Tesla – Flashcard

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Distribution Channels
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What are traditional distribution channels within the automotive industry? (3)
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(1) Franchised Dealer Model: strong manufacturer control but expensive. (2) Manufacturer-owned dealership (3) Independent Sales organisation: Widespread customer reach but weak manufacturer control
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How does Tesla use the physical distribution channel format? (4)
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1. Direct through stores. 2. New Car Sales Focus 3. Store-front environment 4. Custom-built products
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Why does Tesla focus on Direct Sales? (2)
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1. Franchise dealers don't always work in the best interests of the rest of the firm (agent-principle theory) 2. Stores promote brand and the EV concept
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What are three advantages and three disadvantages of Tesla's approach to physical distribution channels?
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Advantages: 1. Cost-advantage 2. Control of Stores 3. Low inventory Disadvantages: 1. Need for manufacturing and selling expertise. 2. High capital requirement. 3. Cash-flow variability
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What is Tesla's approach to virtual distribution channels?
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1. Dedicated e-commerce. 2. Cost: effective, easy-to-create. 3. Strong manufacturer control over price, no negotiations.
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What is Tesla's focus on e-commerce?
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1. Visible Calls to Action 2. Conversion-oriented 3. Product focus 4. Well-structured 5. Major distribution channels
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What are three advantages to Tesla's focus on e-commerce?
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1. Reduction in selling costs through online sales. 2. Simple ordering experience with a higher degree of customisation. 3. Better customer service
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What are three distribution problems that Tesla is facing?
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1. High-cost: Cost of supply chain until 2018 is $10 billion. 2. Legal: Legal complications and restrictions in some US states of Tesla's distribution model. 3. Long lead times: Long delivery time manifests itself in a 2 month waiting period.
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What are three solutions to the distribution problems that Tesla is facing?
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1. Mixed distribution system 2. If time is vital, sacrifice costs and quality. 3. Outsource manufacturing to improve efficiency.
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What are two characteristics of Tesla's supply chain?
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1. Degree of control: Flexibility and control at the expense of higher costs. 2. Economies of scale: e.g. Gigafactory resulting in production costs being lower because of scale.
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Customer Relationships
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What are characteristics of the market segment that Tesla targets? (3)
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1. Tech-savvy 2. Entry-level luxury car customers 3. Eco-friendly customers
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What are characteristics of the typical potential customer profile? (5)
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Middle-aged male. Large, expensive purchases. Buy in-store and offline. Aesthetics, luxury and electric cars matter. Influenced by the economy, the environment, politics and latest trends.
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What is Tesla's marketing strategy?
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1. Very low marketing budget 2. Own + manage their own relationships 3. Community is strongly attached to the product/brand.
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What are the three facets of Tesla's customer strategy
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1. Getting Customers 2. Keeping Customers 3. Growing Customers
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What are elements of 'Getting Customers'? (3)
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1. Eco-friendly company 2. Use of mobile/web relation strategies 3. New tech from a new company.
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What are elements of 'Keeping Customers'? (3)
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1. Open Communication 2. Transparency 3. Constantly innovating
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What are elements of 'Growing Customers'? (3)
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1. Referrals 2. Up-selling 3. Cross-selling
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What is Tesla's balance between Customer Acquisition Costs (CAC) and monetisation?
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Implement effective strategies while keeping customer acquisition costs very low - e.g. free servicing and software updates w/new features. No CMO or marketing budget.
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How has Tesla created such strong customer loyalty?
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Has strong values and culture, it follows the pattern of: 1. Creating an enemy (combustion engines) 2. Establishing an emotional connection w/customers (by solving earth's energy problems) 3. Being transparent (strong social media presence
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What are three customer benefits?
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1. Speed 2. Safety 3. Technology
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What is Tesla's wider ecosystem and how does Tesla use it to reinforce customer demand?
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Other products include PowerWall and Panel which create energy and are compatible with the Tesla vehicles.
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What are three future threats that Tesla must address?
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1. Driverless cars 2. Competition 3. Price
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What are future strategies Tesla might be able to implement? (3)
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1. Reduce time lag between order + delivery. 2. Cost-reduction initiatives. 3. Global sales expansion
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