Competitor analysis on Tesla - Assignment Example

The escalating costs of fuel and the environmental hazards of emissions make electric vehicles (EVs) the best viable option in the present times. As such, a major share of consumers will prefer EVs such as Tesla, which provide them economy in maintenance and comfort while being environmental friendly and, hence, this segment will be Tesla’s target market. With their entry into the “family sedan market” Tesla will be able to diversify their customer segmentation and include more consumers in their customer base (Binkiewicz et al, 2008, p.2). Recently, Tesla is focusing its attention for direct investment in markets like India, which will provide them great opportunities for market expansion.

India is fast becoming an economic power and many of its citizens have high rates of disposable income. Thus, it is a potential market for Tesla, especially because environmental safety is a primary concern of this country. Obviously, by targeting major cities, populated by wealthy people, Tesla can be “better positioned to expand” its operations into this international market (Gonzalez et al, 2010, p.17). In this context, Tesla’s Model S enjoys an edge over its competitors as they are more efficient.

Research conducted by Danielle Boyke et al (2010) provides a comparative data of EVs, which indicates that Tesla’s Model S, with energy densities between 42kWh to 90kWh will give a mileage/charge of 160 – 300, while Audi’s energy density of 42kWh provides a mileage of 154 miles/charge. Thus, the average consumer will prefer Tesla’s EVs over hybrids as these are less expensive both in terms initial investment as well as maintenance. Luxury car consumers, who come from the influential and educated segment of the society, are highly conscious of the dangers of carbon emission besides having an appreciation of sleek designs.

Tesla’s aesthetic design and environmental friendliness are crucial elements that make it a hot favorite among this target audience. Customer Segment Needs: The likely consumers of Tesla’s products look for economically viable options that can offer them comfortable luxury cars at lower running and maintenance costs. Thus, Tesla’s cars will become potential favorites in countries where fuel costs are higher. Besides, customers in the present day look for environmental friendly cars as governments across the globe place heavy restrictions on vehicles that cause excessive emissions.

Another aspect that customers look for in a car is its design and appeal. Since Tesla’s cars provide good mileage to vehicles on a single charging, they will find the favor of customers. Competitors: For Tesla Roadster the main competitors are Porsche and Ferrari and once they launch the Model S Sedan, they will have to compete against existing and future players in the field that include major automobile manufacturers such as Audi, BMW, Lexus, Mercedes, Toyota, Ford, Honda etc. They are currently planning, in collaboration with Toyota, to develop an electronic version of the RAV4.

The competition will not be a deterrent for Tesla because of several reasons. Primarily, they have a sound technology and efficient team of engineers that can create quality products with good designs. Besides, other major players in the industry mostly focus their attention of fuel run vehicles, which is not going affect Tesla’s operation in any big way. Countries across the globe are currently focusing on environmental friendly vehicles, which is a great advantage for Tesla when it concerns its operations in countries where fuel prices are high.

Pricing: Tesla’s average price of their latest model “range from $50,000 – 70,000” and it appears a competitive price when considering the cost of other cars such as “Audi and BMW EVs and non-EVs” (Boyke, 2010, p.10). Similarly, their current strategy of competing in the luxury car market as well as international market with Model S is a viable proposition because customers will be willing to “