* Case Report: National Geographic Video on TESLA
* New member in a highly competitive industry
Tesla insertion to the automobile industry had to face a challenging atmosphere. An industry with a wide number of competitors, who have been in market for several years earning the consumers trust, and where all the different niches have been exploited, from the low cost models to the luxury ones.
In an industry this tight, out of the box ideas must take place, as Tesla’s vision to lead a revolution in the car industry, towards a future where every car is electric, with zero emission.
To work on the vision, a set of values like high quality and leading innovation where developed in every ...view middle of the document...
For this, Elon applied the strategy to acquirer the talent needed externally. Recruiting Gilbert Passin as Vice President of Manufacturing, is an example how the strategy of how Tesla in other to develop his Core Competence, recruits specialists with experience on the automobile industry, instead of growing them organically inside the company. With the talent incorporated to the company, the strategy of Talent Seeking allows the company to have a product that is rare in the market.
* 2° & 3° Strategy: Green Selling and Low Inventory
Having something that no other competitor has is not enough. In order make it a true Core Competence, that “Special Something” must be sustainable over time and attractive to an important number of costumers. To achieve the sustainability, Tesla used to main strategies to balance the high amount of initial inversion: Green Selling and Low Inventory.
“Green Selling” is a strategy were Payment Flows from the costumers come first in time than the Ownership Flows. This allows to fund some of the initial production costs in base of a pre-paid policy. The vast inversion that Tesla required for building the factory and developing investigation, was in part able to be sustainable thanks to the green selling strategy, where 10,000 in advanced sales gave them 3 years of working budget.
The second strategy seeking for financial sustainability is working in Low Inventory. As a starting company and powered by the “Green Selling”, Tesla developed an initial promotion with a small number of cars to get reputation, collecting later prepaid orders for the more massive selling units. This permits to have a very low inventory inside the company, putting aside the inventory costs.
* 4°Strategy: High Advertisement
As we mentioned before, a Core Competence must be valuable to the costumers. We can have a unique product, but is nobody wants it, it has no future for being business. In order to obtain the automobiles market consumers desire to buy an electrical car, Tesla implemented a High Advertisement strategy. First they focused on making the brand known and positioned as a high quality car, launching reduced number of the Tesla Roadster, the goal was to prove that an electric car can be desirable. The strategy didn’t focus on getting profit out the sales of the first model, it was a tactical move to get people to buy the more mainstream model.
With a reputation built, for the Tesla S model the high advertisement strategy continued. The need of a large investment in marketing strategy can be understood by the tight automobile industry explained at the beginning, where consumers have a large amount of companies that provide cars, that already have a...