FinalPresentation_Tesla
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This document provides an analysis of Tesla entering the Philippines market. It summarizes Tesla's company background, products, competitors, and analysis of the Philippines market. Projections estimate Tesla's market supply and demand in the Philippines, with projected market values of $15-29 million over 3 years. Key challenges include increasing brand recognition and establishing charging infrastructure. Recommendations include initially bringing the Model 3 to capture more of the market, and setting up an Asia plant for long-term growth in the region.
FinalPresentation_Tesla
- 1. tesla GROUP MEMBERS KOH KOK HUI | REBECCA HENG | NEO SHI JUN | ZHANG HAODONG BUSINESS COURSE INSTRUCTOR DR. MOMO DERETIC INTERNATIONAL! in The Philippines
- 2. tesla PRE SE NTATI ON AGE NDA C O M P A N Y A N A LY S I S C O U N T R Y A N A LY S I S T R A D E C O N S I D E R AT I O N S K E Y C H A L L E N G E S P R O J E C T I O N S Q U E S T I O N S & A N S W E R S R E C O M M E N D AT I O N S ?
- 4. tesla C OMPANY BAC KGROUND a US-based company primarily involved in the designing, development, manufacturing and selling of electric vehicles and electric powertrain components. ! company operates in North America, Europe and Asia, is headquartered in Palo Alto, California, and has employed 5,859 people ! recorded revenues of $2,013.5 million during the 2013 financial year (FY2013), as compared to $413.2 million in FY2012 ! 80 sales and gallery locations in 116 locations across North America, Europe and Asia! operates a network of Superchargers in the US and Europe to enable long distance driving ! C OMPANY ANALYSIS
- 5. tesla C OMPANY ANALYSIS STRENGTHS Strong market position of Model S Robust design and vehicle engineering capabilities Weak financial performance Safety concerns with the use of lithium-ion battery cells Supply chain risk WEAKNESSES OPPORTUNITIES THREATS New product launches to drive volume growth Expansion in international markets Seasonality of business Stringent regulations Intense competition SWOT ANALYSIS
- 6. tesla C OMPANY ANALYSIS P R O D U C T MODEL S 70D fully electric, four-door, five-adult passenger sedan that offers compelling range and performance with zero tailpipe emissions! offers a range on a single charge of up to 265 miles ! All-Wheel Drive Dual Motor Model S accelerates from 0 to 60 miles per hour in 3.2 seconds, making it the quickest sedan in the world according to Motor Trend magazine !
- 7. tesla VALUE PROPOSITIONS 1 C OMPANY ANALYSIS 2 an unique combination of functionality, convenience, safety and styling without compromising performance and energy efficiency ! best in class storage space of 31.6 cubic feet and large seating ! advanced wireless connectivity, driver customization of the infotainment and climate control systems of the vehicle ! 3 lower cost of ownership with competitively lower purchase price, aggregated cost of fuel, lower cost of maintenance and lower fuel costs ! 4 platform architecture and common electric powertrain that can be leveraged to create future electric vehicle models ! 5
- 8. tesla C OMPANY ANALYSIS TARGETING, SEGMENTATION & POSITIONING the upper and upper middle class business professionals and executives or elites! is conscious of luxury car ownership, image building, long term cost-savings, eco-friendliness ideals, high speed performance and state of the art technological purchases. ! males who are into sports luxury cars but have a desire for ecological ideals and do not wish to compromise on driving performance.! “More for More” for such a product for the elites. ! !
- 9. tesla C OMPANY ANALYSIS BUSINESS MODEL Direct sales business model in which they sell their vehicles directly to their customers through online channels and direct to customer retail stores! 1 2 Insurance policy subsciption model – users pay for insurance for replacement of battery!
- 10. tesla KEY STRATEGIC PARTNERS Daimler supplies lithium ion battery packs and charging systems Capcom has also teamed up with Tesla to bring gamers the Dark Void Tesla Roadster Giveaway TAG Heuer and Tesla joined forces for a special edition of Roadster Toyota and Tesla signed a contract to build the power train for Toyota's electric Rav4 C OMPANY ANALYSIS
- 11. tesla COMPETITORS ANALYIS Audi, BMW, Lexus and Mercedes! Electric Cars- BMW, General Motors, ! Mitsubishi Corporation, Porsche, Ford! Toyota, Mitsubishi, Honda and Ford ! INTERNATIONAL COMPETITORS DOMESTIC COMPETITORS DIRECT COMPETITORS INDIRECT COMPETITORS Non- Electric Cars- Toyota & Honda! C OMPANY ANALYSIS
- 13. Philippines C OUNTRY ANALYSIS 100 million POPULATION good economic foundations and a competitive workforce that is globally recognized Averaging about 5%, 7.2% growth in 2013 6.1% growth in 2014 Second fastest GROWING Asia economy C OUNTRY OVERVIEW
- 14. C OUNTRY ANALYSIS Close ties with the US and the country's foreign policy FAVOURS PHILIPPINES Increased risk of terrorism rampant corruption within the countryPo l i t i c a l P o s i t i v e N e g a t i v e t h e r s O P o s i t i v e N e g a t i v e strong business process outsourcing (BPO) abundant manpower with English language skills 49% of high technology exports out of all Manufactured products intellectual property rights (IPR) is fairly comprehensive Low RESEARCH AND DEVELOPMENT and a lack of innovation C OUNTRY OVERVIEW
- 15. C OUNTRY ANALYSIS NEW CAR S MARKE T double digit growth over the last three years Market consumption volume increased with a CAGR of 11.4% between 2010 and 2014, to reach a total of 90.3 thousand units in 2014 market's volume is expected to rise to 112.6 thousand units by the end of 2019, representing a CAGR of 4.5% for the 2014-2019 period
- 17. teslaTRA DE C ONSIDERATIONS HOME C ENTRALIZATION STRATEGY TRA DE C OST TRA DE BARRIER TRA DE AGREEMENTS EXC HANGE RATE
- 18. teslaTRA DE C ONSIDERATIONS TRADE COST (Exw + insurance + freight cost) x (1 + custom duties) —Exw Exw price: $72500 Freight cost: $2000-$4000 Insurance : 1.5%-2.5% Custom duties: 30% Trade Cost: (72500 + 4000)(1 + 0.025)(1 + 0.3)-72500 = $ 29436.
- 19. teslaTRA DE C ONSIDERATIONS TRADE BARRIERS - no specific quota for importing cars -(China.org.cn, 2015) only on agricultural products (especially with China)
- 20. teslaTRA DE C ONSIDERATIONS TRADE AGREEMENT (US Department of State, 2015). tax reductions, bilateral trade agreement, tariffs agreement under the scheme of the Most- Favored-Nations Treatment (MFN)
- 21. teslaTRA DE C ONSIDERATIONS EXCHANGE RATE CONSIDERATIONS -maintain strong trade relations with the US
- 22. PROJECTIONS tesla KEY M A R K E T S U P P LY M A R K E T D E M A N D
- 23. teslaKEY PROJECTIONS 0 20000 40000 60000 80000 100000 120000 140000 160000 2013 2014 2015 2016 2017 SUPPLY (CAPACITY OF PRODUCTION) DEMAND • Tesla uses a direct dealership • Tesla does not store any inventory • Vehicles manufactured when ordered MARKE T SUPPLY PROJECTIONS
- 24. teslaKEY PROJECTIONS MARKE T SUPPLY PROJECTIONS • Tesla could potentially produce up to 150,000 cars by 2017 • Surpassing the current amount of demand • Excess capacity to export to other parts of the world
- 25. teslaKEY PROJECTIONS MARKE T DEMAND PROJECTIONS P x N x W = MV P= Potential number of customers N= Number of purchases per year W= Average wholesale price MV= Market Value Identity Competitor • Porsche AG Number of Porsche sold in Philippines • Approximately, 192 units per annum Assuming Tesla is priced competitively alongside Porsche we project the amount of Tesla within a year to be 192.
- 26. teslaKEY PROJECTIONS MARKE T DEMAND PROJECTIONS P x N x W = MV P= Potential number of customers N= Number of purchases per year W= Average wholesale price MV= Market Value Using the formula P x N x W = MV, Potential Market value = 192 x 1 x 101,936 = US$19,571,712 Projected Market value = 19,571,712 x 80% = US$15,657,369.60
- 27. teslaKEY PROJECTIONS MARKE T DEMAND PROJECTIONS Market Value Projection over 3 years 15,657,369. 00! 21,262,707. 00! 28,874,757. 00! 0.00! 5,000,000.00! 10,000,000.00! 15,000,000.00! 20,000,000.00! 25,000,000.00! 30,000,000.00! 35,000,000.00! 1st year! 2nd year! 3rd year!
- 28. PROJECTIONS tesla KEY C O S T O F I N V E S T M E N T
- 29. teslaKEY PROJECTIONS C OST OF INVESTMENT PROJECTION -Operating Expense -Cost of Sales - Setup Cost of Showrooms/ Galleries OPERATING EXPENSE
- 30. teslaKEY PROJECTIONS C OST OF INVESTMENT PROJECTION -Operating Expense -Cost of Sales - Setup Cost of Showrooms/ Galleries C OST OF SALES
- 31. teslaKEY PROJECTIONS C OST OF INVESTMENT PROJECTION -Operating Expense -Cost of Sales - Setup Cost of Showrooms/ Galleries SE TUP C OST OF GALLERIES
- 32. teslaKEY PROJECTIONS C OST OF INVESTMENT PROJECTION -Operating Expense -Cost of Sales - Setup Cost of Showrooms/ Galleries C ONSOLIDATED ESTIMATE 25MILLION
- 34. tesla KEY C HALLENGES C URRE NT M A R K E TING OB JEC TIVE S Increase demand Establish brand recognition Permit Customer inputs on developmental process Manage existing customers and build up loyalty 1 2 3 4
- 35. tesla KEY C HALLENGES MA RKE TING, SA LE S & PROMOTI ON Global network of galleries and showroom Highly visible, premium outlets Specialised staff, no external dealership
- 36. tesla KEY C HALLENGES C HA RGING STATI ON INFRASTR UC T URE Manila Electric Company has started creating charging stations and Tesla could tap into this growing infrastructure
- 37. tesla KEY C HALLENGES SAFETY ISSUES There are safety concerns of Tesla cars catching fire However, such incidents are very rare and the company has one of the best car safety standards
- 39. tesla RECOMMENDATIONS SHOR T R UN LO NG R UN ENTER BRIN G OVER M ODEL 3 SE TTING UP OF ASIA PLA NT To c a p t u r e a l a r g e r m a r k e t s h a r e b y r e a c h i n g t o t h e m i d d l e i n c o m e p o p u l a t i o n To g a i n a f o o t h o l d i n A s i a a n d t a p o n P h i l i p p i n e s L o w e r l a b o u r c o s t a n d h u m a n c a p i t a l C o n d i t i o n s a n d r e s e a r c h h a s r e v e a l e d l a r g e l y f a v o u r a b l e c o n d i t i o n s