P r o s

Cons

 Performance through technology Technology needs charging staEons New sales model and distribuEon Facing distribuEon

difficulEes
 CO as lt Eme
 E hsp
i

 No tradiEonal paid

adverEsing
 E
 xcepEonally good at creaEng buzz
 Over achieving results S p ly and demand: ProducEon
 up
 Keeping up with compeEEon2 4- 2 8

O p t i o n s
①Stay as is, conEnue on the revoluEonary path.
②Stay in line with their high end innovaEve
strategy, build their own factories so they no
longer rely on outsourcing producEon.
③Get in the mass market family car game
quickly before it’s too late.

2 5- 2 8

A n a l y s i s
Tesla Summary Assessment
AlternaEves (RaEng)
RelaEve
Weights

OpEon 1 OpEon 2 OpEon 3

Technology

.3

5

5

4

Emerging CompeEtors

.2

1

2

5

New CEO

.2

2

3

5

AdverEsing

.1

2

3

4

ProducEon Outsourcing

.1

3

1

4

Geographical Expansion

.1

3

3

4

Rela3ve Weight x Ra3ng

1

2.9

3.2

4.4
2 6- 2 8

Re c o m m e n d a t i o n s
Option 3 :
G e t in t h e m a s s m a r k e t g a m e
q u i c k l y !

 Nissan Leaf is leading the market

 CO crucial to new vision
 Es
i
 AdverEsing to keep up with compeEEon

 ProducEon outsourcing boost

 Geographical expansion

2 7- 2 8

Q u e s t i o n s
?

2 8- 2 8

Te s l a