Martine Eberhard and Marc Tarpening formed Tesla Company in 2003. The company’s development was spurred by creating an electric sports automobile. Elon Musk, a co-founder of Tesla, was one of the persons who contributed financially. At the company’s start, Eberhard served as Chief Executive Officer, while Tarpening served as Chief Financial Officer. Musk served as the company’s chairman from 2004 until 2007, after being fired. He became a significant shareholder in the company after resigning. In 2008, the company created the first electric vehicle and had kept building on its technologies.
Tarpening left Tesla in 2008 as Vice President (Bessen, 2014). He was also responsible for electronic software and electronic engineering development. In 2012, the company released the Model S sedan, which was greatly enhanced by current technology. It stood out in the marketplace because of its high-performance capabilities, particularly the battery option. Later, the business released the Model X crossover vehicle, designed as a sports automobile. The majority of the invention has occurred under the leadership of current CEO Elon Musk.
The firm has achieved significant progress in growth and development, despite the problems that have arisen. As part of their dedication to the use of renewable energy, Tesla Company also established solar energy-focused branches. The automobiles are made in Fremont, and the company’s facility is in California. The company’s primary goal is to increase the transmission speed and achievement of renewable energy worldwide. Its ingenuity has demonstrated to the rest of the globe that electric power can improve people’s quality of life through faster and better automobiles. It is a company that is well-known for its product development and innovation around the world, which is primarily based on the use of renewable energy sources like electric motors and solar power. The organization claims that continued reliance on fossil fuels will result in environmental degradation. The use of electric energy is critical for maintaining a lean atmosphere.
The company has created one-of-a-kind solutions for environmental protection. Creating the power pack, solar roof, and power wall are only a few breakthroughs. They have resulted in continual improvements in people’s lives worldwide. The company has faced several hurdles to become an internationally competitive organization. One of the most significant problems it encountered in 2007 and 2008 was the financial crisis, which halted its development and growth. Some people are opposed to electric automobiles and innovation as a means of environmental protection (Bessen, 2014). Elon Musk’s takeover in 2007 and applying his leadership style resulted in a significant improvement in people’s services and a rise in revenue. A well-structured leadership system is another component that has aided the company’s success.
Biography of Elon Musk
Elon Reeve Musk was born on June 28, 1971, in Pretoria, South Africa. He is a successful businessman from the United States of America. His father is from South Africa, and his mother is from Canada. He spent most of his youth in South Africa, his father’s homeland, with his siblings. While he was ten years old, his parents split, just as he discovered his passion for computers. He taught himself to program at the age of 12 and created the game Blaster (Spisak, 2017). Musk got a Canadian citizen in 1989 and an American citizen in 2002. He married Justine but separated in 2010, after which she married Tallulah Riley and divorced her later. With Justin, he had five children, and with Tallulah, he had five. In 1999, he founded PayPal, which was initially known as X.com. He is also the founder of Space X, which began operations in 2002, and Tesla Motors, which started operations in 2003. In 1989, he graduated from Queens University in Canada and went to Pennsylvania. He earned a bachelor’s degree in economics and a master’s degree in physics from both colleges. Later, he enrolled as a doctoral student at Stanford University in California, where he studied energy physics (Spisak, 2017). He dropped out of school and was a key figure in founding the Zip2 Corporation and the subsequent Internet boom. Corporations were in charge of creating new websites with content.
Compaq Computers purchased zip2 Corporation. Musk was a co-founder of Tesla Motors, which was founded in 2003. It is a business that specializes in the manufacture of solar roofs and electric automobiles. In 2008, Musk became the CEO of Tesla, which later became Tesla Inc. in 2017. He has been in charge of the firms’ continual implementation of innovative inventions. Beyond General Motors, which had constantly controlled the industry, the firm stated in 2017 that it had become the most profitable automobile company (Spisak, 2017). The company’s development and growth occurred during Musk’s term as CEO. The business introduced the Model 3 Sedan in November 2017 and has subsequently improved its inventions. He has also supervised an increase in weekly car manufacturing during his tenure. As CEO of Tesla, he encountered several problems, particularly following the 2008 financial crisis. He took over as CEO when Eberhard was fired for mismanaging the company’s resources. Musk has used transformative leadership characteristics to transform the organization, resulting in the company’s expansion and growth despite various hurdles.
Many parallels have been drawn between him and Henry Ford, particularly regarding the invention and innovation of new automobile models that do not yet exist in the industry. Musk has produced additional innovations that are undoubtedly well-known around the world, in addition to his work with Tesla and Space X. He created a Hyperloop in 2013, intending to make commuting between large cities easier and faster. In 2015, he invented Al and Neuralink, which focuses on artificial intelligence. His company, The Boring Company, was founded to reduce traffic congestion through tunnel construction. He’s also the creator of a unique High-Speed Train. Following Donald Trump’s election in 2016, he became one of his advisers, focusing on infrastructural projects. He is the creator of the Musk Foundation, a non-profit organization dedicated to exploring space.
SWOT Analysis
When you examine Tesla Motors, Inc., you see an incredibly inventive firm growing year after year because of Elon Musk’s extraordinary mind. They design and build energy storage systems as well as high-performance electric cars. Tesla had sold 107,000 new Model S automobiles worldwide as of 2016. Even though Telsa has declared losses every year since its inception, everyone understands it is the future. Their automobiles are electric and are getting more and more affordable is one of the company’s assets. Tesla isn’t just another auto manufacturer; it single-handedly transforms how people approach everyday driving (Kissinger, 2018). The company has also done an incredible job of building a massive market for electric cars and premium, which is difficult to come by.
Elon Musk has recently been working to make the Tesla Model 3 as affordable as possible to become a more everyday vehicle. Tesla has spent a significant amount of effort ensuring its cutting-edge procedure. The Tesla brand is well-known; everyone knows what it is and who owns it. Elon Musk is very involved in the community. He is now accomplishing incredible things with the Space X program, making him a trustworthy and intelligent individual in the eyes of his customers.
One concern about Tesla is that they had spent much money initially launched. This is primarily due to significant research and development expenditures. Despite the company’s efforts to make the Model 3 vehicle cheap, it is still a premium brand. Unless you want your Tesla to be barebones stock, it will cost much money, deterring the typical buyer.
Even while Tesla is well-known globally, it has little presence in the market, which bothers stakeholders interested in its prospects. The United States accounts for most of its revenues, with China second at roughly 9% (Dalvagas). Also, because Tesla parts are often more expensive than other carmakers, supply chain alternatives are limited. Because of their high prices, it’s difficult for them to expand their consumer base and market share swiftly with only one plant in the United States, located in Fremont, California, limited manufacturing area. It has a capacity of half a million automobiles, which makes it challenging to have people preorder cars and efficiently manufacture and distribute them. Tesla has done an excellent job of publicizing that they sell the world’s first electric sports cars. However, some individuals are still reluctant to buy since the technology is so speculative that they are unsure whether or not they should invest. Tesla is undoubtedly the most innovative automobile company out there right now, doing good for the environment while also releasing new models regularly.
On the other hand, other auto industries are following Tesla’s lead. Some have committed to start investing twice as much time in developing new electric car options and self-driving technology. If Tesla does not keep growing and produce new things, it will be left behind. The stories of self-driving system faults and odd fires are significant reasons some people are concerned about Tesla. People with families will be conscientious and wait until they receive assurances that their family members will be secure in the car (Bhasin, Hitesh, and Provie, 2018). For them to truly advance, they must discover a means to extend the battery life of their vehicles. Currently, the typical battery life is roughly 220 miles. While this may sound like a lot, this can be a problem for people who travel frequently.
As previously stated, Elon Musk is constantly innovating. Whether it is spaceships, batteries, or flying cars, he is the brains behind it all, and the company’s success rests heavily on his shoulders. They are making a significant contribution to the cause of clean cars and moving away from petroleum and other fossil fuels. The only difficulty is that some individuals are unconcerned. When oil is cheap, it is more comfortable for them to go to the gas station a mile away. Tesla is a trailblazing firm that never stops innovating. They have a clear goal statement and a strong leader in Elon Musk. I am confident that he will continue to revolutionize the globe and daily driving.
Structure of the organization
The corporation’s organizational structure has typically been established to develop the local market, followed by creating the worldwide market. Despite the hurdles, the company’s growth has been aided by the framework based on its foundation, and the organization has stayed relevant and competitive. The new structure has made it easier to carry out its transformational strategy. Unlike Eberhard, who was the initial CEO, change-oriented CEOs like Musk are the best suited in the organization (Bessen, 2014). As a result, transformation leadership is the best fit for the organization because it continually creates new goods and innovations. The organization strives to improve its services and has increased its development and operational efficiency.
The corporation’s international importance is further enhanced by its well-developed management structure. It enables collaboration with all stakeholders, allowing for growth and improvement simultaneously. The top leadership’s primary responsibility is to ensure that all actions are closely monitored. As a result, they have overcome the hurdles that the organization may confront in terms of worldwide expansion and growth. In the company, hierarchy is rigidly adhered to maintain order and allow for the division of work. It has increased mutual respect between workers and management. There is also consolidation in the company to improve the efficiency of decision-making in the corporation.
The responsibilities are evenly allocated among the employees and purely depend on their abilities. When the senior leadership makes a decision, the burden is divided among all concerned departments. The implementation of the factors considered by the administration has been enabled by using the proper management style (DuBrin, 2015). The firm has stayed relevant in the global market thanks to implementing the appropriate management and leadership style, primarily focused on improving client service delivery. As a result, the company has stayed competitive both locally and globally. As a result, the CEO is a fantastic fit for the company, as is his transformational leadership style.
In summary, Tesla has had a significant impact on society. It has enabled people who love technology and creativity to realize their ambitions. Musk’s innovations have an immediate effect on the economy and society. It has improved infrastructure as well as the way international trade is conducted. Tesla’s continual inventions to reduce vehicle energy consumption will also contribute to environmental sustainability. Collisions have been noticed in the transfer of the corporation’s leadership styles, particularly during the transformation from the first to the second CEO.
Reference
Bessen, J. (2014). History backs up Tesla’s patent sharing. Harvard Business Review Blog, 13.
Bhasin, Hitesh, and Provie. (16 May 2018, ). “SWOT Analysis of Tesla Motors – Tesla Motors SWOT Analysis.” Marketing91, www.marketing91.com/swot-analysis-of-tesla-motors/.
Dalvagas, Lason. “SWOT Analysis Tesla Motors Inc.” Value Line – The Most Trusted Name in Investment Research.
DuBrin, A. J. (2015). Leadership: Research findings, practice, and skills. Nelson Education.
Kissinger, D. (2018). Panmore Institute. Tesla Inc. SWOT Analysis & Recommendations.” Panmore Institute, panmore.com/tesla-motors-inc-swot-analysis-recommendations.
Spisak, A. (2017). Elon Musk and the Quest for a Fantastic Future by Ashlee Vance. Bulletin of the Center for Children’s Books, 70(5), 241-241.
Tesla Marketing Strategies Free Writing Sample
A solid marketing strategy needs to focus on the firm’s value proposition, which tells customers what the company stands for, how it runs, and why they should do business with it. Therefore, the marketing strategy is considered a detailed outline of the marketing plan, which is a document that outlines the many sorts of marketing activities that a firm engages in and includes timelines for implementing different promotional projects. In this article, we will major in Tesla’s marketing strategies.
Tesla’s Strategic Marketing Execution
A company’s success is primarily determined by its marketing techniques, among other things. Other businesses in the business market offer relatively similar services or products, and a company can stand out if it executes its marketing strategy well. Tesla Inc. is an example of a corporation that has seen significant growth in its brand popularity in the United States and other countries, particularly China.
Tesla Inc. has implemented high-quality products, infrastructure investment, and advertising marketing tactics (D’Arcy 2019). Based on growth, the development of a firm is defined by a rise in sales volume, and Tesla Inc. had designed a unique marketing approach to accomplish this. The firm started with a notable $100,000+ Roadster based on a Lotus basis that had been modified. The vehicles sold poorly in the United States, but the firm is now focusing on lower-cost cars, such as the $60,000 entry-luxury vehicles, which are progressively growing sales. Tesla intends to expand its mass manufacturing of electric vehicles in China following the Chinese government’s clearance of its Gigafactory (Yu, 2019). The first car from the factory is planned to arrive in early 2020. Tesla Inc. plans to construct charging stations within a driving range of 98 percent of the American population, based on infrastructure investment and the predicted rise in the number of customers purchasing electric cars. These terminals provide free charging to Telsa owners, with some offering supercharging choices of 80 percent in 40 minutes. The same ambitions are in the works in China, following the approval of the Tesla Gigafactory in Shanghai.
In terms of high-quality products, the first Tesla car was the Roadster S model, designed to be the best and most prestigious electric car in the United States. Its efficiency was matched to that of gasoline-powered vehicles. On the other hand, it accelerates from zero to sixty miles per hour in less than four seconds and has a top speed of 125 miles per hour. Due to its elegance and elite appeal, Tesla hopes that the debut of the Model 3, which has identical attributes to the one sold in the United States, in the Chinese Market would draw even more buyers. Tesla has never advertised its products in the media, according to advertising. Instead, they put the money toward making the product even better for their customers. Following the loss of some of its $7,500 tax credit in 2016, Tesla allowed its consumers to recommend the best approach to sell its product. Yu (2019) explains that when it comes to customer experience and traffic, Tesla initially had some issues, primarily owing to late deliveries. Nonetheless, better plans are in the works to improve the delivery procedure. To address some of the problems, Tesla’s CEO, Elon Musk, takes individual accountability for calling customers in a misunderstanding about delivery or even the product itself. To grow customer traffic, the company plans to employ the same customer experience model in China by creating additional retail stores to reach more customers.
The Advantage in the Market
Technology is one of the company’s competitive advantages. Because the company is a technology firm that creates technology platforms, it is a technology investment. Not only does the corporation produce automobiles, but it has also constructed the infrastructure necessary to support the operation of these vehicles (Manecuta, 2020). For example, it has developed a series of superchargers and battery swiping stations in various parts of the United States. Other car manufacturers have already delivered complete autonomous driving capabilities; therefore, the company is on pace. A significant strength is the company’s reputation. They have, for example, converted electronic automobiles from slow to fast vehicles capable of competing with other companies in the marketplace. However, most of their models have a top speed of 60 mph, which only a few superior cars can match (Virvilaite et al., 2011). The company has a strong brand image thanks to its reputation for quality. Most significantly, they have broadened their scope of operations. They’ve begun producing solar roof tiles to supplement their business with rechargeable lithium-ion batteries.
Marketing Techniques
Because they aim to reach clients worldwide, the company prefers to adopt an internet sales approach. Nonetheless, they have created physical stores to sell their autos. They do not, however, use a traditional dealer network. Regardless, the company’s distribution channel faces several obstacles due to the significant investment required to establish the distribution channel (Bhasin, 2019). Other manufacturers, for example, have partnered with a third party to market their vehicles. Tesla relies solely on its stores to sell its electric vehicle concept, which is the only route available to them. The company’s selling costs have been decreased by selling their car online—their dealership functions as a showroom for customers to come in and look at the vehicles. The company’s growth has been primarily shaped by word of mouth. The method has resulted in numerous referrals, turning customers into marketers. As a result, the corporation is under pressure to deliver a fantastic product that will provide the user with an unforgettable experience. The Tesla referral program is evolving, just like many other firms that have formed a referral campaign to support their customers to spread the word (Srivastava, 2009). According to the programs, anyone who refers people to the company will receive a thousand dollars credit toward purchasing a new Tesla or any Tesla-related service.
Product/Marketing Mix
Tesla, Inc. is a privately held company that produces a wide range of technologically advanced products. The company follows the B2B business model, encouraging companies to form partnerships to deliver products and services. They likewise follow the B2C strategy, offering vehicles for families, luxury, and the mainstream Market. The firm is a well-known eco-friendly product maker, developer, and distributor. It also provides automotive-related services to other automakers around the globe (Bhasin, 2019). The electric automobile, powered by a battery, is the main product created and marketed by this company. Aside from that, it also produces sustainable energy technology and supercharging stations.
Induction motors, magnet motors, lithium-ion batteries, autopark, roof glass autosteer, and the emergency braking are just a few of the company’s products. Based on their cars, Tesla Model S is one of the models. The Tesla Model S was the company’s first sedan vehicle. The vehicle offered luxury features and quality, such as a powerful engine, adaptive lighting, a self-driving auto-pilot, and a defence mode for all occupants. The Tesla Model 3 is another type. The car is classified as a third-generation model and one of the company’s most coveted automobiles, and it is built using electric vehicle innovation. It also meets the highest levels of user safety. Finally, there’s the Tesla Model X. The vehicle is classified as a crossover SUV with an aluminium body. Clean air technology has also been incorporated into the car’s manufacturing, designed to protect the user from dirty air. The car is also regarded as one of the fastest, with a 60 mph acceleration time of only 2.9 seconds.
Place
The organization has placed a strong emphasis on customer service. It comes in a variety of sizes. The corporation owns and operates its sales and distribution networks in Europe, North America, Asia, Dubai, and the United Arab Emirates. China is Tesla’s largest market, and as a result, they’ve established a manufacturing facility in the country. As of 2017, the company had opened eight locations in various sections of the world. The company has opened storefronts in cities across Canada, including Ontario and Montreal. The corporation was founded in San Carlos, California, and then expanded to other locations, including Los Angeles and Manhattan. The corporation has over 300 locations in the United States (Bhasin, 2019). Most of these businesses are located in shopping centres because the corporation wants to take advantage of the many shoppers who frequent malls to obtain maximum brand awareness.
Nonetheless, they have a webpage where interested clients can purchase their products. The corporation has opted to follow the customer’s instructions. In its stores and service centres, it employs a point-of-sale strategy. They can do so by communicating with potential customers and providing immediate services feedback from their clients. All automobile services and inspections are available. They have performed in their service stations. In addition, the company has heavily made investments in social media marketing and corporate showrooms. In addition, significant funds were invested in research and development centres in Athens, Greece.
Price
The customer’s product positioning is where they are addressing the wealthy. As a result, they have attracted affluent customers who can afford to pay exorbitant prices for their goods. The company began by charging a premium price. Since then, it has kept all of its premium products at high rates. Nonetheless, their product uses cutting-edge technology, which is why their clients must pay a premium. Nevertheless, following its entry into a new market, particularly in Asia, the corporation has provided affordable items accessible to mid-scale customers. They’ve recently implemented a more affordable pricing plan, allowing them to reach a more extensive consumer base.
Promotion
The corporation has made significant investments in product promotion. For example, they have invested a considerable amount in their referral program to entice buyers. To promote favourable brand recognition, the corporation uses media releases and its sales and marketing team. The corporation is surcharging stations on several highways, malls, and hotels as part of its marketing.
The Influence of Social Media
The company has invested resources in building various social media platforms to increase brand awareness. The business has a well-known website and blogs for online marketing. For example, when launching a new product, they will always generate a viral buzz by uploading videos to their YouTube channel, Twitter, and Facebook page account (Ian, 2020). Furthermore, the firm will welcome press members to test the car, ride it, and report about it before the unveiling. It’s a good deal considering a test ride from its sales center costs $5,000. As a result, getting a celebrity to test drive the automobile is an innovative marketing approach. Tesla has worked with prominent influencers who have a large social media following, and as a consequence, they’ve benefited from it. Their CEO has the most sway over them.
When comparing the firm’s social media account to the CEO’s, you can see how powerful he is. The CEO, for example, has more than 23 million Twitter followers, whereas the firm’s account has 3 million. Instead of paying influencers, the company’s CEO considers promoting the brand through his individual social media account (Kim et al., 2014). It helps to save costs while also customizing the brand. It also offers the organization a face, and buyers are more likely to buy the goods since the owner has already earned their confidence. The corporation is more than just a vehicle manufacturer; it is a vision for the future. Because he influences the brand, the firm CEO is the face of the company. The CEO’s attention to his customers and Tesla users who contact him is one of the reasons why it’s difficult to distinguish between the brand and the CEO. He’s also quite active on social media, where he talks about company technologies new production and answers client questions. Consequently, his presence is felt quite strongly. Furthermore, the company has continuously demonstrated that it values its user experience, and as a result, it has aided in shaping the general impression of the brands.
Finally, Elon Musk, the CEO of Tesla Inc., is mainly responsible for the company’s marketing success. Many countries, notably China, have endorsed his mission to hasten the world’s shift to more sustainable energy. With the opening of Tesla’s factory in Shanghai, Musk expects that in the following years, sales in China will more than treble those in the United States.
Reference
Bhasin, H. (2019). Marketing mix of Tesla Motors – Tesla Motors Marketing mix. Marketing91. Retrieved 16 November 2020, from https://www.marketing91.com/marketing-mix-of-tesla-motors/.
D’Arcy, P. J. (2019, January 20). Tesla Marketing Strategy. Retrieved November 30, 2019, from https://scienceofrevenue.com/tag/tesla-marketing-strategy/.
Ian, T. (2020). How Tesla Used a $0 Marketing Strategy To Dominate a Market. Marketing Strategy. Retrieved 16 November 2020, from https://www.marketingstrategy.com/marketing-strategy-studies/howtesla-used-a-0-marketing-strategy-to-dominate-amarket/#:~:text=Tesla’smarketingstrategythen goes,notdirectlymarketingtothem.
Manecuta, A. (2020). Tesla: How to Leverage Social Media to Build a Top Brand. Medium. Retrieved 16 November 2020, from https://medium.com/@13alexm/tesla-how-to-leverage-social-media-tobuild-a-top-brand-b7a043da68ff.
Srivastava, R. (2009). Measuring brand strategy: can brand equity and brand score be a tool to measure the effectiveness of strategy?. Journal of Strategic Marketing, 17(6), 487-497.
Kim, S., Pai, S., Bickart, B., & Brunel, F. (2014). How Social Media Influencers Build a Brand Following by Sharing Secrets. SSRN Electronic Journal, 5(4), 3-8.
Virvilaite, R., Seinauskiene, B., & Sestokiene, G. (2011). The Link between Standardization/Adaptation of International Marketing Strategy and Company Performance. Engineering Economics, 22(1), 7-9.
Yu, Y. (2019, November 13). Tesla wins approval for mass production at Shanghai Gigafactory. Retrieved December 1, 2019, from https://asia.nikkei.com/Spotlight/Electric-cars-inChina/Tesla-wins-approval-for-mass-production-at-Shang
The Black & Decker Corporation: Power Tools Division Case Study Writing Sample
Black & Decker is a manufacturing firm that specializes in the production of power accessories and tools, as well as home items, security hardware, and outdoor equipment. In the Black & Decker Corporation: Power Tools Division case, there exists competition amongst Makita Electric and B&D in three important sectors of the power tool business— Tradesmen, industrialists, and consumers. Despite having a significant market share in the industrial and consumer divisions, B&D is significantly behind Makita Electric in the professional tradesman area. There is room for them to grow their market share in the tradesmen category. B&D intends to grab market share away from Makita Electric by employing the most effective marketing strategy (Dolan, 2001).
Central problem
Black & Decker established a power tool firm in the United States in the early 1900s. Consumer, as well as Professional-Industrial categories, accounted for the lion’s share of market share for this company. When B&D arrived, they held a 9 percent share of the market in the Professional-Tradesmen sector. By contrast, current research indicates that B & D has a 9% market share and low profitability, despite having one of the strongest brands in the world as well as generating industry-leading products. Debts totaled $4.2 billion, or nearly 84 percent of the company’s total capital (Dolan, 2001). MakitaElectric of Japan has consolidated its market position in the Professional-Tradesmen segment. B & D faces stiff competition from Milwaukee in this market as well. Even though the goods sold by B & D merchants were losing revenue, the company demanded additional advertising financing as well as cash rebates. As a result, the B & D marketing strategy was reworked in order to increase the share of the market in the Professional-Tradesmen sector.
Analysis of the situation
Market analysis
An estimated 1.5 billion dollars is spent annually on power tools in the US every year. The construction industry uses miter saws, while the general public uses electric screwdrivers. The two markets for tools are vastly different. Plumbers and electricians, for example, are part of the tradesman market, which comprises people who utilize tools daily. It is more important for tradesmen to use reliable, strong, and versatile tools. There is no way they can afford to buy new equipment each month since they wear out too quickly. They require a tool which has been specifically created and checked for daily use. A total of $550 million was spent on industrial tools in the professional market back in 1990. Another $420 million was earned by construction companies who work for the public industry by doing work at home. For personal use, another 530 million dollars was purchased.
External market
B& D works in a competitive market with several formidable competitors. Milwaukee Electric, Makita, Porter-Cable, and Bosch are the company’s most significant competitors in the industrial sector. They are regarded as having high-quality items and providing outstanding customer service in this business. Craftsman, Wen, and Skil are the companies that compete most directly with them in the consumer market. These companies enjoy widespread brand recognition as well as regulate roughly half of the entire industry. Makita accounts for more than fifty percent of the market in the tradesman group, whereas Black and Decker has around 9 percent (Dolan, 2001).
Internal market
As soon as Black and Decker noticed that their general view of their equipment in the tradesman business had deteriorated, they developed a range of more lasting items and were designed in a different color to distinguish them in the marketplace. They were certain that tradesmen might notice the difference in color between the items while making a purchasing choice because many other merchants used a similar strategy to distinguish between different grades of tools. B&D undertook two investigations to make sure the quality of the new product was not the reason for their failure in the tradesmen market, and the results were positive. In these investigations, which included laboratory and on-site testing, it was discovered that the eminence of the new line-up of Tradesman tools was comparable to that of other brands. The new range of items did not perform worse than the existing products (Dolan, 2001). This demonstrated that this was not the product’s quality that was the problem, indicating it is more likely the impression of the good’s quality that might be the root of their problem.
Black & Decker possesses a significant following in both the industrial as well as consumer markets They have a solid reputation in the marketplace and are among the highly trusted brands in the industry (Dolan, 2001). There is no significant difference between consumer-grade items as well as tradesman or professional-grade goods, aside from the price, a tiny color variation, and the location in which these goods are sold. Because the only difference between the old and new product lines is the color. It is not a strong enough indication to inform experts that the line of products has been enhanced and is built to endure everyday usage in the workplace. When communicating with tradesmen, it might be critical for Black and Decker to convey the message that the new product of goods has been thoroughly tested to endure day to day usage and is similar to these other products or brands in the market, like Makita. They must reclaim their repute and regain a greater portion of the market in order to succeed.
Decision Criteria and Alternatives
The firm has three main options for addressing the current issue in the tradesman market. The first and most prudent course of action is to focus on other segments rather than the tradesman sector. This could also mean a complete exit from the business. As a second option for resolving the issue, sub-branding for professional tradesmen could differentiate higher-quality tools from lower-quality ones. This could mean that the products receive a new name or color under which they will be sold. Thirdly, the goods could be marketed under a dissimilar brand name unrelated to the Black and Decker line of products. However, this would not assist the brand’s image or perception of quality. The firm’s standing in the industry will not be enhanced in any way. Additionally, the new brand is highly improbable to quickly gain traction in the tradesman market, as tradesmen place a premium on purchasing high-quality tools. The sector is not receptive to newcomers, and entry is difficult. The firm will suffer this obstacle by introducing a new name line of products.
Black and Decker can refocus its efforts on other sectors of the industry. This, however, will not be sufficient to achieve the firm’s ultimate aim of increasing its market share. They can only make a difference in the tradesman industry since they have already profited in other markets. They would not increase their share in the market if they shifted their focus to another segment or exited this one. Their actions may have a detrimental effect on the market’s perception of quality. Other segments of the industry are likely to see negligible if any, market gains. Additionally, they have substantial involvement in a number of many other markets. Expanding sales in other industries could be possible if Black and Decker are able to successfully capture the tradesman market as well as establish a reputation for quality for their brand.
Preferably, a sub-brand aimed at tradespeople would be created with a new brand name and color scheme. Yellow is a widely used industrial color and thus is the most likely selection here. The new tradesman line will be heavily promoted to demonstrate its strength and durability. Wal-Mart and other large-box retailers will be unable to stock the item. It might be easier to tell the difference between the brand and the commercial-grade line through this. This effort will increase the company’s quality recognition. Branding which is more tailored to the tradesman would then assist in differentiating it from customer counterpart. Furthermore, other market sections can embrace the brand as they seek longer-lasting tools. Moreover, this may result in a greater market share. The idea will alter the way the industry views the product.
References
Dolan, R.J. (2001). The black & decker corporation (A): Power tools division. Harvard Business School. Case 9-595-57.