Considering the total population of Puerto Rico and the general production of Tesla, it is important to note that the company has an important role to play in satisfying the total population and managing the penetration process. Tesla is an American electric automotive company that was founded in 2003(Rimmer p.47). The company specializes in energy storage, electric automotives and the manufacture of solar panels. In 2015 the country was the best selling for electric cars in the world. Tesla has since expanded to Canada, Europe, Asia and Australia in terms of stores and partnered with Mercedes and Toyota. This essay will analyze Puerto Rico as a potential market for Tesla's products.
In the 19th century immigrants from Spain and South Africa arrived in Puerto Rico. European Catholics were allowed to settle in the island in 1815 during the Real Cedula de Gracias de. During the 20th century Jews and Germans were also allowed to settle in the island. This migration greatly contributed to growth in population to almost a million from 155,000. Puerto Rico's population as at Monday, February 19, 2018, was at 3,660,497 according to United Nations. The countries population stands at 0.05% of the world's population (Ramos,Castro & Jimenez). The urban population in Puerto Rico is 3,438,360 people which constitute 94 percent of the country's total population. Puerto Rico's land area is 8,870 squared kilometers. The racial distribution in 2015 was 2,495,997 whites, 301,519 African Americans, 11,775 American Indians, 10,159 Asians, 129 Native Hawaiians and 3,547,288 Hispanic and Latinos according to US census. This island has a birthrate of 8.1 per 1000people and a growth rate of negative1.74percent. Generally, the current population of Puerto Rico would be a perfect market for Tesla's products especially the electric cars and solar panels.
Economic statistics and activity
In Latin America and Caribbean region, Puerto Rico was considered the most competitive and dynamic economies. Their economy relies mainly on aid from the government of United States. Until 1940s the economy Puerto Rico was dominated by the production of sugar. Manufacturing which composes almost half of the gross domestic product of Puerto Rico has surpassed agriculture as the first sector of economic activities. Industries such as electronics, textiles, pharmaceuticals, processed foods, clothing and textiles lead as the service industries followed them. The elimination of tax preferences in 2006 had a negative impact on the growth. The main problem in Puerto Rico today is an expanding population which lacks jobs and the rate at which her economy is improving. The average GDP of Puerto Rico between1960 and 2015 was 38.15 USD billion which is 0.17 percent of the world's economy. Puerto Rico has copper, nickel, construction rocks, and a great potential for solar, wind and hydroelectric power which is a specialty for TESLA. Puerto Rico has a transportation system of roads, highways, ports and harbors, and railway that serve the population. Electronics, canned tuna, beverage and medical equipments are among the major exports of Puerto Rico. The US dollar is the unit of currency used in Puerto Rico but is divided into 100 cents referred to as 'peso'. The operations' framework bears similarities that are significant to that of the United States. International trade regulations are like those of US same as labor and capital movement. Puerto Rico does not levy taxes on corporate and personal income that is earned on the island. The great potential for solar energy and good network of roads makes Puerto Rico a good market for Tesla's products.
Development in science and technology
The Puerto Rico Science, Technology and Research Trust is an entity that acts as an agent that promotes science research, investments and developments in technology. Its main goal is to develop the economy technologically. This entity receives funding from Research Fund of the University of Puerto Rico and FEDE. 40 percent of their annual funding is used to fund projects in science and technology. The key research and development areas include Food, agriculture, new industrial technologies, medical devices, electronics, aerospace, aeronautics, computer science and information technologies. The current labor force is estimated at 1,134,000 persons which was an increase of 4000 persons from 1,130,000 in 2015. The labor force would to great for Tesla as a company as they further improvements on their products.
Channels of distribution (macro analysis)
Puerto Rico has had a decade long break since May 2006 when the government implemented phase out of section 936 tax incentives and a two weeks shutdown on budget impasse according to economists. In 2006 retail sales went down to 34.81billion US dollars from 35.38 billion US dollars in 2005. The years that followed had slight differences that never went beyond 35.4 billion US dollars until 2011. The situations have improved gradually, with total annual sales in 2014 reachingn38.39 billion US dollars. One of the main factors that place a strain on local retails is taxation by government alongside high costs of electricity. The IVU tax model where 1.5% was paid to the municipality and 5.5 percent to the state government was hiked to 11.5 percent put a strain to most business establishments (Van). Hackles were raised and the government promised to reform to value added tax from the IVU tax model. Imports of equipment and vehicles are regulated by the Environmental Protection Agency (EPA). U.S emission standards must be adhered to by all imports. Imports that to not adhere to the U.S standards will not be cleared for import by U.S Customs and Border Protection (CBP). The taxes on the clearance and permit of operations are not too high and Tesla is likely to prosper.
The ever changing political status of Puerto Rico makes it an attraction for media firms. The print and broadcast media expresses the different opinions of Puerto Rico's inhabitants. Since 1898 an approximate of twenty papers published in Puerto Rico were in English. Ever since 1891 after the first association, Puerto Rican Press Association there has been hundreds of publications. These publications were a range of Catholic and Protestant papers. In 1922 the first radio station WKAQ was received in Puerto Rico. In January 1954 the first transmissions of televisions took place. At that time an estimate of 7000 families owned televisions. Telemundo was the first commercial television station. The number of owned televisions increased to a million TVs and channels to twenty one with an inclusion of three channels that were broadcast by the military of United States (Tucker).
Advertisement spending of Puerto Rico in 2016 amounted to five hundred and thirty four million US dollars according to statistics. The same source predicted that the advertisement spending would decrease to around four hundred and seventy three US dollars in 2018.
Tesla would reach a big audience using billboard advertising which is an efficient and successful method of communicating especially in Puerto Rico. Research shows that the most successful countries use billboard within their strategies of advertising (Kaplan pg.46). Additionally billboard advertising is an economic advertisement for Tesla that would save them a lot of capital since it will only require renting space on the billboard.
Gluzmann, Pablo, Martin Guzman, and Joseph E. Stiglitz. "An analysis of Puerto Rico's debt relief needs to restore debt sustainability." (2018).
Makoff, Gregory, and Brad W. Setser. "Puerto Rico Update: PROMESA, Population Trends, Risks to the Fiscal and Economic Plan-and Now Maria." (2017).
van Eck, Nees Jan, and Ludo Waltman. "Citation-based clustering of publications using CitNetExplorer and VOSviewer." Scientometrics 111.2 (2017): 1053-1070.
Ramos, Francisco, et al. "Abstract A65: Identifying perceptions of cancer prevention education needs and outreach strategies among young population in Puerto Rico." (2017): A65-A65.
Rimmer, Matthew. "Intellectual property and autonomous vehicles in a gridlock economy. A Submission to the House of Representatives Standing Committee on Industry, Innovation, and Science and Resource's inquiry into the social issues relating to land-based driveless vehicles in Australia." (2017).
Tucker, K. L., Mattei, J., Noel, S. E., Collado, B. M., Mendez, J., Nelson, J., ... & Falcon, L. M. (2010). The Boston Puerto Rican Health Study, a longitudinal cohort study on health disparities in Puerto Rican adults: challenges and opportunities. BMC Public health, 10(1), 107.
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