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"

4"

"
Market
Analysis"
"

5"

Market Shares in the U.S. Hybrid and Electric

Market (2013)"
Market Share"

Toyota"
Ford"
GM"
Nissan"
Hyundai"
Honda"
Tesla 3.1%"

6"

Customer
Segments"
"

7"
"

Eco-Friendly"

"

Mid- to Upper Class"

"

Tech-Savvy"

8"

Product & "

Price"
"

9"

What Makes Tesla Cars Better?"

Eco-friendliness"
Design"
Performance"
Speed"
Safety"
Battery"
Gigafactory"
Supercharger"

10"

What Makes Tesla Cars Better?"

Technology"
Safety, usefulness, entertainment"
Cooperate with a Silicon Valley tech-company"
Apple"

11"

Placement &
Promotion"

12"

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"

13"

Risks &
Management"

14"

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"

"
- Musks blog post, claiming
reports were exaggerated,
stating higher occurences of
gasoline-based fires. "

15"

Financials"

16"

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"

21"

Introducing the Tesla Model M!

22"

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"

23"

Key Takeaways!
Teslas Main Issue: "
Push marketing strategy into high gear"

Markey Analysis: "

Customer segments"
Competitors and market share "

Proposed Marketing Strategy: "

"

Marketing focus on Tesla cars 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!

24"

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"

25"

25"

Q & A"

26"

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"

31"

Superchargers Open Today"

32"

Open at the End of 2014 (80 % of US population

and parts of Canada)"

33"

34"

35"

Risk Management"

LAWSUITS!

PUBLIC PERCEPTION!

REDUCED CREDITS!

- Emphasis on why Teslas

factory direct sales method is
necessary for them to ensure a
sustainable profit. "

- Improve public relations by

addressing customers safety
concerns first."
"

- Change the sales revenue

model to reduce excessive
reliance on sale of tax credits."

- Deal with facts, but also

sympathize with customers
emotions of fear, doubt."
"
- Show the measures Tesla is
taking to look into and prevent reoccurence of the issue."

"
- Lobbying for tax credits."