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Situation Analysis Tesla · PDF fileTesla Motors is an American company that designs, constructs and sells electric cars. Consumer Analysis ... support and marketplace profitability,

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  • Situation Analysis ___________________________________

  • Tesla Motors, Inc. Situation Analysis 2

    Contents

    Situation Analysis

    o Company Analysis.. 3

    o Consumer Analysis.. 3

    o Marketing Analysis.. 4-8

    o Product Analysis 8

    o Competitive Analysis..... 9-10

    References.. 11-12

  • Tesla Motors, Inc. Situation Analysis 3

    Company Analysis

    Tesla Motors, Inc. was founded in 2003 in the Silicon Valley area. Silicon Valley engineers

    grouped together to prove that electric vehicles could change the world. Martin Eberhard and Marc

    Tarpenning founded Tesla Motors, however current CEO Elon Musk led the first investment round in

    2004. The company remained in stealth mode until July of 2006. During 2006, Tesla revealed its first

    production car, the Roadster. Tesla Motors is an American company that designs, constructs and sells

    electric cars.

    Consumer Analysis

    Tesla Motors won a, near, perfect score in an annual owner-satisfaction survey for its

    Model S. A year after Tesla Model S was introduced; it got the highest marks in owner

    satisfaction in latest annual auto survey. Last spring, the Model S earned a road-test score of 99

    on their 100-point scale, making it the highest-rated car theyve tested in the last five years.

    Tesla has helped transform the popular image of electric cars to something that can be

    fun and luxurious and packed with cutting-edge technology, (Garthwaite, 2013). There is plenty

    of buzz in the media concerning the Model X, high expectations have been set for the new

    product and must live up to the expectations. This is the car to get Tesla off government life

    support and marketplace profitability, for a couple of very simple reasons: It was built on the

    Model S sedan platform, its a seven-passenger SUV that doesnt look like one and has genuine

    eco-cred, (Motavalli, 2012).

  • Tesla Motors, Inc. Situation Analysis 4

    Marketing Analysis

    Market Segmentation

    Demographics

    According to the United States Environment Protection Agency, the consumer

    segmentation based on demographics included the following attributes: higher-than-average-

    income ($114k), Urban or suburban residence, private garage with electric power, low weekly

    mileage (100 miles), environmental sensitivity, concern about dependence on foreign oil,

    political activity, and willingness to pay for convenience. In addition to the EPAs consumer

    profile, the U.S. Department of Energy also collected data that considerably resembles the

    demographics from EPA research. The DOE info graphic below illustrates the some the income

    aspect of EV owners. According to this data, the basic Tesla market segmentation should consist

    of; 40-60 and preferably have an income of more than $100,000.

  • Tesla Motors, Inc. Situation Analysis 5

    Geographic

    In terms of EV geographic information, the Seattle Times has reported top markets for

    EV sales from largest to smallest are as follows; San Francisco, Los Angeles, Seattle, New York,

    and Atlanta. Together these metros comprise fifty-two percent of the U.S. EV market. As the

    figure below suggest, the target consumer is more likely to come from an urban area or large

    city.

  • Tesla Motors, Inc. Situation Analysis 6

    Psychographic

    With the demographic profile of EV owners, probable Tesla consumers could be identified as:

    Early Adopters/Tech Savvy Individuals

    Similar to early hybrid owners

    Those interested is environmental best practices

    Educated; four-year degree or higher

    Value conscious; owners of EVs want an EV that can compete with gas-powered

    competition on price, quality, and performance. Interested in an EV that can go long

    distance with proficient performance.

    Market Needs

    The main problems within the Tesla Motor consumer market, revolves around showing

    the general public that EVs are more valuable than gas-powered vehicles. In concern to EV

    competition, the Tesla Model S, will out-accelerate any electric powered vehicle. In 2013,

    Technology Review reported that the Tesla Model S has been outselling both Nissan Leaf and

    the GM Volt- regardless of the fact that it cost twice as much. This leads to the Market Growth

    According to market information from WSJ Market Watch, Tesla Motors will

    successfully grow into a mass producer of EVs by 2020. The image below is a NASDAQ

    Analyst Forecast of Tesla Motor, Inc

    Obvious underlying need of lower production cost so that Tesla motors can compete with

    EV market prices.

  • Tesla Motors, Inc. Situation Analysis 7

    Market Growth

    According to market information from WSJ Market Watch, Tesla Motors will

    successfully grow into a mass producer of EVs by 2020. The image below is a NASDAQ

    Analyst Forecast of Tesla Motor, Inc.

    Market Competition

    In 2013, the WSJ reported that top competitors that Tesla Motors will face including the

    following: BMW, Cadillac, Volkswagen, Porsche, and Audi.

  • Tesla Motors, Inc. Situation Analysis 8

    Market Trends

    According to the blog, Scientific American, Motor Trend named the Tesla Model S the

    2013 car of the year. The first time an EV has ever won. Overall, current EV market trends

    evident through research only benefit Tesla. Although the company faces competition, they are

    at an advantage from production and sales of power trains and battery packs to other auto

    manufactures.

    Product Analysis

    The Tesla Model X not only sports luxury, but also utility and efficiency. This SUV has

    the lowest center of gravity allowing it to switch lanes, turn and make sudden moves safely and

    securely with all seven passengers in the car. The Model X is built with duel motor all-wheel

    drive, upping the torque to 50 percent, and enabling the car to reach 0 to 60 miles per hour in five

    seconds. The ability to maneuver safely, quickly, efficiently and in style appeals to men and

    women between the ages of 30 and 45 years old, with children, looking to protect their wallet as

    well as the environment.

    Though style typically ranks lower when considering safety, the Model X sports both

    style and performance well. The falcon wing doors will not only turn heads, but are also perfect

    for the tightest of spots. These doors open up and out of the way, providing better parking

    options and an easily accessible entry into the car. The ability to slide the second row of seating

    also helps passengers enter the vehicle. Small children and adults will no longer need to climb

    into the car or fight over the passengers seat because the second and third rows are just as

    comfortable and accessible as the front.

  • Tesla Motors, Inc. Situation Analysis 9

    The Tesla Model X comes complete with a futuristic Tesla Touch screen allowing drivers

    to access any information or entertainment needs on the road. The Model X is perfect for

    consumers dreaming of owning an SUV due to the money they will save at the pump. The Model

    X does not use any gasoline, and is powered by a 60 or 85 kWh battery. Consumers will save

    money in the long wrong when switching to Tesla.

    Competitive Analysis

    2014 will be a breakthrough year for Tesla Motors. Currently, Tesla vehicles can be

    found in small numbers throughout the major American markets, and some overseas particularly

    in China. Tesla Co-Founder and CEO, Elon Musk, has launched Tesla gaining spectacular media

    coverage and notice from a specific clientele. So far, Tesla hasn't been able to break through to

    the mainstream American masses. As the Tesla Supercharger network expands from its current

    number of 100, Tesla hopes to launch Model X in 2014 to great demand.

    Since the Model X has not yet been released, consumers and the media are only left to

    speculate on the qualifications of the new model. However, other car companies are beginning to

    offer their version of the luxury electric SUV. The most direct competitors of the Model X are:

    Audi Q-8 E-tron: This is the car that will most directly compete with the Model X,

    although it is to be released in 2015.

    Other hybrid models from Toyota and Honda: the fact that many other automakers create

    hybrid models of sedans and SUVs is limiting Tesla and holding them back.

  • Tesla Motors, Inc. Situation Analysis 10

    As we begin the Model X campaign, we need to distance Tesla and find the sole factor that

    separates it from it's lesser priced, more generic counterparts. Although Tesla already has a

    dedicated "niche" following, for the Model X to be successful it needs to gain more widespread

    appeal through an integrated campaign.

    Tesla Motors (Model X) Competitors: Luxury models that are NOT electric

    Chevrolet Corvette Stingray

    Mercedes-Benz S Class

    Jeep Cherokee

    Lexus RX 350

    Cadillac CTS

  • Tesla Motors, Inc. Situation Analysis 11

    Works Cited

    Baez, Tabitha. "2014 TESLA Model X Car Reviews & Specs." A Buyers Gallery of Autos, Homes, Boats. DuPont Registry, n.d. Web. 07 Apr. 2014. . Bailey, Shaun. "2014 Tesla Model X." Road & Track. N.p., 22 Feb. 2012. Web. 07 Apr. 2014. . Balk, Gene. "Local News." The Seattle Times. The Seattle Times, 20 Aug. 2013. Web. 07 Apr. 2014. . Biello, David. "Tesla