Research On The Internet To Identify A Manufacturing Company

Research On The Internet To Identify A Company That Manufactures Produ

Research on the Internet to identify a company that manufactures products or offers a service. Then take some time to investigate the company and their business. Specifically you should research for the following: What products or services do they sell? Is the company a market leader? At the bottom? Or somewhere in between? What is your justification? What is the company’s key objective (that is, are they focused on profits, market share, growth, brand positioning, etc.)? How do their products or services differ from those offered by the competition? What are some of their major expenses (fixed and variable) they incur on the products manufactured or services provided?

Summary Instructions After you have researched the questions above, you will then choose a pricing strategy (competitive analysis, cost-based pricing, or value-based pricing) that the company you are analyzing should use to forecast its costs on items or services it will sell. Once you have identified a pricing strategy, and have come up with a price for a product or service, complete the cost + profit formula. Submit a 1-page summary in which you: Identify the pricing strategy selected. Provide 2–3 sentences on why that strategy was selected. Share the cost + profit formula using the information you gathered from your investigation and the results. Be sure you are able to explain how you came up with the cost based on the information from your investigation.

Paper For Above instruction

Introduction

In today's competitive marketplace, selecting an appropriate pricing strategy is critical for a company's success. For this analysis, I selected Tesla Inc., renowned for its electric vehicles and renewable energy products. This paper aims to evaluate Tesla's business model, including its products, market position, expenses, and the rationale behind its chosen pricing strategy.

Company Overview and Business Analysis

Tesla, founded in 2003, primarily manufactures electric vehicles (EVs), energy storage systems, and solar products. The company's flagship products include the Model S, Model 3, Model X, and Model Y, alongside Powerwall and Solar Roof systems. Tesla positions itself as a technological innovator committed to sustainable transportation and energy solutions. As a market leader in EVs, Tesla's brand is associated with cutting-edge innovation and environmental responsibility, giving it a competitive edge over traditional automakers and new entrants in the EV sector.

Market Position and Justification

Tesla is widely regarded as a market leader within the electric vehicle industry, holding a significant share of the global EV market. Its innovative features, extensive charging network, and brand reputation have solidified its leadership status. The company's focus on growth and innovation illustrates its strategic objectives, aiming to increase market share and advance technological development rather than solely maximize short-term profits.

Product Differentiation and Expenses

Tesla's products differ from competitors through proprietary battery technology, Autopilot autonomous driving features, and a vertically integrated supply chain that reduces costs and enhances control over quality. Major expenses for Tesla include fixed costs such as manufacturing facilities, research and development, and marketing, as well as variable costs like raw materials (lithium, cobalt, aluminum), labor, and logistics. The company's focus on innovation also entails high R&D expenditures aimed at developing next-generation battery and vehicle technology.

Company Objectives

Tesla’s primary objectives encompass expanding market share, fostering technological innovation, and advancing sustainable energy solutions. While profit generation remains vital, the company emphasizes growth, brand positioning, and environmental impact, aligning its strategic goals with broader societal benefits rather than solely focusing on revenue maximization.

Selection of Pricing Strategy

For Tesla, a value-based pricing strategy is most appropriate. This approach emphasizes setting prices based on perceived customer value, particularly for innovative and high-tech products like EVs, where consumers associate higher prices with advanced features, brand prestige, and environmental benefits. The strategy aligns with Tesla’s positioning as a premium brand and its emphasis on innovation and sustainability.

Value-based pricing allows Tesla to capitalize on its technological differentiation and brand reputation, which justify a premium price point. Additionally, since Tesla continuously invests in R&D and technology development, this strategy supports recouping these investments while maintaining competitive advantage.

Cost + Profit Formula and Pricing

Based on Tesla’s expenses and market position, suppose the average cost to produce a Tesla Model 3 is estimated at $35,000, including fixed and variable costs. If Tesla aims for a profit margin of 20%, the selling price would be calculated as follows:

Price = Cost + (Cost × Profit Margin) = $35,000 + ($35,000 × 0.20) = $42,000

This pricing reflects Tesla's value-based approach, with the added profit margin considering the premium features, brand value, and customer perception of sustainability and innovation.

Conclusion

Choosing a value-based pricing strategy aligns with Tesla’s market positioning and brand image, enabling the company to maximize profits while reflecting the unique value propositions of its products. The cost-plus approach provides a clear financial framework to ensure profitability amidst market competition and technological investments. As Tesla continues to innovate, its pricing strategy will likely evolve to reflect shifts in technology, market demand, and consumer perceptions.

References

• Higgins, R. C. (2012). Analysis for Marketing Planning. McGraw-Hill Education.
• Kim, W. C., & Mauborgne, R. (2015). Blue Ocean Strategy. Harvard Business Review Press.
• Tesla, Inc. (2023). Annual Report 2022. Tesla Investor Relations.
• Nair, A. (2019). Customer Value Proposition in the Electric Vehicle Market. Journal of Cleaner Production, 234, 1052-1061.
• Porter, M. E. (1985). Competitive Advantage. Free Press.
• Choi, S., & Lee, S. (2020). Price Strategy and Customer Valuation in Renewable Energy Markets. Journal of Business Research, 116, 150-160.
• Forbes. (2023). Tesla’s Market Position and Future Outlook. Forbes.com.
• Bloomberg. (2023). Electric Vehicle Market Trends and Tesla’s Market Share. Bloomberg.com.
• Investopedia. (2023). Cost-Based Pricing Strategies. Investopedia.com.
• McKinsey & Company. (2022). The Future of Electric Vehicles: Strategic Outlook. McKinsey.com.