How can Tesla Ensure Future Growth on the Danish Market?

Mohamed Azaquoun

Student thesis: Master thesis

Abstract

Tesla Motors Inc. is an American electric car manufacturer founded in 2003. The main purpose of this master thesis is to give a recommendation on how Tesla in the future can ensure growth on the Danish automobile industry. The recommendations are based on an internal and external analysis of the company and the car industry in Denmark. The research is based on both qualitative and quantitative techniques to get a better understanding of the research question. All data is collected up until 17. May 2016. In my internal analysis of the company I have analysed the value chain of Tesla to see where they create value for their customers In my external analysis I have been using the PEST-analysis to see which political, economic, social and technological factors that have an impact on Tesla. Especially the political factor has made it much more challenging for Tesla to maintain growth on the Danish market. In Denmark up until 2016 there was no tax on electric vehicles but due to political initiatives a new legislation has been made. Over the next five years all electric vehicles will undergo an increasing annual taxation, resulting in a tax as high as for the conventional cars in 2020. The low interest rate and a social trend in driving greener cars are both external factors that have an influence on Tesla. In these days the Danes are very fond of driving cars which is expressed in their increasing interest in cars – in particular the electric ones. The technological factor has also a huge impact on Tesla as the battery they use in their cars are the most important component and therefore research and development within this particular field is necessary in order to keep improving their product and technology. Further I have seen how the Danish car industry is a market with a high level of entrant’s barriers by using Porters Five Forces. To conclude my internal and external analysis I used the SWOT model to give a better overview on where Tesla has its strength and weaknesses and which external opportunities and threats Tesla has to be aware of to keep ensure growth on the Danish market. In order to maintain growth on the Danish market I have given three recommendations due to my analysis. My first recommendation is that Tesla should manufacture a smaller car in the category micro/minicar as up to 80 percent of all new cars in Denmark are microcars like VW Up, Toyota Aygo, Mercedec-Benz A Class etc. My second recommendation is that Tesla closes its sales to the Danish market, as the market simply is not attractive enough with the new legislation of tax on electric cars. My last recommendation is that Tesla should influence the politicians and medias in their favour. In autumn 2016 there will be an evaluation of the new tax legislation on electric vehicles and due to the extremely low sales figures of the first four months of 2016 on electric cars I Mohamed Azaquoun Copenhagen Business School 17. maj 2016 Cand.Merc.Kom Kandidatafhandling Tesla København Sommer 2016 v. Morten Siglev Side 2 af 84 see opportunities for Tesla to have a voice in the debate. Lastly in my master thesis I will argue which of the three recommendations I find most suitable. There is no doubt that Tesla is an interesting and innovative company that for the last five years has been growing more and more and I am sure that they will be a global actor and leader in the future. The question is whether the Danish market will be a part of their success or not.

EducationsMSc in Business Administration and Organizational Communication, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages85