The company is listed on USA NASDAQ, with an IPO in June 29, 2010 and its headquarters is located in Austin, Texas, United States. The company was founded on 1st July 2003 by Elon Musk, Martin Eberhard, JB Straubel, Marc Tarpenning and Ian Wright (Dzialo, 2018). Tesla is better described as a battery manufacturer, even if its name is most commonly associated with electric vehicles. The firm was operates within the automotive sector where it is well-known for its expertise in solar panels and Lithium-ion battery energy storage.
According to the past three years worth of stock activity at Tesla Inc., the average share price for the company was about $205.39 as per the data provided by Yahoo Finance. Based on the data on the site, the stock price for 2020 was 29.53 USD, 2021 was 235.22 USD and as of 31st December 2021 it was 352.26 USD (Microsoft Corp., 2022). The previous three years have seen a tremendous increasing trend in the price of Tesla Inc. shares with the December 2021 share prices being the highest.
The highest stock price as on October 3 04:00PM EDT was $414.50 while the lowest was $206.86. Tesla’s 52-week high was at $414.50 on 5th November 2021 and today this trend has reduced to $242.40 (Microsoft Corp., 2022). Over a span of three years, the prices of Tesla shares have increased in overall by about 4.8 percent and this is expected to rise over time at a similar rate. Similarly, the previous three years have witnessed the company’s revenue increase tremendously due to improved client base and sales.
When a company decides to split its stock into several shares, it is typically to reduce the price for investors. With the company stock split having been rumoured for many months, the company ended up approving the 3-for-1 stock split during its annual general meeting held on August, 4, 2022. A research on the outstanding share of stock for Tesla has revealed that as per the quarter that was ending on June 30, 2022, there was about 3.465 Billion outstanding share of stock (Microsoft Corp., 2022). This represents nearly 3.22% increase as compared to the previous financial year (Microsoft Corp., 2022). As of June, 30, 2021, Tesla’ shares outstanding were 3.387 Billion representing an increase of 4.25% from the 2020 financial year.
Considering the variety of companies that are listed and are available for investment on the NASDAQ, I believe it would be prudent to invest into a company with a NASDAQ basis such as Tesla Inc. In addition, NASDAQ is such a well-known and trustworthy exchange, investors may rest certain that they are receiving a fair return on their investment. To reiterate, NASDAQ companies are a safe investment sites due to the exchange’s history, stability and reputation.
The New York Stock Exchange and the NASDAQ both operate within the same industry. An example of a company listed on the New York Stock Exchange include Forward Industries, Inc. (FORD). On comparison between the two companies, it is evident that the stocks are traded more often and are more costly on the NASDAQ stock exchange as they are on the New York Stock Exchange (Dzialo, 2018). This finding clearly depicts that an investor who purchases a single share on the NASDAQ stock exchange platform does so at an expensive cost than on the New York Stock Exchange. This cost is probably high due to greater demands of stocks on the NASDAQ stock exchange.
References
Dzialo, B. (2018). Charging down the Road: A Historical Analysis of the American Auto Industry and Tesla Inc. Sage
Innovative approaches to communication at an organization have proven to be effective solutions to problems associated with fast decision-making. E-mail exchange within the structure of a company allows for the aligned and systematic exchange of information pertaining to operations within an organization. However, given the different approaches to arranging e-mail-based communication, various types of organizations might benefit from them in different ways. Tesla, as an innovative company whose structure is less complicated than that of General Motors, is more likely to benefit from unconventional free communication due to the emphasis on the ideas and overall company outcomes.
Elon Mask’s approach to free communication between any representatives of any department contradicts the conventional e-mail rules in business but serves the purpose of the organization. The reason why this approach would work better for the Tesla company than for General Motors is that Tesla is driven by innovative, fast, unique, and effective solutions that originate in employees. The ability to incorporate each individual’s contribution on the team through the unconstrained exchange of information allows Tesla to implement bold projects and concentrates on the company’s overall mission (Bariso, 2017). On the other hand, General Motors is a manufacturing-driven enterprise characterized by precision in operational processes, systematic performance, and standardization for larger volumes of production. Innovation is not the critical aspect of this company’s work, which is why subordination and a structured approach to information exchange in the form of formal reports would suffice the needs and requirements of such a company.
Conclusively, the memo sent to the employees of Tesla illustrates the communication culture at an innovation-driven company that prioritizes effectiveness and idea-generating over subordination and hierarchy. Elon Mask’s approach to e-mail rules adjustment validates the innovation-based mission of the organization and motivates employees to prioritize the interests of the company and not separate departments’. Therefore, such a school of thought on organizational communication might be more effective for Tesla than for General Motors.
Reference
Bariso, J. (2017). This email from Elon Musk to Tesla employees describes what great communication looks like. Inc. Web.
A sustainable competitive advantage can be achieved in several ways to ensure the company is able to deliver its services better than other organizations. The two main strategies include service differentiation and information exchange. Tesla has already proved itself as a successful disruptor of the electric vehicle industry (Lang et al., 2021). Still, it continues offering the best innovative technologies for customers, and it is important to check the existing variety of customers’ needs.
Thus, the introduction of unique goods and services has to be a “number one” strategy for Tesla. Such steps as the analysis of the field, communication with people (potential customers), and the evaluation of recent technological achievements will help Tesla recognize new trends and its readiness to change something. Service differentiation is not about introducing a new exclusive idea but the ability to cooperate at different levels and use available information.
Another strategy is related to information exchange and knowledge promotion. Despite the desire to be all-rounded, only a few people understand the core vision of Tesla. Within a short period, the company has demonstrated success in multiple data-driven decision-making processes to enhance product management and information exchange (Lang et al., 2021). Now, it is high time to share its knowledge with other people. Therefore, Tesla should enhance free meetings and charity events to attract the attention of new people and demonstrate its intention to cooperate. When a person sees a service, asks questions, and has a free trial, the guarantees of a future purchase increase.
Tesla must establish a connection with society and prove that its futuristic technologies are closer than people could imagine. Service differentiation and a solid, informative background for customers are the two strategic decisions for Tesla at the moment. These steps are relatively inexpensive because much depends on how its employees work with current facts and implement them for competitive advantage.
Tesla is among the leading players within the scope of the automotive industry. Through the years, it has been demonstrating a great extent of competitiveness, innovativeness, and success. This is reflected in its profit margins and stable market performance, which is essential under the conditions of severe rivalry. The below discussion will explore Tesla’s strategic foundation, as well as external and internal factors affecting the company, to define the basics of its competitiveness.
Globalization
The Tesla Motors corporation decided to enter the foreign market for a variety of reasons. First, it is important to note that the company’s website states that its purpose is to produce and market a product that would enable more sustainable use of the environment. Environmental issues are quite important when it comes to the transportation business; according to certain data, this industry is responsible for about 70% of the world’s oil consumption as well as for around 57% of greenhouse gas emissions that are harmful to the environment (Liu, 2021). Furthermore, it is crucial that several nations pay attention to ecological issues on a global scale. Governments are prompted by environmental consciousness to offer certain unique benefits to businesses that support the development of environmentally friendly technology.
It should be noted that although Tesla Motors has only just started growing globally, the company has already had a lot of successes there, sometimes even overtaking the competition as the top brand. Because environmental concerns are a developing global concern, using cutting-edge, environmentally friendly technologies was the primary element in its success (Liu, 2021). If the company continues to place a strong focus on the ongoing use of cutting-edge technology, it could be able to predict the company’s future success.
Technology
Technologies now in use will determine how far Tesla’s automobile and energy solutions businesses progress. For instance, the company’s batteries’ performance and cost-effectiveness are determined by materials engineering technology. The rapid advancement of technology is both a potential and a risk. The fast pace gives Tesla a chance to advance the technology in its products. The same external element, though, poses a threat to the business since it might cause the technology utilized in its goods to quickly become obsolete. Nevertheless, the trend of growing commercial automation offers the opportunity (Tesla Inc., 2021). For instance, Tesla may expand by further automating its operational procedures. Additionally, the corporation should incorporate these technologies more deeply into its vehicles as a result of the rising adoption of online mobile systems. The distant or macroenvironment’s technical state highlights the potential for development based on technological advancement.
Industrial Organization Model
Although competition from huge companies like automakers including General Motors, Honda, Toyota, Volkswagen, Nissan, and BMW, Tesla’s sales profits for electric cars, batteries, and solar modules are rising. This state shows that the external issues in the distant or macro environment of the firm are effectively addressed (Hitt, 2020). Hence, the company is able to expand its operations toward an attractive industry with related characteristics – truck production, for example.
Tesla possesses the necessary resources to acquire a number of companies that are involved in truck production. The corporation can develop such acquisition firms toward electric vehicles. Tesla already has experience in this field – Cybertruck is a project with promising projections (Williams, 2021). The company should use this expertise and experience in this framework – which can be considered an asset – and utilize them within the acquired organizations. This strategy can be implemented in Europe – an area in which demand for expensive and exclusive cybertrucks will be significant. Such an approach is likely to result in superior returns and increased global presence.
Resource-Based Model
Internal business assets, including the company’s brand, provide the automobile company with the capacity to compete with other organizations for long-term prosperity in the world market. According to Elon Musk’s corporate objectives, the Tesla brand is a representation of innovation and sustainability. The corporation may launch new solar goods and automobile models that draw interest from target clients all around the world thanks to its strong brand (Tesla Inc., 2021). The tremendous rate of invention at Tesla is well recognized. It makes sense to regard this internal strategic component as a major competitive advantage that enables the business to create viable and lucrative goods for the market for electric cars (Hitt, 2020). This strength partially depends on Tesla’s company culture, which governs the support of human resources for creative improvements.
Given the mentioned factors, it seems that entering the market of nanotechnologies is an attractive industry for Tesla. An essential element here is to be able to introduce and implement innovations, which Tesla does significantly. It may establish some joint ventures with the leading players in the industry so that experience and expertise could be linked to considerable assets.
Vision
Tesla, Inc’s vision statement is to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles (Tesla Inc., 2021). The philosophy behind Tesla’s mission statement is also expressed in more detail in its vision statement. It concentrates on the corporate objective. The following essential elements make up the vision statement. First, it is to develop the 21st century’s most engaging automaker. Second, it is to drive the switch to electric automobiles throughout the world. These two elements are dependent on one another’s accomplishments. Tesla needs to develop into the most alluring automaker in order to steer and aid the world’s shift to electric automobiles, which are a healthier and greener choice.
When every other prominent automaker concentrated on gasoline-powered vehicles, Tesla was the first to focus substantially on electric vehicles. They made significant innovation investments in order to compete with gasoline-powered automobiles of similar size. Tesla’s electric vehicles were scrutinized and received unfavourable press in the beginning because of the models’ minor flaws. People had doubts about how practical and efficient electric cars were. However, Tesla has persevered and innovated over the past ten years, and as a result, newer Tesla car models have exceeded expectations. This proves that Tesla is making progress toward realizing its goal of being the most compelling automobile manufacturer of the twenty-first century.
Mission
Tesla’s mission statement is to accelerate the world’s transition to sustainable energy (Tesla Inc., 2021). The world’s unavoidable transition to sustainable energy is discussed in Tesla’s stated mission, along with the corporation’s commitment to actively accelerating the change. The utilization of energy is becoming more widely recognized. More than ever, the wider populace is aware of the risks posed by environmental degradation and climate change. They are aggressively looking for electric automobiles as a healthier form of mobility. Tesla’s innovations have completely changed the electric vehicle market; its electric vehicles provide a variety of benefits like uniqueness, speed, cutting-edge battery technology, cleanliness, and more.
The ability to position electric automobiles as a hip, modern, superior alternative to gasoline-powered vehicles is Tesla’s greatest accomplishment. This sparked curiosity and increased awareness in individuals. The strategic choices were made with the intention of making electric automobiles appear hip and environmentally friendly. The business was able to present itself as a captivating brand with a clear vision thanks to favourable media coverage and creative marketing techniques.
Stakeholders
Communities’ needs are directly met by Tesla’s car division. Communities are key stakeholders who shape brand perception through considerable advocacy efforts and reactions to the company. The preservation or protection of the natural ecosystem is one of the concerns of this stakeholder group. The corporation’s solar panels, electric cars, and chargers answer such desire in this business research scenario (Tesla Inc., 2021). Then, customers have an impact on Tesla’s profits and care about good products at fair prices. Given this considerable impact, the corporation places a strong premium on these stakeholders in its CSR initiatives. The company looks for innovative methods to save expenses in order to fulfil these interests.
Employees are an essential component of success for Tesla’s automotive and energy solutions businesses, according to the company’s plan for corporate social responsibility. Employees have an impact on corporate success and productivity as stakeholders. High pay and numerous job options are among their CSR priorities. The formative days of Tesla were financed by a number of investors. The capitalization of the firm is significantly impacted by these stakeholders. Shareholders and investors have a stake in the success and expansion of the company (Tesla Inc., 2021). Through long-term plans that seek to alter the transportation and energy markets, Tesla’s CSR strategy meets these objectives. Finally, governmental action has an impact on Tesla – governments are key players who provide companies with mandates, restrictions, and possibilities. The concerns of this stakeholder group encompass both commercial participation in economic growth and legal compliance.
Sources
Lara Williams. 2021. What Will Tesla Do Next? Investment Monitor. Web.
Michael A. Hitt. 2020. Strategic Management: Concepts and Cases: Competitiveness and Globalization. 13th ed. Cengage Learning.
Shiyong Liu. 2021. Competition and Valuation: A Case Study of Tesla Motors. IOP Conference Series: Earth and Environmental Science, 692.
Green marketing has become a part of people’s lives due to the changing paradigm regarding people’s attitudes towards the environment. Ottman (2017) note that generations X, Y, Z, as well as baby boomers, are environmentally conscious, which results in the development of certain behavioral patterns. For instance, up to 84% of American shoppers note that they buy at least one green product regularly (Ottman, 2017). Clearly, various factors affect people’s mindsets, but it is also apparent that particular items and brands also shape people’s viewpoints and boost environmentally friendly trends. The present study will concentrate on the effects Tesla cars have had on people’s views regarding green technology, automotive market, innovation, as well as shoppers’ behaviors related to green products.
The primary research question guiding this research is as follows: How have Tesla cars influences American consumers’ views and behaviors regarding green products? The supporting questions that will be instrumental in addressing the research questions include:
In what ways have Tesla cars affect car users’ views on green cars?
How have Tesla car marketing strategies influenced peoples’ buying behaviors?
What is the impact of Tesla car marketing strategies on peoples’ views on innovation and green products in general?
In order to address the research question, it is possible to employ qualitative research design as the emphasis is on people’s views and attitudes rather than quantitative data. Focus group discussions can be an effective strategy as this method enables the researcher to include a considerable number of participants and analyze their perspectives. The focus groups will discuss Tesla cars, the way the company’s marketing strategies have affected them, and their attitude towards green products. Some messages delivered in terms of Tesla’s campaigns will be discussed, which presupposes the review of some slogans, advertisement materials, and videos. The participants will be encouraged to share their viewpoints on green products and their shopping behaviors before and after the production of Tesla. Descriptive statistics analysis will be mainly related to the participants’ age, gender, education, and employment status. It can be beneficial to identify the differences in the mindsets of different groups. This study will potentially provide insights into the ways a single brand and specific marketing strategies can shape people’s buying behaviors and views on green products.
Annotated Bibliography
The research implemented by Heo and Muralidharan (2019) is a valuable source for the present study due to its focus on the attitudes of Millennials towards green products. The researchers examined this population’s consumer behaviors, and their findings can help in shaping specific questions that will be asked during focus group discussions.
The study by Leonidou et al. (2013) is relevant for this research as it provides insights into the use of green marketing by companies and its effects on their performance and competitiveness. It is necessary to understand how exactly and why companies deliver their messages related to environmental sustainability.
The article by Chabowski et al. (2011) provides a detailed account of the research on green marketing, which can be used for the development of the theoretical framework for this study. It is also clear that insufficient attention is paid to consumer’s behaviors, so the present study will address this gap.
The research by Kadirov and Varey (2013) is instrumental in identifying the interrelationship between green product manufacturers’ messages and people’s views on environmentally-friendly consumption. This article is valuable for the present study due to its emphasis on meaning co-creation and the impact of marketing on people’s behaviors.
The study by Barrios et al. (2017) provides helpful insights into the effective ways organizations use to change people’s behaviors. The choice of Tesla’s marketing messages will be informed by the finding of this research.
The automotive market segment has historically been essential to economic growth and development. According to Saberi (2018), it represents almost 4% of the world GDP, and, in the context of developed economies, 1% of automotive industry growth triggers respective 1,5% growth in the country’s GDP. Such a relationship is caused by the automotive sector’s strategic position in the middle of other market segments, which results in a multiplier effect. However, the industry nowadays has to face serious environmental concerns and anticipate energy crises. In this context, electric cars and the companies producing them, including Tesla Inc. (Tesla), receive much attention.
Tesla is a relatively new electric vehicle company that dedicated itself to researching, developing, and selling electric vehicles and their spare parts. It was founded in 2003 by people willing to prove that electric vehicles present a reasonable alternative to their fuel counterparts (Shao et al., 2021). Due to the specificity of Tesla’s chosen course, the company has a long history of enthusiastic research and development activity (Flehantova & Redka, 2021). However, this activity yielded little profit, and Tesla required substantial external investments to sustain itself in the first seven years (Shao et al., 2021). Eventually, the company decided to transition from being privately held to a public state.
Tesla made an Initial Public Offer (IPO), listing its shares on the NASDAQ stock exchange. The stock then grew gradually and eventually tripled its IPO value in three years (Shao et al., 2021). In 2014, the stock rose even more with the presentation of the auto-pilot function (Shao et al., 2021).
During the years that followed, the price of the stock remained approximately constant until 2020, when the share increased 4,5x more, overcoming the expectations. Thus, for the first time, Tesla managed to close a year with a positive net income.
Tesla presents an interesting case in terms of its capital structure. Being in a high growth stage, it does not generate enough revenue to pay dividends. However, paying dividends is more commonly attributed to more mature companies, while recent profits can be considered promising. According to Zhao (2021), in 2020, the company had a negative EBIT due to not having profit for the previous five years. Consequently, Tesla’s interest coverage ratio can not be greater than 0, which indicates that an optimal debt ratio should theoretically be 0 (Zhao, 2021). In addition, it implies the company does not have enough profit to pay all its debts; therefore, issuing any debt in this state would not be a good idea. Table 1 presents the respective calculations of a company’s capital structure.
Table 1: Tesla Capital Structure Comparison of 2015-2019 and 2020
The fact that Tesla finally started to earn money in 2020 does not have a significant influence on the overall state. Despite the company being able to pay the interest in the first half of the year, even the lowest 5% debt ratio would not allow it to pay for the total interest (Zhao, 2021). The displayed capital structure of Tesla can be considered reasonable only due to the sharp drop in the debt ratio from approximately 19% to 3%, which caused the company’s stock price to increase (Table 1). Another implication of the presented calculations highlights a higher cost of capital sensitivity in 2020 than in the previous years. Ultimately, it means Tesla has to be more attentive to its debt ratio fluctuations than it used to be.
To conclude, Tesla’s future seems promising even despite its rather volatile stock. It operates in a new, fast-growing, and unpredictable market; consequently, it can not rely on possible high expected future returns. Nevertheless, the external factors affecting the industry are greatly in Tesla’s favor. Natural resource depletion resembles a time bomb that will eventually cause significant disruption. Therefore, a focus on an alternative to fuel means of transportation slowly rises in value.
References
Flehantova, A., & Redka, O. (2021). Innovation as the main driver for the future economic growth of the company (on Tesla, Inc. Example). In Economy and Human-Centrism: the Modern Foundation for Human Development: V International Scientific Conference (pp. 89-92).
Saberi, B. (2018). The role of the automobile industry in the economy of developed countries. International Robotics & Automation Journal, 4(3), 179-180.
Shao, X., Wang, Q., & Yang, H. (2021). Business Analysis and Future Development of an Electric Vehicle Company – Tesla. In 2021 International Conference on Public Relations and Social Sciences (ICPRSS 2021) (pp. 395-402). Atlantis Press.
Zhao, L. (2021). Capital Structure of New Energy Automobile Industry. In Proceedings of the 4th International Conference on Economic Management and Green Development (pp. 236-246). Springer, Singapore.
Data visualization is crucial in helping the audience understand complex information that is represented using numbers. Through data visualization, people interact with and see complex information in a simplified manner. John Snow pioneered the use of mapping for data visualization. Currently, technological advancements have revolutionized data visualization. Researchers adopt Edward Tufte’s approach to graphical excellence to visualize numerical and non-numerical data. Various business publications integrate data graphical techniques to make their data appealing and easy to understand. Data visualization is important for the business organization since it helps in gaining insights from vast amounts of data, promoting effective decision-making.
Meaning of Data Visualizations
Data used in research articles can be complex to gain meaning from it. Moreover, some researchers can use vast amounts of data that can become challenging to a targeted audience. Therefore, there is a need to present the data in a manner that any person with little knowledge can make meaning out of it (Park et al., 2021). Data visualization is a technique that researchers adopt to represent data and information through the use of common graphics (Park et al., 2021). Charts, plots, infographics, and animations, among other graphics, are commonly used. Charts such as line graphs help in the identification of trends of a given data. Data visualization has made research activities easy since it simplifies the data collected.
John Snow’s Observations
John Snow was a doctor who thought it fit to represent the information about Cholera attacks in England through mapping. Therefore, for several years, he followed the devastating cholera waves hitting England from time to time (Pelling, 2022). As the disease got more dangerous, John Snow made two significant observations. He noticed that the “miasma” theory that was developed by writers and researchers was misleading. John Snow observed that although entire households were wiped out by cholera, some remained unaffected. Moreover, he observed that vomiting and diarrhea were the common symptoms at the onset of the disease. Therefore, he believed that diseases were caused by something that was eaten by the affected individuals.
The cholera attack in the overcrowded Soho district of London initiated the use of mapping to record pandemics results. John Snow diligently recorded the cholera deaths as they mounted. He drew a map, on which he recorded the location of deaths on each street. For ease of interpretation of his recorded data, he used a black bar to represent each death. Where multiple deaths occurred at a similar address the bars were stacked on top of each other (Pelling, 2022). Therefore, one could easily tell the number of deaths on each street by counting the black bars. John Snow used black discs to represent water pumps’ locations. John Snow’s map was a crucial tool in understanding the spread and severity of cholera.
Upon observing the map various conclusions were made, providing significant medical evidence. Firstly, John Snow observed that the deaths were roughly clustered around Broad Street Pump. Secondly, there were scattered deaths in houses that were several blocks away from the Broad Street Pump. Thirdly, there were no deaths recorded two blocks east of the pump. Lastly, John Snow observed that their more deaths around Rupert Street Pump, and the residents in that area used Broad Street Pump. The map helped John Snow to establish that water supply cleanliness was key in controlling cholera. John Snow’s observations were an explicit example of the importance of data visualization.
Modern Data Visualization Techniques
Technological developments have led to the advancement of data visualization techniques. Therefore, there is a significant improvement in contemporary data visualization compared to John Snow’s era. The modernized techniques have made visualization easy for recording and interpretation. Firstly, there is the use of digital computers to draw and share maps (Park et al., 2021). Unlike John Snow, where hash marks were hand-drawn, computers have integrated artificial intelligence for map drawing. Consequently, there are minimal chances of errors with improved accuracy. For instance, an article by Skov (2021) shows the distribution of some keywords in various subjects through mapping.
Secondly, modern mapping has included visuals that are more appealing than that used by John Snow. The improved visualizations make it attractive to read and interpret the data that is being represented. For example, research by Hiatt et al. (2022) uses a combination of scatter, line, and bar graphs to show HIV-host interactions in primary human T cells. Lastly, modern maps have integrated predictive features through the use of extrapolation techniques. Therefore, it is easy to predict the future occurrence of a given scenario by observing the visuals used. The use of technology has made modern data information visualization easier than that during John Snow’s time.
Scientific Publication Similar to John Snow’s Observations
Simpson et al. (2022) made observations telling a similar story to John Snow. The researchers utilized data information visualizations to correlate the cholera outbreak and war in Yemen between 2016 and 2019. The researchers use mapping to record the frequency of war events in various areas in Yemen. Moreover, a map of cholera rates in similar areas was drawn for interpretation and correlation (Simpson et al., 2022). The researchers found that their cholera rates were high in regions with high clusters of war and traveling waves. Therefore, Yemen civil war, 2016-2019, exacerbated the cholera spread.
Edward Tufte’s Approach
Edward Rolf Tufte, an American statistician, laid out several approaches that can be adopted when representing data through visuals. Edward Rolf Tufte’s approaches are focused on graphical integrity, data ink, chart junk, and data density (Ng, 2022). For graphical integrity, Tufte suggested that visual representations must tell the truth, without overstating the effect. For data-ink, Tufte suggested that graphical representations must maximize data-ink and non-data-ink (Ng, 2022). For the chart junk, Tufte discouraged the use of excessive and unnecessary graphical representations. Furthermore, Tufte required the graphical representations to be proportional to the data being represented. Edward Tufte’s approaches to data information visualization have led to the use of meaningful graphics by researchers.
The data visuals used by Skov (2021) and Hiatt et al. (2022) conform to Edward Tufte’s approaches. The graphical representation used in the article by Hiatt et al. (2022) has borrowed data from previous research on a similar topic, achieving data integrity. Additionally, the graphs used have minimized the use of non-data-ink, instead using colors for data only. Meanwhile, the map used by Skov (2021) shows staff distribution, using black dots, proportionally. Furthermore, in both articles the researchers have represented necessary data, avoiding chart junk. Applying Edward Tufte’s approach to data information has made the research by Skov (2021) and Hiatt et al. (2022) easily interpreted.
Data Visualization in the Field of Business
Data visualization and representation serve various importance among business organizations. Firstly, data information helps business organizations to analyze data in better ways. The visual mediums help stakeholders understand key areas needed for improvement and maintenance. For instance, research by Fang (2022) used a graph to represent the market performance of the automotive industry compared to others. The data show that automotive is more profitable, allowing investors to focus more on the industry than others.
Moreover, data information visualization can help ease track of a business’s past performance. The use of line graphs makes it easy for a business analyst to understand whether a company can be potentially profitable based on its past performance. In the research by Huang et al. (2022) a line graph of the value of Tesla’s stock price from 2020 to 2024 has been used. The graph shows that the company’s stock price has been increasing its value for the period represented. Further, the use of data visualization in the paper has helped predict the price of Tesla’s stock for the year 2024. Therefore, data visualization is crucial for important decision-making among businesses and their stakeholders.
Conclusion
Although research data can be complex, the use of graphical representations makes it easy for their interpretation. Visual information representation involves the use of graphics to represent data that would otherwise be complex if described using text. John Snow is one of the ancient researchers to use mapping to track the cholera outbreak in England. Unlike the John Snow era, modern data visualization is associated with the use of advanced technology. Consequently, there is increased accuracy in representation. Additionally, Edward Tufte developed approaches that researchers can adopt to ensure that their visuals are appealing and make sense. Data information visualization is crucial for decision-making among various sectors including business organizations.
Hiatt, J., Hultquist, J. F., McGregor, M. J., Bouhaddou, M., Leenay, R. T., Simons, L. M., Young, J. M., Haas, P., Roth, T. L., Tobin, V., Wojcechowskyj, J. A., Woo, J. M., Rathore, U., Cavero, D. A., Shifrut, E., Nguyen, T. T., Haas, K. M., Malik, H. S., Doudna, J. A., & May, A. P. (2022). A functional map of HIV-host interactions in primary human T cells. Nature Communications, 13(1), 1752. Web.
It is pivotal for multinational enterprises (MNEs) to be able to adequately assess the advantages and disadvantages of entering the market of a new country (Peng, Wang & Jiang 2008). This paper explores the possible legal, political, and economic pros and contras of Tesla’s entry in Argentina, focusing on the facts that this is a developing country (International Monetary Fund 2015) that is a member of WTO (World Trade Organization n.d.b) and of Mercosur (Filho, Lixinski & Giupponi 2010). The Porter’s Diamond model (Porter 1990a; Porter 1990b) is also applied when analysing the economic advantages and disadvantages of Argentina’s being a developing country for Tesla’s entry.
Background
The Country: Argentina
Argentina is a developing country (International Monetary Fund 2015, p. 151). It is located in the southern part of South America; it stretches a long way from north to south, and its landscapes range from tropics to tundra; it has access to the Atlantic Ocean in its eastern part, as well as to the Drake Passage in its southern part (Central Intelligence Agency 2017). The country’s population is approximately 44,886,748, according to a July 2016 estimate; the population is mostly White (97%, primarily Spanish and Italian), whereas the rest of the population (3%) is comprised of mestizo, Amerindian, and some other non-White ethnic groups (Central Intelligence Agency 2017). The Argentines mainly speak Spanish, which is the official language in the country; other widespread languages are Italian, English, German, French, and several indigenous languages (Central Intelligence Agency 2017). Its population is generally rather young, as can be seen from Figure 1 below; the median age is 31.5 years (Central Intelligence Agency 2017). It is stressed that if the youth are provided with high-quality education and sufficient employment, the country could experience strong economic growth (Central Intelligence Agency 2017). The country currently has a democratic government chosen via universal and compulsory elections (Central Intelligence Agency 2017).
Figure 1. Argentine population pyramid. Source: Central Intelligence Agency (2017).
The Company: Tesla, Inc.
Tesla, Inc. is an American international company which focuses on production of electric cars, energy storage devices (accumulators), and solar panels. The company is probably most known for its electric vehicles, which it produces in the U.S. and the exports to other countries, and which will be the focus of this paper. It was chosen due to its focus on environmental friendliness (e.g., electric cars can be more environmentally friendly than fuel-burning vehicles), which is appealing to the author of this paper.
Tesla is currently present in several countries of North America, Europe, Asia, Australia, and the Middle East; the company’s website lists 27 countries in which its stores are present (Tesla n.d.). Tesla boasts a large share of electrical vehicle market in the U.S. – nearly 30%, as can be seen in Figure 2 (Morris 2017). Simultaneously, when it comes to total car sales, Tesla’s share is much more modest; for instance, Tesla sold nearly 76,000 electric vehicles in 2016, when Ford sold approximately 6.7 million cars (BBC News 2017).
Tesla’s cars, however, are oriented on the high-end part of the market rather than on the mass consumer. Additionally, as was noted, Tesla also sells products other than cars, such as accumulators (BBC News 2017); for instance, its Gigafactory (a batteries manufacturing facility) has recently begun production, and is still under further construction; it will reach its full potential in 2020 (Lee 2016).
Figure 2. Sales of electrical vehicles in the U.S; two Tesla’s models account for nearly 30% of sales. Source: Morris (2017).
Impact of Being a Developing Country on the Attractiveness of Argentina for Tesla
Legal Advantages and Disadvantages
Argentina has a civil law system originating from West Europe (Central Intelligence Agency 2017). As a developing country, it has some legislation-related issues which may pose a barrier to MNEs wishing to enter the country. For instance, significant changes in the legislation may sometimes occur; in particular, Argentine tax legislation is complex and changes frequently (Department for International Trade 2016), which may create unexpected problems for MNEs.
There might exist problems with intellectual property, in particular, with protection of trademarks, which may cause issues when considering Tesla’s products that are not vehicles; legal proceedings are complex and may last for years, which complicates resolving legal issues (Department for International Trade 2016). Thus, legislation appears to create issues for MNEs such as Tesla, although not all of them are significant. Also, although there previously existed legal limitations on international trade in Argentina, the state currently takes steps to liberalize this type of trade (Central Intelligence Agency 2017), which may further facilitate MNE operations.
Political Advantages and Disadvantages
Argentina has experienced several significant crises in the 20th century, and suffered from a public strife at the beginning of the 2000s, when several presidents were forced to resign due to public protests (Central Intelligence Agency 2017). Nevertheless, the strife ceased, and today Argentina enjoys a fairly stable, democratic political system in which the authorities are chosen in universal elections. The current government strives to liberalize the economy (Central Intelligence Agency 2017; ‘New president vows to liberalize Argentine economy’ 2015), which means that there is a beneficent political climate for MNEs entering the country.
Economic Advantages and Disadvantages
Argentina, as a developing country, has had a history of economic crises which set it back in development. Consequently, the country has rather high poverty rates: 30.3% of Argentines were below poverty levels in the second half of 2016 (Reuters 2017); in 2014, 4.28% of the population lived on 3.10 USD or less per day (The World Bank n.d.). Nevertheless, the poverty rates are stated to be currently going down (Reuters 2017). The currently high poverty levels present a disadvantage for Tesla; the company’s electric vehicles are aimed at high-end market, so it is better for Tesla if people are wealthy. Nevertheless, the decreasing poverty levels and the large potential for growth in a country that is, on the whole, quite rich, present a potential advantage (Thirlwall 2013).
Porter’s diamond model (Porter 1990a; Porter 1990b) can be used for further analysis, which is summarized in Table 1 below. However, it should be noted that the used Porter’s model has been described as offering critical insights, but having a number of weaknesses, especially when applied on the national level (and not on the level of the firm or industry), which should be taken into account when considering this analysis (Grant 1991; Smit 2010).
Table 1. Using Porter’s diamond model for analyzing advantages and disadvantages of Argentina for Tesla’s expansion. Source: developed by the author for this work.
Element of Porter’s Diamond Model
Facts
Advantages
Disadvantages
Factor Conditions
The infrastructure is currently poor (Newbery 2016). The labour force has the potential for development (Central Intelligence Agency 2017)
If properly developed, the labour force can facilitate innovation;
Investment in infrastructure is planned (Newbery 2016), which presents an opportunity
The prospects depend heavily on future development (Peng, Wang & Jiang 2008)
Demand Conditions
The customers’ tastes for high-end electric cars are probably not very sophisticated in a developing country
Easy to satisfy the clients’ desires
Unsophisticated clients present little opportunity for further Tesla’s innovation and development
Related Industries
Other car manufacturers and retailers are present, such as Alfa Romeo, BMW, Chevrolet, Chrysler, Citroen, Ford, Jaguar, Toyota, etc. (Garcia 2016)
These companies are known in the international market, and their presence may stimulate further Tesla’s innovation and development
The companies are competitors
Firm Strategy and Structure
Tesla manufactures cars in the U.S. and then sells them to other countries (Tesla 2017)
No need in effort to adjust manufacturing to the local environment
Less opportunity for change and development, which could have happened while adjusting manufacturing to the local specifics
Impact of Being a Member of WTO on the Attractiveness of Argentina for Tesla
Legal Advantages and Disadvantages
Argentina is a member of WTO (World Trade Organization n.d.b), which creates several legal benefits for Tesla if it is to enter Argentina. First and foremost, Tesla will have to primarily comply with WTO’s rules of international trade, which means enhanced transparency and simplicity (World Trade Organization n.d.a); these contrast with the previously-mentioned complexity of Argentine rules. The customs procedure should also be simplified according to WTO’s standards (World Trade Organization n.d.a), which is important for Tesla as it will likely operate as an importer of electric cars to Argentina (Tesla 2017). Possible lower tariffs also lead to lower prices for clients, which means increased sales for the company. No significant disadvantages were found.
Political Advantages and Disadvantages
There exist several political advantages of Argentina’s being a member of WTO for Tesla. For instance, WTO is stated to stimulate political stability on the international level by providing a framework for dispute resolution and encouraging good political relationships between its members (Hagiu, Barbulescu & Brinzea 2014), which means that on the whole, Tesla risks less when it enters a country that is a member of WTO. It also means that in case of potential conflicts, Tesla will be able to more fairly resolve the dispute, and, importantly, will have a distinct and clear set of rules to comply with (World Trade Organization n.d.a). No considerable disadvantages were found.
Economic Advantages and Disadvantages
On the whole, WTO aims at creating the situation in which the tariffs for imported goods are quite low, and that such goods can fairly compete with domestic goods in the market of a country (Hoekman & Kostecki 2013; World Trade Organization n.d.a). Therefore, the fact that Argentine is a member of WTO might mean that goods imported in Argentina can have free access to its markets, and that domestic products do not gain preferential treatment (Balaam & Dillman 2016); in this case, Tesla will not have to raise the price on its products for customers to compensate for entry tariffs. No considerable disadvantages were found.
Impact of Being a Member of Mercosur on the Attractiveness of Argentina for Tesla
Legal Advantages and Disadvantages
Argentina’s being a member of Mercosur (Office of the United States Trade Representative n.d.), a regional trade agreement comprised of several local states, provides several legal benefits for Tesla if it is to enter Argentine market. For instance, the fact that Mercosur is aimed at creating a common market and enhancing trade liberalisation (Filho, Lixinski & Giupponi 2010, pp. 87-90) may facilitate a further expansion into Mercosur countries; it may also be easier to deal with tariff and customs issues.
However, there is also a disadvantage: the principles of WTO and Mercosur do not always agree (Filho, Lixinski & Giupponi 2010, pp. 133-134), which means that certain conflicts may need to be resolved while complying not only with WTO’s standards but also with Mercosur’s regulations (International Trade Administration n.d.), complicating the resolutions process.
Political Advantages and Disadvantages
Apart from Argentina, Mercosur includes several other countries, such as Brazil, Paraguay, Uruguay, and Venezuela (Filho, Lixinski & Giupponi 2010). These countries are also developing economies, which means that there exists a risk of political instability in these countries, which might present a disadvantage (McCarthy 2016). If such instability develops, it may have a considerable impact on Argentina, which may lead to adverse consequences for Tesla as well. It does not appear that there are considerable political benefits for Tesla.
Economic Advantages and Disadvantages
Economically, Argentina’s being a member of Mercosur means that if Tesla expands into Argentina, it can then more easily become a part of the rest of the members of this organisation, which may be advantageous to Tesla. Also, it is possible for Tesla to enjoy some of the benefits of the common market (Filho, Lixinski & Giupponi 2010), for instance, to more easily acquire the benefits and resources it needs from all the member countries (International Trade Administration n.d.). The disadvantages are that the company will face additional competition from its rivals in the rest of the countries as well.
Conclusion
On the whole, there appear to be numerous advantages and few disadvantages for Tesla’s entry in Argentine market when it comes to Argentina’s being a member of WTO and Mercosur. However, when discussing the pros and cons of Argentina’s being a developing country, Tesla’s entry, while facilitated by several benefits, can face a number of disadvantages as well. Nevertheless, it appears that Tesla has rather good prospects for expanding into Argentina.
Reference List
Balaam, DN & Dillman, B 2016, Introduction to international political economy, 6th edn, Routledge, Abingdon.
Grant, RM 1991, ‘Porter’s “Competitive advantage of nations”: an assessment’, Strategic Management Journal, vol. 12, pp. 535-548.
Hagiu, A, Barbulescu, M & Brinzea, VM 2014, ‘The advantages of WTO commercial system’, Scientific Bulletin – Economic Sciences, vol. 13, no. 2, pp. 78-86.
Hoekman, BM & Kostecki, MM 2013, The political economy of the world trading system: the WTO and beyond, 3rd edn, Oxford University Press, Oxford.
International Monetary Fund 2015, World economic outlook. Uneven growth: short- and long-term factors. Web.
International Trade Administration n.d., Argentina. Web.
Lee, D 2016, Inside Tesla’s gigantic Gigafactory. Web.
McCarthy, M 2016, ‘6 things you need to know about Venezuela’s political and economic crisis’, The Washington Post. Web.
Office of the United States Trade Representative n.d., Argentina. Web.
Peng, MW, Wang, DY & Jiang, Y 2008, ‘An institution-based view of international business strategy: a focus on emerging economies,’ Journal of International Business Studies, vol. 39, no. 5, pp. 920-936.
Smit, AJ 2010, ‘The competitive advantage of nations: is Porter’s Diamond Framework a new theory that explains the international competitiveness of countries?’, South African Business Review, vol. 14, no. 1, pp. 105-130.
Though not a one-of-a-kind product, Tesla’s electric vehicles (EVs) have become a household name for an environmentally safe and sustainable mode of transportation known for outstanding quality and an appropriately high price.
Extensive efforts have been undertaken to promote Tesla’s EVs in the Chinese market so far. It is quite remarkable that the government also lent a hand in advertising cars as new-energy vehicles (NEVs).
Nevertheless, the success of Tesla’s entry into the Chinese market is yet to be seen. Because of current challenges, entrepreneurship may fail to sell the expected number of cars, thus suffering significant financial damage and possibly losing its chance to establish a strong presence in the Chinese market. Needless to say, the failure to successfully integrate into the identified environment is likely to have a deplorable effect on the company’s progress, setting it back several steps in its development.
Herein lies the necessity to identify the differences between the behavioural patterns of customers living in the United Kingdom, and Chinese consumers. It is assumed that cultural misconceptions, in general, and the lack of cultural awareness required to appeal to the target members of the population successfully, in particular, are the key factors preventing the entrepreneurship from experiencing a rapid and consistent triumph in the context of the Chinese EV market. As a result, an improvement in the current market density rates can be expected.
The study shows that there is a strong need to reconsider the current approach to multicultural communication, by focusing on the study of customers’ unique needs and cultural characteristics.
Introduction: Tesla’s Density Issues in The Contemporary Global Market
Background: Company’s Innovative Management Model in the Context of the UK and the Chinese Markets
The transportation issue has always been a subject of debate as, on the one hand, it is a huge industry that creates a wealth of jobs, contributes to an increase in the state’s GDP rates, etc., and, on the other hand, creates premises for a large rise in environmental pollution levels (Zhang & Yao 2015).
The creation of electric vehicles (EVs) seemingly solved the problem, as the specified mode of transportation does not involve the use of petroleum; as a result, the levels of CO2 emissions would be expected to drop significantly (Gardoso et al. 2014).
Therefore, Tesla’s innovative EV products were welcomed with open arms in the UK market, despite the comparative costliness of the cars. It could be argued that the Tesla company proved its success by deploying an original marketing strategy that would not commonly be viewed as appropriate for an automotive and energy storage company. Particularly, the application of the approach, similar to that applied by Apple to sell its iPhones, needs to be brought up as the foundation for the company’s strategy.
Tesla’s EVs can be considered a commercial miracle. Although environmentalism as the selling point of a product became dated some time ago, the company managed not only to sell its products to the target audience but also made EVs a brand with an outstandingly huge competitive advantage.
Problem Statement: When the Lack of Cultural Awareness Becomes an Impediment
The progress of the organization in the environment of the Chinese market has been rather bumpy thus far. It would be wrong to claim that the entrepreneurship has not been provided with opportunities for attracting the attention of the target population – quite the contrary, Tesla has received extensive support from the Chinese government, which reinforced the importance of environmental awareness among the target denizens of the population. Nevertheless, a lack of understanding of specifics of buyer behaviour in the identified area poses an impediment to Tesla’s expansion.
Research Question: What Needs to Be Identified
How will the crucial differences and similarities between the buyer behaviour patterns of Chinese and UK customers affect the current management system adopted at Tesla, particularly in the promotion of the EVs?
Goals and Objectives
The goal of the paper is to identify similarities and differences between the consumer behavioural patterns and the decision-making processes of customers in the UK and China, as far as the purchase of EVs, in general, and Tesla cars, in particular, is concerned. The research will be carried out as a qualitative case study. A questionnaire will be used as the primary tool for data collection.
To attain the goal described above, one will have to complete an array of objectives. First and most obvious, the specifics of the Chinese customers’ behaviour in the EV market should be identified. Afterwards, the similarities and differences between the behavioural patterns of the two types of customers will be identified. Finally, the strategy that a foreign company should use when promoting its EVs to foreign demographics, in general, and the Chinese market, in particular, should be outlined.
In other words, the customer-related factors that determine the density of Tesla in the UK and especially the Chinese market can be viewed as the key goals of the study. To put it another way, it is imperative to identify the essential drivers behind the decision-making process among the customers in the UK and China, so that the further course for the company’s development, including an increase in its density in the identified environments, can be determined.
Along with the primary goal identified above, one will have to consider a range of objectives to be attained. First, it will be necessary to determine the specifics of buyers’ behaviour in the UK and Chinese markets, identifying the factors that enhance or inhibit the process of purchasing goods. Thus, the foundation of marketing and management strategies can be determined.
Afterwards, the attitudes towards the idea of using EVs should be identified among the British and Chinese audiences. There is no need to stress that the environmental movement is gaining strength once more, yet some members of the population may be unaware of this for cultural or other reasons (Jensen, Cherchi & Ortuzar 2014). Thus, it is crucial to ensure whether the participants of the study are environmentally aware; in the case that they are, promoting Tesla’s EVs should rest on the opportunities for a green and sustainable approach to the transportation process, and the positive environmental effects will have to be greatly emphasized.
Finally, the unique characteristics of the behavioural patterns of the target customers will have to be identified so that the corresponding decisions can be made concerning the choice of the marketing strategy and the management approach. As stressed above, the choices that people make when purchasing products depend heavily on the specifics of the buyers’ culture. To be more specific, the cultural background of the buyers determines the issues that they pay special attention to; as a result, the promotional campaign for British buyers is likely to be significantly different from that targeted at Chinese customers.
By focusing on the behavioural patterns of a specific group of consumers, one will receive information that will help adjust the current strategy adopted by the company to the ever-changing environment of the global market. Specifically, one will retrieve essential knowledge about the means of catering to the needs of any population, so that the demands of the target customers could be met most efficiently.
Put another way, the study has two primary rationales, the first one concerning a rather narrow goal of determining the strategy that Tesla should adopt to manage the situation that it is currently facing with its Chinese customers.
On a larger scale, the research will embrace the opportunities that companies are provided with for cross-cultural communication in the context of the global economy. In other words, patterns can be created for direct solutions to any emerging cultural conflicts or misunderstandings. Furthermore, the chances to avoid possible misconceptions when designing a brand product for the representatives of a specific culture can be discovered by considering the issues that Tesla has been facing in the Chinese market.
The lack of an intercultural dialogue, which can be viewed in the contemporary global market, and which is likely to be detrimental to the relationships between companies and their target customers belonging to different cultures is, therefore, the primary rationale for carrying out the research.
Significance: An Addition to the General Knowledge of Buyers’ Decision-Making Processes
Because the present-day environment of the global market requires extensive knowledge and understanding of the reasons behind the choices that customers belonging to different cultures make, it is imperative to carry out an analysis of the differences between the Chinese customers’ market behaviour and that of the British buyers. As a result, Tesla will receive essential information concerning the further changes that its marketing and management approaches will have to undergo.
On a larger scale, the importance of carrying out the study lies in the identification of the strategies that a company may use in the context of a multi-cultural environment, or in a scenario requiring a perfect understanding of a specific culture. In other words, the outcomes of the research can be applied to determine a general strategy that will help the market not only NEVs but also other products to people all over the world. On the one hand, the strategy to be determined is likely to be rather broad; on the other hand, the tools identified in the process will serve as universal means of managing the possible issues that may emerge as a result of two different cultures colliding.
Indeed, the issue of a culture clash is not new to the global economy; because of the differences in perceptions among the representatives of different ethnicities, numerous misunderstandings and misconceptions may emerge, leading to a significant drop in sales and the loss of customer loyalty. By analysing the choices that Tesla has or will make in the UK and the Chinese markets, one is likely to determine the general problems that organizations face when promoting their goods to those who are members of other cultures. Consequently, a general tool can be designed.
Literature Review: Tesla’s Ev, Branding, Customer Choices, and Related Issues
Tesla’s Branding Model: The Art of Marketing
A closer look at Tesla’s branding tool will reveal that the company uses a combination of several ideas, thus propelling its product to the top of the contemporary EV market. First and most obvious, Tesla emphasizes the significance of its innovative solutions, detailing the unique approaches that it adopts to cater to the needs and demands of the target audience as far as quality and usability are concerned.
Much to the credit of the organization, one must admit that the innovativeness of the company’s solutions is beyond doubt and quite evident. In the first place, one should bring up the fact that the company distinguishes between the innovations related to the cars themselves and the unique solutions related to the battery, therefore making it clear that both items deserve attention, and that each should be viewed as a separate achievement.
Furthermore, the organization also puts a heavy emphasis on the innovations related to its value configuration. In other words, the business model innovation that Tesla works towards incorporates not only a consistent redesign and improvement of the brand product, but also a clear focus on the correlation between the firm’s values and the quality of the end product. As a result, Tesla manages to keep customer satisfaction rates high, while at the same time building room for further development (‘Tesla’s electric man; Brain scan’, 2015).
As soon as the quality of the product offered to the company’s Chinese buyers is established and Tesla becomes recognizable in the target market, the emphasis on its luxury must be advanced. The identified process can be carried out by putting such aspects as outstanding quality, impressive speed, environmentally friendly design and more into the limelight and determining the specified features as the sort of innovative concepts that only a NEV can combine in its unique design (Han, Han & Aki 2014).
Tesla is a marketing wonder since it manages to sell a product that has an array of cheaper substitutes for a truly luxurious price. One might argue that the disruptive nature of the product, i.e., the fact that Model S, as well as other creations of Tesla, represents an environmentally safe means of transportation, is the key to the stunning success of the firm in the UK (Nelson 2015).
However, considering the subject matter more closely, one must admit that there is more than meets the eye in Tesla’s unexplainable success. Particularly, the organization did a fantastic job at improving the quality of the existing EV concept and designing the battery that seems to have become the firm’s trademark (Cheong, Song & Hu 2016).
One might argue that the model used by Tesla is not original to the company’s design. Indeed, the fact that the entrepreneurship has been using a strategy that Apple deployed quite a few years ago has become common knowledge: ‘Tesla’s business model reflects a marketing strategy that is adoptive of Apple’s marketing approach to innovative technologies’ (Mangram 2012, p. 304). However, one must admit that the statement above can be defined as rather broad and, therefore, is not limited solely to Apple and its corporate marketing framework.
By targeting rich customers as its primary audience, Tesla makes it evident that the quality of its EVs is beyond outstanding. As a result, the necessary impression is created for the target audience (Arora, Shen, & Kapoor 2016).
Expanding in the UK Market: Pandering to the Needs of the UK Audience
The process of promoting EVs to the company’s British customers is also admittedly complicated. Although the study of the reasoning behind the British clients’ decisions may not be as convoluted as the analysis of the Chinese buyers’ behaviour, an overview of the factors that determine their decision-making process shows that Tesla will have to focus on quality enhancement strategies and quality management processes to a considerable extent (Fiori, Ahn & Rakha 2016).
There is a tendency in the system of global marketing to assume that British customers are driven by their appreciation of tradition (Ruan, Walker & Zhang 2016). The idea expressed in the statement above is often twisted to the point where the concept of tradition becomes the opposite of innovation, thus leading one to an erroneous assumption that British customers do not want innovative solutions and products (Ma et al. 2012). The specified myth, however, has very little to do with reality.
Similarly, the concept of an ethical consumer, which British customers are quite frequently tagged as, may not necessarily correlate with the truth. A recent study on the behavioural patterns of British customers shows that they are inclined towards making ethical choices when it comes to addressing essential social, political, economic and environmental dilemmas, yet predicting the choices that they will make is barely possible:
There is conflicting research to date on the proclivities of consumers to support or reject the ethical and unethical conduct of marketing firms. A recent MOBI poll commissioned by the Co-operative Bank in the UK suggests that one-third of consumers are “seriously concerned” with ethical issues (Carrigan & Attalla 2001, p. 564).
In other words, British customers can be viewed as environmentally aware, which means that they are likely to support Tesla’s products as items that will eventually lead to a drop in air pollution rates. The target audience is becoming more conscious about the choices that they make, as well as the effects that their decisions have on the rest of the world. The tendency for the British customers to gain awareness and responsibility as far as their behavioural patterns are concerned affects their perception of EVs, in general, and the products supplied by Tesla, in particular (Rechtin 2012b).
It would be wrong to claim that the identified tendencies are purely the effect of the customer evolution – the British buyers are also considerably influenced by several outside factors, such as choices made by the state authorities: ‘Many European governments and cities (e.g., Norway, Denmark, the Netherlands, France, UK, as well as Oslo, Amsterdam, Paris, and London) are incentivizing consumers to opt for electric mobility, each with their own schemes’ (Amsterdam Roundtables Foundation 2013, p. 16). Nevertheless, the shift towards a more conscientious approach regarding the purchasing process can be deemed a positive factor in promoting Tesla’s EVs.
Establishing Presence in the Chinese Market: Understanding the Behavioural Patterns of the Chinese Audience
The expansion in the Chinese market, however, poses a plethora of challenges to the company’s further progress as the target customers are not driven by the same hype for environmentalism as their European and American counterparts. Therefore, a detailed analysis of the customers’ behavioural patterns for the further identification of the choices that the entrepreneurship may make in the context of the Chinese market is required (Xue, You, Xiang, & Liu 2016).
It should be borne in mind, though, that the Chinese market is represented by customers with a unique culture that forms the basis for their decision-making. Seeing that the target market belongs to the Asian environment, it can be viewed as the exact opposite of what the Tesla managers are used to dealing with, i.e., the American and European clientele. Indeed, casting a single glance at the identified population will reveal that the identified audience is inclined to choose the sort of items that allow them to improve their social status: ‘higher-priced, name brands function as symbols and demonstrate the social distance between different groups in China’ (Wei & Yu 2012, p. 41).
The focus on luxury items as the essential attribute of a successful person is, therefore, an integral part of the Chinese market culture. Indeed, the research mentioned above points to the fact that the acquisition of luxury items helps one build a stronger societal position and become more respected among the members of the society: ‘Status appeals are therefore common in advertisements for luxury goods in China, such as automobiles, which highlight images of modernity, affluence, and social achievement’ (Wei & Yu 2012, p. 41).
In light of the information mentioned above, the current approach undertaken by Tesla seems quite legitimate. Specifically, the fact that the company markets its product as a luxury item aligns with the concept of customer satisfaction is a significant factor in driving the Chinese market (Webb 2012). As stressed above, Chinese customers are thrilled about the idea of having luxurious products that will allow them to gain a better and more powerful social status. In their minds, this is achieved by purchasing a car that is deemed as not only expensive but also luxurious by the target audience (Undercoffler 2016).
Indeed, another glance at the approach that the company has been using thus far to attract Chinese customers and gain a competitive advantage in the identified environment will point to the fact that Tesla has been using its resources most efficiently and sensibly. It could be argued that the triumph enjoyed by the entrepreneurship owes its nature to the specifics of the Tesla management approach, in general, and the framework of managing the marketing processes, in particular (‘11 new members join EV leaders’ 2012).
The fact that the company has been applying a uniform strategy to promoting EVs to both its UK and Chinese customers can be deemed as both a flaw and an opportunity for the organization. One might argue that, by disregarding the cultural specifics of the Chinese customers, the company may lose significantly and, therefore, fail to drive Chinese buyers’ attention to the product.
Indeed, the failure to appeal to the identified audience is a tangible threat. Unless the unique characteristics of the Chinese buyers are identified and addressed, Tesla is unlikely to establish and maintain a strong presence in the specified market. On the other hand, a closer look at the current success of the organization in the realm of both the UK and the Chinese economic environment points to the fact that the selling point of Tesla can be used to appeal to Chinese and British buyers alike (Chappel 2012).
Changes in the Corporate Strategy Approach: Building an Emergent Industry
However, assuming that the entrepreneurship’s marketing model did not undergo any changes when EVs were introduced to the Chinese market would be quite a stretch (Crane 2016). The changes that the company made can be deemed as merely viewing Tesla’s products from a different perspective. In other words, the firm has retained its innovative practices.
As a recent report shows, Tesla still focuses on the three areas identified above. Furthermore, the framework of innovation has been successfully turned into the efficient strategy of value proposition in the identified markets (Rechtin 2012a). Particularly, the performance of the vehicle improves consistently with the introduction of new technological concepts, and the focus on the development of the connective services for EVs needs to be listed among the primary elements for the further course of the company’s selling strategy. Indeed, according to the latest data on the company’s performance, there has been a significant improvement in both the characteristics of the cars and the services connected with them:
The Tesla Roadster, which is released in 2008, changed people’s imagination on EV by offering a fancy looking sports car with offering a 0-100km/h within 3.7s acceleration and a standard range of 393km for a one-time charge. Following this, Tesla motor released Tesla Model S in 2012, with purpose design for a premium family car. It has several different sub-type with acceleration performance varies from 3.2s to 5.9s for 0-100km/h acceleration, and the standard range varies from 335km to 426km for a one-time charge (Chen & Perz 2015, p. 6).
One should also bring up the fact that Tesla offers extensive options for its customers to control the battery system. As a result, EV users can customize the car according to their requirements (Truett 2016). Therefore, Tesla’s current strategy is geared towards customizing its services to meet the demands of the largest variety of the target population (Ciferri 2015). This approach can be deemed quite sensible due to the flexibility that it offers.
Research Methodology
Research Type: A Qualitative Framework
Seeing that the research question does not require quantifying the data and is geared towards the analysis of the qualitative relationships between the key variables (i.e., the differences between the consumer behavioural patterns of Chinese and UK buyers and the factors that these relationships are defined by), a qualitative framework will be used for the study (Willig 2013).
According to the existing descriptions, qualitative research can be determined as the method of academic inquiry that involves the use of qualitative tools for data collection and its subsequent analysis (Carsrud & Brannback 2014). Although a qualitative study does not allow for accurate measurement of the research outcomes in the same way that a quantitative analysis does, nevertheless, it offers a plethora of advantages, the primary one being the opportunity for an in-depth study of the data provided by the respondents. Therefore, the method in question is extremely useful when there is a strong need to thoroughly describe a complex phenomenon (Benbya 2015).
Furthermore, ample opportunities for retrieving an insider’s viewpoint can be deemed to be an essential benefit of the chosen method (Siegfried 2014). As a result, the study embraces a wide array of factors that would have otherwise passed unnoticed. Also, the chance to consider the participants’ opinions leads to a better understanding of the factors that motivate customers to purchase specific products, as well as those that compel them to make choices in favour of certain brands. Therefore, the use of the qualitative design will help shed some light on the current situation with Tesla, allowing one to understand how it managed to become popular with both UK and Chinese clients, as well as how it can retain its success and, therefore, increase its density in the identified markets (Simkin 2013).
Research Design: A Case Study as the Foundation for the Analysis
The case study was chosen as the primary means of carrying out the analysis since the identified research method serves as the tool for determining the current tendencies in as efficient a manner as possible. It is essential that a case study does not require building a model of the relationships between the key variables but instead allows for a direct study of the issue (Saquib 2013).
When considering the benefits of a case study as the research design, one must mention the fact that the identified tool permits simplifying complex ideas and notions. As a result, opportunities present themselves for creating a basic model of the relationships studied in the case. Furthermore, there are relatively few other tools that help explore real-life interactions, which makes a case study irreplaceable in the specified situation (Guo 2014). Therefore, the application of a case study as the most suitable means of discerning the reasons for the low density of Tesla in the Chinese market can be viewed as a sensible step to take.
Unfortunately, the use of a case study as a research design also implies that certain limitations must be addressed. Specifically, the fact that a rather small number of participants can be included in the case study design needs to be mentioned. Furthermore, the time issue is another reason for concern; being rather time-consuming, the specified research design may hamper the process of data analysis (Beaumont, Whitaker & Pedersen 2014).
Data Collection: Questionnaire as the Means of Acquiring Relevant Information
To retrieve the necessary information and isolate the factors that determine customers’ behaviour when considering the choice between an EV and a traditional car, a questionnaire was used (see Appendix A).
The questionnaires were provided to the participants and answered by them online via Skype. Thus, the data can be collected straight away without any procrastination; as a result, the accuracy of the information retrieved in the process is going to be rather high. Specifically, the first reaction to the questionnaire of the people involved in the study will be assessed and interpreted successfully. As a result, certain types of research bias, such as the misinterpretation of the data due to the lack of connection between the researcher and the participants, can be avoided (Brock & Birkinshaw 2015).
Moreover, the fact that the questions will be addressed to the participants via Skype implies that there will be an opportunity for recording the answers. Consequently, the analysis will be even more accurate, and the prevision of the analysis tools will be enhanced significantly (Kasahara 2015).
In other words, the exploratory research questions asked of the participants will compel the author of the study to incorporate the ontological and the epistemological approaches into the methodology. Put differently, the analysis will encapsulate both the participants’ realities and the endeavour to understand the phenomenon (Williamson, Williamson & Jenkins 2013).
It should be borne in mind that the application of a questionnaire has its pros and cons. Speaking of the advantages that the use of the specified tool will give in the identified scenario, one should mention that a questionnaire helps retrieve the necessary data within a relatively short amount of time, encompassing a significant amount of the target population. The speed of receiving the necessary results, in its turn, creates premises for an accurate analysis of the latest tendencies in the identified area; in other words, the latest factors can be taken into account.
Description of Participants: Who Was Included in the Research
To provide an accurate assessment of the buyers’ behaviour, eleven Chinese volunteers, and fifteen from the UK were selected for the study. The participants were aged 20-35, the male and the female demographics being represented by five and six in the group of the Chinese participants and eight and seven in the UK group respectively. The people participating in the research came from middle-class families.
The reasons for choosing the participants mentioned above are rather basic. To make the research results as credible and meaningful as possible, as well as suitable for developing the strategy that could apply to other entrepreneurial settings, one had to choose the demographics that could represent a rather specific type of audience. Thus, the unique characteristics thereof could become the foundation for building a strategy that would allow catering to the needs of the identified type of clients.
Sample Size Identification: Increasing the Credibility Rates
When calculating the sample size (SS) for the case in point, one must bear in mind that, in qualitative research, the SS hinges on the characteristic known as data saturation (DS) (Mason 2010). By definition, DS is used to mark the point at which the further review of the existing information will not introduce any new factors that will have any tangible effect on the study outcomes (O’Reilly & Parker 2013).
Based on the existing assumptions regarding the SS determination for a qualitative study, it is assumed that a sample of 30 participants can be deemed to be the optimum solution. Therefore, a sample of 25 people was used in the study to determine the answer to the research question.
Data Analysis: Coding and Categorization
A system of codes was created in the course of analysing the respondents’ answers to the questionnaire. The information retrieved from the questionnaires can be viewed as an unstructured text that contains the data that can be coded and interpreted afterwards.
To carry out the procedure, one should consider a strategy known as open coding. Although typically viewed as the simplest and the most common approach to use, it is also viewed as the most trustworthy tool for categorizing the data and carrying out a corresponding analysis.
It should be borne in mind that the coding framework both offers ample research opportunities and suffers several limitations that may affect the process of data analysis and, therefore, make the outcomes somewhat biased. To avoid the identified issues, one must take the following characteristics of the coding process into account.
First and most obvious, the methodology, as it is based on qualitative data retrieved from people with the help of a survey that includes open-ended questions, relies heavily on information that may turn out to be subjective. Even more disturbing, it could be argued that by wording the questions in the surveys in a specific manner, the researcher suggests specific ideas to their participants, thus planting certain concepts into their heads and causing the outcomes of the study to be biased (Mason 2010).
Nevertheless, with the use of tools such as Skype, which allow for recording the data retrieved from the participants, and analysing it accordingly, one is likely to reduce the biases mentioned above.
Findings
British and Chinese Customers: Differences in Consumer Behaviour
The analysis of the questionnaire responses has delivered rather noteworthy results. First, it became obvious that the culture factor defines the density of the company in the target market to a significant extent, if not entirely. Specifically, 78% of the British participants indicated that they would rather choose Tesla EVs, due to the high quality that the company promises for its cars.
The Chinese respondents, however, were not as decisive in their choice of the preferred brand; instead, they made it clear that they were willing to consider products that will help them improve their social status. Specifically, the responses of the British customers fell under the categories of both ‘practicality’ and ‘luxury’, whereas the Chinese buyers were inclined towards choosing the goods that factored into the ‘luxury’ category.
Furthermore, when responding to the answer concerning the factors that shape their choices, the British buyers mentioned the significance of commercials and advertising, whereas the Chinese customers pointed to the importance of the government-based promotion. Particularly, the Chinese customers participating in the interview referred to the concept of state-funded advertising by addressing the issues related to new opportunities for investment. Indeed, according to the results retrieved after the questionnaire analysis, 79% of the Chinese participants mentioned the fact that the Chinese government has recently provided a plethora of options for investments in NEV development.
Herein lies the primary difference between the factors behind the density of Tesla in the identified markets; in contrast to the Chinese market, where the process of promoting NEVs occurs at the government level, the British consumers are influenced mostly by the advertisements issued by the entrepreneurs who sell the product. One might assume that the given difference in the issues that influence the behavioural patterns of the target audience create a gap between the motivation rates of each.
However, in a very peculiar manner, the external variables determining the behavioural pattern adopted by the target clients allow for making the cultural differences less noticeable. Particularly, the government-funded focus on NEVs and their significance to the state economy create premises for keeping the Chinese clients’ focus on the product.
As a result, the engagement rates do not drop, which is rather unusual for the Chinese consumers, as the results of reviewing their culture specifics indicate. The effects of marketing tools used by companies on the British population, in their turn, are just as successful as they serve to appeal to similar characteristics thereof, such as the need for high-quality vehicles and the importance of environmentally safe transportation.
Finally, when it comes to determining the unique characteristics of Chinese shoppers that set them apart from British consumers, one must mention that the study showed their complete obsession with the shopping process. In contrast to the British population, which views the process as a part and parcel of everyday routine, Chinese customers are truly excited and often delighted with the idea of shopping.
As the chart below shows, 89% of the Chinese study participants used words with a positive denotation when talking about the process of shopping, whereas only 43% of the British customers preferred to deviate from the use of neutral concepts. Particularly, the identified percentage of the target population used the words with a positive connotation when talking about the shopping process; for example, 37% used the word ‘happy’ when describing their positive experiences with the shopping industry, 15% mentioned the word ‘great’ when addressing a particular part of their shopping process, 58% defined the items that they bought or saw during the shopping process as ‘cool’, and 49% referred to their shopping experience as ‘fun’ (see the graph below).
Figure 1. Characteristics Provided by the Chinese Customers for Shopping
Also, when it comes to determining the types of products that Chinese buyers typically look for, one must mention the peculiar propensity for purchasing luxurious items. Chinese buyers aim at buying products that will help them boost their social status.
The specified finding aligns with the conclusions made in recent studies determining the specifics of Chinese buyers’ behaviour: ‘The standardization–localization dilemma of brand communications for luxury fashion retailers’ internationalization into China is a unique contribution that adopts a managerial approach and presents qualitative insights from 22 luxury fashion retailers currently active in the Chinese market’ (Chandon, Laurent & Valette-Florence 2015, p. 302).
The propensity to purchase luxurious goods as opposed to similar products from less famous organizations has been also viewed as a problem of the contemporary Chinese market: ‘Chinese marketplace, with its low brand awareness and loyalty but pressing needs to maintain exclusivity and standardized brand images’ (Chandon et al. 2015, p. 302). Therefore, the study outcomes point to the fact that the company should reconsider its current brand strategy so that it can incorporate an element of innovation that the Chinese consumers will be interested in.
Similarly, when describing the characteristics of the products that they would prefer to similar ones, Chinese participants in the survey mentioned that the target goods should be ‘luxurious’ (65%), ‘rich’ (33%), ‘deluxe’ (14%), etc. (see Fig. 2). Particularly, the respondents indicated that the NEV cars that they considered as a possible purchase could be characterized in the identified manner. In other words, the Chinese customers were largely concerned about the popularity, as well as the level of luxury, that the product could help them attain.
Figure 2. Chinese Customers’ Characteristics of NEV
Attitudes
The questionnaire also returned rather predictable results concerning the attitudes of Chinese customers towards the concept of NEVs, therefore allowing the researcher to predict the specifics of the target audience’s behavioural patterns in the NEV market rather successfully. According to the results provided in the questionnaire, Chinese customers are quite concerned with the issue of pollution. It is worth noting, though, that there is an evident tendency for the participants of the study who are preoccupied with the problem of pollution to focus on the factors causing it, rather than on the means of managing the root cause.
For instance, the answers to the questionnaires indicate that the respondents tend to focus on the impact that they have on the environment and, as a result, change the behavioural patterns that compel them to cause harm to nature. Specifically, 65% of the respondents claimed that they were ‘very concerned’ about the impact that their vehicles have on the environment, in general, and the progress of global warming, in particular. Particularly, the questionnaire results have shown that the number of participants who claimed to be indifferent towards their impact on nature and, therefore, purchased products no matter how ecologically unsafe they were, is minuscule.
As the figure above shows, environmental awareness cannot be deemed to be one of the strongest points of Chinese consumers. However, one must admit that the identified population, nevertheless, has a general inclination to buy products that can be viewed as environmentally safe. As the responses to the questionnaire have shown, Chinese buyers focus primarily on the quality and popularity of the product. Even though the gravity of environmental awareness has been reinforced among the identified crowd over the past few years by the state government, it still lacks the strength required to make it determine the behavioural patterns of the buyers and, therefore, shape the density of Tesla’s products in the Chinese market.
The identified features of the Chinese audience are in striking contrast with those that are typically displayed by the British population, and that have been identified in the course of the research. Specifically, the fact that British customers are more practical and are less geared towards purchasing trendy products needs to be mentioned. Indeed, a closer look at the answers by the identified members of the population to the same questions that the Chinese participants were provided will show that the key characteristics of the shopping process included epithets such as ‘leisurely’ (36%), ‘relaxing’ (72%), ‘fun’ (80%), and ‘comfortable’ (28%) (see Fig 4).
Figure 4. Characteristics Provided by the British Customers for Shopping
Therefore, it can be assumed that, unlike the Chinese buyers, British consumers prefer comfort to the search for excitement and novelty. Similarly, the British members of the target population seem to be considerably less thrilled about the idea of purchasing solely luxurious items; according to the responses provided, the comfort and quality of the product were perceived with much more appreciation for its belonging to a worldly renowned trademark. Specifically, only 2% of the participants involved indicated that any luxury inherent in the purchase meant anything to them.
It is quite striking, though, that the survey allowed distinguishing two very specific and rather numerous groups of buyers, whose approach towards the purchasing process, as well as the concept of brand awareness, are the exact opposite of each other. Specifically, 22% of the respondents indicated that they are willing to try new brands and find the idea of product novelty rather thrilling. Particularly, in their answer to the question ‘What do you think of EVs, in general, and Tesla’s EVs, in particular?’, they included words and phrases such as ‘innovative solution’, ‘new and thrilling’, ‘cool’, ‘positive’, etc., thus indicating that they applaud innovative solutions and are willing to try new products.
The other group, in its turn, pointed to the fact that they are inclined heavily towards buying ‘traditional’ products since it allows them to feel ‘secure’. Although there were very few variations on the words mentioned above, the identified group made up 24% of the entire number of the British respondents.
Herein lies the principal difference between the attitudes towards the buying process as evidenced by the British and the Chinese consumers. As stressed above, the Chinese respondents were mostly homogenous in the characteristics of the products that they prefer to purchase, as well as their concept of brand identity and brand loyalty.
The British consumers, in their turn, showed quite clearly that some of them are willing to experiment with the choices that they make as buyers, whereas the rest stated that they prefer more traditional products, as well as the brands that have established themselves in the target market for quite a while and, therefore, have proven that they are worth trusting.
British and Chinese Customers: Similarities in Consumer Behaviour
It would be wrong to claim that the Chinese and British consumers have nothing in common between them. On the contrary, the study results showed that the target audiences share quite a several characteristics, the primary one being a concern for the environmental effects of the products that they buy. Although it has been stressed that Chinese consumers are not overly concerned about the threats that the modern vehicle industry poses to the global environment, they are, nonetheless, quite environmentally aware.
The British participants also proved to have a general understanding of the deplorable effects that traditional cars and similar vehicles that run on petrol have on worldwide ecologies. To be more accurate, 87% of the respondents claimed that they were in favour of consuming those products that do not pollute the environment or harm it to a lesser degree than other solutions. Although one might argue that there is a significant gap between the 65% among the Chinese audience who supported the idea of a greener approach, and the 85% of the British research participants who returned the same response, the identified characteristics can still be viewed as similarities.
British and Chinese Customers: Differences in Decision-Making Towards EV
Although the promotion of NEVs in the Chinese market and EVs in the British one can be considered successful, the attitudes of the target audiences towards the subject matter are strikingly different. When it comes to detailing what sets the two categories of customers apart, one should bring up the process of decision-making as a crucial stage in the purchasing process. Indeed, the Chinese participants claimed to base their decisions on a set of concepts that are quite different from those of the British participants.
Naturally, the phenomenon described above owes much of its nature to the perception of luxury by Chinese and British customers. Furthermore, the price does not seem to be an issue for Chinese buyers, as the results of the survey show. The British participants of the study, quite, on the contrary, claimed that they would rather buy a product that is slightly worse yet cheaper, as opposed to a well-marketed brand that costs a small fortune.
British and Chinese Customers: Similarities in Decision-Making towards EV
However, the outcomes of the questionnaire have also pointed to an array of similarities between the Chinese and the British customers when it comes to the process of decision-making. For instance, both participants agreed on the significance of complying with the principles of environmentalism, which the identified product provides. Indeed, because the significance of NEVs as tools for addressing concerns about global warming has been enhanced among the Chinese customers by the state government needs to be acknowledged as a crucial factor in shaping the local population’s attitude towards NEVs.
Similarly, British people are considering EVs as a means of reducing pollution rates and, thus, allowing for a significant improvement in the current levels of climate change. According to the information provided by the participants, 67% of the British respondents confessed that they were highly concerned about the impact that traditional cars have on the changes in the global climate, which aligns with the recent increase in the percentage of environmentally aware Chinese members of the population as shown in the questionnaire analysis. Furthermore, as stressed above, there are a vast amount of the British population whose values, as far as the process of purchasing is concerned, align perfectly well with those of the Chinese population.
Discussion: Making the Cross-Cultural Communication Successful
Determining the Factors Affecting Customers’ Decisions
As the information retrieved in the course of the analysis has shown, the factors that affect the target customers’ choices can be split into several large groups, i.e., those that are culture-related, political, technological, environmental, legal and economic.
Even though the significance of the economic, financial and political circumstances is not to be underrated, one still has to give credit to the overwhelming influence of the cultural factors as far as shaping customers’ choices is concerned.
When considering the factors that shape the decisions of the Chinese and the British consumers as far as the purchasing of EVs are concerned, one must admit that the decision-making process is influenced heavily by the concept of environmental safety and the effect that the car has on the changes in the global environment. The specified tendency among both British and Chinese audiences to take the issue of global warming and related concerns seriously shows that, despite possible flaws in the product design and the strategy used to promote EVs in the target environment, Tesla has a very strong chance at succeeding in the identified environment.
Consequently, the issue of environmental awareness can be turned into a common selling point in both markets. The issue of luxury is another peculiar aspect that needs to be taken into account when shaping the current approach to marketing. It is important to bear in mind that the British customers are not as thrilled by the luxury-related qualities of the EVs that they purchase and, instead, focus on the quality aspect, as the survey indicates.
To reach a compromise and cater to the needs of all customers, Tesla may consider drawing parallels between high quality and luxury. In other words, the organization may represent its compliance with the latest requirements in quality for NEVs, as well as an improved delivery model, as part and parcel of the luxurious service provided to the end customers.
Opportunities for Tesla in the Context of the Chinese Market
Based on the study results, one may claim that Tesla has a plethora of opportunities to explore in the Chinese NEV market. For instance, the chances for marketing the product as a luxury item that determines the status of its owner and elevates it in the eyes of the rest of the members of the society can be explored quite successfully. Once the car is branded as an element of luxury, the qualities and characteristics of the car will justify its high price. As a result, the process of selling the product to the target members of the population will become much easier, since the Chinese people will have a rather marked idea about the benefits of using the specified vehicles.
In other words, assuming the niche of an ecologically safe and at the same time luxurious item can be viewed as the most sensible step for the company to take. While putting the stakes on the latter aspect of Tesla NEVs as a crucial selling point would be a mistake, since environmental awareness is not yet big in China, the organization should incorporate the identified idea into the branding process.
The propensity of the Chinese customers to have a lot in common with a significant part of the British consumers, who are also eager to buy new and innovative products, allows the assumption that some of the elements of the current marketing approach could be used when designing a framework that will help reach the Chinese buyers. Specifically, the tools that the company uses to cater to the needs of a younger and more excited crowd can be applied to the context of the Chinese market.
It should also be borne in mind that the prerequisites for NEVs to enter the environment of the Chinese market have been created artificially by the Chinese government for some time (Zhang, Yu & Zou 2012). As a result, there is a rather profound platform for the organization to build its promotional campaign on. To be more accurate, the target audience must be aware of the problems of traditional, gas-based cars, and is therefore likely to be willing to purchase vehicles that do not pose a significant threat to the environment.
Possible Threats to Be Aware of in the Chinese Market Environment
Naturally, operating in the realm of the Chinese market implies facing an array of threats, the key one being customers losing their interest in the product. As the analysis of the questionnaire and the overview of the recent studies of the Chinese customers’ characteristics have shown, the identified population is extremely prone to choosing such items as are consistently innovative and original. Therefore, as soon as the novelty of NEVs wears out, Tesla is likely to face the threat of losing a significant part of its customers. Hence, it is imperative to make sure that the target members of the population should be provided with new and improved versions of NEVs.
Besides, when considering the responses of the participants to the questionnaires, one should also pay attention to the fact that a wide range of participants proved to be rather conservative about their choices when it came to making purchases. Particularly, the identified characteristics of the target population imply that traditional cars are associated with the idea of high social status and luxury to a considerably greater extent than the NEV cars in the eyes of a regular Chinese buyer. The specified tendency is common with both the younger and the older population; thus, there is a threat that Tesla will not be able to change how people think within the relatively short amount of time that it needs to market its products in China. Finally, the inability to meet the quality requirements may become a tangible threat due to the lack of standards for NEVs in the Chinese market:
This interoperability problem is further exacerbated by China’s NEV demo areas, industrial incubators located in 88 cities that regularly issue new and differing NEV standards. Without a uniform standard uniting the infrastructure in these different areas, application of NEVs will remain limited on a national scale (Marro, Liu & Yan 2015, par. 12).
The specified characteristics of the Chinese NEV market open an entirely new pool of opportunities for Tesla in China. Specifically, the organization may become the one that will set the standards for the quality of NEVs in the Chinese market. The honour of the task, however, should be taken with a grain of salt. On the one hand, by setting the quality hallmark for the rest of the organizations to meet to sell the product in the identified environment, Tesla will create a significant barrier for new entries, thus possibly gaining a monopoly over selling NEVs in the target environment.
Another possible threat that the organization may face with its Chinese customers is the rapid change in the focus of their aspirations. As stressed above, the choices of the identified population can be characterized as rather light-minded as far as the buying process is concerned. Therefore, it is going to be fairly complicated to keep Chinese clients excited about the opportunities that Tesla’s NEVs provide to them.
Even in the case where the company decides to brand its cars as exclusive and luxurious material, the buyers may switch to other expensive brands after the novelty of this one wears out its welcome. The responses to the question of whether the target audience will switch to a different brand that offers something more exciting point quite clearly to the fact that Tesla has a lot to fear.
Therefore, the threat of losing its customers due to the lack of change in the brand product and the absence of innovation can be viewed as the primary challenge that Tesla will have to address when entering the target environment. One might argue that getting used to a specific product, to the point where it becomes stale, is unlikely to occur within a short amount of time – quite the opposite, Tesla is likely to have a lot of time to think its future strategy through and consider the avenues for appealing to its Chinese customers with success. However, the entrepreneurship must be one step ahead of its clients; thus, Tesla will not be taken by surprise as the clients suddenly change their attitude towards NEVs.
Avoiding and Addressing the Emergent Threats: A Sustainable Strategy
It should be borne in mind that the cautious approach designed specifically for the British customers, to lure them into buying EVs as products of the finest quality, at the same time offering a wide array of bonuses, discounts and other options, may fail to work with the Chinese consumers as the target population does not seem to be aimed at buying the target products.
It could be suggested that the possible unwillingness of the Chinese customers to relate to NEVs as items of luxury could be managed by carrying out a vast and ground-breaking promotional campaign. Although changing stereotypical thinking is not an easy task, building the brand image that can be immediately related to luxury and the perception of wealth is still an opportunity once the correct images and ideas are utilized in the process.
Furthermore, when shaping the brand strategy so that the target audience could perceive the company’s products as luxurious ones, Tesla marketers should bear in mind that the survey results have also pointed to a rather peculiar understanding of luxury as demonstrated by Chinese customers. Specifically, the fact that 87% of the respondents related luxury primarily to the outstanding quality of the product needs to be brought up. In other words, the marketing strategy that the company should consider as the foundation for its further promotion in the identified environment should revolve around the quality of the NEVs.
Apart from the obvious fact that Tesla’s NEVs do not emit any CO2, information about recent modifications to the size of the cars could be incorporated into the marketing campaign. As the official description of the latest Tesla NEV products says, the new cars can be defined as highly compact, which allows for increased manoeuvrability, especially as far as the use of the autopilot is concerned:
Autopilot allows Model S to steer within a lane, change lanes with the simple tap of a turn signal, and manage speed by using active traffic-aware cruise control. Digital control of motors, brakes, and steering helps avoid collisions from the front and sides and prevents the car from wandering off the road. Autopilot also enables your car to scan for a parking space and parallel park on command. And our new Summon feature lets you “call” your car from your phone so it can come to greet you at the front door in the morning (Tesla Corporation 2016, par. 4).
Therefore, the actual benefit of the car as far as its technological characteristics, the velocity that it develops, and other capacities of the vehicle, needs to be the focus of the marketing campaign. As a result, the customers are expected to view the product as a luxurious one. The subsequent rise in the enthusiasm rates regarding the purchase of the product, in its turn, can be sustained by introducing new improvements with every new design of the NEVs produced.
Furthermore, the issue of comfort has to become the focal point of the commercial so that the target audience could perceive NEVs marketed by Tesla as luxury items. To be more specific, the fact that the car offers a more relaxing environment for the driver should be incorporated into the message of the commercial, as well as the entire promotion campaign:
Active sensors combined with GPS and high-resolution digital maps comprise a mutually reinforcing system that pilots Model S along the highway, staying within your lane, even in stop and go traffic. Real-time feedback from the Tesla fleet ensures the system is continually learning and improving upon itself (Tesla Corporation 2016, par. 5).
The brand product released recently by the company has a potential for success in the environment of the Chinese NEV market due to its outstanding quality and its unique design. The combination of the original look and the extra options for manoeuvrability that it has to offer to its target clients can be determined as a foundation for success and the key selling point in China. Therefore, the focus on the consistent improvement and the additions to the traditional design of the EVs issued by the organization can be considered a sustainable approach towards maintaining competitiveness in the Chinese EV market. The further focus of the company’s innovations, for example, may concern the increase in the car’s velocity, the enhancement of the safety system, etc.
Conclusion and Recommendations: What Can Be Suggested To Support Tesla
Implications for the Company’s Further Development
As the analysis carried out above shows, the organization must consider the adoption of an innovation-geared strategy. Because of the requirements set by the Chinese customers, i.e., the need for consistent innovation and a focus on the improvement of the existing services, the organization must keep the audience’s focus on changes in the design of Tesla’s NEVs.
It is, therefore, essential that the entrepreneurship should use every single opportunity to improve its current product. Furthermore, Tesla should consider the application of the latest tools for quality improvement; specifically, the philosophy of iSix Sigma mentioned above needs to be considered. By definition, the identified approach helps reduce waste and optimize the essential production processes in the organization within a relatively short amount of time (Nahbid & Yusof 2012).
More importantly, the framework serves as the means of creating a corporate philosophy based on quality improvement and the promotion of consistent performance enhancement. As a result, the organization will set the pace for further development, preventing the threat of customers’ dissatisfaction. It should be noted, though, that the identified approach implies a very strong connection with the target audience, with a detailed analysis of any change in the demand. Thus, Tesla will be able to cater to the needs of the target population successfully. Specifically, the DMAIC tool as the impetus for a consistent quality upgrade needs to be considered more closely and incorporated into the firm’s performance design.
Issues to Be Addressed: Locating the Dents in the Current Strategy
Even though the organization has been quite successful in the target market so far, it is necessary to make sure that it understands the needs of the identified customers and is capable of successfully catering to these needs. As impressive as the current strategy used by Tesla maybe, one still has to admit that the company is not fully prepared to meet every challenge in the Chinese market.
For instance, the innovation issue mentioned above, which the organization is likely to suffer from within the next few years, needs further management. In particular, the technical characteristics of the products will have to be improved. As stressed above, the low battery life can be viewed as a reason for concern for most companies producing NEVs nowadays (Noel & Sovacool 2016); therefore, improving the battery life regularly should be considered a possible route for Tesla to take.
Furthermore, when addressing the issue of customer demand in the target market, TESLA should consider increasing the range of products that it will provide to the target audience.
As a recent study shows, three primary types of EVs can be mass-produced; these are Battery Electric Vehicles (BEV), Hybrid Electric Vehicles (HEV), and Plug-in Hybrid Electric Vehicles (PHEV) (Pappas 2014). As a result, the problem of managing the uncertainty that some customers have about battery shelf life, as well as related environmental effects, can be handled in a very efficient manner: ‘A major potential barrier to widespread EV adoption detected among our technologically minded target group is the uncertainty associated with the EV battery technology and sustainability of fuel source’ (Egbue & Long 2012, p. 724).
In other words, the combination of the ecology issue and the absence of new ideas may lead to a rather lacklustre impression of the product among the target audience. The production of different types of NEVs, in its turn, can be viewed as a solution to the problem. As soon as the novelty of the traditional HEVs released by Tesla wears out, the organization may up the ante by introducing BEV and PHEV products to the customers.
Much to Tesla’s credit, though, the battery used currently in its NEVs can be deemed as a breakthrough in the realm of EV production. Indeed, by definition, the cars cannot be viewed as anything but luxurious items for a reason – the battery as it is designed to have the tiniest effect on the environment possible and provide the longest run for the car truly is a technological miracle: ‘The company’s innovative battery and charging technology has given it a substantial lead in making batteries cheaper and recharging quicker, and it’s also helping Tesla lower costs faster than its competitors’ (Bullis 2013, par. 7). Nevertheless, the company must keep its wheel of innovation rolling by updating its technology and keeping the audience on their toes.
One must admit, though, that making sure that the customers are aware of the differences between the identified products and, therefore, are capable of appreciating the challenges that Tesla will overcome to provide its clients with the best product possible, is crucial to the firm’s success. Because EVs are a comparatively new concept in the target market, it begs the question of whether the Chinese audience will differentiate between the types of vehicles and will understand the magnitude of the changes that the company will make to NEVs.
Sustainability as the Foundation for a Successful Entry
Despite the generally positive response that Tesla has received regarding its current options of integrating into the Chinese market, the organization should optimize its innovation and marketing strategies to keep its Chinese customers in a state of unceasing awe. Towards this end, the provision of unique opportunities to the customers, as well as a regular update of the current NEVs’ design, must be viewed as a necessity.
Specifically, the entrepreneurship should improve the technical characteristics of the vehicles, such as the speed to which it can accelerate, the manoeuvrability, etc. The latter is especially important because competitors successfully use the identified characteristic feature of the product in the global market. Therefore, unless the organization incorporates the quality of manoeuvrability into the list of its product’s characteristics, it is highly likely that customers may refrain from purchasing the car.
The issue of price, in its turn, should not be deemed a problem at present. Even though the EVs produced by Tesla is far from being cheap, even by global standards, in the eyes of the Chinese customers, the quality of the end product outweighs the costs involved in purchasing it. Therefore, as long as the cars meet the high standard set by the target population and are successfully promoted to the Chinese customers, the concern of cost is unlikely to be an issue.
Finally, the value chain delivery model needs to be altered slightly so that the customers can receive high-quality products in a manner as timely as possible. The specified strategy is likely to help the company build a strong support system in the environment of the Chinese market, which is currently viewed as hostile and, therefore, dangerous to the organization. Seeing that Tesla will have to be prepared for rapid changes in the environment of the Chinese market, it will be reasonable to adopt the Lean Six Sigma (LSS).
By definition, the specified approach is likely to help the entrepreneurship address the harshest issues that it may face in the target market (Nahbid & Yusof 2012). Indeed, because LSS serves as a tool for consistent quality improvement in an environment that requires careful and sensible use of resources, the identified approach is likely to help the company use its available resources sparingly, at the same time improving the quality of its products and reducing the rate of the waste.
Furthermore, seeing that Tesla must apply a customer-driven approach to cater to the needs of the Chinese audience, it could consider the adoption of the so-called customer offer zones as the means of improving the quality of NEVs and maintaining adequate loyalty rates among clients. Suggested by Kalyanaram and Aung (2015), the identified approach will allow for building stronger relationships with customers by enhancing the communication process and at the same time defining the boundaries thereof: ‘These zones give logical boundaries and the scope for a firm to communicate and direct their collective efforts on service enhancements’ (Kalyanaram & Aung 2015, p. 10). In other words, the concept will serve as a foundation for improving the current approach towards building the company’s communication strategy and, therefore, create prerequisites for retrieving customer feedback in a much more efficient manner. As a result, the needs of the target audience will be heard, and the corresponding changes will be made in a manner as efficient and expeditious as possible.
Becoming a part of the Asian market is one of the most challenging tasks for an organization operating in any domain, and especially for a company producing vehicles. The unique characteristics of the target population’s culture, as well as the original customer behaviour patterns, call for a detailed assessment of the market and its specifics.
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Tesla Motors is one of the contributors to the global automotive industry through the invention of best known electric motors. It gets its name from an engineer named Nikola Tesla who laid a foundation for the designing of electrically powered automobiles (Durney par. 7). The growth and development of this organization are accredited to various stockholders, investing their resources in stages. The company is the first car corporation in America to offer its shares to the public in 2010, after Ford Motor Company that did the same in 1956.
The main issues affecting the organization include the high production cost that gets out-of-control due to the excessive R&D expenditures as well as several product design changes (Roy, Souchoroukov, and Shehab 694). These massive costs substantially diminish the company’s investment capital, thus, requiring more stockholders to raise extra funds. Also, the company is facing the problem of delays in the production of a reliable and well-tested transmission to last for many miles.
Analysis of Tesla Motors’ external environment is achievable by looking at various factors surrounding the company. First, there is a five-year loss-making period. This stage significantly hurt the company’s sales until 2013 when it first sold its Model S vehicle to customers. Secondly, it is the issue of competition. It is quite evident that the organization has been able to rise above its competitors, by providing its clientele with electric vehicles that encourage cleaner surroundings, unlike their counterparts that are carbon-producing and gasoline-powered motors. Thirdly, the issue of customers comes out clearly. According to the report of the company, the organization has been able to attract more consumers in a short period which encourages an increase in sales especially through word of mouth (Jullien and Pardi 96).
The analysis of the organization’s internal environment is possible by examining some aspects within the company. The first aspect is the change in management. Due to the delays in the production of the company’s vehicles, the board of directors changes the CEO personnel. The new CEO is in charge of enhancing production and initiating deliveries of vehicles to their clients. The other issue is to lay off a certain percent of unproductive employees. The new management succeeds in raising production and sales through ensuring that only the active workers remain in the company (Donnelly, Collis, and Begley 289).
This corporation follows three levels of strategy. The stability strategy is developed through the acquisition of capital investment from different stockholders. This investment assists in the stabilization of production and deliveries of more automobiles to customers. The company also uses a growth strategy. Growth strategy is an approach achieved via selling its shares to the public. It increases the capital investment of the company. On the other hand, the retrenchment strategy is accomplished by firing more than two hundred and fifty workers including some executive members. This action reduces the organization’s expenses by paying fewer productive employees to work for the company (Kompalla, Kopia, and Tigu 2016).
SWOT Analysis
TOWS matrix
I would recommend that the firm invests in machines that work faster and longer to reduce the number of workers. On the second issue, I would recommend the creation of a production department that only deals with manufacturing cars to reduce the delays.
In a bid to curb the problem of high expenditures, the management lays off ten percent of the employees including some of the high positions leading to reduced expenses. On the issue of delayed production, a knowledgeable C.E.O with engineering skills is employed to enhance production and deliveries (Gobetto 2).
Works Cited
Donnelly, Tom, Clive Collis, and Jason Begley. “Towards Sustainable Growth in the Chinese Automotive Industry: Internal and External Obstacles and Comparative Lessons.” IJATM International Journal of Automotive Technology and Management 10.2/3 (2010): 289. Web.
Durney, Edward Gordon. “Re-inventing Carmaking with Truly Electric Cars: Using a Modular Car Architecture to Build New Cars and a New Carmaking Industry.” 2012 IEEE International Electric Vehicle Conference (2012): n. pag. Web.
Gobetto, Marco. “Historical Outlines and Industrial Strategies for Automotive Industries.” Springer Series in Advanced Manufacturing Operations Management in Automotive Industries (2013): 1-43. Web.
Jullien, Bernard, and Tommaso Pardi. “Structuring New Automotive Industries, Restructuring Old Automotive Industries and the New Geopolitics of the Global Automotive Sector.” IJATM International Journal of Automotive Technology and Management 13.2 (2013): 96. Web.
Kompalla, Andreas, Jan Kopia, and Gabriela Tigu. “Limitations Of Business Strategies And Management Systems Within Automotive Industry.” INTED2016 Proceedings (2016): n. pag. Web.
Roy, R., P. Souchoroukov, and E. Shehab. “Detailed Cost Estimating in the Automotive Industry: Data and Information Requirements.” International Journal of Production Economics 133.2 (2011): 694-707. Web.
