Case Study Research in Tesla (China)

Marketing Strategy Application

During Covid-19

BACHELOR THESIS WITHIN: Business Administration Major

NUMBER OF CREDITS: 15 credits

PROGRAMME OF STUDY: Marketing management & International

Management

AUTHOR: Changhao Bai, Zikang Chen, Xinyi Liu

TUTOR: MaxMikael Wilde Björling

JÖNKÖPING May 2022

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Acknowledgements

First of all, we would like to thank our supervisor Max Michael Wilde Björling for all his
help in the research and thesis process and for his patient and careful guidance, support and
encouragement throughout the process. MaxMikael's answers were of great help to us during
the editing process of this study.

Secondly, we would like to express our gratitude to all the students who participated in the
seminar and provided us with important feedback and comments on our thesis, which helped
to clarify and improve the content and structure of our research project.

Thirdly, we would like to express our gratitude to the interviewees who participated in the
research, they spent a lot of time in the process and provided us with enough information to
support this research topic, without their participation, the results of this study would be
seriously missing.

Finally, we would like to thank our course coordinator, Anders Melander, and all the
lecturers who initiated additional courses, whose teaching and help in the conduct of the
study produced much help in the conduct of our thesis.

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Bachelor Thesis in General Management

Title: Case Study Research in Tesla (China) Marketing Strategy Application

During Covid-19

Authors: Changhao Bai, Zikang Chen, Xinyi Liu

Tutor: Max Michael Wilde Björling

Date: 2022-05-19

Key terms: Tesla, Chinese market, marketing, strategy analysis, Covid-19,

Abstract

Background: In the past two years, the outbreak of the coronavirus has had a major impact
on the world economy, and has a considerable negative impact on the performance and sales
of the automobile manufacturing industry. Enterprises need to sum up their experience.
Tesla's successful case can be used as a reference for analysis. .

Purpose: In response to the substantial increase in sales performance of Tesla's Chinese

market during the epidemic, relevant market strategy analysis was made, and the researchers
tried to summarize relevant experience to provide reference for the automotive industry.

Method: The researchers used a relatively flexible and exploratory qualitative approach,
conducting semi-structured interviews with seven current Tesla employees and using
secondary sources to aid in proving the veracity and viability of the information.

Conclusion: The results show that most of the targeted strategies implemented by Tesla
during the epidemic are effective, and the application of various strategies is related to
changes in sales performance. The researchers collected raw data through interviews,
analyzed why Tesla used these strategies, and evaluated the application effects of the main
strategies. At the same time, the researchers also put forward our own views and opinions.

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Table of Content

1. Introduction ........................................................................................................................7

1.1 Background .............................................................................................................. 7

1.2 Problem formulation ................................................................................................ 8

1.3 The purpose of the research ..................................................................................... 9

1.4 Research questions .................................................................................................10

1.5 Delimitations to the research ................................................................................. 10

2. Literature Review .............................................................................................................10

2.1 Marketing strategy ................................................................................................. 11

2.1.1 Application of marketing strategies and their shortcomings ...................... 12

2.2 Brand strategy ........................................................................................................ 13

2.2.1 Brand Positioning Strategy ......................................................................... 14

2.3 Analysis process .....................................................................................................14

2.3.1 PEST analysis model ............................................................................... 14

2.3.2 SWOT analysis model ................................................................................ 17

2.3.3 STP analysis model .....................................................................................18

2.4 Supply chain management ..................................................................................... 20

2.4.1 The important role in the company's development .....................................20

3. Methodology .................................................................................................................... 21

3.1 Method of data analysis ......................................................................................... 22

3.1.1 Qualitative ...................................................................................................22

3.1.2 Reasons and limitations of the qualitative .................................................. 23

3.1.3 Philosophy and approach ............................................................................ 23

3.1.4 Reason for choosing Tesla as a single case ................................................ 24

3.2 Data Collection ...................................................................................................... 25

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 3.2.1 Primary data collection ............................................................................... 25

3.2.2 Development of interviews ......................................................................... 25

3.2.3 Selection of samples ................................................................................... 26

3.2.4 Interview process ........................................................................................ 27

3.2.5 Reasons and limitations of the interview .................................................... 28

3.3 Ethical issues ..........................................................................................................29

4. Finding and analysis ........................................................................................................ 29

4.1 Problems facing Tesla in the epidemic .................................................................. 35

4.1.1 Reduced the numbers of customers ............................................................ 35

4.1.2 Declining customers buying power ............................................................ 36

4.1.3 Longer supply chain ....................................................................................37

4.1.4 Shop stability threatened by increased staff separation .............................. 38

4.1.5 PEST analysis ............................................................................................. 38

4.2 Usage Strategies .....................................................................................................39

4.2.1 Implementing a stockless strategy .............................................................. 39

4.2.2 Launch of new products ..............................................................................40

4.2.3 Targeting fixed groups ................................................................................40

4.2.4 Telemarketing ............................................................................................. 42

4.2.5 STP Analysis ...............................................................................................42

4.2.6 SWOT analysis ........................................................................................... 44

4.3 Effectiveness of strategy application ..................................................................... 46

4.3.1 Screening for customers with genuine purchase intent ...............................46

4.3.2 Improving staff business skills ....................................................................48

4.3.3 Expanded customer base and facilitated transactions .................................49

4.3.4 Analysis ...................................................................................................... 51

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5. Conclusion ....................................................................................................................... 51

6. Discussion ........................................................................................................................ 53

6.1 Implications ............................................................................................................53

6.2 Limitations ............................................................................................................. 54

6.3 Recommendations for future study ........................................................................54

8. References： ....................................................................................................................55

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 1. Introduction

1.1 Background

With the development of the social economy and the advancement of science and culture,
people's awareness of environmental protection has gradually increased. For the automotive
industry, the new energy vehicle market is gradually growing. Thanks to accelerated
urbanization and rapid development, China has become one of the fastest-growing economies
over the past 30 years. The Chinese market is on top of the world (Shao, Zhang, Ren, Xiao,
and Zhang, 2018; Lou and Ulgiati, 2013). China's economy and society have undergone
tremendous changes (Xin & Xin, 2016). The increase in China's GDP and the average
disposable income of the Chinese has led to a significant improvement in people's material
life (Xin, Zhang & Liu, 2010). On April 16, 2020, the Ministry of Finance of the People's
Republic of China issued the "Guidelines for New Energy Vehicle Purchase Tax Exemption",
which further reflects the Chinese government's support for developing new energy vehicles.
According to a guiding document on China's work to achieve carbon peaking and carbon
neutrality goals released on October 24 by the Chinese researcherities, China aims to
gradually increase the share of non-fossil energy consumption to around 20 per cent by 2025,
around 25 per cent by 2030, and over 80 per cent by 2060 (XIN HUA, 2021). This means that
new energy vehicles will have a super large market in China; the trend is that New energy
vehicles are gradually becoming the mainstream in today's society, slowly replacing the fuel
vehicle market, and many famous new energy vehicle manufacturers have been born, such as
the well-known Tesla. Founded in 2003 by a group of engineers, Tesla is one of the world's
largest manufacturers of new energy vehicles (Desk, A. H. T, 2021).

Since Tesla entered the Chinese market in 2014, it has achieved great success. Its brands
Model 3, Model S, Model X, and Model Y occupy a large part of China's mid-to-high-end
new energy vehicle market. According to a filing on Monday, Elon Musk's electric vehicle
company posted $3.11 billion in sales in China in the third quartering of 2021 or 48.5% of the
$6.41 billion in sales in the same period. According to the China Passenger Vehicle
Association data, both the Model 3 and Y are among the top three sales in China's new
energy passenger vehicle market (CNBC, 2021). In addition, Tesla has established a wholly-
owned Gigafactory in Shanghai and plans to invest up to 1.2 billion yuan ($187.91 million) to
expand the capacity of its Shanghai factory to employ more than 4,000 workers (Reuters,
2021). Gigafactory production is mainly to meet huge customer orders in China and the Asia-

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Pacific region. The temporal context of the researcher's study is Covid-19. At the end of 2019,
Covid-19 gradually broke out worldwide and significantly impacted the entire human society.
Many countries and regions have issued related policies in response to the epidemic, affecting
many enterprises. In sales terms for all industries, a decrease of 13.8% is forecast for the
2019-2022 period, further highlighting a notable negative trend that began in 2018 (Carlier,
M, 2021). COVID-19 is not only a global epidemic and public health crisis; it has also
severely impacted the global economy and financial markets. It saw historically significant
and rapid declines across all sectors, spanning roughly the first month of the crisis. Recall
that early in the epidemic, all news was terrible, uncertainty was extraordinary, and the
downside seemed unlimited (Bradley, C., & Stumpner, P, 2021). Sharply reduced incomes,
rising unemployment and disruptions to transportation, services and manufacturing are the
main consequences of the epidemic. According to the news report, after the epidemic
outbreak, China was the first country to implement closed management. Every community
was blocked, stores were demanded to be closed, and all factories stopped working. At the
same time, China is also one of the countries that pursue "zero infection". If a case occurs
somewhere, anyone who comes into contact with the sick person will be quarantined to
prevent further infection (Policy Forum, 2022). In China, the production index in February
declined by more than 54% from the preceding month's value (National Bureau of Statistics
of China, 2020). It has a significant influence on vehicle sales. Year-to-date sales are lower
than in 2019. In China, 1.3 million new passenger cars were sold each month in the first six
months of 2020. This is about a 23% decrease from the first half of 2019 (Peter, 2020).

In addition to covid's impact on productive economic activity, outbreaks often change

consumer behavior. The main reason is that consumers' purchasing power and desire to buy
have declined due to the decline in income and household financial conditions and the fear
and panic accompanying the epidemic, which has a significant impact on business activities.
Therefore, daily data on stock market volatility and price action is a good indicator of
consumer and business confidence in the economy. Since 2020, leading U.S. and European
stock market indices (the S&P 500, FTSE 100, CAC 40, and DAX) have lost a quarter of
their value (Pak, A, 2020.).

1.2 Problem formulation

While many car firms were hit hard in 2020 by the coronavirus epidemic, Tesla bucked the
trend. Its shares surged nearly 700% over the year, making it the world's most valuable

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carmaker (BBC, 2021). Compared with other automakers, Tesla not only did not suffer a
huge financial crisis due to the epidemic but instead achieved profit growth. The researchers
are curious about such an achievement. How did Tesla achieve this achievement? The
performance and strategy of a company are closely related. In the face of force majeure
factors such as the epidemic, it is more difficult to formulate corporate strategies, including
strategic adjustments to markets, brands, and supply chains. For the new energy vehicle
manufacturing industry, it is known that the epidemic has limited the purchasing power of
consumers. It is essential to balance the production and sales of products. Enterprises should
adjust in time according to the actual situation and look at how to make profits based on
avoiding large losses. Besides, Tesla also met some problems with the supply chain, with
numerous supply interruptions, including shutdowns in our Shanghai factory and nearby
suppliers due to covid (Rivero, N, 2022). The existing articles focus on how to make the
marketing strategy efficient (V. Bonoma, T, 2014) and how to design a business plan
( Zinkhan, G. M. 1994). The most relevant literature that the researchers can find so far is
how companies reduce losses in force majeure situations (Assubayeva, A, 2020). The
researchers hope that our research will fill this gap, combined with researching the correlation
between Tesla's strategy application and sales growth during the epidemic. We can analyze
how companies can reduce losses and achieve profit growth. companies can not only reduce
losses, but also achieve profit growth.

1.3 The purpose of the research

It is a case study considering the epidemic's impact on all human beings, especially the
economic and consumption aspects. The researchers have seen too many companies facing
financial crisis or bankruptcy due to the epidemic, and Tesla's success is instructive. As the
most vulnerable auto industry, Tesla still maintains commercial vitality, so how did they do it?
As students majoring in marketing management, the researchers may also enter into work in
all walks of life in the future and face the same predicament. Therefore, we must analyze and
summarize what Tesla did and how they were successful. Next, the researchers will collect
data and analyze its business strategy. This research mainly analyzes the necessity of
implementing various strategies and makes a comprehensive evaluation of the final effect in
combination with Tesla's various strategies for the outbreak of the epidemic. The purpose of
this research is not limited to analyzing Tesla's various strategies. At the same time, the
researchers will combine theoretical knowledge and try to summarize how the vehicle

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company should quickly make a reasonable response plan when faced with sudden challenges.
What should be done in daily operations, and how to prevent the vehicle company from being
helpless when it suffers a significant blow, resulting in final business difficulties. In addition,
this study combines multiple disciplines, such as marketing and management. The researcher
hopes to provide a model and reference for most business managers through the researcher's
research and factual basis. It aims to help vehicle companies provide more stable operations,
thereby further preventing large-scale production shutdowns and unemployment due to
emergencies. To sum up, the researcher hopes to help vehicle enterprises complete a more
stable operation from a commercial point of view.

1.4 Research questions

The researchers have seen a trend of substantial growth in Tesla's sales performance
against the background of the epidemic, which is different from the situation in many of the
same types of companies in the researcher's observation that have suffered during the
epidemic. Therefore, the researchers have developed a strong interest in how Tesla responded
to the epidemic, so the researcher's research question can be defined as what strategies Tesla
has implemented for the Chinese market under the epidemic, and what result has it brought?

In that case, the researchers propose the researcher's research question:

What market strategies have Tesla applied during the epidemic?

What are the results of these strategic applications?

1.5 Delimitations to the research

This article aims to analyze Tesla’s response to the epidemic. The researcher describes the
analysis at the company level and does not include a consumer perspective. The researchers
are describing the Chinese market, so the raw data collected in this study was obtained
through interviews with Tesla employees in the Chinese market. The researchers mainly use
qualitative analysis, so there is not much data analysis work involved.

2. Literature Review

Literature Review

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 Databases Jönköping University Library Services Primo; Google
Scholar; Web of Science

Main Theoretical Fields marketing strategy, brand strategy

Search Words SWOT analysis， PEST analysis, STP analysis and

supply strategy, brand position strategy

Literature Review Academical Articles, Journals and Literature books, and

the internet

Language of publication English

2.1 Marketing strategy

A marketing strategy refers to an organization's integrated decision-making model that sets

out the critical choices of sectors and target segments, how marketing activities are carried
out and the allocation of marketing resources between markets, segments and markets.
(Porter, 1997). According to Morgan et al. (2019), It is a marketing activity that aims to
create, communicate and deliver products that provide value to customers and thus enable the
organization to achieve specific objectives. Varadarajan(2010) argues that marketing strategy
is conceptualized as the key choices an organization makes in terms of products, markets,
marketing activities and marketing resources that provide value to customers in return for the
creation, communication and delivery of the organization's products.

One objective of marketing strategy is to change, influence or shape the mood, perceptions
and behaviors of customers and consumers to the extent that they acquire, own, and consume
the organization's specific products (Carpenter et al., 1997). The purpose of marketing
strategy is to create market-based relationship assets and market-based knowledge assets for
the organization and to enable the organization to establish and nurture mutually beneficial
exchange relationships with customers (Srivastava et al., 1998). According to Morgan et al.
(2019), Marketing strategy is a structure that lies at the conceptual core of the field of
strategic marketing and at the heart of marketing practice.

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 2.1.1 Application of marketing strategies and their shortcomings

The marketing strategy sets out the target market and the value proposition that will be
delivered based on an analysis of the best market opportunities. One aim of marketing
strategy is to enable organizations to establish and nurture mutually beneficial exchange
relationships with their customers (Kotler and Keller). Researchers have found (Katsikeas et
al., 2016) that the marketing literature extensively suggests that firms' marketing efforts
influence their market and economic performance through the development and
implementation of specific resource deployment patterns aimed at achieving targeted
marketing objectives. The development of a marketing strategy involves managers making
clear 'what' decisions about objectives and the broad ways to achieve them, including target
market selection, desired value proposition and desired positioning, timing, etc.(Kerin et al.,
1990) Marketing strategy is a philosophy that embodies the process by which organizations,
groups and individuals get what they need and want by identifying value, providing value,
communicating value and communicating value to others (Porter, 1997).

In the information society, marketing strategy has taken on a greater role in predicting the
long-term growth of organizations based on strategic management, business process
efficiency and organizational capital. Companies operating in a modern market economy
must constantly analyze their internal and external environment and the actions of their
competitors and investigate consumer needs and consumption trends in order to continuously
improve their marketing strategies (Išoraitė, M. 2009). According to Kotler, P. (1978), a clear
marketing strategy revolves around the company's value proposition, communicating to
consumers what the company stands for, how it operates and why it is worth their business.
The ultimate goal of a marketing strategy is to achieve and communicate a sustainable
competitive advantage over competing companies by understanding the needs and wants of
consumers. Whether it is a print advertising design, mass customization or social media
campaign, a marketing asset can be judged by how effectively it communicates a company's
core value proposition (Porter, 1997).

While there have been many theoretical and prescriptive contributions to the discussion of
marketing strategy implementation, there have been few results achieved as a basis for action.
At its simplest, the implementation problem has been described as "the frequent failure to
create change after a seemingly workable plan has been developed" (Nutt, 1983). Although it
provides a useful starting point, this view of marketing implementation as a logical, ongoing

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task, objective, strategy and tactic is highly problematic. From a more practical perspective,
the managerial view of marketing implementation is often expressed as 'making strategy
work' (Bonoma, 1984) By assessing the conditions required to achieve strategic marketing
objectives in a particular organizational context. However, in this corporate environment,
individuals and groups can use 'posturing, delay and obstruction to limit or block attempts at
change that they perceive as threatening or simply disagree with' (Nutt, 1983).

2.2 Brand strategy

According to Aaker (1991), branding is a form of consumer evaluation and perception of a

company and its products, after-sales service, cultural values and a form of trust. Consumers
are able to identify the goods and services of a seller or a group of sellers and distinguish
them from those of competitors. Brands can create value for consumers and organizations by
virtue of their ability to identify and distinguish differentiators. At the same time, brands are
extremely important intangible assets for companies, and it is necessary for companies to
manage them strategically (Aaker & Joachimsthaler, 2000).

Brand strategy is usually expressed in three areas which are brand structure, vision and
core values and brand identity (Aaker, 1996). The basic brand structure can be derived from
the brand hierarchy, representing four levels: corporate brand, family brand, personal brand
and modified name or number (Keller, 2008). In the context of the brand hierarchy,
endorsement strategy means that the corporate or family brand stands behind the product
rather than in front of it. (Aaker, 1996) Brand vision and core values can help a brand move
into the future. Firstly, a brand vision should articulate the desired future (Hamel & Prahalad,
1990). The brand identity forms the mirror and channel for the organization's core values.
Furthermore, the brand identity can be seen as a non-material part of the organization's core
competencies (Urde, 1994). Brand identity can create consistency and become a commitment
of the organization to its customers; (Aaker, 1996). A brand identity can be seen as a symbol,
a product, a person and an organization. The core brand identity remains the same; the
identity is the association the company tries to create and maintain in the market, while the
extended identity may vary by product and market (Keller, 2008).

According to O'Neill and Mattila (2010), brand strategy is necessary for companies to
achieve rapid growth, and brand strategy is positioned to manifest the company's culture in
synergy with strategic management, grasping the target audience to adequately communicate

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the identification of their products in relation to the brand culture. A brand strategy can help a
company define its relevant purpose, vision, mission and values. This is used to guide the
company's business decisions (Mosmans, 1995). A clear brand strategy provides a company
with a competitive advantage in the marketplace and helps to differentiate the company's
brand (De Chernatony, 1991).

2.2.1 Brand Positioning Strategy

The term "positioning" is often used to refer to where a company decides to place its brand
and corporate image in the target market (Douglas & Craig, 1995). Porter (1997) sees
positioning as "performing a different activity or performing a similar activity in a different
way than competitors". Positioning advantage is a valuable market resource that cannot be
fully imitated and cannot be replaced, providing companies with a sustainable competitive
advantage and operational excellence (Barney, 1991).

Porter (1997) proposed brand positioning strategies as a way of developing a generic

competitive strategy typology. The three cornerstones of generic strategy are differentiation,
cost leadership and focus. Mühlbacher, Dreher and Gabriel-Ritter (1994) use a process-
oriented approach to develop and manage an organization's positioning practices. Brand
positioning is understood as a broad concept of activities that create a real or perceived
advantage for a brand in the minds of potential customers. In other words, positioning is a
market-based organizational capability that can provide a firm with a market advantage.
Brand positioning is seen as the act of designing a company's products to occupy a unique
position in the minds of its customers (Kotler, 2010).

2.3 Analysis process

2.3.1 PEST analysis model

The complexity of each industry in the new economic environment creates a complex
environment that constantly affects the internal and external environment of the organization
(Barney，1991). Therefore, companies must constantly adapt their strategies to the external
and internal environment in order to increase the value of the products they offer to
customers in order to maintain their competitive advantage (Barney，1991). When analyzing
an organization's macro-environment, it is essential to identify the factors that influence
important variables that may cause changes in the organization's levels of supply and demand

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(Johnson & Scholes, 2008). According to Balls (2010), PEST analysis refers to the analysis
of the macro-environment, where P is political, E is economical, S is social, and T is
technology. Kotler (1998) argues that PEST analysis is an indispensable strategic tool for
companies, helping them to quickly understand the growth or decline of their markets, their
business position, their potential and the direction of their operations. The use of PEST
analysis can not only help companies develop a range of business and strategic planning and
marketing plans but also ensure that the company's development is positively aligned with the
powerful forces of change affecting the business environment (Porter, 1985).

Politics refers to the political forces and related laws and regulations that have actual and
potential influence on an organization's business activities. When the political system and
institutions, the attitude of the government towards the organization's business changes, and
when the government issues laws and regulations that are binding on business operations, the
business strategy of the company must be adjusted accordingly (Thompson, 2002).
According to Koumparoulis (2013), political factors fall into three categories: supranational,
national and sub-national class. Companies should develop the right strategy to adapt to the
changing political environment for the foreseeable future. Areas of national policy that can
have a significant impact on business strategy include tax policy, government incentives for
business, planning and licensing, etc. (Sammut-bonnoci & Galea, 2014).

Economic refers to a country's economic system, economic structure, industrial layout,

resource situation, level of economic development and future economic trends (Thompson,
2002). Sammut-Bonnoci and Galea (2014) agree that economic factors have the most
pronounced impact on the profitability and overall attractiveness of a market or industry.
According to Thompson (2002), The economic environment is one of the main factors for
success and easy profitability at all times. They affect the availability and cost of capital and
demand. The economy is a double-edged sword. A downturn may cause some organizations
to fail, and it may also bring opportunities to others (Thompson,2002). Economic conditions
and government policies are closely linked, and the economy is influenced by government
policies.

The elements that make up the social environment include population size, age structure,
ethnic structure, income distribution, consumption structure and levels, and population
mobility (Johnson & Scholes, 2008). The sociocultural environment includes changing needs

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and tastes with fashion and disposable income, as well as general changes that may present
opportunities and risks for specific businesses (Thompson,2002).

Technology is recognized in the various strategic management literature (Capron and

Glazer, 1987; Johnson & Scholes, 1993; Jan 2002) as part of organizations and models that
can be used to create competitive advantage. Non-industrial technologies can also be
captured and used, which in turn can be influenced by government support and
encouragement. Technological breakthroughs can create new industries that may pose a
threat to existing organizations whose products or services may become obsolete, and
companies that may be affected need to be aware of this possibility. Likewise, new
technologies can provide useful inputs for manufacturing and services, but in turn, purchasing
new technologies requires capital and possibly training personnel to use them.

According to Sammut & Galea (2014), firms operate as part of a larger ecosystem. They
are vulnerable to a variety of external factors that can have a significant impact on the
competitive positioning of a business. PEST analysis is a good way to grasp the status quo of
the macro environment and its changing trends, grasp the survival and development
opportunities of enterprises and identify and avoid potential environmental threats as early as
possible (Barney，1991). Researchers can use the different perspectives of PEST to uncover
the growth potential that the industry now possesses from the changing factors and to have a
general overall grasp of the company's growth prospects (Sammut-bonnoci & Galea, 2014).
At the same time, the impact of external factors on sales and strategy is studied through the
company's timely response to changes in various areas.

For diverse businesses, managers need to strengthen their management knowledge

capabilities because they "have difficulty conceptualizing or defining what their environment
is" when faced with complex situations, "hold a narrow, limited or ineffective view of their
environment", and have difficulty "grasping the impact of the many environmental and
organizational interaction dynamics" (Fleisher & Bensoussan, 2003). According to Fleisher
and Bensoussan (2003), practitioners of PEST analysis need to be aware that there are several
divergent perspectives on the environment itself, such as the industry structure model
perspective, the cognitive model perspective, the organizational domain model perspective,
the ecological and resource dependency model perspective, and the era model perspective.
Not understanding these perspectives can easily lead to confusion in PEST analysis when
different practitioners hold different perspectives on the environment.

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 2.3.2 SWOT analysis model

SWOT has been used by countless marketing researchers and practitioners in related
industries and is a common and popular tool for students of business marketing and strategy.
According to Glaister and Falshaw (1999), SWOT analysis is considered to be one of the
most prevalent tools in strategic planning. Panagiotou (2003) argues that SWOT is used much
more frequently as a strategic tool than other tools. However, the origin of "SWOT" is now
untraceable. Learned et al. (1969) describe the analysis. Haberberg A. (2000) declared that
SWOT as a concept was used by Harvard scholars in the 1960s. Wheelan and Hunger (1998)
used SWOT to find gaps and matches between capabilities and resources and the business
environment in popular business policies and strategies. Regardless of each different scholar's
definition of when swot appeared, swot has been present and in use in literature for over half
a century.

Strategy Researcher (Ansoff, 1965; Andrews, 1987; Porter, 1991; and Mintzberg et al.,
1998) shows that SWOT consists of Strengths, Weaknesses, Opportunities and Threats, and
this analysis provides the basis for questions for achieving desired consistency in
organizational variables. Through the four quadrants of the SWOT analysis network,
researchers are able to list the internal strengths, weaknesses and external opportunities and
threats that are closely related to the subject of study through a survey and then match the
various factors with each other to better understand how the company can use its strengths to
seize opportunities and how the weaknesses and threats can affect the company. In addition,
SWOT can help companies to identify ways to overcome weaknesses and threats in order to
avoid risks(Hofer & Schendel, 1978; Schnaars, 1998; McDonald, 1999; Kotler, 2000).

According to Helms and Nixon (2010), SWOT analysis is still a commonly used tool in all
marketing research and has an important place in business and profitable research. Zenobia et
al. (2009) used SWOT in their social simulation and found the application to be very useful
for predicting future market behavior. Hackbarth and Kettinger (2000) use SWOT analysis to
help managers transform their organizations into e-commerce. They use SWOT because the
tool is both a quick response to complex environments and a tool that many people are
familiar with. Brewer et al. (2000) provide business schools with an approach to continuous
improvement through the use of various tools. They believe that tools and techniques such as
the Strategic Management Process Model, McKinsey's 7S Framework, SWOT Analysis,

17
Groupware Software, Porter's Five Forces Model, and the Planning/Classification Model are
the most effective.

SWOT is often used as a strategic tool by profitable companies. Oliver (2000) agrees that
SWOT is popular in research, while it is an excellent strategic management tool and has been
used effectively with senior management plans, particularly for reaching substantive
discussions that arise in the normal course of a business struggling with short-term problems.
Gunn and Williams (2007) agree that SWOT analysis is central to strategic planning as an
industry framework. They argue that the use of strategic tools is essential in modern strategic
management, and stress that scenarios in which strategic tools can be used can be identified,
which may suggest that business schools should rethink how they use strategic frameworks,
learning and communication. Ahmed et al. (2006) used SWOT analysis to study the carriage
of Kong Air in China and its implementation. Sorensen et al. (2004) studied Kirby's
application of SWOT analysis to assess the company's learning process. By using SWOT
analysis, Vrontis and Vignali (2001) studied chocolate and supplier Cadbury Schweppes.
Beneda (2008) suggests the use of SWOT analysis as a key strategic tool when companies are
conducting competitive analysis.

A researcher can analyze a company's strengths, weaknesses, opportunities, and threats

during a time based on the SWOT model's mastery of the internal and external competitive
environment and investigate the impact of these factors and the effects that can be created by
exploiting them.

2.3.3 STP analysis model

The STP model is widely used in marketing and it is composed of three components:
market segmentation, market targeting, and market positioning (Jun, 2011). It has a feature
that helps marketers to address different needs of customers over a very long period of time
(Xavier, 1998). The company should target its marketing to the customer groups that will
bring the company profits. With the help of segmentation, targeting and positioning, the
company can better achieve this goal (Romppanen, 2021).

The concept of market segmentation was introduced in the mid-1950s by the American
marketing scientist Wendell R. Smith (1956) who argues that products in the market are
homogeneous or similar. Companies have to make precise use of product differentiation and
market segmentation as part of their marketing strategy when planning their marketing

18
activities. Product differentiation and market segmentation are closely related, but there is
still a certain difference between the two: differentiation tries to secure one layer of the
market cake, while those who use market segmentation strive to secure one or more wedge-
shaped segments. This was the first time that market segmentation was presented as a
strategy.

Lynn (2011) argues that segmentation methods are now quite complex and there is more
than one way to segment. Companies differentiate customers based on one or more variables
such as demographic variables (e.g. age, gender, education and income), geographical
variables (e.g. country, state and region), psychographic variables (e.g. attitudes, opinions and
values) and behavior (e.g. media habits, purchase frequency, brand loyalty and channel
usage). Essentially creating a total addressable market (Blank and Dorf, 2020). Researchers
(Hassan et al. 2000; Leonidou et al. 2002) agree that companies use a variety of segmentation
strategies from country to country to mixed strategies, where some segments are essentially
defined globally and then have regional attributes to define the segments to exploit the
segments. The basis for identifying different segmentation strategies for customer groups
depends on the group’s buying behavior patterns and the company’s brand reputation within
the group (Hassan et al., 2003). The company's analysis of the different segments will
determine the number of segments the company intends to pursue (Blank and Dorf, 2020).

Market segmentation results in many groups with similar needs. Targeting is the selection
of profitable targets from these groups that the company wants to serve. Priorities are
determined based on market prospects, business direction or long-term strategy (Kotler and
Armstrong, 2017). Therefore, the company needs to adopt the best solution in order to
achieve maximum profitability (Blank and Dorf, 2020). Companies can evaluate products by
using a competitiveness matrix to develop appeal to their target market (Hunt and Arnett,
2004) According to Markey et al. (2007), companies should also target "design targets"
customers who are most likely to recommend a product or brand to their friends.

Market positioning is to identify its products or services in a certain position in the target
market during the marketing process, i.e. to determine the competitive position of its own
products or services in the target market, also called "competitive positioning" (Kotler and
Armstrong, 2017). Businesses need to understand how consumers define their brands (Keller,
2012). At the same time, Keller (2012) proposed the concept of "brand ladder" consisting of
three levels

19
 1. Attributes, the function of the product

2. Functional utility, the utility the product brings to the customer

3. Emotional utility, the role of the product in the daily life of the customer.

The sub-markets after market segmentation are more specific and researchers are able to
understand the needs of consumers more easily through STP. Companies can determine who
they want to serve according to their own business ideas, guidelines and production
technology and marketing power. At the same time, in the segmented market, information is
easy to understand and feedback, once the consumer demand changes, enterprises can quickly
change their marketing strategies and develop corresponding countermeasures to adapt to the
changes in market demand and improve the enterprise's resilience and competitiveness
(Keller, 2012). With market segmentation, companies can produce marketable products for
their target markets to meet market needs and increase their revenues (Hunt and Arnett, 2004).
Through market segmentation, companies can analyze and compare the buying potential,
level of satisfaction and competition in each market segment to explore market opportunities
that are suitable for the company to better suit the needs of the market (Blank and Dorf, 2020).

2.4 Supply chain management

According to Christopher (2005), supply chain management is the network of

organizations involved in various processes and activities that create value in the hands of the
final consumer through upstream and downstream in the form of products and services". The
term supply chain management is defined as the task of integrating organizational units into a
supply chain and coordinating the flow of material, information and capital to meet the needs
of the (end) customer, thereby improving the competitiveness of the entire supply chain
(Silver et al. 1998). The ultimate goal of SCM - competitiveness - and customer service is the
means (Schneider et al. 1994). The two main components of SCM are the integration of
organizational networks and the coordination of information, material and financial flows
(Christopher, 2005).

2.4.1 The important role in the company's development

The effective coordination of material, information and financial flows remains a

challenging task for a multinational company. Close collaboration between different

20
functions such as marketing, production, purchasing, logistics and finance is an essential
requirement (Aaker, 1998).

Supply chain strategies can make an excellent contribution to enhancing customer

satisfaction with the services provided by a company (Barney, 1991). According to
Christopher (2005) customer service is a multidimensional concept. It consists of three
elements: pre-transaction, transaction and post-transaction. The pre-transaction element
relates to the activities of the company before the contract is signed. It relates to the
customer's access to information about the products and services offered by the company and
the existence of adequate links between the organizations involved (Christopher, 2005). The
transactional element is the element that facilitates order fulfillment. Product availability
(inventory) is an option. If products or services must be produced on demand, order cycle
time comes into play (sliver, 1998).

From the point of view of organization theory, supply chains are a special form of
network organization. They consist of loose, independent actors with equal rights. Their
organizational structure is dynamically adapted to the tasks to be performed and the
objectives of the network organization as a whole (Sydow , 1992). Each entity in the supply
chain will focus on its core competencies and will be freed from rigid decision-making
processes and administrative procedures. This has the benefit of helping companies to
increase their ability to innovate and be flexible enough to adapt to new market trends (Burns
and Stalker 1961). Entities in the supply chain are economically interdependent. Clearly, the
structure of the supply chain is a win-win situation for each member when it remains stable
(H˚akansson and Johanson, 1990).

3. Methodology

This chapter provides an overview of the methodology and methodological considerations

applied after this paper. The next section, Section 3.1, explains the strategy chosen for the
qualitative study, method philosophy and explains the reasons for choosing Tesla as a single
case study. After that, section 3.2 discusses the motivation for choosing interviews as a way
to collect empirical material. Next, Section 3.3 will discuss the ethical issues and solutions
posed by the approach taken in this paper.

The purpose of this thesis is to examine Tesla Inc.'s (Tesla) marketing strategies for the
Chinese market during the epidemic. Specifically, these strategies focus on what

21
opportunities and challenges Tesla faced and what impact it had in terms of marketing,
marketing and brand image in China during the epidemic. Without in-depth research, the
study will remain difficult to answer and address these questions. Therefore, this paper was
conceived to complete this research and to generate new knowledge and provide reference
solutions for companies affected by the epidemic in China and other countries.

This paper will analyze and discuss the research questions by collecting secondary data,
interviewing Tesla personnel and using three marketing models.

3.1 Method of data analysis

The article will focus on Tesla's marketing strategy in China during the COVID-19 spread
period. A qualitative research approach to data analysis is used. To achieve the purpose of the
paper and answer the research questions stated in the introduction, the design of the study
will be reflected in the research process by collecting secondary data, such as Tesla's annual
reports, data from the China Association of Automobile Manufacturers (CAAM), and using
these data to observe the changes in Tesla's sales in specific periods and countries, comparing
the overall data of the automotive industry during the epidemic. Study Tesla's strengths and
weaknesses. Also, use them as a basis for analysis. In addition, for information that is not
available from literature and industry-related organizations, interviews will be used to gather
information through conversations with people involved in the company and correlate it with
the research topic to obtain a further result that can be used to discuss a trustworthy
conclusion.

3.1.1 Qualitative

Qualitative research refers to the reasoning of universally recognized truths through the
inherent characteristics of things, and it relies on a large number of facts and life experiences
(Sandelowski, 1995). It often collects primary data from interviews, and case studies, and
uses this information to describe, interpret and understand the research question being
mentioned. Qualitative research is a more exploratory type of research that uses interviews
and other techniques to obtain deeper information about people's thoughts and feelings and
needs, primarily to understand issues related to the behavior, motivations, and attitudes that
people generate (Chen, 1996). Tesla, as a multinational company producing electric vehicles
(Cui, 2021), is a reliable case study. Thus, the strategies being applied by Tesla and the
impact of the strategy in China during the epidemic are collected, and the research and

22
discussion are developed through this information. A few data are used as an aid to obtain the
impact of the relevant strategies. At the same time, correlating the literature and lived
experience gathered from the qualitative research to integrate and discuss the known
information to obtain a higher level of credibility and professionalism.

3.1.2 Reasons and limitations of the qualitative

Qualitative research can help study Tesla's marketing programs. It is based on events,
situations, and actions to understand Tesla's strategy in the Chinese market during the spread
of the epidemic and the purpose of doing so. Qualitative research has the advantage of being
more detailed and in-depth compared to quantitative research, it allows for a deeper
discussion of an issue in the form of interviews, and using its open-ended and dynamic nature,
qualitative research can help gain more ideas to support the discussion of the topic(Chen,
1996). Not only that, the qualitative research approach involved in this paper can help
interpret and identify the data collected to corroborate the authenticity and development of
the data with content (Kelle, 2006). Using qualitative data for research is an acceptable
method, which will make the article's causal relationships clearer and easier to understand
and for others to use (Chen, 1996).

On the other hand, qualitative research has some disadvantages in business cases. In that
case, the alternatives will be discussed in this part. Firstly, for the Tesla case, qualitative
research would make the content too subjective and make it difficult to quantify the issues,
which would lead to a lack of objectivity in the study (Feng, 2017). According to this
situation, an alternative solution is proposed, using data collected for comparison from some
authorities and Tesla's official website to increase the credibility of the content. Secondly,
since qualitative research can be influenced by local knowledge and culture (Shan, 2008), this
paper will use semi-structured interviews as an alternative, which is a more flexible interview
format that facilitates two-way communication during the interview process and helps to
increase the richness, completeness, and value of the information (Brinkmann, 2014).

3.1.3 Philosophy and approach

Interpretivism and positivism are seen as the philosophical foundations of research

paradigms, while positivism is considered to be an objective, hypothesis-proof doctrine
through the collection and analysis of data, but interpretivism is used to interpret the things
by different groups (Alharahsheh & Pius, 2020). This research will analyze the strategies

23
used by Tesla (China) during the epidemic and the impact of these strategies on sales via
collecting interview information as primary data, comparing and discussing the information
through secondary information from academics and official organizations, and verifying the
veracity of the information through Tesla's annual statements. Therefore, an interpretivism
approach was adopted for this research.

The inductive approach is a method that summarises new findings from information
provided by others (Soiferman, 2010). As the Inductive approach is a way of summarising
raw data into a streamlined content and concluding it (Thomas, 2006), it makes qualitative
research more accessible (Thomas, 2003). This research collected feedback from Tesla
employees about Tesla (China) during the epidemic regarding the actions taken and their
effects, and used them for coding and drew new conclusions based on the information,
therefore, this research adopts an inductive research approach.

3.1.4 Reason for choosing Tesla as a single case

Since qualitative research is a form of data analysis that requires in-depth research through
a certain direction (unit, individual, program, or institution), this paper chooses the Chinese
market during the Tesla epidemic for a single case to gain a better understanding of a more
in-depth discussion, if using traditional research method to choose some of the companies as
the target instead of one, it will be difficult to have a detailed result (Njie & Asimiran, 2014 ).
Not only that, case studies are one of the important types in the field of qualitative methods, it
is also proven to have a more specific and irreplaceable value in a practice-oriented field
(Starman, 2013). Second, Tesla's marketing strategy in China during the epidemic was
chosen as a single case for two other reasons. One is that Tesla is one of the companies that
entered China's market several years ago but has achieved a significant result. When the
COVID-19 spread in China and the government prohibited the citizens from going outside,
the need for cars reduced dramatically. Tesla still can keep the amount of the sales, and
outperformed other companies in the same industry (Du, 2020). The other reason is that
China was the first country where the presence of COVID-19 was discovered and therefore
the first to take action (Sun, Li, Tan, Jiang, Chen, Li & Gao, 2020), and because of this
reason, scholars worldwide have followed the market changes in China, which would
facilitate the information found to justify the study.

24
 3.2 Data Collection

Since the topic of the study has a clear scope in terms of time and place, that is, the
epidemic period is the time scope and China is the place limit, the data sources will focus on
two aspects, one is the research of Chinese scholars and the research of scholars from other
countries for the Chinese automotive market, and this part of the data relies on Google
Scholar and JU Library, as well as some economic organizations' reports, speeches and Tesla
official website. Another is the interaction between the Chinese market and Tesla during the
epidemic and its impact. These data will be obtained from the White Papers section of the
World Health Organization and the Chinese government website. At the same time, semi-
structured interviews were chosen in order to refine and corroborate the authenticity and
reliability of the collected data, as well as to validate the results of the strategy.

3.2.1 Primary data collection

Based on the purpose of this paper and the available data, semi-structured interviews were
chosen as the source of the primary data. Because this research is to be explored, semi-
structured interviews can help to understand existing issues from different perspectives (Wan,
2004). Semi-structured interviews are not as serious as structured interviews; they are more
flexible and can adjust the topics and questioning style according to the course of the
conversation (Smith, 2019). At the same time, it has clearer constraints on the answers
compared to unstructured interviews, avoiding open-ended answers and allowing for a clearer
discussion of the interview results afterward (Brinkmann, 2014). Prior to the interview, 10
questions were prepared that were linked to Tesla's strategy in China. The following sections
will explain the interview preparation and interview process in detail.

3.2.2 Development of interviews

Simple literature support is difficult to visually reflect the market changes and profit
increase or decrease of Tesla during the epidemic, so this paper will obtain further
information through interviews to improve the reliability, accuracy of the argument. The
theoretical information obtained through previous studies and the actual strategies officially
released, this paper will also obtain information and data related to sales volume, sales, and
growth through interviews with Tesla employees, and use them to explore the impact of
marketing strategies and changes in store conditions during the epidemic.

25
 The researcher will use semi-structured interviews during the interview process, which
means that it allows for greater clarity on the subject matter and a more comprehensive
understanding of the subject matter by those being interviewed (Harrell & Bradley, 2009).
Because semi-structured interviews are an interpretive approach to data research, it is easier
for the interviewee to articulate and justify a particular issue in sentences or examples as
opposed to a closed-question questionnaire (Dearnley, 2005). The purpose of the interviews
was to verify that the data collected and the information summarized were factually correct.
The questions of the interview will be shown in the appendix.

3.2.3 Selection of samples

Qualitative studies tend to focus more on deeper understanding, so the sample size selected
for qualitative studies is important (Chu, Zhao, Ni, Li, Zhao, 2021). In this study, seven
interviewees were selected. For the selection of the interview sample, a non-random sales
sample from different stores was selected for interviews because of the uneven distribution of
the Chinese population and the limited access to them. The selected personnel met the
following criteria.

I. Have joined Tesla in China at least one year prior to the outbreak

II.Still working at Tesla as of January 1, 2022

III. Be familiar with Tesla's products sold in China for at least one year before and after
the outbreak

IV. Have communicated with multiple customers prior to the outbreak

V. Communicated with multiple customers during the outbreak

Firstly, since this study explores Tesla's marketing strategy in China during the epidemic,
the participants needed to know the Chinese market during the epidemic. The problem of
being onboarded for too short a time would be unfamiliar with Tesla's corporate culture and
policy development process to help in this regard. Secondly, the prior before January 1,
2022, was chosen for interviewers to ensure that the most up-to-date information and data
collected were matched and could help demonstrate how known policies were developing in
Tesla stores. The researchers concluded that the interviewees' additions and deletions of
products before and after the Tesla epidemic were one way in which they could react to

26
whether the change in product content caused a change in sales. Not only that but the fourth
and fifth conditions for screening the sample were designed to ensure that the interviewees
had some knowledge and understanding of the market's needs and could help discuss what
particular changes in the market's needs had occurred as a result of the epidemic.

Based on these limitations, we selected 7 people to be interviewed.

Interviewees Position Age Length of employment Gender

(year)

Interviewee 1 Store manager 31 6 Female

Interviewee 2 Store manager 33 7 Male

Interviewee 3 Regional manager (North 30 6 Male

East of China market leader)

Interviewee 4 Sales executive 28 5 Female

Interviewee 5 Sales executive 27 4 Female

Interviewee 6 Supervisor of trainee sales 27 5 Female

Interviewee 7 Supervisor of trainee sales 29 7 Male

3.2.4 Interview process

On March 11, 2022, we developed the framework of questions and logic for the interviews
around the marketing strategy. The following week, we contacted Tesla employees who met
the requirements and briefly explained the purpose and topic of the study to them and further
explained the interview process and approach to those who could understand and participate.
Through discussion, participants were scheduled to be interviewed in early April. Due to
regional restrictions, all interviews were conducted via voice call on WeChat. 7 interviews
were conducted with different interviewees. Interview questions were provided prior to the
interview, which meant that participants had more time to prepare detailed content, and since
the interviewees were native Chinese speakers, the interviews were conducted in Chinese to
avoid information errors due to language differences during the interview.

27
 The interviews began with an introduction to the topic and purpose, although each
participant had learned about these prior to the interview. The purpose of this was to help the
interviewees understand the purpose accurately. The second step was to address the ethical
issues with the participants and get their consent to begin the formal interview. Interviewers
were selected and asked questions based on pre-provided questions in each interview. When
the interviewee's answers were not connected to the content, the interviewer would slightly
adjust the questions to guide the interviewee's answers. Each participant confirmed at the end
of the interview that the information recorded during the interview and what they had
expressed were consistent.

3.2.5 Reasons and limitations of the interview

Firstly, the results of the interviews will help identify unobserved or overlooked variability
in the data collected. Second, the level of mutual trust and understanding between the
interview partners is critical to the quality of the data (Xiang, 2015). One of the reasons Tesla
was chosen was because the researchers had a long history of interacting with Tesla
employees and leaders, and trust existed between them. Not only that, but the interviews were
a small sample study, which is usually conducted with a specific type of respondent to
provide an acceptable result at a lower cost (Kelle, 2006). Since Tesla is a large company,
with 211 stores in 60 cities in China as of January 2022 (Sputniknews, 2022), this is a large
sample, so the restricted interviews will make the study more meaningful.

These filtering criteria can help make the study more precise, satisfying the interviewees'
understanding of marketing results during the epidemic while also describing market changes
and changes in customer demand before and after the epidemic in terms of
experience .Secondly, as mentioned in 3.1.3, the interviews will be conducted in a semi-
structured manner, which means that some questions can be discussed in depth during the
interviews, and the questions can be modified around the topic when confronted with the
issues that need to be researched, making the connection between the results and the research
stronger and avoiding the lack of relevance of the interview results to the research questions
due to differences in expertise and life experiences (Harrell & Bradley, 2009). It also avoids
misunderstanding of the questions by the interviewees, and the questions will be more clearly
explained and understood by the interviewer and the interviewee in the discussion about
Tesla's marketing plan during the spread of the epidemic in China.

28
 However, there are some limitations of the interview. Interviewing as the main source of
data collection is risky because interviewees tend to give a result based on subjective ideas
and life experiences, which will make the study lack objectivity and reduce credibility to
some extent(Brinkmann, 2014). To avoid this situation, the interviewees' work experience,
workplace, and some related requirements are restricted. At the same time, secondary data
collected through Google Scholar and authoritative institutions will be used as a tool to
corroborate with the interview content, improving the credibility and refer-ability of the study.

3.3 Ethical issues

Before the interviews began, the researchers contacted potential interviewees through
social media such as WeChat. Also, each interviewee had been informed of the purpose of
the interview and agreed to disclose the interview, confirming that the interview transcript
was consistent with the interview process, and we determined that the interviewee had been
provided with adequate information and participation. Due to the COVID-19 and regional
restrictions, all interviews were conducted through the phone. At the same time, each Tesla
employee interviewed was able to understand and participate in the interview questions, there
was no coercion of the interviewee during the interview, and all conversations were provided
voluntarily. For the sake of transparency, all participants will be sent a translated version of
the document.

4. Finding and analysis

The researcher's main purpose of this study is to explore the relationship between Tesla's
Chinese market strategy application and sales growth under the epidemic. The researchers
used qualitative analysis methods to conduct interview-style dialogues with Tesla's
employees in the Chinese market. By summarizing, the researchers found that, in general,
Tesla's strategies under the epidemic have a stimulating effect on the growth of sales
performance, which means that Tesla's strategies under the epidemic have a positive impact
on performance growth. Next, the researchers will combine the PEST, SWOT and STP model
to analyze. Next, the researcher will analyze the content of the dialogue, extract the
corresponding reference information, and describe and analyze.

Quote Category Theme

29
 “During the epidemic, a large number of
customers reduced their trips due to
government policy”

“During the epidemic, China has upheld a zero-

Covid policy of travel restrictions and swift Reduced the number of
customers/footfall
lockdowns of neighborhoods or office towers to
control outbreaks，many customers who are
interested in our products cannot come to our
store to visit because they are restricted from
going out”

“With the impact of the epidemic and the

downturn in various industries, there are clients
with companies that need capital to continue Declining customers buying
their operations, they need to control the assets power
at their disposal and save their savings to fight
against unknown risks”
Problems facing Tesla in the
epidemic

“The impact of the rising supply of raw

material prices and parts shortages led to higher
car prices and more customers buying ahead of
the price increase, resulting in a short spike in
orders. Also affected by the raw materials,
delivery times were delayed” Longer supply chain

“During the epidemic, the price of chips has

risen sharply, and at the same time, there are
shortages, and deliveries are often delayed,
which is a huge challenge to our supply chain.”

“During the outbreak, many colleagues

resigned and there were instances of staff being
Shop stability threatened by
poached by other peer companies. Many of the
increased staff separation
new staff in the stores had not yet completed
the handover and became skilled in the business
when the old staff who taught them left, and

30
some customers responded that the replacement
customer service was confusing to them in
terms of their needs and understanding of the
products and the business.”

“Our company is not like traditional car

companies, who keep some stock cars in their
warehouses. In contrast, after our customers
buy a Tesla product, the Shanghai Super
Factory will order the cars in order of purchase
and produce them according to the order
number ”

"I had a customer who came to the store on Implementing a stockless

August '21 to look at a car and he actually strategy
wanted to buy an Audi, but Audi was affected
by the epidemic and took more than six months
to deliver the vehicle. The customer could only
be delivered a car that had been in production
for four months. The customer had to give up
the Audi to choose the Tesla."
Usage Strategies

"During the epidemic, in early 2021, Tesla

launched its second SUV, priced from RMB
316,900, and at one point outsold the Model 3.
Before the launch of the model y, I felt that
there was a lack of performance in all aspects
of the stores, but after the launch of the Model
y, things got a lot better."

Launch of new products

"Due to the epidemic, a lot of customers who
were interested in city-based SUVs in the
RMB 300,000-400,000 price range held off on
buying a vehicle because the only other car in
the same price range at that time was the Model
3. This led to many customers extending their
vehicle purchases."

"After the launch of the Model y, many

31
customers who had previously turned us down
came back to our stores asking us for
information about the Model y's relevant
configurations.

"In our stores, we offer different activities to

attract different customers, based on the
feedback from the sales people"

"My customer is 40 years old and he is

a fan of Tesla, but his wife and children don't
know much about Tesla, so they don't support
him in buying one. But the family was invited
to a holiday event and his wife and children
liked some of the features of the Tesla and
ended up supporting my customer in placing an
order."
Targeting fixed groups
"There are many customers who bring their pets
inside the stores or have one or two pets at (Segmentation of customers

home, and sometimes they take them out, but based on user experience,

there are still so many places in China where product needs, and

pets are not allowed, and they have to leave development of different

them in the car. We are targeting these types of marketing programs)

customers by showing them what Tesla has

designed in terms of caring for their pets by
turning on Tesla's 'Dog Friendly Mode' when
they have to be in the car, in which the interior
of the Tesla cabin is kept at a temperature
suitable for pets and allows them to rest better."

We also launched a 'Special Pampering'

campaign for families with pets to promote and
showcase the pet-friendly aspects of Tesla.

"Some of my customers tell me that when they

choose a brand, they initially want something
more recognizable like Mercedes, but then
some of their personal needs are difficult to
meet, for example, Mercedes is more business-

32
 like, and then their idea of speed is not met."

“During the trekking event, some customers

said that he was interested in environmental
protection and that the event made him feel that
the Tesla was a better fit for it, no longer just
because of the tram.”

"Due to the epidemic, many of our customers

were unable to visit us in store, so we
introduced our products to them over the phone
and also followed up with them in real time by
calling them back during the week or month to
follow up on their situation and changes in their
needs."

"Even when isolated at home, we were in

telephone contact with 50-70 customers a day.
Telemarketing
Because they all had to stay at home and many
customers were willing to communicate with
us, my number of cars sold did not reduce
because of the special period."

"Even because of some unforeseen

circumstances, we adopted the right strategy to
minimize the losses caused by the special
period and we are satisfied with the overall
result compared to the sales of other brands."

"Affected by the epidemic as well as

government policy, we asked customers to
register their visit when they entered the store Screening for customers with
Effectiveness of strategy application
and some uninterested people refused to fill out genuine purchase intent
the information."

"We call back within a week after customers

33
who have filled in their information have left.
Customers who remain interested do not reject
our calls and will talk to us again about
something that interests them."

"I had a client who told me that he was

planning to buy a Mercedes, but because of my
frequent communication with him during this
time, he has now decided to reconsider."

"During the outbreak, sales staff were asked to

communicate with customers by telephone. In
the limited time available for communication,
we had to learn to capture the customer's main
concerns, understand clearly what the customer
wanted to know, and present it in a structured
way."

"I can feel that my business skills have

improved. During the epidemic, the volume of
customers decreased and I was thinking every
day about how I could get the attention of Improving staff business
customers in a short time. If I hadn't been skills
pushed by the epidemic, I probably wouldn't
have thought about it so much or done so
much."

"One of my employees felt that the sales model

under the epidemic put a lot of pressure on him
and when he contacted customers on the phone,
many of them clearly expressed their distaste
for telemarketing and their dissatisfaction with
sales, which exacerbated his psychological
pressure"

"Before we launched the Model Y in '21, we Expanded potential customer

had a lot of customers who said they would not base and facilitated
consider buying a Tesla because they wanted transactions
more of a city SUV but Tesla could not meet

34
their needs. But when Model Y was launched,
this was transformed. Many customers have
expressed their love for the model Y to us over
the phone and through test drives."

"The events for pets that we held in our stores

were promoted by the customers who attended
the events, and more people in the customers'
pet circles became aware of Tesla in a new
way."

"People are restricted from traveling due to

national policies. Our store organized sales to
drive to the customer's city to hold a test drive
for them. When we later received customers in
our stores, many of them said they had
increased their affection for Tesla because of
the events we held and eventually chose Tesla."

"Some of my customers said they considered

other brands of vehicles before buying a Tesla.
But because of the epidemic, other brands had
to wait six months or even a year for new
vehicles to be delivered, and if they didn't want
to wait that long they had to buy a vehicle that
had been in stock for more than four months."

4.1 Problems facing Tesla in the epidemic

4.1 is mainly through the dialogue between the researchers and the interviewees to learn
about the problems faced by Tesla during the epidemic. The researcher analyzes what impact
these problems will bring to Tesla. The following researchers will describe and analyze the
classification of the problem in more detail through coding and topic analysis.

4.1.1 Reduced the numbers of customers

The first problem Tesla faces is the sharp decrease in the number of consumers. The
researchers learned from the answers of Interviewee 1 that due to China's implementation of
the epidemic dynamic clearing policy, the blockade of areas with outbreaks will affect the

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purchasing power of consumers and have negative effects. For instant Interviewee 1 stated
that

“During the epidemic, China has upheld a zero-Covid policy of travel restrictions and
swift lockdowns of neighborhoods or office towers to control outbreaks ， many customers
who are interested in our products cannot come to our store to visit because they are
restricted from going out”

Moreover, Interviewee 3 in answer to the question about the primary motive to invest in
real estate affirmed that

“During the epidemic, a large number of customers reduced their trips due to government
policy”

The interviewees also stated to the researcher that the Chinese government's epidemic
policy also limits the number of customers who come to the store every day, so the store has
to adopt an appointment system, which dampens the enthusiasm of consumers to visit to a
certain extent. From a macro perspective, government policies have an important impact on
the development of enterprises, the business environment will be changed by policies, and
enterprises cannot change government policies. Tesla has had to face tough measures from
the Chinese government against the epidemic, and if there are infected people near Tesla's
stores, Tesla stores will have to close for at least two weeks. Or if the city where Tesla stores
are located is defined as a high-risk area, then they also have to close. Therefore, Tesla's main
goal at this stage is to reduce the economic losses to the company due to the government's
epidemic policy.

4.1.2 Declining customers buying power

The second category can be described as the economic impact of the pandemic, with the
interviewers stressing to the researchers that the impact of the pandemic on the incomes of
some consumers they knew was huge. At the same time, the epidemic has also caused panic
among people, forcing Tesla's target consumer groups to be reluctant to spend large sums of
money, and their purchasing power and willingness to buy are greatly reduced. As
Interviewee 2 stated

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 “With the impact of the epidemic and the downturn in various industries, there are clients
with companies that need capital to continue their operations, they need to control the assets
at their disposal and save their savings to fight against unknown risks”

Tesla employees interviewed by the researchers agreed that reduced income and
purchasing power of the customer base are the biggest problems Tesla faces in sales during
the pandemic. The overall impact of the epidemic on the economy is also significant. Due to
the dynamic zero-clearing policy implemented by the Chinese government, if a case occurs in
a certain community, the residents of the entire community will be restricted from traveling
for at least two weeks, which greatly affects the residents' income and the company's
performance (main employees are unable to come to work, etc.). As mentioned in the
interview, the income of Tesla's target consumer groups has been affected, causing them to
temporarily stop buying expensive commodities.

4.1.3 Longer supply chain

The third category is supply chain. The impact of the epidemic on the supply chain of
automakers is huge, including rising raw materials and longer production cycles. As
mentioned by Interviewee 5

“The impact of the rising supply of raw material prices and parts shortages led to higher
car prices and more customers buying ahead of the price increase, resulting in a short spike
in orders. Also affected by the raw materials, delivery times were delayed”

Also mentioned by interviewee 6

“During the epidemic, the price of chips has risen sharply, and at the same time, there are
shortages, and deliveries are often delayed, which is a huge challenge to our supply chain.”

As a car manufacturer and seller, Tesla's supply chain has been hit hard during the
pandemic. The first is the shortage of chips, which prevents stable production at the Tesla
factory, and the second is the increase in transportation costs and warehousing costs. At a
time when China's economy is being hit by the virus, if Tesla's pricing increases due to higher
costs, it could have a further negative impact on sales.

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 4.1.4 Shop stability threatened by increased staff separation

The fourth category is categorized as the increase in employee mobility. The customer
groups that Tesla targets are mid-to-high-end people and their pricing in the Chinese market
can also be reflected accordingly. Therefore, in the early days of the outbreak, in the face of
the plummeting number of customers, many employees chose to change jobs. At the same
time, there were many examples of experienced employees being poached by their peers, as
mentioned by Interviewee 6

“During the outbreak, many colleagues resigned and there were instances of staff being
poached by other peer companies. Many of the new staff in the stores had not yet completed
the handover and became skilled in the business when the old staff who taught them left, and
some customers responded that the replacement customer service was confusing to them in
terms of their needs and understanding of the products and the business.”

Increased employee separation means fewer experienced employees, which is very

detrimental to corporate sales. Experienced sales take away their customers, and new sales
need to discover customer resources on their own, which takes more time. Correspondingly,
cultivating employees with strong business ability in a short period has also become one of
the main problems that Tesla needs to face.

4.1.5 PEST analysis

The researchers are going to use the PEST framework to analyze what situation that tesla
met during the epidemic. Kotler (1998) argues that P.E.S.T analysis is an indispensable
strategic tool for companies, it consists of political, economic, social and technology. From
the Political perspective, During the epidemic, China has upheld a zero-Covid policy of travel
restrictions and swift lockdowns of neighborhoods or office towers to control outbreaks (Tan,
H., & Cheng, E. 17 April 2020). With this policy, lots of people have been asked to stay at
home if there are any new patients reported nearby. It also means, for the Tesla store, there
are no more consumers coming during the epidemic situation. Supply chain has been
influenced as well, with rising the price of raw materials and chip shortage, Tesla's
production cycle has to become longer. At the same time , economics has been affected
seriously. The market cannot maintain stability, and enterprises may be required by the
government to suspend business at any time, which affects the income of enterprises and
individuals. So, the consumers are more cautious about buying expensive products, and the

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consumer's buying power is reduced. The overall state of society is depressed, and people
will also be affected psychologically during the epidemic. For example, they worry about
whether hang out will be restricted, whether the workplace will be required to close, and
whether their salary can be obtained on time. These factors also reduce consumers'
purchasing desire to a certain extent.

4.2 Usage Strategies

The researchers will study the second major theme based on the data collected. It was
obvious that the majority of respondents indicated a change in consumer mindset as a result
of the epidemic and that they needed to use different targeting strategies to sell to different
consumer psychologies.

4.2.1 Implementing a stockless strategy

The customer places the order and then the factory makes the production and delivery of
the vehicle. The model of no inventory allowed Tesla to reduce the burden during the
epidemic. Participant 2 told us：

“Our company is not like traditional car companies, who keep some stock cars in their
warehouses. In contrast, after our customers buy a Tesla product, the Shanghai Super
Factory will order the cars in order of purchase and produce them according to the order
number ”

Also in interviewees 1 and 6, similar expressions were mentioned. Buying a car is an

important event for many customers, and from the customer's point of view, no one wants to
buy a car that has been in storage for a long time, even if it is brand new, and there is a high
probability that the customer will refuse this purchase. Interviewee 6 gives us an example

"I had a customer who came to the store on August '21 to look at a car and he actually
wanted to buy an Audi, but Audi was affected by the epidemic and took more than six months
to deliver the vehicle. The customer could only be delivered a car that had been in production
for four months. The customer had to give up the Audi to choose the Tesla."

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 4.2.2 Launch of new products

When discussing Tesla products with the participants, most of them made the point that
different types of products at the same price point would attract more customers to the
vehicle. A single type of product does not meet the customer's requirements for a vehicle.

Interviewee 3 mentioned that

"During the epidemic, in early 2021, Tesla launched its second SUV, priced from RMB
316,900, and at one point outsold the Model 3. Before the launch of the Model y, I felt that
there was a lack of performance in all aspects of the stores, but after the launch of the model
y, things got a lot better."

Interviewee 7 added his perspective:

"Due to the epidemic, a lot of customers who were interested in a city-based

SUVs in the RMB 300,000-400,000 price range held off on buying a vehicle because
the only other car in the same price range at that time was the Model 3. This led to many
customers extending their vehicle purchases."

Interviewee 4 added an interesting observation：

"After the launch of the Model y, many customers who had previously turned us down
came back to our stores asking us for information about the Model y's relevant
configurations.

4.2.3 Targeting fixed groups

Most of the interviewees were leaders or group managers of each store, who found in their
daily work that many of the strategies that were working well before the epidemic were not
working as well as they should have during the epidemic. The economic downturn brought
about by the epidemic led to an increasing number of customers staying on the sidelines. The
interviewees were told through sales feedback that the vehicles were not known enough in
some respects to make up their minds to buy. So in this case, stores need to launch different
activities to invite customers to experience the features of the vehicle in-depth and stimulate
them to make a choice.

Interviewees 1, 5, 6, and 7 all mentioned:

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 "In our stores, we offer different activities to attract different customers, based on the
feedback from the sales people"

Respondent 1's store launched a festive outing for children with families, inviting
customers and their families to experience the reality of the vehicle on the road, citing an
example from the event:

"My customer is 40 years old and he is a fan of Tesla, but his wife and children don't
know much about Tesla, so they don't support him in buying one. But the family was invited
to a holiday event and his wife and children liked some of the features of the Tesla and ended
up supporting my customer in placing an order."

Interviewee 5 mentioned.

"Some of my customers tell me that when they choose a brand, they initially want
something more recognizable like Mercedes, but then some of their personal needs are
difficult to meet, for example, Mercedes is more business-like, and then their idea of speed is
not met."

Interviewee 6 stated.

"There are many customers who bring their pets inside the stores or have one or two
pets at home, and sometimes they take them out, but there are still so many places in China
where pets are not allowed, and they have to leave them in the car. We are targeting these
types of customers by showing them what Tesla has designed in terms of caring for their pets
by turning on Tesla's' Dog Friendly Mode' when they have to be in the car, in which the
interior of the Tesla cabin is kept at a temperature suitable for pets and allows them to rest
better."

What’s more interview 2 said

“During the trekking event, some customers said that he was interested in environmental
protection and that the event made him feel that the Tesla was a better fit for it, no longer just
because of the tram.”

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 These customers considered Tesla's products and activities as demonstrating their focus on
being environmentally friendly and sustainable, which is one of the key reasons why they
choose Tesla.

4.2.4 Telemarketing

During some special periods of the epidemic, influenced by Chinese government policy,
both sales and customers have to stay in their houses. But this was a situation where the sales
also had to keep an eye on the changing thoughts of their customers and help them to
understand the developments related to Tesla. During this period, the interviewees introduced
approaches that were appropriate for the particular period. The salespeople used the
telephone to communicate with customers and follow up with them in real-time.

Interviewee 2 described to us the requirements of working during the special period.

"Due to the epidemic, many of our customers were unable to visit us in store, so we
introduced our products to them over the phone and also followed up with them in real time
by calling them back during the week or month to follow up on their situation and changes in
their needs."

Meanwhile Interviewee 1 recalled to us how he was working at the time.

"Even when isolated at home, we were in telephone contact with 50-70 customers a day.
Because they all had to stay at home and many customers were willing to communicate with
us, my number of cars sold did not reduce because of the special period."

Interviewee 6 concluded that.

"Even because of some unforeseen circumstances, we adopted the right strategy to

minimize the losses caused by the special period and we are satisfied with the overall result
compared to the sales of other brands."

4.2.5 STP Analysis

Tesla's market segmentation can be summarized as different products based on differences

in car purchase usage, something that is worth investigating. Tesla's market segmentation
differs from that of Mercedes-Benz, a company that also has a large customer base in China.
Whereas Mercedes-Benz prefers to segment the market by region, and when it is in China, it

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divides the country into three regions - North, East and South (Sun, 2012), Tesla takes a more
differentiated approach to differentiating between different types of customers based on their
individual characteristics. In a situation where people are restricted in their travel and have
difficulty in observing whether the vehicle meets their additional needs expectations based on
the actual situation, Tesla's segmentation of the market according to customer needs has led
to more consumers who are concerned with their personal needs to value Tesla, even if they
cannot see the vehicle for themselves.

On the other side, Tesla chose a differential market strategy in the selection of its target
market (Zhou, 2018), which means that the brand chooses two or more markets as target
markets when facing an already segmented market and offers products and services that are
more specific and in line with consumers' psychological expectations for the different
characteristics and different needs of each sub-market. For customers who like to travel,
Tesla launched a second SUV with more space and a boot for storing suitcases and supplies
for travel, and despite its price being a little higher than other cars with the same performance,
it still saw a significant improvement in sales numbers over the Model 3.

Finally, in terms of market positioning, as mentioned in the target market, Tesla looks at
the individual needs of its customers and tries to meet those needs, which is one of the keys
to differentiate it from other brands of cars in its price range. In addition to this, the more
environmentally friendly trams are unique to Tesla and are their main market position, as
well as being the main reason why many customers choose Tesla over Mercedes, Audi and
other brands. According to the 2020 Tesla Impact Report, electric cars only account for
approximately two thirds of the CO2 emissions of fuel cars when discussed in terms of long
term use, and consume significantly less overall than fuel cars.

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 {Figure from the 2020 Tesla Impact Report page 15}

The main technology and positioning that Tesla uses to differentiate itself from other
multinational car brands are that of an electric car, which can be considered an
environmentally friendly company. In contrast to other companies that focus almost
exclusively on performance, Tesla's events in China to reach out to potential customers and
introduce its products are often linked to nature, as in the case of the greening event and the
"Special Pampering" event during the epidemic, which emphasized the harmony between
man and nature. The sales staff introduced Tesla's ability to reduce CO2 emissions and its
environmental friendliness in a natural environment and invited participants to experience the
new product, which allowed customers to increase their sense of identity on a psychological
level. At the same time, the "special pet-friendly" event not only brought sales and families
closer together but also promoted Tesla's desire to create a better living environment for
animals. This is a very good match with Tesla's aim of producing electric cars and striving for
social responsibility.

In summary, what can be suggested is that Tesla has chosen to target not everyone in
China who is interested in buying a car, but customers with more specific needs, be it travel
needs, personal needs, or environmental needs. Tesla established its target market by
analyzing the needs of different kinds of customers and building a market position within the
target market that is in line with its core corporate and product values, capturing people's
desperate desire for outdoor recreation programs and trekking in its publicity and
encouraging them to buy environmentally friendly products. At the same time, Tesla is
developing more detailed services for customers on top of the original ones. This is an
important reason why they were able to maintain sales during the epidemic.

4.2.6 SWOT analysis

One of Tesla's brighter strengths in the epidemic is its adherence to a no-inventory strategy.
The no-inventory strategy means that customers are given an order number when they place
an order, and the factory produces according to the order number. The customer can also
check the production progress against the order number and keep track of the vehicle's
production process at all times. In contrast to car companies that cannot give specific delivery
dates, Tesla's no-inventory strategy provides consumers with confidence and assurance in
their purchase. At the same time, the ability to deliver products in a way that ensures that

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customers receive the most recently produced product, rather than one made months ago, can
reap the benefits of customer goodwill, resulting in more positive feedback from customers
who want to buy the most recently made product and gaining an advantage over other brands
in the same category. More importantly, the no-inventory strategy reduces Tesla's costs in
terms of warehousing and manpower, easing Tesla's financial pressure during the epidemic.

Tesla's strategy of telemarketing and launching different campaigns for different customers
shows the researchers another advantage of Tesla: a team of employees with a lot of expertise,
strong execution and active ideas. The implementation of the strategy is dependent on the
staff's control of the details of the campaign. In telemarketing, the sales team is constantly
improving its business skills to better serve the customer. In the strategy of launching
different campaigns for different customers, the staff are not confined to traditional ideas, for
example, proposing campaigns such as "Special Favourites", which help customers
understand Tesla while enhancing the relationship with them. At the same time, the more
professional team helped Tesla to develop a better image and trust among its customers.

Tesla's launch of new products during the epidemic showed the researchers that Tesla has
the advantage of a cutting-edge research team and advanced technology. Launching new
products tests a company's research and development capabilities, and there is no doubt that
Tesla has one of the leading technical teams in the electric vehicle industry, which provides a
good foundation and experiences to produce new products. At the same time, an excellent
research team can help Tesla close the technological gap with its competitors and keep
Tesla's products at the leading edge of technology.

Considering Tesla's supply chain, it has been greatly affected. The lack of timely delivery
of goods due to the epidemic has led to a significant increase in the price of materials and
chips required for vehicles, which in turn has led to an increase in vehicle prices. The
shortage of materials has also led to an increase in delivery times and the inability to meet set
timelines, which makes many customers hesitant and difficult to make a decision.

The reduced footfall in Tesla stores due to the epidemic has resulted in relative decrease in
potential and active customers and increased difficulty in selling vehicles. Many customers
were also uncertain about their vehicle purchases due to the risks associated with the
epidemic. These factors have led to increased psychological stress among the staff, which is
not conducive to the long-term development of the store.

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 For opportunities, although the flow of customers to the stores and the customer base is
decreasing, the quality of the customers is increasing. Customers who enter the store for a
visit or test drive are much more likely to buy than they were before the epidemic. Sales
should seize the opportunity to convert the more interested customers into confirmed
purchasers.

However, there are still some threats. During the epidemic, Tesla has seen an increase in
staff turnover, with some sales and middle and senior management being poached by
competitors because Tesla not only has an outstanding performance of sales in China, it is
also a leader in the training and professionalism of its employees. Tesla's competitors in
China include not only local new energy car companies such as BYD, which already have a
certain market share, but also new companies such as Azera, as well as traditional fuel car
brands. Distinct from car companies, Huawei and other internet giants have also made a
statement to enter the new energy vehicle market. The lack of professional staff has led them
to set their sights on Tesla employees, leading to the phenomenon of staff turnover in some
Tesla stores.

4.3 Effectiveness of strategy application

The third theme identified by the researchers was the effectiveness of strategy application,
where respondents were asked to recall the implementation of the strategy during the
outbreak and to assess the impact of the strategy after implementation from a sales
perspective.

4.3.1 Screening for customers with genuine purchase intent

It is clear from the discussion that telemarketing and policies introduced in stores under
government policy guidance can help Tesla better identify customers who are interested in
purchasing a car.

Interviewee 3 said to us：

"Affected by the epidemic as well as government policy, we asked customers to register

their visit when they entered the store and some uninterested people refused to fill out the
information."

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 This primary screening reduces the number of customers who are just curious and have
no intention of buying, while combined with telemarketing, it allows sales to identify
customers with greater precision.

Interviewee 7 told us.

"We call back within a week after customers who have filled in their information have
left. Customers who still remain interested do not reject our calls and will talk to us again
about something that interests them."

Interviewee 2 said that after implementing these strategy, they interacted more closely with
their customers：

"I had a client who told me that he was planning to buy a Mercedes, but because of my
frequent communication with him during this time, he has now decided to reconsider."

Government policies have inconvenienced the conduct of Tesla's work, the store
Interviewees work for has implemented targeted initiatives in response to force majeure.
However, it needs to be mentioned that these targeted initiatives were a double-edged sword.

They help Tesla to filter out truly interested customers, and clarify the direction of sales in
its daily work, i.e. to focus on interested customers and communicate with them further. One
person has a limited amount of energy, and before the implementation of the targeted
initiatives, sales could not allocate time to all the customers who came into the store, and
sales' energy was inevitably distracted, reducing productivity. However, with the help of
these initiatives, sales can achieve performance targets with less effort and time, increasing
their productivity and reducing work pressure. With clarity of intent, sales pay more attention
to the customer, give more time and increase their control of the customer's situation. At the
same time, the communication between sales and the customer can deepen the customer's
understanding of Tesla. During the communication process, the sales team can solve the
customer's doubts and make targeted presentations on the customer's common points,
increasing customer satisfaction and the success rate of orders.

However, these initiatives also have a negative impact on Tesla. The practice of
telemarketing and registering personal information and phone numbers can be offensive to
some customers. In communication with sales, customers are resistant. Negative customer

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sentiment is not conducive to sales and if not handled properly, customers can become
disgusted with Tesla and even alienated from Tesla's sales and products. This is an area
where Tesla still needs to improve its relationship with its customers.

4.3.2 Improving staff business skills

When discussing the impact of these initiatives, the theme of changing employee
competencies was mentioned by essentially all interviewees. Employees' occupational skills
have been affected by the implementation of the measures and have been improved or
reduced.

Interviewee 2 argued.

"During the outbreak, sales staff were asked to communicate with customers by
telephone. In the limited time available for communication, we had to learn to capture the
customer's main concerns, understand clearly what the customer wanted to know and present
it in a structured way."

Due to the specific nature of the epidemic, customers' needs are constantly changing and
communication with sales is reduced by the inability to meet them, at a time when concise
and clear information about their needs is important to them. This requires staff who are in
contact with customers to reflect on the content of the conversation and the needs of the
customer.

Interviewee 6 shared his personal experience with us.

"I can clearly feel that my business skills have improved. During the epidemic, the
volume of customers decreased and I was thinking every day about how I could get the
attention of customers in a short time. If I hadn't been pushed by the epidemic, I probably
wouldn't have thought about it so much or done so much."

However, interviewee 5 answered us in a negative light.

"One of my employees felt that the sales model under the epidemic put a lot of pressure
on him and when he contacted customers on the phone, many of them clearly expressed their
distaste for telemarketing and their dissatisfaction with sales, which exacerbated his
psychological pressure"

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 Interviewees indicated to the researchers that the improvement of employees' professional
skills during the epidemic helped Tesla to achieve new sales targets. Each salesperson was
constantly adapting to the changes brought about by the epidemic: the implementation of
government policies to prevent the epidemic, reduced store traffic, and increased customer
uncertainty. This different sales situation than before the epidemic has prompted sales to
reflect on how to manage their relationships with customers and how to better achieve their
sales targets each quarter. Different sales have developed distinctive sales styles based on
their unique personalities. At the same time, they are constantly finding flaws in their sales
styles and improving them in practice. The interviewees who are store leaders tally the
experiences of the best performers each quarter and promote them internally. More
salespeople add what they think works to their own sales models. The practice of replication
by the interviewees not only helps each colleague to improve their business skills but also
creates a good competitive atmosphere within the staff.

At the same time, the psychological problems of employees should also be taken attention
by Tesla in time, as performance levels and problems encountered at work can lead to
increased stress and are not conducive to the psychological well-being of employees.

4.3.3 Expanded customer base and facilitated transactions

Respondents all mentioned the potential customer base in their interviews, with the
majority of interviewees indicating that their potential customer base had expanded following
the introduction of their new strategy.

For example, interviewee 1 stated：

"Before we launched the model Y in '21, we had a lot of customers who said they would not
consider buying a Tesla because they wanted more of a city SUV but Tesla could not meet
their needs. But when the model Y was launched, this was transformed. Many customers have
expressed their love for the model Y to us over the phone and through test drives."

Launching new products has helped Tesla attract more consumers to make purchases, and
Tesla's equally priced products complement each other, attracting more customers to make
their choice. Not only has this strategy helped Tesla expand its customer base, interviewee 2
gave us the following example：

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 "The events for pets that we held in our stores were promoted by the customers who
attended the events, and more people in the customers' pet circles became aware of Tesla in a
new way."

Also interviewee 7 told us a similar story：

"People are restricted from traveling due to national policies. Our store organized sales
to drive to the customer's city to hold a test drive for them. When we later received customers
in our stores, many of them said they had increased their affection for Tesla because of the
events we held and eventually chose Tesla."

By organizing different events for people in different situations, the high quality of the
events impressed customers and volunteered to promote Tesla, expanding the customer base
for Tesla and giving more people a good impression of Tesla.

Interviewer 3 indicated that Tesla's no-inventory strategy, which remained in place during the
epidemic, also had an impact on sales activities.

"Some of my customers said they considered other brands of vehicles before buying a
Tesla. But because of the epidemic, other brands had to wait six months or even a year for
new vehicles to be delivered, and if they didn't want to wait that long they had to buy a
vehicle that had been in stock for more than four months."

Through the interviewees' accounts, the researcher found that Tesla's growth during the
epidemic was due to the strengths that the company has maintained: its unique production
methods, its direct sales network, its advanced research team, and its highly professional sales
team.

The unique production method is reflected in the no-stock strategy, the customer can also
check the progress of production against the order number.

Tesla's direct sales network, cutting-edge research team, and advanced technology ensure
that the technology and products are ahead of their time, resulting in the Model Y receiving a
great deal of praise from consumers and attracting a large number of purchases, leading to a
significant increase in purchases.

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 According to the interviewees, the Tesla sales team has a wealth of expertise, strong
communication skills, and the ability to adapt. The sales team has been able to plan different
campaigns for different regions and different groups of people, and after the campaign has
been implemented, they have been able to summarize the results and find the reasons for
success or failure， and relevant training after the event.

4.3.4 Analysis

Based on interviews with respondents, the researchers found that the strategies Tesla put in
place during the epidemic had an unexpected effect. In the face of uncontrollable factors, for
example, policy changes and the spread of outbreaks Tesla actively sought solutions to
minimize their negative impact on them and adopted appropriate strategies to avoid the
damage. However, the strategies adopted by Tesla in the face of policies that could not be
changed, such as those suggested by the previous interviewees, were very helpful in helping
Tesla was able to cope with this unfavorable situation and at the same time reap the
unexpected benefits of improving the business skills of its employees, screening customers
with higher purchase intent， consolidated and expanded client base from previous, laying
the foundation for subsequent sales. The strategy was a good example of Tesla's service-
oriented, customer-first approach to minimizing the impact of the epidemic while turning a
disadvantage into an advantage and boosting sales.

However, when evaluating the results of the strategy, the researchers found that the
positive effects of the strategy were accompanied by inevitable negative effects. For example,
some customers felt that telemarketing helped them to better understand the product, and
enabled more timely feedback on their needs. but others felt that telemarketing interfered
with their normal lives and was an invasion of their privacy, leading to negative feelings
towards Tesla.

What can be known from the changes in Tesla's sales during the epidemic is that the
positive effects of these strategies outweighed the negative impacts. It can be said that the
strategy that fits the style, culture, and relevance of the company has been successful.

5. Conclusion

In this study, the researchers investigated what market strategies have Tesla applied during
the epidemic? What are the results of these strategic applications? The main purpose of the

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research is to analyze how Tesla has achieved a substantial increase in profits during the
epidemic. According to the researchers' survey results, the significant growth of Tesla's
performance in the Chinese market is related to the application of strategies. As the findings
of P.E.S.T analysis, at the beginning of the outbreak, Tesla faced the problems of reduced
customer traffic, decreased customer purchasing power and desire to buy, and changes in the
supply chain cycle. Problems such as long-term growth and serious employee turnover have
also appeared. The researchers combine the SWOT analysis and STP analysis to find out how
does Tesla response to these major problems, Tesla has leading technology in the electric
vehicle industry, and at the same time, because of its advocacy of sustainable development, it
has gained a large number of loyal fans, making the Tesla brand a considerable influence.
Tesla has taken a series of measures, including implementing a no-inventory strategy,
promoting sales to fixed groups, launching new products, and determining customers'
purchase intentions in advance by telephone. Then, the researchers learned from interviews
with Tesla employees that the effects of these targeted measures include that Tesla has no
inventory pressure and does not have to pay for expensive product storage costs. The new
products launched were quickly welcomed by consumers, which further expanded Tesla's
brand influence. As the STP model finding shows, Tesla has segmented the market for
consumer groups, making promotions more targeted. Tesla's strategy of recommending
products that meet the expectations of customers with different needs has led to increased
trust and loyalty to the brand and increased purchase intentions. Through telephone
communication between employees and customers, the scope of prospective buyers is
narrowed, and the reception pressure of stores is reduced. At the same time, the business
ability of employees has been significantly improved, and employees have a clearer
understanding of targeted sales. Tesla has become more targeted to potential customer groups
by holding salon events. As the survey results show, the researchers believe that Tesla's
targeted measures have further attracted consumers, while reducing its own cost of sales,
stimulating increased sales and profit growth. In order to facilitate readers to put the results of
this research into practical application, the researchers summarize the following model based
on the application of Tesla's market strategy in the epidemic. First, analyze the degree of
impact of emergencies on the company, then summarize the company's advantages and
disadvantages, reduce the losses caused by the disadvantages, and formulate targeted
measures for the advantages to increase profits. Finally, analyze and summarize the strategy
application.

52
 6. Discussion

This section presents implications from our research, as well as limitations encountered
when elaborating this thesis and recommendations for future studies.

6.1 Implications

The background of the researchers' research is during the epidemic, as a sudden public
event, it has caused a non-negligible impact on the global economy. Through the
interviewees' statements, the researchers understand that making everything more "targeted"
is an important factor in Tesla's ability to achieve a large increase in profits during the
epidemic. For this type of sudden event, no one can predict in advance. The researchers have
seen too many companies that have been severely hit by the epidemic. Unlike these
companies, Tesla also encountered huge difficulties in the early stage of the outbreak. But
managers concentrate resources, including targeted training for employees, narrowing the
scope of potential customers, so as to conduct targeted sales and so on. Therefore, the
researchers have reason to believe that when an enterprise encounters difficulties, it’s
necessary to summarize the problem first, then make targeted breakthroughs, which is quite
effective for the enterprise to get out of the predicament.

53
 6.2 Limitations

The researchers of this study adopted qualitative analysis. Qualitative research is highly
dependent on personal cognition. Whether it is the respondents' knowledge or personal
experience, there may be some biases, which is also one of the biggest limitations of this
study. When taking qualitative research, it is difficult to briefly summarize the content, and
the results of research analysis may need to be applied with more caution. The time range of
this study is limited to the context of the epidemic, so the analysis of some measures may not
be applicable to other conditions, which is closely related to government policies and the
macro social background. The region of this research is limited to the Chinese market, so the
results may not be applicable to other regions and should be more cautious when applying to
other regions. All the interviewees are from Tesla China, and it is not excluded that they are
influenced by factors such as company culture.

6.3 Recommendations for future study

The researchers of the research on this topic believe that it is valuable, and future research
can expand on the basis of this topic. More research will help to understand more clearly how
Tesla achieved this achievement. For example, not only from the company's point of view,
but also from the consumer's point of view to evaluate and analyze Tesla's corresponding
measures, which requires more investigation and analysis. There are many factors for Tesla
to achieve profit growth during the epidemic. Different consumers may have different
perceptions of Tesla and purchase motives. In addition, it includes training for employees,
how does Tesla achieve "zero inventory"? These topics involve consumer psychology, human
resources, supply chain disciplines, etc. Doing these studies can conduct a multi-dimensional
comprehensive analysis and evaluation of Tesla, which is of great reference for similar
companies. This article mainly studies some of Tesla's market strategies during the epidemic,
and there may be other impacts, such as financial investment.

54
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