Tesla’s international-level strategy is the transformational strategy. With this strategy, Tesla looks to concurrently attain low prices through economies of scale, location economies, and understanding outcomes; and transform its cars across global industry to record for local differentiations. Most of Tesla’s strategies in the foreign market are close to those it employs in the United States. These strategies are as follows.
Tesla sells its cars straight to clients through its showrooms and galleries or through the Tesla website. Elon Musk (2012) describes that the major cause for this direct selling, and not vending through traders, is the basic dispute of engrossment confronted by traders between selling gasoline cars, which comprises the huge bulk of their business, and selling the advance technology of electric cars. Advantages of this direct selling comprises better client contentment since Tesla can vastly meet its manufacturing with buyer predilections and a lesser total price grateful to the absenteeism of trader prices such as inventory financing and insurance and advertising and sales commissions.
Certified Pre-Owned (CPO) Program
Tesla utilizes a buyback agenda called Certified Pre- Owned (CPO) in countries such as Germany, France, Sweden, Norway, and Canada. Through this agenda, a Tesla Model S is sold with the guarantee to give it back to the organization after three years for a reimbursement of 43% to 50% of its original price. Tesla then examines, renovates, and verifies the pre-owned cars, after which it increases the guarantee and sells the cars for about 62% of a Tesla Model S new car’s price. With this strategy, Tesla not only accumulates the resale profits (since it sells directly to clients) but also enhances more into the main market as it can appeal the not-so-wealthy clients by selling at a more reasonable price.
Strategic Positioning of Stores and Galleries
Other strategy used by Tesla in the foreign market is purposely placing its showrooms and galleries in high foot traffic, prominent retail venues, like malls and shopping streets that people often go in a very pleasant buying mood. According to Musk go to the people before they decide for a new car.
As one of its schemes to appeal clients in the foreign market, Tesla modifies its cars to match local requirements and to please the tastes and priorities of its clients. For instance, in answer to client responses, Tesla made some advancements to its Tesla Model S in China, comprising an ‘executive rear seat choice, which costs $2000 over the main design and points to make the rear seat experience more suitable.
A scheme made by Tesla to enhance internationally is associated expandation through strategic association with well-organized global auto and battery manufacturers. Tesla actively amalgamates with foreign organization in the research, enhancement, and manufacture of electric powertrain elements (lithium-ion battery cells). This was the case with the Japanese automotive producer Toyota, for which Tesla make the lithium-metal- oxide battery and other powertrain elements for the Toyota RAV4 EV Second generation; the German automaker Daimler AG, for which Tesla produced electric powertrain elements for the Mercedes-Benz A-class E-cell and the Mercedes-Benz B-class ED; and the Japanese battery cell maker Panasonic, together with which Tesla develops nickel-based lithium-ion battery cells for electric vehicles and with which Tesla corporates on the production of photovoltaic (PV) cells and modules. With these collaborations, Tesla was ready to understand bigger price economies by profiting from the experience of these well-organized firms and, thus, construct a superior international place not only in the electric car sector but on the whole automotive market.