How Tesla Rewrote the Rules: A Company with Little Marketing Investment Takes Over Traditional Car Makers

For Tesla fans, the process of selling a car is straightforward: we freely give rides, offer test drives, and express our passion for the vehicles. This dedication creates a market where no traditional marketing is necessary. However, Tesla’s success transcends this simple approach, echoing the strategies of other forward-thinking companies like Apple, Amazon, and Cirque du Soleil.

Tesla: A Systems Company

Tesla does not see itself as a traditional car maker. Its mission is to accelerate the transition to sustainable energy, with no mention of manufacturing or traditional automotive industry aspects. Tesla bypasses traditional dealership structures and has moved away from having physical stores, making it easy for consumers to purchase vehicles online.

By focusing on the broader problem of transportation and energy, Tesla integrates the manufacturing of vehicles, battery technology, artificial intelligence, and over-the-air updates. The ultimate goal is transitioning to sustainable energy, pushing the boundaries of what “car” makers can achieve. Solar City and PowerWall technologies are key innovations in this mission.

The Future of Transportation

Tesla envisions a future where vehicles are utilized as part of a fleet of autonomous vehicles, rented on a per-use basis without human drivers, much like Uber. This vision is on track to revolutionize the transportation industry, a scenario where the “car” market is not just electrifying existing vehicles but fundamentally changing the way we move around.

Marketing Strategy and Red Ocean vs. Blue Ocean

Tesla’s marketing strategy is as innovative as its product. By targeting the affluent market, they identified a niche where eco-friendliness and cutting-edge technology would find acceptance. This demographic would be willing to pay a premium for a unique and high-quality product, effectively creating a demand that wouldn’t exist without them.

The success of Tesla can be attributed to the principles of the Blue Ocean Strategy, which is about creating an uncontested market space by capturing new demand rather than competing with existing players. By stripping away the traditional smelly and dirty aspects of automobiles (like animals and freak shows), Cirque du Soleil similarly disrupted the traditional circus industry, leading to the concept of a red ocean (bloody from competition) and a blue ocean (wide open opportunities).

Similarly, the iPhone’s integration of a computer and portable communication devices (a smartphone) pioneered a new industry, transcending existing boundaries. Amazon, with its business model centered around the long-tail of products, revolutionized retail, as described in Chris Andersen's book The Long Tail.

Tesla’s strategic approach emphasizes the broader systemic changes required for a sustainable energy future, positioning it as a leader in the blue ocean of innovation. The alignment of their mission with a trillion-dollar industry demonstrates the company’s foresight and potential for disruptive change.

In conclusion, Tesla’s success in the automotive industry is not just about marketing strategy; it’s about rethinking the entire value chain and creating a future where sustainable energy and intelligent transportation systems become the norm. The company’s approach sets a new standard for what it means to be a car maker in the 21st century.

Keywords: Tesla, marketing strategy, sustainable energy, autonomous vehicles, red ocean, blue ocean