Introduction to Marketing. Business & Marketing Coursework.

Introduction to Marketing
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Introduction to Marketing
1 Competitive Advantage at Tesla
Competitive advantage in the current business environment is an edge for any contemporary firm. A firm attains a competitive advantage when it offers superior products or lower costs of its products compared to its rivals and more importantly if it can preserve these elements for the long-term (Wang, Lin, & Chu, 2011, p. 100). When the firm can maintain these competitive advantages over the long-term, it is considered to have a sustainable competitive advantage. Michael Porter established a competitive advantage concept. He asserted for companies that are willing to create a competitive strategy they have two central choices to consider. First, the long-term profitability of the respective industries and the factors that influence this proposition. Secondly, the firm should seek to establish clarity over its relative position in the industry (Porter, 1985, p. 9). The position is highly determined by the firm's profitability in comparison to that of the industry average. Nevertheless, Porter states that a firm can attain two primal types of competitive advantage, which include differentiation or low cost albeit their strengths and weaknesses vis-à-vis its competitors. In analyzing the competitive advantages at Tesla, it is necessary to have a deeper analysis of the strengths and weaknesses that behold the firm relative to the industry.
The hype behind EVs may compel many of the traditional automobile firms to begin their productions. Since they have the finances and personnel, they may find it easy to integrate this proposition into their operations. However, they are unaware of the need for supercharger stations, at least based on the current situation. Tesla understands this proposition to the core. They are well aware that their customers require need ubiquitous fast-charging stations. Between the first quarter of 2018 and the third quarter of 2019, Tesla installed over 7,600 supercharger points to bring their total to about 14,700, which is a commendable number considering their high demand (Forbes, 2020). It is also worth noting that these are the fast-charging points rather than the slow charging spots that are also in the market
Tesla’s Supercharger Network Growth between First Quarter 2018 and Third Quarter 2019 (Forbes, 2020).
Customers are saved the annoyance that comes with the penny-counting pricing approach that is imminent when one is charging their vehicles. Tesla owners are saved this hustle as the charging costs are rolled into the actual price of buying the product. This dimension provides Tesla owners the psychological relief that they will not have to pay for the supercharging for the rest lifetime of the car. Currently, no automobile firm has adopted this method and as time progresses, Tesla is filling its geographic supercharger presence meaning that customers will opt for the firm's vehicles most of the time.
Tesla is a vertically integrated and technology firm similar to the American smartphone giant, Apple. Tesla’s approach to software is top tier relative to any other company in the world. The ordinary understanding that vehicles are massive machines with small computers in them. However, Tesla is reversing this realm of thought. Every Tesla owner can attest to the fact that their cars are computers on wheels. This dimension of engineering is one that Tesla has perfected meaning that there it will take a while before other car companies get the concept right. Tesla owners similarly receive regular over-the-air updates that individuals receive a smartphone, tablet, and computer updates (Ahmad & Khan, 2019, p. 16). Besides, at times the company does virtual recalls in case something is non-functioning to its optimal best. Even though other companies might adopt this system, there is no doubt that Tesla will be ahead of the pack.
The company has built a reputation for wanting to build their customers the best products that could be available in the marketplace. This dimension is an intangible strength that sets it apart from the competition around. For instance, its flagship project in Tesla Roadster changed the widely-held idea that EVs were small and very slow vehicles (Bohnsack, 2013). A large segment of the market never realized the benefits of the Roadster because the company entered the market with the price skimming strategy. However, the production of the cheaper Model S sedan was about what customers were anticipating. It is the sedan with the quickest dash moving standstill position to 60 mph in a mere 2.7 seconds. Most customers in the automobile are convinced that Tesla is the model to buy.
The greatest competitive advantage that the firm possesses lies in its battery supply chain and technology within its ranks. This dimension is a prime competitive advantage because the company's batteries are better than its competitors, which is the same case with the supercharger stations. Analysts perceive them to be cheaper because of Panasonic's input to the course particularly, with their quality cells. Besides the quality, the company is making tremendous efforts to enhance its production scale. Scaling up production will result in major benefits for the firm including cost reductions, manufacturing improvements, and greater manufacturing efficiencies. To this accord lies the massive constructions in progress in most of the American locations. The gigafactories are bound to fulfill this objective as the firm aims to increase its overall presence in the EV market (Cooke, 2020).
Tesla has several dimensions in which to gain massive competitive advantage regardless of whether its profits are above or below the industry average. The company makes the best EV battery packs (the most important component for the EV market) in the market. Its gigafactories will guarantee scaled production. Currently, there is no other firm with such massive infrastructure. It has already created an efficient and effective supercharger system, which is free for Tesla owners. The over-the-air software updates provide another competitive advantage for the firm that most car companies have not realized. Its reputation and desire to build superb products as well as create the best customer experience serve to highlight the firm’s long-term sustainability in the market is quite secured.
2 Motor Industry and Micro-Environment at Tesla
The automobile industry has for long been considered the fortress for the American economy. There is no doubt as to the extent the industry has helped the economy grow to the production magnate the country is today. Its growth to its modern state was facilitated by its importance as an infrastructure of the national economy. An increase in the global production of cars in-between 2007 and 2017 was equivalent to 3.65% of the entire world’s gross domestic product (GDP) (Saberi, 2018, p. 179). Cars are one of the most traded exports to the extent that it surpasses oil revenues with $775.2 billion worth of exports in 2018 justifying the essence of the industry to the globe (Workman, 2020). Its importance to the country is further apparent in the fact it spends approximately 84 billion euros in major innovation. This investment is directed towards the research, development, and production divisions.
Even it is one of the sectors with the most demanding capital- and knowledge-intensive demands, the industry faces most of the new and pressing challenges. These changes are imminent in increasing competition, digitalization, individualizations, and globalization (Uchil & Yazdanifard, 2014). Moreover, companies are expected to increases their safety requirements as well as environmental commitments. The current marketplace is quite dynamic that being a large firm never guarantees success. Companies that are innovative and at the same time, provide value to its customers are the ones that prosper in the modern market. This position brings Tesla into the picture.
Tesla Inc. is creating a new commendable story in the automobile industry. In essence, it is changing attention offered to conventional firms to the new approaching world of electric vehicles. Tesla is a Silicon Valley by-product created in 2003 to produce zero-emission electric cars. The group of engineers was keen to advance the sustainable mode of transport through electric vehicles. To achieve this, they would create compelling as well as mass-market EVs for this mission to actualize (Bilbeisi & Kesse, 2017). Elon Musk is the longest-serving chief executive officer (CEO) in the automobile industry and is quite popular around the globe.
Tesla is an attractive option for most stakeholders including the public, governments, and non-governmental organizations because of the propositions and options it offers to a deteriorating to a global ecological system (Liu & Meng, 2017, p. 966). Climate change activists and concerned stakeholders understand this very well considering the greenhouse effect. Much of this is predicated on adverse human actions such as car emissions. Counties that have had immense production output such as Germany, China, and the U.S. are taking a major part of the blame. On the other hand, oil is a non-renewable resource implying that it is bound to be exhaustible in the foreseeable future. EVs offer people an alternative in regards to renewable energy and more so, in the recurrent costs involved. The popularity that surrounds Tesla as a firm compels the consolidation of a report that outlines the micro-environment factors affecting the firm.
A company’s environment consists of factors that it can control and those that are beyond its powers. The former is referred to as the micro-environment while the latter is often known as the macro-environment. There are a couple of micro-environmental factors although the most important ones include customers, suppliers, employees and their union, marketing intermediaries, competitors, and the public. These factors affect Tesla in various capacities.
The customer remains the most primal asset to any organization. In his assertion, Peter F. Drucker comments that "There is only one valid definition of business purpose, that is to create a customer" (Watson, 2002, p. 55). He furthers his argument claiming “the purpose of an organization is to make a profit – 'is not only false, but it is irrelevant'" (p. 55). Tesla has employed this tactic to its utmost potential by providing its clients with more profitable sales instead of hinging making major sales volume. Customers receive a Tesla model that is quite sleek in its design as well as performance. Tesla outperforms many exotic cars including Lamborghini. The Model X can make a 0 to 60 mph dash in a mere 2.7 seconds. (Dow, 2016). Once charged the Model X can cover a remarkable 328 miles while Model S has a range of up to 390 miles (Suba, 2020). In this regard, the customers a...