Tesla Case Analysis

Good Essays
Tesla at current
Tesla right now has sold 10,500 cars in the first half of 2013 and is expected to sell more next year. Total revenues are 560 million and net income is more than 10 million dollars. These are numbers that will continue to grow to take up more and more market and BMW needs to fully understand how Tesla is now in this position. It is very important that BMW understands both from a strategic viewpoint and execution viewpoint, how to best counteract this sudden rise in a potentially dangerous rival. Once this strategic plan is carefully crafted, BMW will be in a better position to respond and position the company to maintain its footprint in the car industry.
The path to an award-winning EV
Tesla utilized their cost structure
…show more content…
This is a company that wants to directly compete with BMW and continue to erode our market share. The Model S competes directly with the BMW5 model. While the BMW5 has lower costs, there are other categories that the Model S edges BMW out. The Model S has a faster 0-60 start, more horsepower, higher cargo capacity with seating, higher max cargo capacity, and a higher consumer rating just to name a few. BMW, of course, has a higher sales volume and higher total revenues. Between 2012 and 2013, Tesla made $413,256,000 in the former year and $966,931,000 in the latter year. This represents a 57.3% increase in revenues which for this industry is a large increase. BMW, to counteract this growing rival, needs to continue to use our powerful brand and economies of scale to our favor. The strategy will be to continue to appeal to our core constituency and build a BMW that is luxurious as well as affordable. It is also important to continue to modernize our plants to maximize profits. BMW will also have to reduce our raw materials to ensure the company does not have an oversupply of raw materials in the pipeline. Focusing on the hybrid market is also important for those consumers who may not buy a traditional car but who also may not want to buy a fully electric car now. Our brand is our most important asset and we must use it to reposition ourselves for the next chapter in our historic

Related Documents

  • Decent Essays

    In late 2015, The central bank believed the U.S. economy is strong and on the path to sustainable growth so the Federal Reserve should raise the interest rate from zero percent to 0.5 percent . The increased rate’s percent is a small one, but it will affect the market dynamics and millions of Americans, including investors, bankers, home buyers and manufacturers. (Figure 1-2) Low interest rates have been a key contributor to the automotive industry’s growth and sale’s boost percentage, providing buyers with additional spending power to buy more vehicles or allowed them to make monthly payments on vehicles they otherwise would not have been able to afford. Based on 2015 U.S. Automotive Outlook report, (the percentage of leased vehicles among retail purchases has risen from 13 percent in 2009 to 26 percent in 2014, and the percentage of 72 month loans has grown from 22 percent to 32 percent during the same period).…

    • 1102 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    He also made a substantial positive difference in the net income for the company. According to Statista, the statistics showed that net income of the Ford Motor Company from the year of 2007 to the year of 2016 had increased and it was about 7.4 billion U.S. dollar. Therefore, this indicated that Ford is now one of the most significant automobile manufacturers…

    • 1980 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    Case Study: Aston Martin

    • 1059 Words
    • 5 Pages

    Selling premium cars can be a winning business strategy. Procedures of selling cars at higher prices require different marketing approaches than those used to sell cheaper vehicles. Marketing strategy for a deluxe car brand needs to exalt the quality of the car, and make a remarkable difference in the performance. The brand of the luxury car chosen is Aston Martin. British luxury carmaker Aston Martin has been in the business since 1914 and is known for its product placements in popular movies.…

    • 1059 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    The BMW Group has set course for a successful future with its strategic realignment. The Group’s strategic direction up to 2020 is clearly defined: The BMW Group is the world’s leading provider of premium products and premium services for individual mobility. Return on sales target of 8 to 10 percent in Automobile segment The future strategy focuses on ensuring the company’s long-term success and safeguarding its independence. The BMW Group has set ambitious interim targets for the first five years: Automobile retail is supposed to rise to more than 1.8 million vehicles by 2012. During this period, the company plans to increase deliveries in the motorcycle business by 50 percent to 150,000 units per annum.…

    • 1207 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    BMW is the leading automobile manufacturer and the seller in the world. The sales keep on rising profusely. Yet a big treat lingers over BMW – the rising competition in automobile industry. Competitors such Audi, Mercedes-Benz, Bentley are some of the rising threats to BMW. As BMW uses both the type of data collection techniques – that is primary and secondary – the marketing strategies are effective and helps in establishing a strong customer base and brand image by bring out new innovated series.…

    • 971 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Ford Weaknesses

    • 1179 Words
    • 5 Pages

    Those markets have a big potential and the company should work on escalating its market share there. The car industry is a very competitive business. Every year new cars are developed that have more and more features. Ford should invest heavily in new technologies that would help company to increase demand and sales for their cars. The growing market for alternative fuel cars is another opportunity for Ford.…

    • 1179 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Case Study Of Toyota

    • 976 Words
    • 4 Pages

    Also, the company should continue to invest capital into alternative forms of cars or try making a joint venture with a firm such as Google or Apple to make the first automated car a reality. The investment in the automated market could ensure that Toyota will be able to continue to stay the largest auto company by sales and market cap. Finally, the company should look into Tesla’s direct dealer model, however this could be expensive to adopt at this stage. Reaching out, the company should look to expand to markets that are not entirely saturated by its competitors or to so-called third world countries, which are growing at faster paces than developed countries. According to charts 1 and 3, it appears that Toyota has the ability to expand its sales in Europe, which appears to be undersold compared to its other sales regions.…

    • 976 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Analysis of the Environment The automotive industry is highly competitive and a significant contributor to the United State’s economy. It is a pillar in providing millions of jobs on a global scale and contributes almost 3% to global GDP. This industry in many countries also provides people with a higher standard of living because it enables mobility in a comfortable and safe manner. With increasing population globally, the consumer demand on vehicles is also on the rise. The industry demand can vary hugely year to year not only by population but depending on the increase price of gasoline and a possible weak U.S. economy.…

    • 762 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Distinct brand image The BMW brand is defined by high marketing budgets and high quality inputs, and is therefore considered to be more luxurious and better quality than other brands. Since 1975, customers have maintained a distinctive brand image, and they want to make a statement by buying a BMW car, just as BMW marketing ensures that driving pleasure is the same as the ultimate driving machine. This has led new entrants to have to allocate high budgets to brand their products, so it is as good as BMW to attract customers. High initial R&D investments To be successful in the high-end automotive industry, focusing on the design, production, quality management and technical aspects of the continuous development. New entrants need to set up…

    • 879 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Tesla has done most of sales online, but does quite a bit in stores too. If you ask me Tesla is a greats stock here are some reasons why. It has the best technology and strongest brand by far, in the auto market’s largest growth sector.The value of Tesla’s stock increased past Ford and General Motors to become the most valuable car company in the United States. The amount of Tesla's yearly car production rate is about to explode from 100,000 cars today to 500,000 cars in 2018 because of the company’s lower-priced Model 3. Even better, this doesn't even take into account Tesla's newest energy storage…

    • 1713 Words
    • 7 Pages
    Decent Essays