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

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN ******* GROUP 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 Le Ngoc Mai - 11202450 Vu Tran Tien - 11203929 Subject: Change Management Lecturer: Dr Phung Minh Thu Thuy Hanoi, 2023 Contents General information about Tesla, Inc 2 Analyzing the Change Process using Kotter's 8-Step Model 2.1 Step 1: Creating a Sense of Urgency 2.2 Step 2: Pull together the guiding team and decide what to .4 2.3 Step 3: Develop the change vision and strategy 2.4 Step 4: Communicate for understanding and buy it 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 company specialized in designing, manufacturing, and distributing electric vehicles and components for electric propulsion systems The company takes its name from the electrical engineer and inventor Nikola Tesla Tesla Motors was founded by a group of engineers in Silicon Valley in July 2003 The founding members included Martin Eberhard, Marc Tarpenning, JB Straubel, Ian Wright, and Elon Musk Musk led Tesla through its Series A funding round in 2004 as the Chairman of Tesla Starting as a young startup, Tesla gradually surpassed industry giants like GM and Ford to become the world's most valuable automaker with a brand value exceeding 60 billion USD Currently, Tesla is the world's leading automaker in terms of market value, with an estimated 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-electric sports car The Tesla Roadster utilized an AC electric motor directly based on Tesla's original 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 Tesla then expanded its business operations  Company Business Strategy: Tesla's business strategy focuses on providing consumers with electric products and penetrating the luxury car market, targeting affluent buyers As the products mature and gain traction, the company plans to enter the mass-market segment, increasing competition Tesla's core focus is on pure electric technology, even extending to larger vehicle segments and ranges exceeding 200 miles." 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 electronic component malfunction that affected the braking system Repairing the cars posed significant difficulties Similarly, in 2018, Tesla faced a tough year The production of the Model encountered obstacles, leading to inadequate supply for customers Plans for building a new factory were delayed due to high costs and accumulating debt Additionally, 42 directors 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 other electric car manufacturers.' [CITATION Bus18 \t \l 1033 ] The challenges compounded when the United States reduced tax incentives for electric cars, prompting Tesla to cut prices by up to $2,000 At this juncture, Tesla needed a new direction Recognizing China's potential, Tesla saw an opportunity as Beijing allowed foreign car companies to establish wholly owned subsidiaries with 100% ownership in China, avoiding the need for joint ventures to share technology with Chinese partners, as was the previous practice Moreover, electric cars produced in Tesla's Shanghai factory qualified for the same subsidies as domestically manufactured electric vehicles Manufacturing in China also helped Tesla circumvent import tariffs amid ongoing trade tensions between Washington and Beijing China permitted Tesla CEO Elon Musk to construct the immense Tesla Gigafactory for electric car production in Shanghai in 2018 On January 7, 2019, Elon Musk attended the groundbreaking ceremony for Tesla's first electric car manufacturing facility outside the United States, marking a new chapter for the company ⇒Thus, despite facing challenges both internally and externally, Tesla managed to overcome 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 overcome hardships." [ CITATION Sta23 \l 1033 ] 2.2 Step 2: Pull together the guiding team and decide what to - The difficulties Tesla faced when starting to implement the change Tesla had to compete with other electric car makers in both markets, who also benefited from the tax incentives and lower production costs For example, Tesla faced pressure from domestic rivals in China, such as Nio and Xpeng, who offered cheaper and more localized electric vehicles [ CITATION JOH18 \l 1033 ] Tesla had to balance its global demand and supply, as it had limited production capacity and resources It had to prioritize certain markets over others, which could affect its customer satisfaction and brand loyalty [ CITATION JOH18 \l 1033 ] Tesla had to deal with regulatory hurdles and local competition in China, which could pose challenges for its operations and innovation For example, Tesla had to cooperate with the Shanghai government on technology and research and development, which could 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 in increased tariffs on imported goods China imposed a 25 percent tariff on top of the existing 15 percent import tax for US-made cars, which affected Tesla’s sales in the Chinese market [ CITATION IRS23 \l 1033 ] The US also imposed tariffs on Chinese-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 his vision and mission of accelerating the transition to sustainable energy Moreover, he has 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, including Musk as the CEO and director, Zachary Kirkhorn as the CFO (also referred to as Document continues below Discover more from: Strategic Management Đại học Kinh tế Quố… 169 documents Go to course 34 Swot-Tesla - Phân tích SWOT cho Tesla Strategic Management 100% (4) 07 12 12 Strategic Management 100% (3) Vissan Case Study Group Internal… Strategic Management 100% (2) Lunenburg, Fred C The Decision Making… Strategic Management 100% (2) Dominox 27s-project-1 27 compress Strategic Management 100% (1) Tổng hợp Strategy 41 management Strategic Master of Coin), Andrew Baglino as the SVP of Powertrain and Energy Engineering,100% (1) Management Tom Zhu as the SVP of Automotive, and Robyn Denholm as the chairman of the board The board also includes independent directors such as Hiro Mizuno, James Murdoch, 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 other companies over the years, such as Panasonic (for battery production), Toyota (for electric vehicle development), Daimler (for electric vehicle components), and SolarCity (for solar energy solutions) These partnerships have helped Tesla gain access 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 USChina trade war and the increased tariffs on imported cars Tesla wanted to become a global leader in electric vehicles and sustainable energy, and to achieve that, it had to overcome the challenges of high production costs, low market share, and local competition in China Tesla also wanted to align its vision with its mission of accelerating the transition to a clean energy economy and reducing greenhouse gas emissions o Step 1: Identify the need to set a new vision for the future - This involves analyzing the current situation, the external environment, the opportunities and threats, and the gaps between the desired and actual outcomes For Tesla, this meant recognizing the impact of the US-China trade war and the increased tariffs on its sales and profitability in China, as well as the 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 that describes 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 and sustainable energy and aligning its vision with its mission of accelerating the transition 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 with internal and external audiences, such as employees, customers, investors, partners, suppliers, regulators, and media For Tesla, this meant using press releases, social media, events, and reports to announce its plan to build a local factory 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 in Shanghai, China, which would allow it to avoid the import tax and reduce its production costs Tesla also developed a strategy to achieve its vision by securing land, permits, loans, and incentives from the Chinese government, as well as hiring local talent, suppliers, and partners Tesla’s vision was to produce affordable and highquality electric vehicles for the Chinese market, as well as to export them to other regions 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 steps for establishing the change:  Step 1: Develop a strategy to achieve the vision - This involves identifying the actions, resources, timelines, and measures that are needed to realize the vision For Tesla, this meant planning how to secure land, permits, loans, and incentives from the Chinese government, as well as how to hire local talent, suppliers, and partners It also meant deciding how to design, 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 the timelines, and evaluating the results For Tesla, this meant building and operating its factory in Shanghai, China, which started in January 2019 and completed in October 2019 It also meant starting to deliver its locally made Model 3s in China in early 2020, which boosted its sales and market share It also 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 making changes to improve the effectiveness and efficiency of the strategy For Tesla, this meant adapting to the changing regulations and customer preferences in China and other markets It also meant innovating its products and processes to maintain its competitive edge and quality standards This step is ongoing and requires 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 and external audiences, such as employees, customers, investors, partners, suppliers, regulators, and media  Tesla used its website, social media, press releases, events, and reports to announce its plan to build a local factory in Shanghai, China, and to explain how it would benefit its customers, shareholders, and society On July 10, 2018, Tesla published a blog post titled “Tesla and Shanghai Government Reach Agreement for Gigafactory in China” [ CITATION Rob22 \l 1033 ], which stated that “By bringing significantly lower-cost, high-volume production to China, we will be able to make vehicles that are more affordable for customers throughout the country.” The blog post also emphasized Tesla’s vision of accelerating the transition to sustainable energy and reducing greenhouse gas emissions  Tesla also used its annual shareholder meeting on June 5, 2018, to communicate its change vision and strategy to its investors Elon Musk, the CEO and chairman of Tesla, 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, increase the market share, and avoid the import tariffs in China He also shared some of the challenges and opportunities that Tesla faced in China and other markets  Tesla also engaged with its employees and customers to communicate its change vision and strategy through various channels For example, Tesla sent out emails and newsletters to its employees to inform them of the latest developments and updates on the Shanghai factory project Tesla also invited some of its customers and fans to visit the Shanghai factory site and witness the construction process Tesla also created a video titled “Tesla Gigafactory Shanghai” [ CITATION Lyn20 \l 1033 ], which showed the progress and milestones of the project from January 2019 to December 2019 Tesla also leveraged its brand image and reputation as a leader in electric vehicles and sustainable energy to communicate its change vision and strategy to the public Tesla used its innovative products and services, such as the Model 3, the Model Y, the Supercharger network, the Powerwall, and the Solar Roof, to demonstrate its vision of creating 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 clean energy ecosystem that integrates renewable energy generation, storage, and consumption Tesla’s communication strategy in 2018 was mainly focused on conveying its vision and mission of creating affordable and high-quality electric vehicles for the global market, as well as overcoming the challenges and difficulties it faced in terms of production, finance, and regulation Some of the feedbacks or reactions from different sources are:  Inc Magazine praised Elon Musk’s internal memo that outlined Tesla’s communication protocol within the company, which emphasized the importance of fast and direct communication among employees and managers, regardless of the chain of command The magazine said that this approach was “shockingly atypical and right-in-line with his disruptive nature” and that it could challenge the inertia and bureaucracy of big auto companies [ CITATION Mat17 \l 1033 ]  Business Insider summarized the various incidents that led to Tesla’s moment of reckoning in 2018, such as Musk’s erratic behavior on social media, the SEC investigation and settlement over his “funding secured” tweet, the production bottlenecks and delivery delays for the Model 3, and the questions about Tesla’s financial health and profitability The article said that Tesla was at an inflection point and that it had to prove that it could maintain profitability and stay out of trouble with regulators in the future [CITATION Bus18 \t \l 1033 ]  CleanTechnica highlighted Tesla’s achievements and successes in 2018, such as setting record sales and revenue numbers, becoming the most profitable US automaker in history, surpassing its rivals in terms of market cap and customer satisfaction, and launching new products and services like the Model Performance, the Model Y, and the Supercharger V3 The article said that 2018 was a giant, awesome year for Tesla because of Elon Musk’s vision and leadership [ CITATION Mat17 \l 1033 ] 2.5 Step 5: Empower others to act Field trip to China: Tesla has been working to reach an agreement to open a factory in China for several years Finally, in 2017, Tesla executives traveled around Chinese cities to find a factory location and chose Shanghai as a possible location The company announced that an agreement had been reached between the Shanghai municipal government and the car manufacturer[CITATION Phi21 \l 1033 ] Factory Construction In China: In July 2018, CEO Elon Musk signed an agreement to build a fully owned Tesla factory in Shanghai City[CITATION Vìs20 \l 1033 ] The Gigafactory in Shanghai was started and completed in 2019 This factory helps Tesla produce Model electric vehicles in China at reasonable prices and minimize import costs[ CITATION Thu19 \l 1033 ] Increasing Production Capacity: Tesla has focused on increasing production capacity to meet the growing demand of the Chinese market Having a factory in the country reduces delivery times and helps Tesla take advantage of the supportive policies of the Chinese government[ CITATION Bíc22 \l 1033 ] 10 Partnering with local businesses: to leverage knowledge and experience of the Chinese market and improve products Tesla has battery production partnerships with Panasonic, South Korea’s LG Chem and China’s Contemporary Amperex Technology Co Ltd (CATL) that are expected to continue [ CITATION Lie20 \l 1033 ] Cooperation with the Chinese Government: Tesla has been working with Chinese authorities and governments to better understand the policies and regulations related to electric cars and related technology They have engaged in negotiations to facilitate business operations[ CITATION Hua22 \l 1033 ] Charging stations: Tesla also installed their own charging stations, allowing them control of as much of their product as possible in a convenient resource for Tesla drivers This helped to alleviate some consumers’ concerns about the lack of charging stations for Tesla cars [ CITATION Jon22 \l 1033 ] 2.6 Step 6: Produce short-term wins In 2017, U.S electric vehicle giant Tesla made over billion U.S dollars in China Two years on, it's still showing signs of strong growth China became the most important market outside of the U.S 11 [ CITATION Tes19 \l 1033 ] In 2019, the car company saw sales in the billion-people market increase by 161% compared to the previous year, equivalent to 40,000 Tesla units [ CITATION Bus20 \l 1033 ] According to Tesla's report, Q3 sales in the Chinese market reached $3.11 billion, or 48.5% of total sales of $6.41 billion in the US At the same time, China's share of Tesla's total sales rose to 22.6%, up from less than 20% in the same period last year [CITATION Thị21 \l 1033 ] The website for Tesla in China allows a customer to everything necessary to be able to buy their car Customers can also take advantage of a referral plan Instead of spending money on advertising, people share their Tesla experiences with others The power of word of mouth for the manufacturer appears to be effective in China As a result, their vehicle sales continue to grow[ CITATION Jon22 \l 1033 ] 12 Tesla is exempt from 10% sales tax on Tesla Model cars and receives a government subsidy of $ 3,560 per vehicle[ CITATION Bus20 \l 1033 ] 2.7 Step 7: Don’t let up Challenge - Covid 19: Due to the strict blockade measures due to the COVID-19 epidemic of the Shanghai government, Tesla's factories have been slowed down[ CITATION Diễ22 \l 1033 ] The factory in Shanghai has been operating under a closed management process, Tesla requires workers to sleep near the production line and not come into contact with others outside the factory since mid-April to ensure they are not infected with COVID19 - Massive Recall: More than 80,000 Teslas have been recalled according to the Chinese market regulator [ CITATION Jon22 \l 1033 ] This recall is to fix software issues affecting the cars’ battery operating system Past recalls have been issued to repair faulty seat belts and possible defects in the car’s semiconductor that could make the car more likely to be involved in a crash - Fatal Crash: A driver in China claimed that his brakes would not respond for over a mile before the car ended up crashing The vehicle was said to have reached speeds of 123 mph Two people were killed because of this accident Tesla offered a statement that disputed the driver’s story They claim that the vehicle’s brake lights never flashed on and that the car’s throttle was pushed down for extended periods This data could mean that the brake was not used throughout the incident There hasn’t been a comment from authorities about the incident at this time [ CITATION Jon22 \l 1033 ] - Cars Banned for Alleged Spying: Even though Tesla has seen success in China, it hasn’t been smooth sailing The manufacturer has seen Tesla cars banned from certain areas due to suspected spying Government officials in China expressed some serious concerns that there could be spying activity done through Tesla vehicles The Chinese military claimed that anyone who drove a Tesla would no longer be able to park their car on both military bases and housing communities [ CITATION Jon22 \l 1033 ] Create Positive Changes - It's not an exaggeration to say: China is Tesla's "paradise" China even considers Tesla to be the "Apple of the auto industry" Tesla's innovative marketing strategy is a "marketing budget of $0" [ CITATION Dax22 \l 1033 ] 13 - However, despite the lack of budget, there are several factors that make Tesla's marketing strategy in China special - First, Tesla aims to optimize the customer experience All information about the car is available on the website and the entire car buying process takes place online This is especially important during the COVID-19 pandemic - Also, instead of paid advertising, Tesla's marketing strategy in China involves a referral program People share experiences of buying and using Tesla, attracting new customers - Elon Musk's personality is also important to Tesla's marketing strategy in China He is active on social media, especially on Twitter - Finally, transparency is also important to Tesla in China Company representatives always share with consumers what will happen if something goes wrong, which increases consumer confidence in the brand  Tesla has made a difference that no other electric car brand has been able to before - Although Tesla's start in the Chinese market coincided with the Covid 19 pandemic (2019), the car industry showed signs of gradual recovery, thanks largely to electric vehicle sales In which, Tesla sales accounted for 30% [ CITATION Bus20 \l 1033 ] 14 - Tesla cars are still very popular on the streets of China In 2022, the company delivered more than 710,000 Model and Model Y units to customers in this country, an increase of 50% compared to the same period in 2021 [CITATION Phi23 \t \l 1033 ] - On April 9, 2023, electric car company Tesla signed a contract with the Shanghai city government to build a second factory to produce batteries [ CITATION Ngọ23 \l 1033 ] This will double its production capacity to at least million vehicles a year amid growing demand for electric vehicles in China, the world's largest auto market Tesla made the right decision when choosing China as a market to develop That shows a very clear vision of the leader Despite the unnecessary troubles, Tesla is still on the growth path year by year and is not heavily taxed Even China has to thank Tesla because the volume of Tesla car exports from the Shanghai factory to Europe and Asia has helped China overtake Japan as the world's largest vehicle exporter [ CITATION VũA23 \l 1033 ] 2.8 Step 8: New Culture Tesla always comes up with bold ideas, that's why Elon Musk constantly pushes employees out of their "comfort zones", directing them to burn out to exceed their limits With strict dedication requirements From CEO Elon Musk, Tesla employees have to perform periodic reviews and have dozens of employees laid off every quarter due to poor performance The record is that more than 500 Tesla employees were laid 15 off in a week because of unproductive work, leading to late production[CITATION Trí18 \l 1033 ] In formulating Tesla's business strategy, Elon Musk and his associates declared their mission to "accelerate the world's transition to sustainable energy." Unlike other car manufacturers, Tesla with the desire that every ordinary person can own an electric car of its own, Tesla has shifted from producing expensive electric cars (Tesla Roadster, 2008) to affordable electric cars (Tesla Model 3, 2017) suitable for mass customers [ CITATION Quy22 \l 1033 ] In addition, during the US-China trade war, China has imposed an import tax of 40% on Tesla cars, while other car manufacturers only must bear 15% Since China is the largest consumer of Tesla cars, Tesla has built a factory in China to avoid taxes to reduce competition with Chinese domestic cars With his dream of becoming a global electric vehicle supplier, Tesla's management has decided to move the car factory to China [ CITATION CNB18 \l 1033 ] China's vast economic environment, the country's population is currently 1.4 billion people China is also the country with the most polluted cities in the world, causing people's tastes to gradually switch to electric vehicles At least 10 major Chinese cities have enforced "parity" policies There, traditional vehicles with number plates ending with odd numbers will be allowed to travel on the road on odd days, and those ending with even numbers will travel on even days Meanwhile, electric vehicle owners can drive on any day Signing up for electric vehicles is also cheaper in China, along with much more priority for consumers than traditional gasoline-powered vehicles[ CITATION Bus20 \l 1033 ] 16 References An, P (2021, 14) Mối thâm tình Elon Musk Trung Quốc Retrieved from VnExpress: https://vnexpress.net/moi-tham-tinh-cua-elon-musk-va-trung-quoc-4220640.html An, P (2023, April 10) 'Cuộc chiến' xe điện Tesla Trung Quốc Retrieved from VnExpress: https://vnexpress.net/cuoc-chien-xe-dien-cua-tesla-o-trung-quoc4591143.html Anh, V (2023, June 02) Trung Quốc phải cảm ơn Elon Musk: Tesla giúp đánh thức phần thị trường ngủ quên, lợi cạnh tranh trông thấy rõ Retrieved from CafeFvn: https://cafef.vn/trung-quoc-phai-cam-on-elon-musk-tesla-giup-danh-thuc-mot-phan-thitruong-dang-ngu-quen-loi-the-canh-tranh-trong-thay-ro-188230602105653824.chn CNBC (2018, 10 3) Tesla thiệt thịi chiến tranh thương mại Mỹ - Trung Retrieved from VnExpress: https://vnexpress.net/tesla-thiet-thoi-vi-chien-tranh-thuong-mai-my-trung3818794.html Crawford, A (2021, 24) Zero to 100 in 2.1 seconds – is this too fast for the road? 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