Tesla Company in Dubai - Essay Example

The company built a strong brand image that captures the attention of customers through celebrity impact. The company develops sleek car models that meet the expectations of the customers. The marketing strategy through social and traditional media has catapulted the company into the celebrity limelight. The company’s customer–centric approach has also been one of the main factors for its success in Dubai. Tesla fosters a strong customer relationship, thus creating a positive image among consumers.

The first strategy available for Tesla’s international expansion is strategic alliance. Tesla has the option of identifying other companies in foreign markets that have good performance histories and joining forces with them. The company can easily gain entry into foreign markets through mergers and acquisitions. Through mergers, Tesla will create joint ventures with potential competitors in the market while acquisitions will involve buying out rival companies in the market. Mergers and acquisitions in foreign markets will enlarge the company’s customer base and also enhance intellectual capital as well as performance efficiencies of the resultant company (Benjamin, 2006).

The second strategy that Tesla can use to expand into international markets is licensing. This strategy involves entering foreign markets by leasing a company’s intellectual property rights to a foreign firm (Kozami, 2005). Tesla can lease its technology, patents, brand name, and trademark to companies in foreign markets. In this strategy, Tesla would be the licensor while the other companies to which it leases its intellectual property rights would be the licensee. Ireland, Hoskisson, and Hitt (2008) argue that “licensing is popular because it involves little direct cost or risk for the licensor (p.158). Even though this strategy offers a cheap foreign market entry alternative, it also creates a lot of dependence on the licensee.

The third option for Tesla to enter foreign markets is franchising. This method is a special form of licensing where the licensor gives out trademark or offers services such as advertising among others to the licensee for an agreed price (Ireland, Hoskisson & Hitt, 2008). Tesla could utilize this strategy to gain entry into foreign markets. This strategy also offers a relatively cheap way of gaining entry into foreign markets.

The last approach that the company could use to enter foreign markets is a direct business establishment in foreign markets. Tesla could commit its resources and build new start-ups in international markets. By establishing direct foreign investment, Tesla would have absolute control over its foreign businesses. However, this strategy would be the most expensive market entry strategy. It would also expose the company more to the risk of international trade compared with the other market entry approaches (Kourdi, 2009).
The success of Tesla in foreign markets depends on its market entry strategy choice the above market entry strategies. Robust research is necessary for every market before settling on the best approach to use when pursuing international market growth. Read More