INTERNATIONAL

BUSINESS
STRATEGY
GEST-S470-2016/2017

GROUP 26.
ART Charlotte – DUCHESNE
Amandine – HAMIDOUCH
Philippe – HARAKAT Camélia –
PIREAUX Alice
Table of Content
Introduction ................................................................................................................ 3
Company’s Description ..................................................................................................... 3
Competitors’ Analysis ......................................................................................................... 3
Global Drivers’ Analysis ...................................................................................................... 4

International Business Strategy Analysis ................................................................... 5

Ambition .............................................................................................................................. 5
Positioning............................................................................................................................ 6
Capabilities Building ........................................................................................................... 8
Organization ..................................................................................................................... 10

Recommendations .................................................................................................. 11
Appendix .................................................................................................................. 13
Exhibit 1: Tesla Motor’s Electric Vehicle Market Competition Summary .................... 13
Exhibit 2: Tesla Global Sales 2012-2016 ........................................................................... 14
Exhibit 3: EV Market Attractiveness Result Matrix .......................................................... 14
Exhibit 4: Renewable Energy Country Attractiveness Index ........................................ 15
Exhibit 5: Renault-Nissan Alliance I .................................................................................. 16
Exhibit 6: Renault-Nissan Alliance II ................................................................................. 16
Exhibit 7: Top 10 Alliance Countries ................................................................................ 17
Exhibit 8: Tesla Value Chain ............................................................................................. 17
Exhibit 9: Tesla Value Configuration ............................................................................... 17
Exhibit 10: Nissan Human Resource Management Structure ...................................... 18

References ................................................................................................................ 19

2
 Introduction
Company’s Description

Tesla Motor, whose head office is located at Palo Alto, in the Silicon Valley, is a car
manufacturer which has been founded in 2003 by Martin Eberhard and Marc Tarpenning. One year
later, three investors joined the board: Ian Wright, JB Straubel and Elon Musk, who is currently the
CEO and principal investor of the company. In a few figures, Tesla is currently worth $47,416 million
with $7 billion revenues, 155 shares outstanding and 10,161 employees. The company has grown from
a single retail store in 2008 to at least 79 stores worldwide in North America, Europe, Asia and
Australia.

Tesla is the main actor of the electric car industry and inspires both innovation and ethical
values. In addition to selling electric vehicles and innovating, Tesla provides full electric powertrain
components and systems, which are sold to car manufacturers. However, this analysis will only focus
on the electric vehicles’ business of Tesla.

The company waited five years before selling its first model, the Roadster, the first world’s
premium zero emission sedan, which became the third best-selling electric car in the USA and Europe.
The excitement followed in the public with the Model S in 2012, the Model 3 in 2014 and the last one
is the Model X in 2015. Tesla also diversified itself in energy solutions: the Powerwall for the residential
sector and the Powerpack for the industry sector. Finally, in 2016, Tesla bought Solarcity and added to
its products portfolio the panels and photovoltaic tiles.

Competitors’ Analysis

The competition is harsh within the automobile industry. During the previous years, many
changes have been observed: regulatory requirements for vehicles emissions, shift of the consumer's
needs as well as increasing environmental awareness, making the industry evolving in the direction of
electric based vehicles. Within this market segment, there are three different categories: battery
electric vehicles, only powered by energy storage system via on-board batteries, hybrid vehicles,
powered by both a battery pack and an internal combustion engine and plug-in hybrid electric vehicles,
owning similar characteristics than conventional hybrids but unlike the latter, PHEVs can be plugged
in and recharged into an outlet.

Since the market is very attractive and fast expanding, many companies are trying to develop
environmentally friendly alternatives. Companies such as GM, Audi as well as Volkswagen and
Mitsubishi have therefore entered the industry with hybrid models, while Daimler, Lexus, Audi and so
on are developing electric vehicles. Main models competing with those of Tesla are the Nissan Leaf,
Ford Focus BEV, Renault Zoé and Fiat 500e. Some start-ups have also planned to enter the electric
vehicle market even if they haven’t been seen yet. As electric cars’ number has grown around the
world, those car manufacturers are expected to enter the same markets as Tesla. To put in a nutshell,
exhibit 1 describes Tesla Motor’s electric vehicle market competition.

3
Global Drivers’ Analysis

In order to highlight the motives for Tesla’s internationalization, a PESTEL analysis will be
carried out. This framework evaluates the environment variables with the aim of identifying the
importance of external changes within the industry.

Political. Tesla started by selling cars in North America and then expanded itself in Western
Europe and Asia, implying that its business might be influenced by distinctive political patterns. A major
factor affecting the industry is the environmental regulation, which aims at reducing emissions levels
by encouraging the production of environmentally friendly cars. Governmental subsidies and other
incentives are also pushing customers towards greener vehicles. In the US, the government set up
energy loan programs, encouraging R&D of new vehicle technologies and attracting car manufacturers
in the market. As regards to Europe, Norway is a good illustration of government driving the market
with its measures like nationwide access to bus lanes or free parking for electric vehicles. In the same
time, the Chinese government offers credits at purchase and intends to develop the charging network
by building additional stations. Those political decisions represent opportunities for Tesla to find new
investments that could help the company’s growth.

Economic. Sustainable cars demand is increasing worldwide since the industry is growing and
the costs of fuel-engine cars are rising, with the increase of fuel prices. In addition, after the 2008-2009
crisis, the GDP and inflation rate recovery in most developed countries has a significant impact on the
customer purchasing power, leading to a potential increase of electric cars sales and an incentive for
Tesla to enter other markets.

Social. As people pay more attention to what they are buying, environmental awareness has
increased and attitudes towards products have changed. Indeed, people currently prefer eco-friendly
products than pollutants ones. Moreover, the society still judges people on the car they own. Thus, an
additional reason to buy an electric vehicle is the improvement of the social status. Although all people
do not have enough money to buy these expensive cars, since the population is becoming older, with
more wealth and savings, people would be more likely to spend money on environmentally friendly
cars. As people tend to be convinced of the benefits of electric cars, it creates a great opportunity for
Tesla to generate demand globally and satisfy the needs of a greater base of customers.

Technological. Electric cars saw the light thanks to technological progress, rapid globalization
and the Internet’s emergence. Over the years, technological progress has enabled offering a wider
choice of cars, leveraging safety as well as improving efficiencies and reducing costs within the car
industry. Since 2006, worldwide R&D expenditures have also increased, leading to partnerships with
companies in other countries as Tesla is a highly technological company.

Environmental. All over the world, individuals are getting more aware of environmental
concern. Over the last years, car manufacturers have therefore faced the competitive pressure to
produce eco-friendly vehicles. This contributes to change the car industry since manufacturers are
quite a bit obliged to follow the new modern air. This trend toward environmental protection
stimulates the demand for Tesla's cars at a global scale.

4
 Legal. Green movements are taking place, from which energy loan programs are emanating,
and are leading manufacturers to produce eco-friendly cars. Regulations such as an increased taxation
to incorporate new methods of green business, the “carbon tax” and other green policies were
established. These laws are opportunities for Tesla as they could boost the global electric cars’
demand.

International Business Strategy Analysis

The internationalization strategy that Tesla follows may be qualified as a global strategy. In
order to assess choices the company made and the way it intended to build, sustain and organize a
competitive business system, four elements will be analyzed: ambition, positioning, capabilities
building and organization. Each of those elements will be compared to Nissan. Indeed, as the market
in which Tesla is playing is the 100% electric cars market, the choice of the main competitor has been
made among companies that also produce fully electric cars. The world best-sold model and the only
one present across similar market segments is the Nissan Leaf, making Nissan the more relevant
competitor of Tesla in order to conduct this analysis. Just like Tesla, the strategy of this company can
be defined as a global strategy since Nissan competes in the world’s key markets and its business
system is made of integrated and coordinated activities across borders.

Ambition

By developing, manufacturing and selling fully electric vehicles and energy storage systems, as
well as installing, operating and maintaining solar and energy storage products, the business in which
Tesla operates may be qualified as the one of automotive, and energy generation and storage. The
vision and mission followed by the company are respectively “to create the most compelling car
company of the 21st century by driving the world’s transition to electric vehicles” and “to accelerate
the world’s transition to sustainable energy”, while the long-term objectives are global expansion,
strategic partnerships, technological innovation and shift from ‘High Price Low Volume’ to ‘Low Price
High Volume’. Tesla’s ambitions are therefore market-driven because the company is trying to develop
its offer in foreign countries in order to expand global sales. Exhibit 2 shows the increase of Tesla’s
sales in different countries from 2012 to 2016. Following the same strategy, it can be said that Nissan
is market driven as well. Indeed, especially in 2012, Nissan noticed that emerging markets might gather
opportunities as there were clear signs of expansion. Nissan identified China, India, Russia, Brazil and
ASEAN 5 as emerging markets and planed for most of these countries to establish local alliances and
partnerships, and production facilities expansion.

Concerning the type of player, Tesla can be qualified as a regional player because the electric
car company has only succeeded in establishing a strong competitive advantage in the United States
and not yet in other markets such as Europe and China. Indeed, in the USA, Tesla Model S and Model
X are, for the beginning of 2017, the best-sold electric cars, while most popular electric cars are Renault

5
Zoe in Europe and BAIC EC180 in China. Despite its current role, Tesla ambitions to become a global
player.

In terms of relative importance of key regions and countries, both companies compete more
or less in the same markets. While Nissan delivers its products in over 160 countries with Japan, North
America, Europe and China as main markets, Tesla’s major countries are similar, with the exception of
Japan where the presence of the company is currently limited.

About Tesla, even if the company is the leader in the US, this market still offers a lot of
opportunities as seen with the tremendous 68% of sales’ growth from February 2016 to the same
month in 2017. This market, combined with the Canadian one, is especially important because it is
where 80% of its cars are sold. The remaining sales occur mainly in Europe and then in China, Hong
Kong, the United Kingdoms and Australia. The European market is also very important for Tesla
because the number of electric cars sold there is increasing and it thus represents a huge growth
opportunity. In fact, demand has increased of 20% in 2017 relative to the previous year. The same
trend is happening in China but the growth potential is even bigger thanks to the middle-class effect
and the GDP growth rate which is equal to 6,9%, in 2015, much higher than the worldwide average of
2,6%. In 2016, such favorable economic conditions enabled to import five times more Tesla cars than
the previous year. As regards to Hong Kong, while the country knows a fast growth in EV adoption with
Tesla owning 80% market share, the situation is about to change with the new massive first registration
tax. Despite this constraint, the region remains attractive as it is considered as the world's freest and
most services-oriented economy, with its economy forecasts to grow by 2 to 3% in 2017. Finally, a
recent entrance in the United Arab Emirates makes the country a potentially important market.

When looking at Nissan’s sales, Japan, Europe, and North America accounted for
approximately 62% of global sales in terms of units in 2015. Nissan’s sales in Japan, its domestic
market, have known an 8.1% decrease compared to 2014. However, Nissan still holds a key position
on the Japanese automotive market. Contrarily to Japan, North America is the market where Nissan
sold the most in 2015 and has known a spectacular increase of 9.9% compared to 2014. China is
another important market since the company already has a strong position as sales represented
approximately 23% of global sales in terms of units in 2015 and increased by 6.3% compared to 2014.
As of 2013, Nissan was the leading Japanese brand on the Chinese market. The European and other
markets, that include Australia, South America Middle East and so on, knew a slight decrease in sales
in 2015. Indeed, sales respectively dropped by 0.2% and by 5.9%.

Positioning

Positioning concerns the choice of products and customer segments and of a value proposition
to those customers.

As regards to the choice of countries, companies must first assess the electric vehicle market’s
attractiveness of the region. According to Accenture, which conducted a study to identify and classify
14 markets with respect to their EV attractiveness (Exhibit 3), the USA and China are considered as
“Best-in-Class” markets and lots of European countries as “High Potentials” markets. This remark is

6
relevant since, with their strategy, Tesla and Nissan have established or are trying to do so in key
markets such as the United States, Europe and Japan, where the rating in the ease of doing business
is respectively, 8, 30 and 34 but also in emerging countries such as China. All the areas described have
tremendous markets size and incentives for EV expansion, with most of them ranking at a good place
in “Renewable Energy Country Attractiveness Index” of May 2016 (Exhibit 4). Next to that, Tesla has
launched its activities in the United Arab Emirates in February and has also entered in Portugal, Taiwan,
South Korea and New Zealand. In addition, the company is hoping to develop its activities in other
emerging countries such India. More than a simple country, India may even become a platform country
in the future if Tesla decides to build its second “Gigafactory” there. Concerning Nissan, the company
also acknowledges the importance of being present in other emerging markets such Latin America,
Russia and the ASEAN regions. In order to expand and consolidate its position in those emerging
countries, the car company has a facility expansion plan, which consists in either building new plants
(Mexico, 2013) or increasing production capacity in already established plants (Indonesia, 2014).
Moreover, the alliance with Renault is a great business lever in emerging markets. Indeed, the largest
Alliance plant, where two types of Renault and the Nissan Torrano are manufactured, is located in
India.

About value proposition, while Tesla has positioned itself as a highly technological, reliable,
environmentally friendly and attractive company that offers high-end cars, Nissan is mainly viewed as
a company which delivers relatively affordable and highly technological automobiles of quality.

Concerning Tesla, its main competitive advantages are its superior technologies, including its
lithium battery and its impressive Superchargers’ network, and superior brand perception, enabling
the company to provide customers design and experience but also convenience and range. All of these
make Tesla’s value based on differentiation. Then, the typical first Tesla’s customer can be qualified as
a high-end customer and early adopter, willing to buy a premium luxury car. As being part of the upper
middle class, he is wealthy and is either a successful entrepreneur or an executive, who lives in an
environmentally friendly and technological city. At the beginning, the positioning could thus be
qualified as focused. However, thanks to declining production costs and increasing brand popularity,
Tesla’s generic competitive strategy has shifted to broad differentiation and the company currently
tries to attract mainstream customers in the automobile market by selling more but at a lower price.
By making itself the universal standard for EVs and since its production is quite homogeneous across
countries, Tesla follows a standardization strategy. However, little adaptation is also possible. For
example, in China, thanks to customers’ feedbacks, Tesla has adapted its Model S by making available
a $2,000 option with an “executive rear seat”. As a conclusion and following the elements mentioned
above, Tesla may be considered as a broad standardized differentiator.

On its side, Nissan used to not have a particular type of customers and had therefore a broad
approach. However, in 2011, the company narrowed its scope by portraying its average customer: a
young baby boomer, aged around 45 with an average annual income of 125,000$ and his own home
with garage. He is at least graduated from college and drives less than 50 miles a day. Regarding the
buyer of the Nissan Leaf, he has already got experience with ecologically responsible cars. In terms of
the value offered to customers, it can be said that Nissan is following a cost leadership strategy. Indeed
the Nissan Leaf is most commonly known as the most affordable electrical vehicle. This position is also
clearly reflected in its mission; to deliver to its customers the most highly technologically advanced car

7
at an affordable price. Finally, Nissan can also be seen as a company that uses standardization. Indeed,
vehicles proposed by the company are generally identical on different markets.

Finally, in terms of corporate strategy, Tesla has focused its intensive growth strategy on both
market penetration and product development. The former makes sales revenue risen in current
markets and the latter enables the development of highly technological and environmentally friendly
products. Then, the marketing mix of Tesla is tightly monitored in order to optimize revenues and
customer’s satisfaction. Tesla’s products are electric cars but also batteries and powertrain
components. The company has set up a premium pricing strategy, where prices are high but evoke the
uniqueness of the offer. Concerning the place of its cars, Tesla makes them available in the company’s
own small luxury stores, which are located in luxury centers or fashion streets, but their ordering is
made through the website. In terms of promotion, the company heavily relies on viral marketing and
also uses personal selling techniques in its stores. Direct marketing, public relations and sales
promotion are also used in Tesla’s promotion strategy. During its process of internationalization, Tesla
has adopted a pure global strategy as the cars as well as the price range, the distribution and all the
other elements of a marketing strategy remain the same across markets.

Capabilities Building

Capabilities building is about configuring the various activities a firm is carrying out internally
or externally in order to create a business system able to deliver the value to customers and ultimately
to capture value for itself. To do so, a company first has to build competitive advantages and learn how
to transfer them.

Concerning Tesla, the automotive company is currently leading the electric vehicle market
thanks to its differentiation and innovative advantages. Indeed, as already mentioned above, Tesla
products are different on one hand, leading to an enhancement of customer value and innovative on
the other hand, leading to being ahead in developing new products or services. Although, Tesla proudly
ranks at the first place in the ‘World’s Most Innovative Companies List’ by Forbes 2015 ranking.
Especially, Tesla has been successfully innovating by implementing a blue ocean strategy. The aim is
to solve the environment and energy concerns from combustion engines depending on oil and to
create a sustainable technology for transport. Tesla has created a new market space, called ‘Green
Performance Automobiles’. Across time, the firm may also develop a cost leadership advantage.
Indeed, rapid improvements in technology and the increase in scale have already helped the company
to bring down the production. If it can continue on this way, the chance of disruptive success goes way
up. In order to build those advantages, the mode used by the company is called the first mover
advantage. Indeed, Tesla was one of the first to enter the green automotive market by offering
customers new concepts and products. For the sustainability of those advantages, Tesla can rely on its
strong brand, the unique value it offers to customer and its competencies, costly and difficult to imitate
by competitors. Even though the company begins opening its patents to other organizations, allowing
the competitors to take example, the activities carrying out by Tesla are still too complex to be
perfectly imitated.

8
 The advantages of Nissan are quite similar to those of Tesla. Indeed, since the company
positions itself as a pioneer, by making history with the introduction of its Nissan Leaf, the first mass-
market, affordable pure-electric vehicle, it also uses a first-mover advantage. The Japanese company
has also been acclaimed for its personalization of products and its innovative new ownership schemes
for Leaf buyers, which clearly shows the Nissan is a “modern” company, with affordable latest
technological innovations, and which is using relevant ways to connect with today’s consumer.

Concerning the relationships with other companies, Tesla has not yet merged or acquired
other firms, instead, the company is well known for its strategic alliances. Indeed, in order to facilitate
its growth, Tesla has been following three main strategic alliance types (Holmberg, 2011): Supplier
alliances, R&D alliances and OEM alliances with other automobile manufacturers. Tesla has set up
partnerships with many firms mainly by co-specialization and learning in order to create better
innovations at a faster pace and achieve industry dominance. Firstly, Lotus Cars and Panasonic are
some of its supplier alliances. Then, in 2009, Tesla cooperates with OEM manufacturer Daimler, which
provided the company with access to superior engineering expertise and a cash infusion necessary to
escape from potential bankruptcy. The following year, Tesla signed the alliance with Toyota, which
enabled to buy the former NUMMI factory in Fremont (California) and to learn large-scale, high-quality
manufacturing from a pioneer of lean manufacturing. In 2014, Tesla Motors signed another strategic
alliance with Osaka, based in Japan and owned by Panasonic Corporation. Together, the companies
jointly invested in the development of more efficient batteries. Finally, in 2015, Tesla collaborated with
Solar Edge to offer PV storage solutions to the global market.

As regards to the Japanese car manufacturer, in order to deal with its financial troubles that
occurred in the 90's, Nissan has engaged in its main strategic alliance, the one with Renault. More
details about the Renault-Nissan alliance are given in Exhibit 5 and 6. This alliance aims at protecting
each other during regional slowdowns and enables Renault-Nissan to know a continuous growth. It
also led to the disappearance of an historic rivalry between both companies. The alliance ranks in the
top four of carmakers groups. This successful partnership enabled Nissan to increase its net income
and captured 10% of the market share in 2015. Historically, Nissan was well established in Japan and
Renault strongly present in Europe and countries under French influence (Maghreb, Sub-Saharan
Africa) but thanks to the alliance, Nissan could extend its influence zone and today, the group is highly
present in leading and emerging car markets. In 2015, the group got 30% of the market share in France,
32,3% in Russia, 27,6% in Mexico or 8,5% in the USA (Exhibit 7). In 2010, the group announced
collaboration with Daimler and acquired a majority stake in AVTOVAZ in 2012.

Finally, the business system of Tesla is also influenced by the composition of its value chain,
which is highly integrated and summarized in Exhibit 8. Just like Tesla, Nissan also holds control over
its supply chain. Besides its own production sites (50 in the entire world), the car manufacturer owns
stake in four other companies only in Japan. Technologies such as engines or batteries are produced
in Japan or in Mexico for the North American market. In Europe, the production sites are assembly
sites, due to the alliance since Renault produces the engines or batteries thanks to the co-development
program.

9
Organization

The final key part concerns the design of the organization, built with the aim of supporting and
implementing all the elements of the global strategy mentioned above.

On one hand, the organizational structure of Tesla may be qualified as functional. Indeed, with
a global hierarchy, a global centralization and minimal regional divisions, the company put the
emphasis on managerial control. Headquarters in Palo Alto play an important role in Tesla’s structure
as they monitor most of the decisions. This centralization enables a tight control and is the reason why
overseas offices have no autonomy. The R&D function is also managed in the headquarters. Then,
despite its growing international operations, Tesla is only calling on its overseas factory, which is
located in the Netherlands, for final assembly functions while all of the other plants are situated in the
United States. Concerning its stores, Tesla has showrooms in the USA, Asia, Australia, Europe, Canada
and many others. Different strategies and marketing campaigns are implemented and financial records
and reports are organized depending on these divisions. However, Tesla only has the following
divisions used for financial reporting: United States, China, Norway and Others, meaning that division’s
strategy is minimal. In order to enter markets by keeping that control, the car manufacturer therefore
uses wholly-owned subsidiaries. Indeed, there is one in most Tesla’s markets and they are located
almost in each continent, except the South American one. This can be justified because Tesla has not
yet considered selling its cars there. Even if such mode of entry implies investments of resources and
competences and is time-consuming as it requires to understand local contexts, it enables Tesla to
have a tight control over the operations.

On the other hand, Nissan has implemented a regional organizational structure as each region
has its own headquarters. For instance, in Europe, they are established in Switzerland and control the
strategy of the region relative to the management of the sales and the manufacturing operations.
Nissan also has production sites all over the world in order to decrease the cost of transportation.
Regional headquarters enable to adapt to local markets and gives local managers more freedom.
Concerning the mode of entry used to enter international markets such as India, China or Russia,
Nissan usually makes strategic alliances with local car producers. In Russia, for example, the company
signed a partnership with Avtovaz.

As regards to the degree of autonomy and integration, opposite to the norm in the
automotive industry, Tesla is vertically integrating 80% of its supply chain. In terms of R&D, the
company is continuously improving the core element of its cars: the battery. Keeping the batteries’
development in-house enables reducing costs and being sure it disposes of the required amount of
battery cells. About manufacturing, Tesla owns five facilities. The biggest one is a 5.5 million-square-
foot factory in Fremont, California, following with a facility for metal casting and another for
assembling seats. The assembly function is ensured in the Netherlands. Finally, Tesla has recently built
the Gigafactory, in Nevada, allowing building batteries for a larger volume than the one that is currently
possible to provide and enabling reducing costs. The company also expects to expand its functions
further in the next future. In terms of retailing, Tesla directly sells to its consumers by enabling them
to order cars by phone or Internet. This sale strategy allows managing a low inventory, as customers
are thus put on a waiting list, and reducing risks. Collaborations with other car manufacturers such as
Daimler and Toyota but also with companies not familiar with the automotive industry are reducing

10
the autonomy of Tesla. The Exhibit 9 illustrates the value configuration of the company, elements
drawn in blue representing what is outsourced from suppliers and in yellow the vertically integrated
parts.

Finally, in terms of human resource management, Tesla pays a great attention to the
recruitment and engagement of its employees. In fact, it is a key requirement to attract and keep
talented individuals in the company and translates into a better customer experience. The CEO of the
organization, Elon Musk, plans to keep recruiting and developing a high number of new talents from
countries around the world to sustain growth and ensure the success of the business. About the
organizational value and culture, Tesla encourages its workforce to continuously look for ideal
solutions and innovative products that put the company ahead of the competition by rapidly
responding to trends and changes in the market. Through its organizational culture, Tesla partly
maintains the human resource capabilities important in its continuing success in the global market for
electric automobiles and related products. From the point of view of Nissan and its human resources
organization, the company maintains the focus on three approaches: a Specialized Centre of Expertise,
Human resources by function and Human resources by region (Exhibit 10). In 2014, Nissan chose four
priorities regarding human resources: respect for diversity, career development and learning
opportunities, safer workplaces and dialogue with employees.

Recommendations

Since Tesla is not the major actor in each market where it is currently established, there is still
room for improvements.

As previously exposed, Tesla’s organizational structure is currently characterized as functional.

Although this kind of structure enables the company to tightly monitor its global activities and
facilitates the implementation of new strategies, it prevents overseas offices to be autonomous and
reduces their ability to respond efficiently to local concerns. To tackle this issue, Tesla should adapt its
structure in such a way that the centralization would be mitigated. Thus, a more appropriate structure
would be a geographical structure, where regional offices would have a role of facilitator across the
different offices as well as for the business development. This structure would ensure flexibility and
adaptation to the local requirements. Moreover, since Tesla is intending to expand its business on an
international scale, regional offices that would look after and adapt the strategy locally would be a
requirement. It is crucial if Tesla wants to be effective on a global scale in the future. This change of
structure seems important to operate. Indeed, for instance in the European markets, European car
manufacturers have a strong presence and Renault Zoe is the best-sold electric car there. The new
structure would give more power to the Amsterdam office, which would then be better able to adapt
its strategy to the European market. China can be cited as a second example. In this market, Tesla is
far from being on the top three of the best-sold electric cars. A geographical structure with the
establishment of an Asian office would ensure a better flexibility to the Chinese markets, which might
result in a sales’ increase. However, such a structural change might imply many negative consequences

11
such as employees’ resentment. In such “important” structural modification, cautious and progressive
change might thus be implemented.
Mainly present in China, Europe and North America, expansion opportunities still offer to the
electric car manufacturer. The main country where Tesla could establish its production activities is
India, which is an emerging economy. First, expanding manufacturing activities there would enable
benefiting from costs savings. Indeed, as the production would be achieved in India, it would be close
to surrounding Asian markets, thus reducing shipping costs. The Indian government makes the market
even more attractive by investing in infrastructures and setting up regulations to appeal foreign
investors. Establishing a manufacturing plant in another low labor costs country such as China might
also allow benefiting from costs advantage but India has a British heritage. Indian people are thus more
likely to speak English, easing the collaboration with Tesla. Moreover, as the middle-class effect
contributes to making the Indian market attractive, developing production there might boost the
demand for Tesla’s cars. India might therefore be the perfect place to establish the second Gigafactory
that Tesla is hoping to open in a near future.

Another aspect that Tesla could improve is its Marketing strategy. Tesla has a great name
recognition within the middle and upper class, and has a lot of good press. As Tesla doesn’t spend a
lot on advertising, such great reputation is achieved thanks to polished products release information,
online quality mentions and a famous CEO. However, such strategy might not last forever and back
orders will slow down, requiring to switch from a pure global to an adaptive usage strategy. Indeed,
such strategy, already used by Volvo, enables to adapt the different elements of the marketing mix to
the local context, with the exception of the product. Tesla is already popular in Europe and in the USA,
but not especially in the rest of the world. This adaptation might stimulate the attractiveness of Tesla’s
products and thus, boost sales worldwide.

12
 Appendix
Exhibit 1: Tesla Motor’s Electric Vehicle Market Competition
Summary

13
Exhibit 2: Tesla Global Sales 2012-2016

Exhibit 3: EV Market Attractiveness Result Matrix

14
Exhibit 4: Renewable Energy Country Attractiveness Index

15
Exhibit 5: Renault-Nissan Alliance I

Exhibit 6: Renault-Nissan Alliance II

16
Exhibit 7: Top 10 Alliance Countries

Exhibit 8: Tesla Value Chain

Exhibit 9: Tesla Value Configuration

17
Exhibit 10: Nissan Human Resource Management Structure

18
References
Adner, R. (2015). What Tesla and Apple Both Know About Entering New Markets. [Online] Harvard Business
Review. Available at: https://hbr.org/2015/05/what-tesla-and-apple-both-know-about-entering-new-markets
[Accessed 8 April 2017].

Aglietta, C. (n.d.). Tesla motors, tous les ingrédients d’une success-story! [Online] Available at:
http://www.tesla-mag.com/tesla-motors/. [Accessed 25 March 2017]

Alexander, S. (2015). How Tesla Engages its Employees to Drive Business Results. [Online] Available at:
https://www.geteverwise.com/human-resources/how-tesla-engages-its-employees-to-drive-business-results/.
[Accessed 27 March 2017]

ASEAN. (n.d). ASEAN/ One vision, one community, one community. [Online] Asean.com. Availble at:
http://asean.org/ [Accessed 10 April 2017]

Bergmann, T., Nguyen, V., Santiago, A. and Yang, S. (2017). Tesla Recommendation for International Expansion.
[Online] Available at: https://atvmdoe.files.wordpress.com/2012/11/98132598-tesla-motors-expansion-
strategy.pdf. [Accessed 20 April 2017].

Blecken D. (2016). Nissan’s head of marketing: Branding needs to be couched in business language. [Online]
Campaignasia.com. Available at: http://www.campaignasia.com/article/nissans-head-of-marketing-branding-
needs-to-be-couched-in-business-language/427156 [Accessed 13 April 2017]

Bordes J. (2009) Building and sustaining a competitive advantage.
Bousfield, J. (n.d.). Tesla Motors - A Strategic Analysis. 1st ed. [pdf] Available at:
https://jourdyb.files.wordpress.com/2014/12/tesla.pdf [Accessed 15 April 2017].

Chappell, L. (2012). Nissan shifts Leaf marketing strategy. [Online] Automotive News. Available at:
http://www.autonews.com/article/20121217/RETAIL03/312179957/nissan-shifts-leaf-marketing-strategy
[Accessed 7 April 2017].

Chen, Y. and Perez, Y. (2015). Business Model Design: Lessons Learned from Tesla Motors. In: GERPISA
International Conference. [Online] Available at:
https://www.researchgate.net/publication/277675857_Business_Model_Design_Lessons_Learned_from_Tesla
_Motors [Accessed 11 April 2017].

Cheng, E. (2017). Tesla's China business is booming. [Online] Available at:
http://www.cnbc.com/2017/03/28/tesla-is-sending-a-lot-more-cars-to-china.html. [Accessed 3 April 2017]

CSI Market. (2017). Tesla’s overall competitive report. [Online] Available
at: http://csimarket.com/stocks/compet_glance.php?code=TSLA. [Accessed 4 April 2017]

CSI Market. (2017). Tesla’s business description. [Online] Available at: http://csimarket.com/stocks/TSLA-
Business-Description.html. [Accessed 4 April 2017]

EV Obsession. (2017). Electric Car Sales (Monthly Reports). [Online] Available at:
http://evobsession.com/electric-car-sales/ [Accessed 15 April 2017].

Einhorn, B. (2017). The Cost of a Tesla Is About to Rocket in Hong Kong. [Online] Available at:
https://www.bloomberg.com/news/articles/2017-03-30/hot-tesla-market-unplugged-as-hong-kong-imposes-
115-percent-tax. [Accessed 3 April 2017]

Financial.Morningstars (2017) TESLA Inc. [Online] Available at :
http://financials.morningstar.com/competitors/industry-peer.action?t=TSLA&region=usa&culture=en-
US [Accessed 30 March 2017]

19
Focus2move. (2017). World Cars Brand Ranking 2017. Honda overtakes Hyundai and is 5th. [Online]
Focus2move.com. Available at: http://focus2move.com/world-cars-brand-ranking/ [Accessed 10 April 2017]

Furr, N. and Dyer, J. (2015). Tesla's High End Disruption Gamble. [online] Forbes.com. Available at:
https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/innovatorsdna/2015/08/20/
teslas-high-end-disruption-gamble/&refURL=&referrer=#3792c98c77ed [Accessed 5 April 2017].

Gao P., Sha S., Zipser D, Baan W. (2016). Finding the fast lane: Emerging trends in China’s auto market. [Online]
McKinsey.com Available at: http://www.mckinsey.com/industries/automotive-and-assembly/our-
insights/finding-the-fast-lane-emerging-trends-in-chinas-auto-market [Accessed 11 April 2017]

Gissler, A., Raab, C., Tix, M. and Merk, S. (2016). Electric Vehicle Market Attractiveness. [pdf] Available at:
https://www.accenture.com/t00010101T000000__w__/gb-en/_acnmedia/PDF-37/accenture-electric-vehicle-
market-attractiveness.pdf [Accessed 13 April 2017].

Goldman, J. (2014). Comparing Electric Vehicles: Hybrid vs. BEV vs. PHEV vs. FCEV. [Online] Union of Concerned
Scientists. Available at: http://blog.ucsusa.org/josh-goldman/comparing-electric-vehicles-hybrid-vs-bev-vs-
phev-vs-fcev-411 [Accessed 22 April 2017].

Greimel H. (2015) Nissan vehicles to use common visible part. [Online] Autonews.com. Available at:
http://www.autonews.com/article/20150131/OEM01/302029953/nissan-vehicles-to-use-common-visible-
parts [Accessed: 22 April 2017]

Ha, H. Rothaermel, F.T. (2016). How to Manage Alliances Strategically. [Online] Available at:
http://sloanreview.mit.edu/article/how-to-manage-alliances-strategically/. [Accessed 7 April 2017]

Harget, C. (n.d). How can Tesla Motors improve as far as marketing strategy is concerned? [Online] Quora.com.
https://www.quora.com/How-can-Tesla-Motors-improve-as-far-as-marketing-strategy-is-concerned [Accessed:
22 April 2014]

Hill, J. (2016). Emerging Markets Oust Europe As Most Attractive For Energy Investment. [Online]
CleanTechnica. Available at: https://cleantechnica.com/2016/05/11/emerging-markets-oust-europe-attractive-
energy-investment/ [Accessed 17 April 2017].

History. (n.d). Nissan Motor Company founded. [Online] History.com. Available at:
http://www.history.com/this-day-in-history/nissan-motor-company-founded [Accessed 8 April 2017]

Hong Kong Economy Research. (2017). Economic and Trade Information on Hong Kong. [Online] Available at:
http://hong-kong-economy-research.hktdc.com/business-news/article/Market-Environment/Economic-and-
Trade-Information-on-Hong-Kong/etihk/en/1/1X000000/1X09OVUL.htm. [Accessed 7 April 2017]

Jaynes, N. (2013). Tesla: Nissan leaf competitor on tap in three to four years. [Online] Available at:
http://www.digitaltrends.com/cars/tesla-nissan-leaf-competitor-on-tap-in-three-to-four-years/. [Accessed 4
April 2017]

Jones, M. (2016). Tesla Motors Inc Stock Rallies After Tough Couple Of Weeks. [Online] Available at:
http://www.valuewalk.com/2016/02/tesla-stock-rallies-after-tough-couple-of-weeks/. [Accessed 26 March
2017]

Karamitsios, A. (2013). Open Innovation in EVs: A Case Study of Tesla Motors. [Online] Available at:
http://www.diva-portal.org/smash/get/diva2:635929/FULLTEXT01.pdf. [Accessed 10 April 2017]

Kissinger, D. (2017). Tesla Motors, Inc.’s Marketing Mix (4Ps) Analysis. [Online] Available at:
http://panmore.com/tesla-motors-inc-marketing-mix-4ps-analysis. [Accessed 10 April 2017]

20
Kristina Zucchi, C. (2015). What Makes Tesla's Business Model Different?. [Online] Investopedia. Available at:
http://www.investopedia.com/articles/active-trading/072115/what-makes-teslas-business-model-different.asp
[Accessed 12 April 2017].

Kunwer, S. (2016). How are Tesla sales in other countries? [Online] Available at: https://www.quora.com/How-
are-Tesla-sales-in-other-countries. [Accessed 3 April 2017]

Lambert, F. (2016). Tesla is now ~80% vertically integrated, says Goldman Sachs after a Tesla Factory visit.
[Online] Available at: https://electrek.co/2016/02/26/tesla-vertically-integrated/. [Accessed 26 March 2017]

Lambert, F. (2017). Tesla aims to launch in India as soon as this summer, says CEO Elon Musk. [Online] Available
at: https://electrek.co/2017/02/08/tesla-india-summer-2017-elon-musk/. [Accessed 25 March 2017]

Lambert, F. (2017). Tesla is officially launching in the United Arab Emirates this month starting with service
center in Dubai. [Online] Available at: https://electrek.co/2017/02/04/tesla-united-arab-emirates-elon-musk-
dubai/. [Accessed 7 April 2017]

Lv, C. (2015). Tesla Lights Fire Under Automobile Industry. [Online] Available at:
https://rctom.hbs.org/submission/tesla-lights-fire-under-automobile-industry/. [Accessed 3 April 2017]

Lyu, L. (2015). Improving the sales performance of Tesla in China. [Online] Available at:
https://www.tesla.com/en_EU/blog/all-our-patent-are-belong-you?redirect=no [Accessed 20 April 2017].

Marklines. (2012). Nissan’s Strategy for Emerging Markets. [Online] Markline.com. Available at:
https://www.marklines.com/en/report/rep1091_201207 [Accessed 14 April 2017]

Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. [Online]
Available at:
http://www.tandfonline.com.ezproxy.ulb.ac.be/doi/pdf/10.1080/0965254X.2012.657224?needAccess=true.
[Accessed 25 March 2017]

Meyer, P. (2017). Tesla Motors, Inc.’s Organizational Structure, Characteristics (An Analysis). [Online] Panmore
Institute. Available at: http://panmore.com/tesla-motors-inc-organizational-structure-characteristics-analysis
[Accessed 10 April 2017].

Meyer, P. (2017). Tesla Motors. Inc.’s Organizational Culture, Characteristics (An Analysis). [Online] Panmore
Institute. Available at: http://panmore.com/tesla-motors-inc-organizational-culture-characteristics-analysis
[Accessed 10 April 2017].

MSN. (2014). What makes Nissan an innovative company? [Online] Msn.com. Available at:
https://www.msn.com/en-gb/news/projectinnovation/what-makes-nissan-an-innovative-company/ar-BBaolai
[Accessed 14 April 2017]

Musk, E. (2014). All Our Patent Are Belong To You. [Online] Tesla.com. Available at:
https://www.tesla.com/en_EU/blog/all-our-patent-are-belong-you?redirect=no [Accessed 10 April 2017].

Nissan Motor Corporation: http://www.nissan-global.com

Nissan Motor corporation. (n.d.). Nissan Leaf 24/30 kWh 100% électrique. [Online] nissan-cdn.net. Available at:
https://www.nissan-
cdn.net/content/dam/Nissan/be/fr/brochures/eBrochures/Nissan_Leaf_BEFR.pdf [Accessed 19 April 2017]

O'Hara, M. (2015). International Expansion Is Crucial for Tesla Motors. [Online] Marketrealist.com. Available at:
http://marketrealist.com/2015/08/international-expansion-crucial-tesla-motors/ [Accessed 8 April 2017].

21
Pasley, M. (n.d.). Nissan Leaf U.S. Marketing Plan. [Online] Available at :
http://citadel.sjfc.edu/students/msp08699/webdesign/portfolio2/writing/nissan_leaf.pdf [Accessed 19 April
2017]

Plastics Today Staff in Business (2012) Standardization concepts target components cost cuts. [Online]
Plasticstoday.com. Available at: https://www.plasticstoday.com/content/standardization-concepts-target-
component-cost-cuts/7913766517151 [Accessed 23 April 2017]

Pressman, M. (2016). Vertical Integration: How Tesla’s Elon Musk Employs A Long-Lost Approach From A
Bygone Era In American Business. [Online] Available at: https://cleantechnica.com/2016/12/17/vertical-
integration-teslas-elon-musk-employs-long-lost-approach-bygone-era-american-business/. [Accessed 25 March
2017]

Reuters. (2017). Nissan Motor Co Ltd (7201.T) Company profile. [Online] Reuters.com. Available at:
http://www.reuters.com/finance/stocks/companyProfile?symbol=7201.T [Accessed 9 April 2017]

Reuters. (2017). Tesla Inc (TSLA.O) Company Profile. [Online] Available at:
http://www.reuters.com/finance/stocks/companyProfile?symbol=TSLA.O [Accessed 16 April 2017].

Render, B. (2016). OM in the News: Elon Musk and Vertical Integration at Tesla. [Online] Available at:
https://heizerrenderom.wordpress.com/2016/06/30/om-in-the-news-elon-musk-and-vertical-integration-at-
tesla/. [Accessed 26 March 2017]

Roth B. (2010). Interview: Trisha Jung, Chief Marketing Manager for Nissan. [Online] Triplepundit.com.
Available at: http://www.triplepundit.com/2010/08/interview-trisha-jung-chief-marketing-manager-for-nissan-
leaf/ [Accessed 14 April 2017]

Rowland, C. (2017). Tesla Motors, Inc.’s Vision Statement & Mission Statement (An Analysis) - Panmore
Institute. [Online] Panmore Institute. Available at: http://panmore.com/tesla-motors-inc-vision-statement-
mission-statement-analysis [Accessed 10 April 2017].

Sharma, S. (2016). Tesla Phenomena - A Business Strategy Report. [pdf] Available at:
http://www.academia.edu/25781072/The_Tesla_Phenomena_A_Business_Strategy_Report [Accessed 10 April
2017].

Sparks, D. (2014). Tesla Motors, Inc.'s International Expansion to Hit 15 Countries. [Online] Available at:
https://www.fool.com/investing/general/2014/07/02/tesla-motors-incs-international-expansion-to-hit-1.aspx.
[Accessed 25 March 2017]

Statista. (2017). Statistics and Facts about Tesla. [Online] Available at:
https://www.statista.com/topics/2086/tesla/ [Accessed 10 April 2017].

Tao, R. (2014). Tesla Supply Chain - Custom-build World Class Supply Chain. [Online] Available at:
https://www.tradegecko.com/blog/tesla-custom-built-supply-chain. [Accessed 26 March 2017]

Tesla Motors Inc. - Case Synopsis. (2014). [pdf] Available at:
http://www.sfu.ca/~sheppard/478/syn/1141/Group_D.pdf [Accessed 11 April 2017].

Tesla Motors: http://www.tesla.com/fr_BE

The World Bank: http://data.worldbank.org/

Tyndall, C. (2017). Elon Musk: Tesla is coming to India this year. [Online] Available at: http://factor-
tech.com/green-energy/25472-elon-musk-tesla-is-coming-to-india-this-year/. [Accessed 7 April 2017]

Wikipedia. (2017). Nissan. [Online] Wikipedia.com. Available at: https://en.wikipedia.org/wiki/Nissan [Accessed
8 April 2017]

22
Wikipédia. (2017). Tesla. [Online] Available at: https://fr.wikipedia.org/wiki/Tesla_(entreprise). [Accessed 5
April 2017]

Worstall, T. (2015). Elon Musk Has Raided 150 People From Apple For Tesla. [Online] Available at:
https://www.forbes.com/sites/timworstall/2015/02/09/elon-musk-has-raided-150-people-from-apple-for-
tesla/#65134a4844b8. [Accessed 27 March 2017]

23