The necessity of the creation of an efficient distribution channel is proved by the experience of the majority of world-leading corporations. The growth of the level of rivalry combined with the complexity of markets and modern conditions result in the reconsideration of the role of the channel in business and its deep investigation. Managers accept the impact it has on the evolution of any business and introduces the channel management plan focused on the creation of the most efficient scheme which will be able to face the majority of challenges. Additionally, the aligned distribution channel could serve as the guarantee for the successful entry to the market and improvement of the competitive power of a company. This fact contributes to the further investigation of the given remedy.
In the case of Tesla Motors, the successful and efficient distribution channel is vital for the promotion of its new model and attraction of the targeted audience. The channel structure of any company rests on several important concerns related to the peculiarities of the functioning. First, the number of actors and stages should be determined. There are several schemes used by the companies to align the process of distribution. The manufacturer could sell its products directly to customers, with the help of retailers and wholesalers (Channel Structure and Membership Issues, n.d.). Every model has its strong and weak aspects. In this regard, it is for the company to choose the pattern appropriate to the peculiarities of its functioning.
Tesla Motors focuses on the manufacturing of innovative vehicles which imply the usage of the latest environmentally friendly technologies. It has its own targeted audience and uses various remedies to attract attention to its new model S. However, the structure of the channel remains unchanged.
The company adheres to the simple though efficient scheme presented in Figure 1. Being the manufacturer, Tesla Motors sells its products directly to the customers interested in the innovational vehicle (Musk, 2012). The chain of the company-owned stores plays the role of the retailer, providing the cars to customers. Additionally, Tesla Motors also uses its own website to align the mechanism of online sales. The scale of this segment is relatively big which evidences about the success of the given method.
The given structure of the channel has its own advantages and guarantees a stable income for Tesla Motors. It does not have to cooperate with the retailers of wholesalers, providing the vehicles directly to customers (Lemkin, 2013). This pattern helps to exclude the elements which could have a negative impact on the functioning of a company. Additionally, the process of channel management becomes less complicated as Tesla Motors has unlimited access to all significant actors and can initiate the change process in case of an emergency.
However, the efficiency of the given pattern rests on the relatively low number of customers and distributed vehicles (Marketing Channels and Wholesaling, n.d.). The further growth of the company will pose a question about the reconsideration of the channel structure for it to meet the new conditions and challenges related to the growth of the company. At the current stage of its evolution, the company prefers to avoid the usage of wholesalers or retailers not owned by Tesla. It contributes to the further development of the company and the appearance of new challenges.
References
Channel Structure and Membership Issues. (n.d.). Web.
Lemkin, J. (2013). Why Doesn’t Tesla Use Dealerships To Sell Their Vehicles?Forbes. Web.
Marketing Channels and Wholesaling. (n.d.). Web.
Musk, E. (2012). The Tesla Approach to Distributing and Servicing Cars. Web.