Innovation in Itself Presented by: ! ! 14/10/2014"
!Kristin Andreassen, Katherine Bergstaa, Slavik Spitan, ! !Joshua Chong and Helene Skjelstad"
-Forward Consulting-"
2"
Time To Act!" • Innovative premium electric car producer" • Recent troubles indicate that you need to do something about your 4Ps" "
Improve your marketing strategy by focusing on what differentiates you from your competitors."
CAGR 8.3%" Sales growth"
3"
Agenda! • • • • • • •
Market Analysis" Strategy" Risks & Management" Finances" Implementation" Future Ambitions" Key Takeaways"
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" Market Analysis" "
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Market Shares in the U.S. Hybrid and Electric Market (2013)" Market Share"
Toyota" Ford" GM" Nissan" Hyundai" Honda" Tesla 3.1%"
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Customer Segments" "
7" "
Eco-Friendly"
"
Mid- to Upper Class"
"
Tech-Savvy"
8"
Product & " Price" "
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What Makes Tesla Cars Better?" • Eco-friendliness" • Design" • Performance" – Speed" – Safety" – Battery" • Gigafactory" • Supercharger"
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What Makes Tesla Cars Better?" • Technology" – Safety, usefulness, entertainment" – Cooperate with a Silicon Valley tech-company" • Apple"
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Placement & Promotion"
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Placement and Promotion" TV Advertisement" " " Social Media" - Customer engagement" " " Focus" - Shift focus to experience, tech, performance, design" " " Salesmen" - Present at events, commission based" " " Deals" - Product placement"
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Risks & Management"
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Risks & Management"
SILICON VALLEY!
PUBLIC PERCEPTION!
PROMOTIONS!
- Risk of working with Silicon Valley innovators. "
- Model S battery fires, critics demanding an explanation. "
- Costly to create ads and product placement. "
"
"
"
- Hard to find companies to work with. "
- Could be ineffective. "
"
- Tesla downplaying the incident, claiming fire never reached passenger seat."
- May not appeal to customers"
" - Musk’s blog post, claiming reports were exaggerated, stating higher occurences of gasoline-based fires. "
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Financials"
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This Initiative Will Cost You 11.5 Million USD" Costs of Tesla new innovation initiative"
Promotion" Staff" R&D" Placement"
Financing: Retained earnings"
17"
We Expect Growth in Sales in Upcoming Future if You Implement the Tesla Innovation Initiative" Tesla Sales over 3 year period"
CAGR 8.3%" Sales growth"
Conservative" Optimistic"
2014E"
2015E"
2016E"
Years"
18"
We See a Profitable Tesla in Upcoming Years! Short-Term"
Long-Term"
6-8%" +0,56-0,58" 4-5%"
ROA" Change in PPS" Market share (EV)"
9-10 %" +0,68-0,71" 6-7%" "
Profit (in millions US$)" 100" 80" 60" 40" 20" 0" 2014E"
2015E"
2016E"
19"
Implementation Plan for Tesla Initiative 2014-2016" Q1"
Q2"
Q3"
Q4"
Q1"
Q2"
Q3"
Q4"
Q1"
Q2"
Q3"
1"
2" 3"
4"
2014"
2015"
2016"
1"
Start cooperation with Silicon Valley"
3"
Implement produced batteries "
2"
Launch Movie and TV campaign"
4"
Add innovative features to Tesla car" "
Q4"
20"
Future " Ambitions"
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Introducing the Tesla Model M!
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Tesla Model S: Now In Your Price Range" • Certified Pre-Owned Vehicles" • Broadens customer base" • Buying the cars back after 3 years for 50 % of the base price, and 43 % of any options" • Selling back used with a 10-15 % profit margin"
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Key Takeaways! • Tesla’s Main Issue: " – Push marketing strategy into high gear"
• Markey Analysis: " – Customer segments" – Competitors and market share "
• Proposed Marketing Strategy: "
"
– Marketing focus on Tesla car’s technology and design compard to other cars. Battery that is safe and effective. " – TV advertisements and product placement in TV shows and movies"
Key Takeaways!
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• Risks & Management: " – Working with Silicon Valley" – Public perception" – TV and movie promotion"
• Implementation: " – 2 year plan, starting in November 2014" – To be finished in 2016"
• Financials: "
"
– Expected compounded annual sales growth 8.3%" – Total costs of initiative estimated at USD$11.5 million"
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Q & A"
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Cost structure breakdown" TV shows"
New galleries"
Placement, 2mil US$"
Development of new ecosystem"
Implementation of new system "
R&D, " 5mil US$"
Promotion, 3.2mil US$"
Staff, " 1.33mil US$"
Movie commercials "
Sales staff"
R&D staff"
27"
Net Cash Flow for Tesla Initiative (2014-2016) in millions US$" 2014"
2015"
2016"
Sales"
442"
477"
515"
Operational and Administrative costs"
355"
380.1"
415.2"
Investment"
6"
5.5"
0"
Tax (20%)"
16.2"
18.2"
19.9"
Net Cash Flow"
64.8"
73.1"
79.8"
28"
28"
STRENGTHS!
WEAKNESSES!
• Strong technological expertise" • Developing their vehicles completely in-house" • Strong R&D department" • Successful partnerships with Toyota and Panasonic"
• Higher price than other competitors" • Limited manufacturing capacity" • Heavy reliance on suppliers" • Limited operating history" • Lack of brand recognition"
OPPORTUNITIES!
SWOT!
• Growing support by governments vehicles" • Higher customer awareness" • Rise of petroleum prices, increasing concern about global warning"
THREATS!
• Established manufacturers entering the market at lower prices"
29"
Average Gasoline Prices"
30"
• Supercharger" – 50 % Battery in 30 minutes" – 100 % Battery in 75 minutes"
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Superchargers Open Today"
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Open at the End of 2014 (80 % of US population and parts of Canada)"
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Risk Management"
LAWSUITS!
PUBLIC PERCEPTION!
REDUCED CREDITS!
- Emphasis on why Tesla’s factory direct sales method is necessary for them to ensure a sustainable profit. "
- Improve public relations by addressing customer’s safety concerns first." "
- Change the sales revenue model to reduce excessive reliance on sale of tax credits."
- Deal with facts, but also sympathize with customer’s emotions of fear, doubt." " - Show the measures Tesla is taking to look into and prevent reoccurence of the issue."
" - Lobbying for tax credits."
