Marketing Management

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 Table of Contents

1 Introduction............................................................................................................................................4
1.1 Company Overview.............................................................................................................................4
PEEST Analysis.....................................................................................................................................5
2.1 Political and Legal Environment........................................................................................................5
2.2 Economic Environment.......................................................................................................................5
2.3 Environmental Factors....................................................................................................................5
2.4 Sociocultural Environment.............................................................................................................6
2.5 Technological Environment.............................................................................................................6
3 Micro Analysis....................................................................................................................................7
3.1 Customer Segmentation..................................................................................................................7
4 Competitor Analysis Porter's 5 Forces analysis...............................................................................8
4.1 Threat of New Entrants...................................................................................................................8
4.2 Bargaining Power of Suppliers.......................................................................................................8
4.3 Bargaining Power of Buyers...........................................................................................................8
4.4 Threat of Substitutes.......................................................................................................................8
4.5 Competitive Rivalry........................................................................................................................9
5 Competitor Perceptual Map..............................................................................................................9
6 Internal Analysis...............................................................................................................................10
6.1 Strategy Review.............................................................................................................................10
6.2 Functions Review...........................................................................................................................10
6.3 Productivity Review.......................................................................................................................11
7 TOWs Matrix....................................................................................................................................11
7.1 Strengths-Opportunities Strategies..............................................................................................11
7.2 Strengths-Threats Strategies.........................................................................................................12
7.3 Weaknesses-Opportunities Strategies..........................................................................................12
8 Conclusion.........................................................................................................................................12
Reference list........................................................................................................................................14
Appendices...........................................................................................................................................16
Appendix 1: Company Overview.......................................................................................................16
Appendix 2: Macro Analysis...............................................................................................................16
Appendix 3A: Customer Segmentation..............................................................................................16
Appendix 3B: Competitor Model - Porter's Five Forces Analysis...................................................16
Appendix 3C: Competitor Model - Competitor Perceptual Map.....................................................17
Appendix 4: Internal Analysis............................................................................................................17
 Marketing Audit for Tesla in the China Market

1 Introduction

Tesla has solidified its position as a pioneer in sustainable energy solutions and electric

vehicle (EV) technologies in the fast evolving automotive sector. The purpose of this report is to

perform a comprehensive marketing audit of Tesla's activities in the automobile industry,

including examining its operations in China. According to Shao, Wang, and Yang (2021), Tesla

has received acclaim and global recognition due to its remarkable achievements in the electric

car sector. To maintain its current market dominance and achieve future growth, it is important

to evaluate the company's marketing strategy, as well as the external elements that impact it on a

large scale (macro environment) and a small scale (micro environment). Additionally, the

company's internal strengths and weaknesses should be thoroughly analysed.

1.1 Company Overview

The foundation of Tesla's establishment in China is the strategically positioned

Gigafactory Shanghai, a production plant. Liu (2023) asserts that the facility, which commenced

operations in late 2019, has played a vital role in Tesla's worldwide expansion and has provided

as tangible proof of the company's dedication to the burgeoning Chinese electric car industry.

With a focus on locally produced goods, the Gigafactory initially produced the Model 3 and later

expanded to include the Model Y in response to the growing demand for electric vehicles in the

region. In addition to benefiting from the pro-electric vehicle policies of the Chinese

government, Tesla is able to lower production costs and raise prices in the local market, thereby

improving its competitive position. However, Tesla struggles to stay up to date with Chinese

regulations and manoeuvre through the competitive landscape of the nation.

2 Macro Analysis
PEEST Analysis

Tesla has achieved remarkable success by leveraging and adapting to various

environmental factors. The business has prospered in the cutthroat EV market thanks to its

adaptability to political, economic, environmental, sociocultural, and technological factors. For

Tesla to continue leading the changing automotive industry, it must stay true to its core values of

sustainability, innovation, and consumer insight.

2.1 Political and Legal Environment

The political and legal environment plays a pivotal role in the success of Tesla as an

electric vehicle (EV) manufacturer. Government policies and regulations have a substantial

impact on the adoption of EVs (Hsu, 2023). In many countries, governments offer incentives,

such as tax credits and rebates, to encourage consumers to purchase EVs. These incentives

reduce the overall cost of ownership, making Tesla's vehicles more appealing to potential buyers.

2.2 Economic Environment

The status of the economy directly affects consumer purchasing power and inclination to

invest in sustainable mobility. There is a strong correlation between the performance of Tesla

and the state of the economy. According to McCain's (2019) essay, individuals are more inclined

to acquire pricier items such as electric cars (EVs) during periods of economic prosperity. Tesla

has implemented financing options and lease programmes to enhance the affordability of its

vehicles for a broader spectrum of buyers..

2.3 Environmental Factors

The increasing recognition of environmental issues and the growing apprehension over

climate change have resulted in a significant rise in the market demand for environmentally

sustainable products, such as electric automobiles. Tesla has taken advantage of this trend by
establishing itself as a frontrunner in environmentally friendly transportation (McCain, 2019).

The company's environmentally-friendly practises, such as using renewable energy for its

operations and manufacturing electric vehicles with a reduced carbon footprint compared to

conventional automobiles, appeal to environmentally-conscious consumers. Tesla's distinction in

the market arises from its dedication to clean energy and environmentally friendly practises,

which align with the increasing worldwide focus on sustainability.

2.4 Sociocultural Environment

Understanding changing consumer attitudes is essential for Tesla's marketing strategies.

As society becomes increasingly environmentally aware, consumer preferences are evolving.

Tesla has recognized and adapted to these changing attitudes. It has become synonymous with

sustainable transportation and has garnered a dedicated following among consumers who

prioritize environmental considerations in their purchasing decisions according to McCain

(2019). Demographics, such as age groups and social segments, also shape Tesla's marketing

approach. Understanding different demographic groups' preferences is critical for effectively

tailoring marketing efforts.

2.5 Technological Environment

Tesla's success is intricately linked to technological advancements in electric vehicle

batteries and autonomous driving capabilities. The company's relentless focus on innovation in

these areas has allowed it to stay ahead of competitors. Breakthroughs in battery technology have

extended the range and efficiency of Tesla vehicles, while advancements in autonomous driving

technology have positioned the company as a leader in self-driving capabilities.

3 Micro Analysis

3.1 Customer Segmentation

Research (Wu et al., 2022) indicates that a sophisticated grasp of consumer demographics

and behaviour is essential for Tesla to succeed in the cutthroat Chinese electric vehicle (EV)

market. Tesla needs to adjust its offerings to appeal to younger, tech-savvy consumers who are

drawn to innovation and sustainable technology, taking into account the market's diverse age

groups. To ensure accessibility for a wider range of consumers, income segmentation plays a

critical role in modifying financing options and pricing to suit varying economic brackets.

Furthermore, for efficient market penetration, taking into account the disparities in preferences

between urban and rural areas with regard to lifestyle choices and charging infrastructure is

crucial.

Additionally, psychographic characteristics are essential for customer segmentation. In

order to match its product features and marketing messaging with the ideals and convictions of

environmentally conscious consumers, Tesla should learn more about the lifestyles of potential

customers. Tesla will be able to develop focused marketing strategies by analysing customer tech

adoption rates, connectivity feature preferences, purchase patterns, and brand loyalty. Through

the implementation of these complex customer segmentation techniques, Tesla is able to

customise its offerings and advertising strategies to appeal to the wide range of tastes and habits

that exist within the ever-evolving Chinese electric vehicle market. Maintaining alignment with

changing consumer trends will require routine reevaluations of these segments.

4 Competitor Analysis Porter's 5 Forces analysis

4.1 Threat of New Entrants

Zaggia (2022) arguest that the threat of new entrants into the EV market is relatively low

hence Tesla's dominance is partly attributed to significant barriers to entry. It has invested

heavily in technology, manufacturing facilities, and charging infrastructure, creating substantial

entry barriers for new players. Additionally, economies of scale, established brand recognition,

and a robust charging network contribute to Tesla's competitive moat.

4.2 Bargaining Power of Suppliers

Tesla's primary suppliers encompass battery manufacturers such as Panasonic, LG Chem,

and CATL (Bridge and Faigen, 2022). While the concentration of suppliers suggests some level

of supplier power, the growing demand for EV batteries and components is intensifying

competition among suppliers. Consequently, Tesla's bargaining power is increasing as it explores

alternative suppliers and insources certain components.

4.3 Bargaining Power of Buyers

Buyers in the EV market have moderate bargaining power. Although there are alternative

EV options, Tesla's brand loyalty, cutting-edge technology, and unique product offerings give it

some leverage. Many consumers are willing to pay a premium for Tesla's products due to the

perceived value and innovation they represent. Nonetheless, buyers still have choices, impacting

Tesla's pricing strategies.

4.4 Threat of Substitutes

The threat of substitutes in the EV industry is moderate. Traditional internal combustion

engine (ICE) vehicles are a substitute, but a transition toward EVs is fueled by sustainability

concerns, government incentives, and environmental awareness. This shift is gradually reducing
the threat of ICE vehicles. However, other substitutes like bicycles, public transportation, and

alternative sustainable transport options remain relevant, posing a potential threat.

4.5 Competitive Rivalry

Competitive rivalry within the EV industry is intense. Avvording to an article by Silva

(2022), Tesla contends with established automakers like General Motors, Ford, and emerging

players such as Rivian and Lucid Motors. The battle for market share revolves around

innovation, technology, production capacity, and pricing strategies. Tesla's first-mover

advantage, strong brand, and pioneering technology have allowed it to maintain a dominant

position in this competitive landscape. However, the ongoing struggle to secure a leading

position necessitates continuous innovation and adaptation.

5 Competitor Perceptual Map

High Quality

Tesla

General motors Lucid Motors

Rivian

Low price High Price

Ford

Low Quality
 In the electric vehicle market, Tesla commands the top-right quadrant with its premium

pricing and exceptional product quality, setting the gold standard for cutting-edge technology,

innovation, and luxury electric vehicles. General Motors (GM) offers a more affordable yet high-

quality alternative (Pinto, 2022), thus in the top-left quadrant, providing consumers with reliable

EVs that strike a balance between cost and performance. Meanwhile, Ford occupies the bottom-

left quadrant, prioritizing affordability and standard quality, making electric vehicles more

accessible to a wider range of customers. Rivian and Lucid Motors, both situated in the top-right

quadrant, emerge as promising competitors to Tesla, with Rivian focusing on high-quality

electric vehicles at competitive prices, and Lucid Motors challenging the premium segment with

their blend of luxury, technology, and quality, further diversifying the electric vehicle landscape.

6 Internal Analysis

6.1 Strategy Review

Innovation, sustainability, and industry disruption have been at the core of Tesla's

business strategy. Tesla has successfully established itself as a market leader for electric vehicles

(EVs), claim Thomas and Maine (2019). The primary factor for its success is its dedication to

improving electric vehicle (EV) technology, production efficiency, and sustainable energy

solutions. Tesla is a forward-thinking company, as seen by its rapid growth of Gigafactories and

Supercharger network and its emphasis on self-driving technologies.

6.2 Functions Review

Chen, Chowdhury, and Donada (2019) assert that Tesla's performance is mostly

dependent on its functional domains since research and development (R&D) is a key factor in
driving innovation and producing cutting-edge electric vehicles (EVs) and energy goods.

Maintaining production efficiency and satisfying rising demand need effective manufacturing

and supply chain management. The majority of sales and marketing initiatives have been

nontraditional, depending mostly on internet sales, word-of-mouth, and little advertising. This

strategy has proved crucial in lowering marketing expenses and increasing brand loyalty.

6.3 Productivity Review

Tesla's vertically integrated strategy has allowed them to achieve impressive efficiency

increases. Tesla has better control over prices and quality because to vertical integration, which

spans from battery production to car assembly. Furthermore, increased manufacturing efficiency

has resulted from the company's investment in robots, automation, and AI-powered systems

(Cooke, 2021). But issues like achieving delivery goals, scaling up manufacturing, and

upholding quality control still exist. Sustained productivity growth is still necessary for long-

term viability.

7 TOWs Matrix

7.1 Strengths-Opportunities Strategies

One of Tesla's main strategic focuses should be to use its cutting-edge EV technology to

take advantage of the rapidly expanding global electric car industry, according to study by

Thomas and Maine (2019). Tesla's electric car technology is leading the market and establishing

new benchmarks for effectiveness and performance. By consistently pushing the limits of

electric vehicle (EV) technology and keeping one step ahead of the competition, Tesla can

capitalise on the growing worldwide EV market and sustain its market leadership.
7.2 Strengths-Threats Strategies

Increasing production and quality control procedures must be Tesla's top priority in

reaction to external challenges. In order to protect the organisation from potential supply chain

interruptions, which pose a serious risk, it is imperative that production objectives be met and

quality standards are maintained (Thomas and Maine, 2019). By making these investments,

Tesla can lessen the effects of outside risks like problems with the global supply chain, which

might impede manufacturing and sales.

7.3 Weaknesses-Opportunities Strategies

Tesla must address its manufacturing and quality control issues, which have shown to be

weak spots for the corporation, in order to fully take advantage of the prospects in emerging

countries. Once these internal issues are fixed, Tesla will be able to confidently enter new

markets and provide customers with better-quality, more dependable goods. In addition, Tesla

has to make investments in a wider range of products in order to fully realise the promise of the

expanding worldwide EV market. Tesla can grow its market share and maintain its

competitiveness in a market that is always changing by broadening the variety of products it

offers to suit a wider spectrum of customers with various wants and budgets.

8 Conclusion

In conclusion, constant evaluation and modification of marketing tactics are necessary

given Tesla's incredible ascent in the electric vehicle and renewable energy sectors. Insights

about internal resources, growth and sustainability prospects, and environmental elements both

large and small may be obtained via a comprehensive marketing audit. A targeted marketing

approach will remain essential to Tesla's success as it continues to influence the future of

sustainable transportation.
 Reference list

Bridge, G. and Faigen, E. (2022). Towards the lithium-ion battery production network: Thinking

beyond mineral supply chains. Energy Research & Social Science, 89, p.102659.

doi:https://doi.org/10.1016/j.erss.2022.102659.

Chen, Y., Chowdhury, S.D. and Donada, C. (2019). Mirroring hypothesis and integrality:

Evidence from Tesla Motors. Journal of Engineering and Technology Management,

[online] 54, pp.41–55. doi:https://doi.org/10.1016/j.jengtecman.2019.09.001.

Cooke, P. (2021). Image and reality: ‘digital twins’ in smart factory automotive process

innovation – critical issues. Regional Studies, pp.1–12.

doi:https://doi.org/10.1080/00343404.2021.1959544.

Hsu, S.-L. (2023). On Electric Vehicles and Environmental Policies for Innovation. UC Law

Science and Technology Journal, [online] 14(2), p.231. Available at:

https://repository.uchastings.edu/hastings_science_technology_law_journal/vol14/iss2/2/

[Accessed 9 Nov. 2023].

Liu, R.M. (2023). Tesla is opening a Megafactory for huge batteries in China | CNN Business.

[online] CNN. Available at: https://edition.cnn.com/2023/04/09/business/tesla-

megafactory-shanghai/index.html.

McCain, C. (2019). A Strategic Audit of Tesla, Inc. Honors Theses, University of Nebraska-

Lincoln.

Pinto, F.M.D.P. (2022). Business adaptive strategies in crisis : the case of General Motors.

repositorio.ucp.pt. [online] Available at:

https://repositorio.ucp.pt/handle/10400.14/41046.
Shao, X., Wang, Q. and Yang, H. (2021). Business Analysis and Future Development of an

Electric Vehicle Company--Tesla. Proceedings of the 2021 International Conference on

Public Relations and Social Sciences (ICPRSS 2021), 586(1).

doi:https://doi.org/10.2991/assehr.k.211020.188.

Silva, L.D. da (2022). Tesla: driving a winding road. run.unl.pt. [online] Available at:

https://run.unl.pt/handle/10362/142187.

Thomas, V.J. and Maine, E. (2019). Market Entry Strategies for Electric Vehicle start-ups in the

Automotive Industry – Lessons from Tesla Motors. Journal of Cleaner Production,

[online] 235(1), pp.653–663.

doi:https://www.sciencedirect.com/science/article/pii/S0959652619322498.

Wu, Z.-Q., Nguyen, P.-Q., Phankasemsan, I. and Wolf, E. (2022). Driving Sustainability and

Electric Vehicles Evolution: Tesla Company’s Success Strategies. dspace.fcu.edu.tw.

[online] Available at: http://dspace.fcu.edu.tw/handle/2376/4771.

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 Appendices

Appendix 1: Company Overview

Information Details
Background This section provides a comprehensive overview of
Tesla china Company, covering its history, mission
and vision, core values, organizational structure, key
executives, and global presence. It also delves into
Tesla China significant achievements and role in the
Automotive industry.

Appendix 2: Macro Analysis

PEEST Factors Analysis and Impact
Political and Legal Discussion on the political and legal factors affecting Tesla's operations in
Environment China
Examination of economic factors influencing Tesla's performance in the
Economic Environment Chinese market
Analysis of environmental considerations and their impact on Tesla's
Environmental Factors strategies
Sociocultural Insight into sociocultural factors influencing consumer behavior and
Environment preferences in China
Technological Evaluation of technological factors affecting Tesla's business in the Chinese
Environment market

Appendix 3A: Customer Segmentation

Customer Segment Description
Demographics, psychographics, and behavior traits of
Segment 1 customers in this segment
Demographics, psychographics, and behavior traits of
Segment 2 customers in this segment

Appendix 3B: Competitor Model - Porter's Five Forces Analysis

Force Analysis and Impact
Discussion on the level of threat new entrants pose to
Threat of New Entrants Tesla
Assessment of the bargaining power suppliers hold
Bargaining Power of Suppliers over Tesla
Evaluation of the bargaining power buyers have in the
Bargaining Power of Buyers Chinese electric vehicle market
Analysis of substitute products or services that may
Threat of Substitutes pose a threat to Tesla's market position
Examination of the intensity of competition within the
Competitive Rivalry Chinese electric vehicle market
Appendix 3C: Competitor Model - Competitor Perceptual Map
A visual representation of Tesla and its competitors on a perceptual map based on premium pricing and
exceptional product quality. Tesla dominates the on both premium pricing and high-quality products.
Lucid Motors and Rivian also share this quadrant, suggesting similar positioning. General Motors
emphasizing quality at a more affordable price, while Ford prioritizing affordability and standard
quality.

Appendix 4A: Internal Analysis

Aspect Description
Briefly discuss Tesla's core business strategy,
emphasizing innovation, sustainability, and
Strategy Review disruption.
Examine how Tesla's performance is influenced by
key functional domains like R&D, manufacturing,
Functions Review supply chain, and sales/marketing.
Evaluate Tesla's productivity, discussing the
effectiveness of its vertically integrated strategy, use
of technology, and any existing challenges or areas
Productivity Review for improvement.

Appendix 4B: 7Ps

Aspect Description
Cutting-edge electric vehicles like Model 3 and
Model Y, featuring autonomous driving and long-
Product range batteries.
Invests in staff training in China.
Fosters a strong corporate culture aligned with
People Chinese values.
Streamlined purchasing process with online and in-
store options.
Optimized manufacturing and supply chain
processes.
Processes Robust after-sales service for customer satisfaction.
Utilizes digital marketing and social media.
Emphasizes sustainability and innovation.
Promotion Collaborates with influencers for brand visibility.
Vehicles manufactured at Gigafactory Shanghai.
Distribution through showrooms, service centers, and
Place local dealerships.
Positioned as a premium brand.
Offers diverse pricing tiers, financing options, and
lease programs.
Price
Physical Evidence Showcases commitment to sustainability at
 Gigafactory Shanghai.
Visually appealing and interactive showrooms.
Test drive opportunities and transparent information
on manufacturing processes
Appendix 4c:
Appendix 4C: CBBE Model Analysis
Aspect Description
Salience: Cutting-edge EVs, sustainability,
innovation.
Performance: High-performance EVs with advanced
features.
Imagery: Strong visual identity, sustainability
Brand Identity commitment.
Attributes: Premium, sustainable, technologically
advanced.
Benefits: High-performance, environmentally
friendly, advanced technology.
Emotions: Innovation, environmental responsibility,
Brand Meaning luxury.
Judgments: Positive evaluations of quality,
innovation.
Feelings: Emotional connection with brand values.
Brand Response Resonance: Strong loyalty, active engagement.
Growth: Continuous innovation, product expansion.
Adaptation: Addressing challenges, staying ahead.
Reinforcement: Ongoing efforts in marketing,
Brand Evolution collaborations.
Identity: Distinct in EV market.
Meaning: Represents innovation, sustainability.
Response: Positive judgments, strong resonance.
Brand Pyramid Resonance: Deep connection, strong loyalty.
Loyalty: High retention, repeat purchases, advocacy.
Attachment: Emotional connection, identification.
Community: Engaged community, positive word-of-
Brand Resonance mouth.