(Tiểu luận) topic analyse change in tesla motorfollowing the 8 steps kotter’s model

permitted Tesla CEO Elon Musk to construct the immense Tesla Gigafactory forelectric car production in Shanghai in 2018.. faced pressure from domestic rivals in China, such as Nio and Xp

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN

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GROUP 7 TOPIC: ANALYSE CHANGE IN TESLA MOTOR FOLLOWING THE 8-STEPS KOTTER’S MODEL

Member: Nguyen Thi Ngoc Anh - 11200284

Phung Ngoc Diep - 11200788 Pham Thi Mai Linh - 11202263

Subject: Change Management

Lecturer: Dr Phung Minh Thu Thuy

1 General information about Tesla, Inc 2

2 Analyzing the Change Process using Kotter's 8-Step Model 3

2.1 Step 1: Creating a Sense of Urgency 3

2.2 Step 2: Pull together the guiding team and decide what to do 4

2.3 Step 3: Develop the change vision and strategy 6

2.4 Step 4: Communicate for understanding and buy it 8

2.5 Step 5: Empower others to act 10

2.6 Step 6: Produce short-term wins 11

2.7 Step 7: Don’t let up 12

2.8 Step 8: New Culture 14

References 16

1 General information about Tesla, Inc.

Tesla, Inc (formerly known as Tesla Motors, Inc.) is an American companyspecialized in designing, manufacturing, and distributing electric vehicles andcomponents for electric propulsion systems The company takes its name from theelectrical engineer and inventor Nikola Tesla

Tesla Motors was founded by a group of engineers in Silicon Valley in July 2003 Thefounding members included Martin Eberhard, Marc Tarpenning, JB Straubel, IanWright, and Elon Musk Musk led Tesla through its Series A funding round in 2004 asthe Chairman of Tesla Starting as a young startup, Tesla gradually surpassed industrygiants like GM and Ford to become the world's most valuable automaker with a brandvalue exceeding 60 billion USD

Currently, Tesla is the world's leading automaker in terms of market value, with anestimated brand value of over 66 billion dollars in 2023 according to Statista

[CITATION Ste23 \n \l 1033 ]

 Business Operations:

Tesla initially gained attention by introducing the Tesla Roadster, the first all-electricsports car The Tesla Roadster utilized an AC electric motor directly based on Tesla'soriginal 1882 design It was the company's first vehicle model and the first electric car

to use lithium-ion battery packs, achieving a range of over 200 miles per charge Teslathen expanded its business operations

 Company Business Strategy:

Tesla's business strategy focuses on providing consumers with electric products andpenetrating the luxury car market, targeting affluent buyers As the products matureand gain traction, the company plans to enter the mass-market segment, increasingcompetition

Tesla's core focus is on pure electric technology, even extending to larger vehiclesegments and ranges exceeding 200 miles."

2 Analyzing the Change Process using Kotter's 8-Step Model

2.1 Step 1: Creating a Sense of Urgency

In 2017, nearly 53,000 cars needed to be recalled for inspection due to an electroniccomponent malfunction that affected the braking system Repairing the cars posedsignificant difficulties

Similarly, in 2018, Tesla faced a tough year The production of the Model 3encountered obstacles, leading to inadequate supply for customers Plans for building

a new factory were delayed due to high costs and accumulating debt Additionally, 42directors resigned due to inadequate salaries[CITATION Bus18 \t \l 1033 ] Tesla stated, 'We are going through a lot of difficulties, having only about one percent

of Apple's money So they can pay more, while we still have to compete with otherelectric car manufacturers.' [CITATION Bus18 \t \l 1033 ]

The challenges compounded when the United States reduced tax incentives forelectric cars, prompting Tesla to cut prices by up to $2,000 At this juncture, Teslaneeded a new direction Recognizing China's potential, Tesla saw an opportunity asBeijing allowed foreign car companies to establish wholly owned subsidiaries with100% ownership in China, avoiding the need for joint ventures to share technologywith Chinese partners, as was the previous practice Moreover, electric cars produced

in Tesla's Shanghai factory qualified for the same subsidies as domesticallymanufactured electric vehicles Manufacturing in China also helped Tesla circumventimport tariffs amid ongoing trade tensions between Washington and Beijing China

permitted Tesla CEO Elon Musk to construct the immense Tesla Gigafactory forelectric car production in Shanghai in 2018

On January 7, 2019, Elon Musk attended the groundbreaking ceremony for Tesla'sfirst electric car manufacturing facility outside the United States, marking a newchapter for the company

⇒Thus, despite facing challenges both internally and externally, Tesla managed toovercome these obstacles and rise stronger, thanks to perseverance, innovation,adaptability, and the visionary leadership Evidence of this resurgence emerged in

2019, as Tesla proved its resilience and steadily demonstrated its ability to overcomehardships."

[ CITATION Sta23 \l 1033 ]

2.2 Step 2: Pull together the guiding team and decide what to do

- The difficulties Tesla faced when starting to implement the change.

Tesla had to compete with other electric car makers in both markets, who alsobenefited from the tax incentives and lower production costs For example, Tesla

faced pressure from domestic rivals in China, such as Nio and Xpeng, who offeredcheaper and more localized electric vehicles [ CITATION JOH18 \l 1033 ].

Tesla had to balance its global demand and supply, as it had limited productioncapacity and resources It had to prioritize certain markets over others, which couldaffect its customer satisfaction and brand loyalty [ CITATION JOH18 \l 1033 ]Tesla had to deal with regulatory hurdles and local competition in China, which couldpose challenges for its operations and innovation For example, Tesla had to cooperatewith the Shanghai government on technology and research and development, whichcould limit its autonomy and intellectual property rights [ CITATION Sea18 \l 1033 ] Tesla had to cope with the trade war between the US and China, which resulted inincreased tariffs on imported goods China imposed a 25 percent tariff on top of theexisting 15 percent import tax for US-made cars, which affected Tesla’s sales in theChinese market [ CITATION IRS23 \l 1033 ] The US also imposed tariffs onChinese-made goods, which could increase Tesla’s production costs in China

- Form a key leader group.

Elon Musk, who is widely regarded as an innovator and a disruptor in the industry,built and led a strong and visionary leadership team

He has also attracted and retained talented and passionate employees who share hisvision and mission of accelerating the transition to sustainable energy Moreover, hehas built strategic partnerships with other companies, such as Panasonic, Toyota,Daimler, and SolarCity, to leverage their resources and expertise[ CITATION Eri23 \l

1033 ]

According to Craf.co, Tesla has 127,855 employees, and they hired in those fields:

[ CITATION Tes22 \l 1033 ]According to Craft.co, Tesla’s leadership team consists of 13 executives, includingMusk as the CEO and director, Zachary Kirkhorn as the CFO (also referred to as

Lunenburg, Fred C The Decision Making… Strategic

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Strategic

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Master of Coin), Andrew Baglino as the SVP of Powertrain and Energy Engineering,Tom Zhu as the SVP of Automotive, and Robyn Denholm as the chairman of theboard The board also includes independent directors such as Hiro Mizuno, JamesMurdoch, Kathleen Wilson-Thompson, Ira Ehrenpreis, Kimbal Musk (Elon brother),Joe Gebbia (co-founder of Airbnb), and JB Straubel (former CTO of Tesla)

[CITATION Tes \y \l 1033 ]

According to Forbes, Tesla has formed several strategic alliances with othercompanies over the years, such as Panasonic (for battery production), Toyota (forelectric vehicle development), Daimler (for electric vehicle components), andSolarCity (for solar energy solutions) These partnerships have helped Tesla gainaccess to capital, technology, expertise, and markets

2.3 Step 3: Develop the change vision and strategy.

- Awareness of setting new vision:

Tesla was aware of the need to set a new vision for its future in the face of the China trade war and the increased tariffs on imported cars Tesla wanted to become aglobal leader in electric vehicles and sustainable energy, and to achieve that, it had toovercome the challenges of high production costs, low market share, and localcompetition in China Tesla also wanted to align its vision with its mission of

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accelerating the transition to a clean energy economy and reducing greenhouse gasemissions.

o Step 1: Identify the need to set a new vision for the future

- This involves analyzing the current situation, the external environment, theopportunities and threats, and the gaps between the desired and actualoutcomes For Tesla, this meant recognizing the impact of the US-China tradewar and the increased tariffs on its sales and profitability in China, as well asthe potential of the Chinese market for electric vehicles and sustainable energy

o Step 2: Define the new vision for the change

-This involves creating a clear, compelling, and feasible statement thatdescribes what the organization wants to achieve and why it matters For Tesla,this meant stating its goal of becoming a global leader in electric vehicles andsustainable energy and aligning its vision with its mission of accelerating thetransition to a clean energy economy and reducing greenhouse gas emissions

o Step 3: Communicate the new vision to the stakeholders

- This involves using various channels and methods to share the vision withinternal and external audiences, such as employees, customers, investors,partners, suppliers, regulators, and media For Tesla, this meant using pressreleases, social media, events, and reports to announce its plan to build a localfactory in Shanghai, China, and to explain how it would benefit its customers,shareholders, and society

- Establish the new vision change

Tesla established a new vision of change by deciding to build a local factory inShanghai, China, which would allow it to avoid the import tax and reduce itsproduction costs Tesla also developed a strategy to achieve its vision by securingland, permits, loans, and incentives from the Chinese government, as well as hiringlocal talent, suppliers, and partners Tesla’s vision was to produce affordable and high-quality electric vehicles for the Chinese market, as well as to export them to otherregions Tesla’s vision was communicated to its stakeholders, employees, customers,and investors through various channels, such as press releases, social media, events,and reports In details, they had designed a plan with 3 steps for establishing thechange:

 Step 1: Develop a strategy to achieve the vision.

- This involves identifying the actions, resources, timelines, and measures thatare needed to realize the vision For Tesla, this meant planning how to secureland, permits, loans, and incentives from the Chinese government, as well ashow to hire local talent, suppliers, and partners It also meant deciding how todesign, produce, and deliver its vehicles in China, as well as how to export them

to other regions This step took place from July 2018 to December 2018

 Step 2: Implement the strategy and monitor the progress

- This involves executing the actions, allocating the resources, following thetimelines, and evaluating the results For Tesla, this meant building andoperating its factory in Shanghai, China, which started in January 2019 andcompleted in October 2019 It also meant starting to deliver its locally madeModel 3s in China in early 2020, which boosted its sales and market share Italso meant tracking its performance and feedback in China and other markets.This step took place from January 2019 to December 2020

 Step 3: Review and adjust the strategy as needed

- This involves analyzing the outcomes, identifying the gaps, and makingchanges to improve the effectiveness and efficiency of the strategy For Tesla,this meant adapting to the changing regulations and customer preferences inChina and other markets It also meant innovating its products and processes tomaintain its competitive edge and quality standards This step is ongoing andrequires continuous improvement

2.4 Step 4: Communicate for understanding and buy it

Tesla took to communicating the change vision and strategy to the stakeholders in

2018 by using various channels and methods to share the vision with the internal andexternal audiences, such as employees, customers, investors, partners, suppliers,regulators, and media

 Tesla used its website, social media, press releases, events, and reports toannounce its plan to build a local factory in Shanghai, China, and to explain how itwould benefit its customers, shareholders, and society On July 10, 2018, Teslapublished a blog post titled “Tesla and Shanghai Government Reach Agreement

for Gigafactory 3 in China” [ CITATION Rob22 \l 1033 ], which stated that “Bybringing significantly lower-cost, high-volume production to China, we will beable to make vehicles that are more affordable for customers throughout thecountry.” The blog post also emphasized Tesla’s vision of accelerating thetransition to sustainable energy and reducing greenhouse gas emissions.

 Tesla also used its annual shareholder meeting on June 5, 2018, to communicate itschange vision and strategy to its investors Elon Musk, the CEO and chairman ofTesla, presented the progress and achievements of Tesla in 2017 and 2018, as well

as the future plans and goals for 2019 and beyond He highlighted the importance

of building the Shanghai factory as a way to lower the production costs, increasethe market share, and avoid the import tariffs in China He also shared some of thechallenges and opportunities that Tesla faced in China and other markets

 Tesla also engaged with its employees and customers to communicate its changevision and strategy through various channels For example, Tesla sent out emailsand newsletters to its employees to inform them of the latest developments andupdates on the Shanghai factory project Tesla also invited some of its customersand fans to visit the Shanghai factory site and witness the construction process.Tesla also created a video titled “Tesla Gigafactory Shanghai” [ CITATIONLyn20 \l 1033 ], which showed the progress and milestones of the project fromJanuary 2019 to December 2019

Tesla also leveraged its brand image and reputation as a leader in electric vehicles andsustainable energy to communicate its change vision and strategy to the public Teslaused its innovative products and services, such as the Model 3, the Model Y, theSupercharger network, the Powerwall, and the Solar Roof, to demonstrate its vision ofcreating affordable and high-quality electric vehicles for the Chinese market, as well

as exporting them to other regions Tesla also showcased its vision of creating a cleanenergy ecosystem that integrates renewable energy generation, storage, andconsumption

Tesla’s communication strategy in 2018 was mainly focused on conveying its visionand mission of creating affordable and high-quality electric vehicles for the globalmarket, as well as overcoming the challenges and difficulties it faced in terms ofproduction, finance, and regulation Some of the feedbacks or reactions from differentsources are: