Over time, we’ve seen a number of companies that acquire leader status in their product/ service either by slightly improving their product over existing competitor products or by providing the same product at a lower cost either by operational efficiency or loss-leadership. While such strategies might help companies gain leadership status for a while, it will never help them attain truly sustainable leadership.
To attain a truly sustainable brand, companies need to change their competitive landscape and provide their customers with a product which is truly revolutionary and still difficult to replicate. And if you are able to combine that with addressing an environmental need, you’ve really hit a home run. This is why the success of Tesla to establish their name in the automotive industry through their electric vehicles is to be taken note of.
Tesla Motors to the uninitiated is a leading American automotive and energy company involved in design, manufacturing, and sale of luxury electric cars, electric vehicle powertrain components, and battery products. Tesla Motors was incorporated in July 2003 with an aim to commercialize electric vehicles. Let’s look at the factors that helped Tesla grow into their target market.
- Focused initial launch: Tesla’s initial strategy was to target the early adopters. They started out with the Roadster which was in the premium sports category and target influencers like George Clooney, Leonardo Di Caprio etc. who endorsed the product and the philosophy of it being environmental friendly.
- Develop Ecosystem: In order to make the electric vehicles viable, Tesla also needed to invest heavily in infrastructure around filling stations. Each electric vehicle like any normal vehicle has a certain mileage when full. For electric vehicles to become the new standard, Tesla needed to replicate the existing ecosystem which they’ve done using the Tesla Superchargers. Not only have they set up a comparative ecosystem, they also provide these stations for free. Superchargers have increased their coverage and already cover most states in the US and countries around Central Europe and crucially, are growing really fast.
- Focus on Design: Despite the obvious advantages that Tesla provide with their car being environmental friendly and zero cost charging, Tesla has also focused heavily on ensuring that the design of the car is futuristic and user focused. Features within the design like apps to show car’s charge level and other functionality, keychain remotes, large storage space for long journeys, customizability of car give it an edge over even the regular cars in the market. So just from a design perspective, the cars are attractive to an audience that might not be too concerned over the environmental impact of their car.
- Amazing drive experience: We’ve already spoken about how the design of the vehicle is really impressive for Tesla, but when it comes to driving, the Tesla literally takes the breath away. These cars are designed with a low center of gravity making them more stable then regular cars. The engine of the car is completely silent thereby enhancing the driving experience of users whereas the acceleration is really quick to cater to a younger audience too.
- Tesla Energy: Besides their vision around cars, Tesla as a company has ambitions to really promote re-usable modes of electricity and as a part of their ambition, they have extended the use of Solar electricity to other products under their Tesla Energy brand. Tesla recently announced the launch of its Home energy device Powerwall which sold out almost immediately. With such products aimed at the right audience, Tesla should be able to maintain an edge over competitors.
Thus we’ve been able to see how Tesla as a company have not only created a new line of products but have also grown them into mass market usage by developing an ecosystem around them. Any this not only creates a barrier to entry for new players without capital backing but also the ones with deep pockets who will find it tough to compete with the technological superiority that Tesla has created.
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