Tesla Motors External Analyis Essay

SWOT analysis is an integral tool which helps management to identify the internal strength and weakness of an organization and make strategies accordingly to grab external future opportunities and fight against external threats (Kerin ,Hartley and Rudelius ,2012). The report here focuses on the external factors of a SWOT analysis of Tesla Motors (i.e. on Opportunities and Threats). Opportunities

The future external opportunities available to Tesla Motors are discussed as under. International Expansion: Tesla Motors is a renowned name in United States and has been very successful in the European markets especially Germany. However the company has huge potential and a huge market to cover in the Asian and the Canadian market and emerge itself as a leading company in automobile industry all across the globe. Government Support: Tesla Motors has in the recent past enjoyed huge governmental support in the European countries, further a global market analysis makes a clear indication of growing support by government all across the globe for its specially designed environmental friendly vehicles in form of exemption of duties and taxes which can enable company to capture larger market share and ensure long term growth of the company.

The Tesla Brand Community: Tesla has a brand community of owners and potential owners who can definitely help the company to leverage its sales of environmental friendly vehicles in all parts of the globe particularly in the Asian and Canadian market (Escales, Edison and Bettman, 2010). Innovative Sales Model: The company is characterized to implement an Apple store model which provides a unique and differentiated customer experience. Such models can certainly help Tesla Motors to gain a competitive edge over its rivals and make a strong brand presence of its own in the international and domestic market. Technological Advancement: Tesla Motors can have an added advantage to fight against the rising oil and gasoline prices through its effective and efficient electronic cars which are much ahead in technological advancement then the same offered by its existing and potential rivals. Further oil is not a sustainable energy resource and governments and companies all across the globe are looking forward an alternative energy opportunity (Lakhal, Pasin and Limam , 2006).

Partnership: Recent news and industry analysis has clearly spelled that Tata Motors one of the renowned names in Asian countries is much interested in a partnership alliance with Tesla Motors thus making an easy and safe entry for the company in its future targeted Asian markets. Threats

Tesla Motors similar to other organizations faces an external threat which can attract detrimental consequences for the company. The same is discussed as under. Increasing R&D Expenditure by Competitors: One of the biggest threat which enables Tesla Motors to gain sustainable competitive advantage is its environment friendly and electronic cars. However, recently large motor companies are devoting much of their funds on their R&D department to electric cars and cars fuelled by other alternatives making an intense and stiff competition for Tesla Motors. Continue Economic Downturn: The world on an economic basis is experiencing global downturn which has a direct impact on the income and savings of the people and their demand for expensive cars, thus having a direct impact on the sales and profitability of Tesla Motors. Lower Cost Competitors or Imports: The recent financials of the company makes a clear distinction of its reduction in sales in the domestic market due to low cost competitor products and large imports.

Thus the company looking to target international market at no means can ignore or be confident of their domestic sales which is the only major source of revenue for the company. New Competition: Tesla Motors is not just competing with the regular car and automobile manufacture but needs to compete against a technology which has been in use for over hundred years i.e. the combustion engines. Further people are often resistant to change and it is a challenging task for the company to convince their potential customers on the use of electric cars over combustion cars which may take a lot of time and directly affect the sales and revenue of the company (Woodyard, Chris 2008). Price Skimming Strategy: Tesla Motors had been successful in their marketing strategy of price skimming in the European market however the same may not be the case in Asian market and can act against the company and lead to complete failure of its market expansion strategy in the International market.

Limited Charging Infrastructure: Tesla Motors has a unique product of its won in terms of its environment friendly electronic cars and the company may experience a large demand of its products in the international market. However, there is a huge risk of failing in the underdeveloped and developing economies of the globe due to lack of charging infrastructure which may give the combustion cars an added advantage and swipe off large potential market of Tesla Motors. Thus we see this report clearly highlights the external factors of SWOT analysis of Tesla Motors and provide a deeper understanding of the external threats and opportunities available to the company on a global scenario.

Escales, Jennifer Edison and James R. Bettman (2010), “Self-Brand Connections: The Role of Reference Groups and Celebrity Endorsers in the Creation of Brand Meaning,” in Deborah J. MacInnis, C. Whan Park and Joseph R. Priester (eds.), Handbook of Brand Relations, Armonk, New York and London: M.E. Sharpe, 107-123. Kerin R.,Hartley S.,and Rudelius W. (2012), Marketing 11th edition, Mc Graw Hill, New York, NY. Lakhal L., Pasin F., Limam M., (2006). Quality management practices and their impact on performance. International Journal of Quality & Reliability Management. Vol.22 Iss:6, pp. 625-646 Woodyard, Chris. (2008) “Tesla: Little electric roadster that could.” USA Today. http://www.usatoday.com/money/autos/environment/2008-03-03-tesla-electriccar_N.htm

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