Introduction
Tesla Inc. is an American electric vehicle and clean energy company. It started as a well-established electric car company in 2003 (Du & Li, 2021). Since then, its impressive performance and frequent innovations in electric vehicles have seen it rise among the most reputable firms in the world. As a result, people have developed a strong trust in the company’s products, believing it can change the world with its energy-efficient cars. However, that does not deter it from experiencing the overreaching impacts of macro-environment forces. Thus, the primary aim of this study is to assess the company’s marketing strategies that can help it overcome the forces of its macro-environment.
Change in the Macro Environment Forces
Among the top players in the electric car sector, Tesla is not an exception to the significant forces that impact companies in the industry. The vital macroeconomic forces at play in this field encompass technological, social, political, economic, environmental, and legal factors (Bhardwaj et al., 2020). While all these forces have varying impacts on the company’s performance and marketing strategies, the most critical factor affecting the industry’s current state is the trend toward electric cars.
Companies like Tesla, which offer hope of eliminating fossil fuels from the transportation system, are receiving considerable attention. Most firms see an opportunity to leverage the rising market in the sector (Bhardwaj et al., 2020). In addition, Tesla’s industry is influenced by geopolitical factors, such as trade policies, which can either promote or impede its efficient operations.
Potential Impact on Marketing Strategies
Sustainable Competitive Advantage
There is an increasing focus on eliminating climate change due to the impending consequences it poses to the world. It has become the global center stage for all governments to minimize the use of fossil fuels and other non-renewable energy sources (Gil-García et al., 2021). For instance, key processes have been upgrading and improving energy efficiency in transportation systems or homes (McLeod, 2021).
Additionally, efforts are being made to enhance the locomotive industry and its products, from burning fossil fuels to utilizing renewable energy sources, such as solar batteries and charging systems (Liu, 2021). This is where companies in the automotive industry, such as Tesla, feel the impact of this trend. It is a significant force that drives Tesla’s macro-environment, as electric cars are seen as a potential way to reduce greenhouse gas emissions (Thomas & Maine, 2019). It has led to greater demand for electric vehicles and clean energy solutions.
The macro-environmental forces identified above, including stiff competition in the electric car industry, compel Tesla Inc. to explore ways to establish a robust competitive edge. In the face of increasing competition, the company’s marketing approaches for sustainable competitive advantage have focused on its core strengths, research and development, and customer satisfaction (Galpin, 2019). This is the best way to deter other firms from reaching their level, as it leverages key strengths that others cannot imitate. At the same time, this approach will help it maintain continuous growth, build a strong brand name, and attract more customers to expand its product line.
Tesla Inc. must also focus on expanding its key strengths. The primary force driving Tesla to achieve the significant milestone it has shown in the electric car industry lies in its ability to explore current technologies and use them to its benefit. For instance, it began as a small electric car firm that aimed to enhance customers’ experience in terms of speed and luxury (Galpin, 2019). However, its innovative capabilities enabled the company to go beyond that simple goal. It is one of the most notable firms in the electric car industry. The company boasts a strong brand reputation due to its exceptional customer experience.
Tesla should also strengthen its commitment to sustainability and environmental protection. The current shift towards sustainable, environmentally safe alternatives is drastic. Companies that have the opportunity to explore this need stand a chance to win in the market. This factor has supported its growth since it emerged as an electric car producer. At the same time, many companies focused on luxury and other classic features in cars.
Tesla conceived a groundbreaking idea to transform the world into a sustainable energy alternative. Customers believe it is a firm that can utilize technology to meet their needs and has consistently delivered on its promises. It remains the top company to rely on when seeking environmental sustainability solutions in the transportation sector (Zeng et al., 2019). Therefore, improving and emphasizing its renewable energy products will be a better way to dominate the market in the long term.
However, exploring and improving the identified areas presents significant challenges that the company must understand how to address. Improving car products to maintain their quality and environmental sustainability is a complex process. Instead, it is a process that requires a persistent commitment to improvement, particularly in building technologies that may require extensive resources. In addition, this process requires investment in far-reaching technological solutions, which need top-talented employees and great minds to achieve (Zeng et al., 2019).
In summary, Tesla must continue to innovate and differentiate itself from competitors in response to changing macroeconomic forces. The process may be multifaceted and challenging, but it ultimately pays off. Innovation remains a crucial area for companies to explore to stay productive (Zeng et al., 2019). Similarly, investing in technological solutions is the best way to stay current with the evolving technical business environment. Thus, the two forces combine to help firms, particularly those that rely heavily on technology, achieve their intended goals as market leaders.
Segmentation, Targeting, and Positioning (STP)
Tesla Inc. already demonstrates significantly robust strategies for market STP. However, it still needs significant improvement to be more adaptive. This is critical given the company’s current market context, which is driven by changes in the macro environment. The company knew that the world was changing towards sustainable energy sources. Thus, the company’s marketing segmentation focuses on attracting customers who want to play a role in the current fight for environmentally safe alternatives (Asif et al., 2022).
That includes focusing on customers who want to reduce their reliance on cars that still burn fossil fuels to generate energy. Tesla also understands that most customers nowadays value quality. Thus, the company focuses on customers who are willing to elevate their lifestyle and social status through high-quality, luxury cars (Asif et al., 2022). Its segmentation focuses on environmentally conscious individuals and those who value quality. In terms of positioning, it presents itself as a high-quality electric car manufacturer.
However, Tesla must expand its target market. Focusing solely on current segments or positioning itself as an electric-car provider only is not a reliable strategy. Electric vehicles are becoming increasingly mainstream, and other players are capitalizing on their current market niche. Fundamental changes are necessary to thrive in the new market landscape and win over diverse customers. Central to this reform requires emphasis beyond environmentally conscious customers and technologically savvy individuals to a broader customer segment (McLeod, 2021).
Therefore, the company must explore other customer segments, including those with budget constraints. This can allow the company to expand its customer segment. Also, the company must employ various marketing strategies to help resonate its new marketing efforts and brand name (Panait et al., 2022). This approach will require additional resources, but it will ultimately be beneficial. For instance, it can expand its customer base, a critical factor in building a solid customer base.
Branding
Tesla’s branding strategy has been a critical driver of its success. However, the primary factor driving its brand as a quality manufacturer and producer of electric cars is its ability to explore technological solutions and its innovative mindset (Wu, 2021). This approach of leveraging technology and innovative strategies has helped it to offer quality electric cars that meet consumer expectations. Thus, it remains among the top-loved companies in the sector, with customers remaining loyal to its products and leaving positive reviews.
This helps the company continuously build a solid customer base and expand its reach. The company has established a sustainable advantage through its brand name, which enables it to compete effectively and remain relevant year after year (Shen & Zeng, 2022). Similarly, it uses technological approaches to expand its exploration of sustainable and renewable energy sources. This has also helped it to win the heart of environmentally conscious customers.
Growth Opportunities in the Macro Environment
Expansion into Emerging Markets
Companies like Tesla Inc. have shown significant performance in the locomotive industry. It has implemented various strategies to help it grow and attain substantial outcomes in the sector. For example, its growth has been linked to its ability to expand and attract new customers, enhance the customer experience, and ensure customer loyalty to the company’s products (Teece, 2018). This is a significant sign of constant growth.
Yet it needs to expand into more markets to increase its market reach. This is an opportunity that can help any firm attain a significant outcome. Tesla has a viable opportunity to leverage various marketing strategies and expand into other emerging markets. For instance, focusing on India or China can be rewarding, as these markets exhibit a high growth rate and offer potential customers (Dai & Zhang, 2022). Thus, the company will utilize its reputation and technological solutions to establish a foothold in new markets.
Expanding into additional markets requires extensive research and overcoming the challenges that come with it. For instance, it must initiate strategies to develop marketing plans that focus on consumers’ unique needs and preferences in these markets. Extending its wings to new markets, such as China, will require the company to present its value proposition to them (Cagle, 2019; Thomas & Maine, 2019).
However, Tesla has a viable value proposition in new markets, as it stands among the most highly valued companies in promoting environmental sustainability. Thus, it can position its brand in these new markets as a potential firm that aligns with customers’ values of ecological safety and sustainability.
Diversification into New Products and Services
Tesla can also focus on a new approach to conducting its business. It is well linked to innovation and technological capabilities. However, practicing a new technique, such as diversification into new products and services, can be a more effective way to extend its market reach. The primary reason for pursuing this approach is its ability to eliminate the high risks associated with a single production line (Teece, 2018).
Whenever a company focuses on building multiple products and serving different markets, it can grow even if one product is being challenged by market forces (Chen & Perez, 2018). It can also involve targeting new customers to expand the company’s customer base. This approach presents a viable opportunity for growth.
Relevant Marketing Theory
The analysis and recommendations presented in this section are grounded in several marketing theories. Effective marketing strategies underpin these theories. For instance, the STP concept is a viable way to define these strategies. This is a critical framework for developing effective STP strategies (Hung & Yen, 2022).
It offers a viable way to understand a company’s market, products, and potential audiences in those markets. Therefore, the theory offers an insightful approach to effectively channel marketing communication (Chen et al., 2021). This is critical for reaching relevant audiences and for focusing marketing information to appeal to customers.
Conclusion
Tesla is struggling with substantial changes in its macro environment. Various forces impede its operations as a critical player in the electric car industry. For instance, the analysis has shown that consumer trends and the urgent need for environmentally friendly energy sources are forcing it to build a significant competitive edge. This is where a robust marketing strategy comes into play. The company already has an extensive marketing structure with a precise STP.
Additionally, it possesses substantial brand value among its target audience. However, more improvement is needed to help it retain its position. Moreover, the analysis identifies critical areas that present opportunities for the firm. For instance, it can diversify its offerings to a larger market. These recommendations will help the company establish a robust competitive edge to effectively counter competition.
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