Tesla Motors: Facing the Model 3 Harvard Case Solution & Analysis

Tesla Motors: Facing the Model 3 Case Solution

Tesla’s Entry Strategy


Tesla motors has been designing, manufacturing and selling electric cars for a while now in the market. It was first company that has been combining the green vehicles feature, thus generating zero carbon emission system in its vehicles. The car was powerful, fast and environment friendly.

Initially, Tesla followed a product strategy entering from premium markets and moved to mass market. With the passage of time, the company has been seeking the broadest possible market with unique and high quality offerings.  

Notably, Tesla has followed a Blue Ocean Strategy in respect to manufacturing zero emission car for the first time and has given competitive threats to the competitors or market rivals. The company has created a new Green Performance Vehicle markets space. Tesla Corporation had made the competition irrelevant and captured a new market. In addition to this, it has aligned the entire system of the company’s activities in pursuit of low cost and differentiation (Mauborgne, 2004).

It is obvious to recommend that the new entrants should try to capture the market by offering distinctive products. By following blue ocean strategy, the new entrants would be able to create new market space, it is one of the natural benefit that new entrants could have over their competitors or existing market players. If the companies would derive new strategic moves, the new entrants would most probably create multiple blue oceans strategies over time, thereby they could continue to be growing and generating profits over a sustained period. The establishment of blue ocean strategy is a product strategy and is concerned with the product of managerial actions and not with the size and age of the company.


Overcoming Advertising and Product Designing Cost

The company had overcome the advertising cost by adopting Word-Of-Mouth Advertising Strategy which is an unpaid type of promotion, in which those customers, who were satisfied with the quality, features and price of product, tell other people about their likeness for the product. Tesla Inc. has satisfied its customer base which has allowed the customers to advertise the product with their relatives, family or friends. Tesla has gotten its customers who were quite willing to try new a product. It is highly valued strategy and self-sustaining marketing approach followed by Tesla to overcome cost.

In addition to this technique, the company has also followed media coverage marketing strategy, which is one of the powerful tools, conversely used to overcome the advertising cost. Not only this, it has positioned Tesla in a favorable light by projecting expertise, credibility, image and passion that the company wanted to convey to its audience. Best of all, this sort of advertising technique tend to come from independent source and the cost required is time to organize. Both strategies have been the primary drivers of Tesla’ sales leads and they have also helped the company in achieving sales without traditional advertising or marketing at a relatively lower cost of marketing (Schultz, 2017)

In contrast to advertising cost, the company overcame product designing cost through In-Housing. Tesla Company  chose to manufacture cars in-house, also manufactured parts in-house. The company has been exceptionally performing much of the work-in-house is one of reason Tesla closed to its stated objective of building number of vehicles. Traditionally, many manufactures of cars have outsourced the seat production due to the high design and labor cost, but Tesla created its own seat assembly line with the commitment of a vertical integration strategy. The company kept the production in-house which gave an idea of what it would truly cost on designing product. The  firm conducted its business operations and activities within a company rather than outsourcing, thus reducing product designing cost (Schaefer, 2015).




After taking into account the market entry strategies and  tactics to reduce advertising and product designing cost, and production volume of model 3, it is concluded that, model 3 would meet the customer’s range and expectation which primarily required substantial engineering, design, integration work on each and every system of company’s vehicle.

In a conclusion, the strategies followed by company included Word-of-Mouth, Media coverage strategy and in-housing production strategy, which leveraged the profit returns, thus reducing the cost application on marketing and advertising for the company...............



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