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ManagementBusiness Model PivotAutomotiveAdvanced2012
Tesla: Direct Sales Model
The challenge
In 2012, Tesla wanted to sell cars directly to consumers but every US state had franchise laws protecting car dealerships. Traditional automakers used dealer networks built over decades. Tesla had no dealers, no service network, and limited capital.
The strategy
Tesla decided to fight the legal battles state by state while simultaneously building their own retail stores in malls and showrooms. The strategy was to control the entire customer experience from first contact to purchase to service.
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Try the full case free →Key lessons (preview)
- Controlling distribution gives you control over the customer experience.
- Fighting legal battles for your business model can be worth it long-term.
- Removing friction from the buying process is a competitive advantage.