Strategic directives for Tesla's global expansion and competitive positioning

Strategic Leadership at Tesla
Background
Tesla was founded in 2003 in California and specializes in manufacturing luxury electric vehicles (EVs). Its most popular products to date are the highly-praised but very expensive Model S and the Model 3, which is meant to be the more affordable everyman’s version of the Model S. Tesla is a forward looking company and has attracted a lot of attention as the foremost EV manufacturer and its aim to bring sustainability to the planet through green technology (Tesla, 2013). Tesla was the first major brand to bring visibility to the EV, but in recent years numerous other major auto manufacturers have entered the space: Chevrolet, Porsche, BMW, VW, Jaguar, and more. The EV is a special type of vehicle, however, and comes with its own requirements: it must plug in to the electric grid to recharge its battery cells, for one. It can also be expensive and difficult to find a mechanic to work on it. The EV consumer will have a variety of concerns before buying (Simsekoglua, 2018), but there are ways for dealers and governments to promote the sale of EVs. Incentivizing buyers has been one way to do that (Diamond, 2009). But which demographics outside of the current target market are likely to be the most motivated by incentives? Tesla needs to find a way to touch the lives of more consumers in order to stay relevant in an increasing competitive EV market in which it previously had been the lone player. Currently, most of its market is within the U.S., but it is looking to expand its footprint in Europe and Asia and needs to find a way to be more appealing to other cultures.
Strategy
As the new CEO, my strategy is to grow our sales numbers globally so that the company can face the rising competition. This will depend on creating a revitalized marketing strategy. Thus, my first order of business will be to write a directive to the Director of Marketing and Communications. This will be followed by a directive to the Direct of Human Resources, which will address the recruitment of top talent to meet the demands of the consumer, the retention of that talent and the training and motivation of talent and workers already possessed. The Chief Operating Officer will receive from me a list of data-driven questions that will ask how we can apply metrics to better understand what we are facing. The Chief Technology Officer will receive a letter from me describing my concerns regarding innovation. Last but not least, the Board of Trustees will receive from me a letter regarding the corporate social responsibility platform of the company and what the firm is doing ethically and in terms of its social responsibilities to appeal to the public.

Directive to the Director of Marketing and Communications
Dave Arnold:
Thank you for stepping up to take over after the departure of O’Brien. The job you face is truly an enormous and important one. However, I want you to know you have my full support and I will make sure you have everything you need to execute your directives.
As you know, Tesla is attempting to break beyond the confines of the U.S. market. Other competitors are arriving now to attempt to steal our market share. We need to be able to maintain our hold on public opinion and keep our loyal consumers happy while winning new ones across multiple cultures and nationalities.
External Public Response: Notify the public that we are still growing and aiming to complete our build-out in China next year. We also still have the Tesla truck in the wings and some exciting new features for the Tesla Model 3. We are currently aiming to have a fully autonomous vehicle within the next two years, so Tesla will still be far ahead of the pack in terms of innovation.
Short-Term Strategy: We must focus on what is driving our market. We know tax incentives are expiring in various countries around the world. So we know that consumers were looking for a tax credit when they purchased the EV in the past—but that is gone now. What we want to know is who is still getting in line to buy a Model 3 and why. The short-term strategy should be to connect with drivers from various demographics. We want to know if they are interested in an EV, if not—why not? If they are, what motivates them? We need to use Hofstede’s cultural dimensions model and apply it to markets in North America, Europe and in Asia. Our goal is to better understand the consumer’s needs and wants.
Long-Term Strategy: The world is changing: climate change is recognized as an issue all over the word. England already has as a major goal switching over the cars of the UK to EVs. This is a trend that will not stop with England, and Tesla has to lead the way in this change just as Ford led the way with the first assembly line for cars. Up to now, Tesla has relied on Elon Musk’s social media account to market the firm. From this day forward we are going to let others do our talking for us. We will use influencers on social media—YouTube, Twitter and Instagram—to share their stories and get the word of mouth flowing again. Then Tesla will be ready to break into the mainstream with a Super Bowl commercial. It is time to take our marketing strategy to the next level and see if we cannot grown our brand appeal in the process.
Sincerely,
Me
Your New CEO

Directive to the Director of Human Resources
Ms. Thompson:
Human Resources is a vital part of what we do here at Tesla and I want to personally thank you for leading the way. The main challenge for us going forward is going to be recruiting and retaining the talent we need to take this company to the next level. As I’m sure you know, Tesla has had a difficult time retaining executives in recent years. However, with a new CEO at the helm and you operating as Director of HR, I think Tesla is ready to turn a new leaf.
Recruitment: Tesla is looking to cut costs in the coming years, but what we are not willing to sacrifice on is the talent—and that means we will best competitive rates for top-tier talent—not only in terms of salary and benefits but also with stock options. We need innovative leaders who will bring fresh ideas to our company and they will need to be incentivized to join considering the reputation Tesla acquired under Musk. You will have to show that our culture has changed and that today we are committed to a policy of servant leadership so that innovative minds can get to work in the ways only they know how.
Retention: Retention has been a major issue in the past. In 2018 alone, we lost 41 executives to turnover. Our latest loss—Sanjay Shah, our senior VP of energy operations; and surely you will remember that our chief technology officer JB Straubel stepped down in July. These were tough losses to take and we want to make sure that the culture that led to these turnovers will not resurface. Thus, to retain workers, culture has to be a number one priority: from me, our workers will see servant leadership every step of the way. From you, we will require a focused vision for the promotion of a culture of respect and innovation.
Motivation: Tesla’s employees have always been motivated by a sense of working to make a change, to transform the world into a better place. We want to re-affirm that purpose and make sure our workers have the intrinsic motivation they require to be part of the company that is going to take the automotive industry through the 21st century. Our vision is what has motivated them in the past, and now we need to use that vision to infuse the culture we wish to create. We want to build relationships of trust and demonstrate transparency and supportiveness at the highest levels.
I want you to know that I am always available to take your calls and questions and I want you to feel free to stop by at any time. I am at your service and I will do everything in my power to make sure you get have the tools you require to do an excellent job heading up our HR office.
Sincerely,
Me
Your New CEO

Data-Driven Questions for the Chief Operating Officer
Ms. Kay:
Since taking over the position for Elon Musk, you have overseen the day-to-day administrative affairs here at Tesla with impeccable precision and alacrity. I want to personally extend my thanks for your service.
As you know, we are about to embark on the next chapter in Tesla’s journey, and you are going to help us get there. The following data-drive questions I here present to you have been developed out of a sense of our company’s need to better understand how to satisfy our customers and keep them generating positive word of mouth about their experience with Tesla.
Please consider these questions as you think about how best to guide us on our way forward: What were the top three marketing campaigns of last year in terms of return on investment? What can we do to address our supply chain in order to further cut costs yet boost revenue streams? When it comes to servicing already owned Teslas, what are the top ten issues that customers are having that our engineers should be focusing as they work on the next iteration of the Model 3? What the a) demographic, b) geographic, c) psychographic, and d) behavioral segments of our consumer market? What the a) demographic, b) geographic, c) psychographic, and d) behavioral segments of the consumer market that we have not yet tapped into? Based on current trajectory models, what are our funding needs for the next year, next three years, next five years, and next ten years? Based on the Hofstede model of cultural dimensions, what cultures could our company most easily identify with and integrate our tech into? How can we boost sales and increase revenue by 15% in the upcoming year? As you well know, data analysis is what we depend upon to make effective strategic decisions. The company relies on clear-eyed data analysis to chart its way forward, and I am certain that with your assistance we will be able to find that way. If you have any other questions that you believe would be pertinent to ask, answer and relay to me, please by all means do so.
Sincerely,
Me
Your New CEO

Directive to the Chief Technology Officer
Ms. Foster:
My many congratulations at your recent appointment to the post left open by our illustrious J. B. Straubel! I am confident that your many insights, skills and areas of expertise will enable you to shine in this position and help you to guide Tesla to the next frontier in innovative design.
As you know, we have run into some struggles in recent years, and customer backlash has mounted over criticism about our exploding batteries, poorly functioning autonomous features, and the recently paned rollout of the Smart Summon. Consumers must know that our company takes its tech seriously and is by no means beta testing our products on the public.
Consumer Focus: The Smart Summon failure needs to be addressed and the autonomous function has to be corrected and advanced still further—otherwise, we shall be obliged to cancel it as an option. What do consumers want most in a luxury EV? They want safety, style, comfort, class and performance. Our innovative approach has caused us to miss the forest for the trees. It is time to get back to basics while clarifying exactly what our autonomous features can and cannot do.
We must also address rumors about battery packs not being handled safely in production. I want a full audit of the batter production process and a full report on errors in handling. I want this report to be made public so that our consumers can see that we are correcting the mistakes left by our predecessor.
Infrastructure: Our current production tent is unseemly and does not reflect the values or standards that we at Tesla should strive to uphold. Provide an assessment of what will be required to build out our production factory so as to meet the projected production demand for the next five years.
I look forward to working with you and being part of the innovative process of guiding Tesla into the next decade and beyond.
Sincerely,
Me
Your New CEO

Statement to the Board of Trustees
Ladies and Gentlemen of the Board:
As you know, Tesla is at the forefront of the sustainability movement thanks to its pioneering of the EV and its commitment to green energy tech solutions to the growing climate problems of this world. Our brand must never seem to slacken in its commitment to sustainability. With that in mind, we must address our ethical principles and corporate social responsibility platform to make sure they reflect the values and needs of our communities in the coming years.
Ethics: Ethical leadership is the foundation of performance. I trust that the ethical leadership of this Board will allow us to update our ethical policy and communicate it to stakeholders far and wide. Our commitment to openness, honesty, integrity, transparency and accountability must never waver: this is the heart of my mission to bring authentic leadership back to Tesla. Help me by updating our ethics policy to reflect the serious values and principles that we intend to carry with us as we march forward.
Corporate Social Responsibility (CSR): Our CSR platform is where we must truly show our commitment to the ethics we espouse and to the sustainability goals we aim to reach. We must develop CSR policies that are meaningful. My plan to update our CSR policy is to integrate our ethical principles with our social action. First, we should be locating opportunities to help clean up our communities. Elon Musk was never one to shy away from this initiative and his work with Flint, Michigan, was just one of many opportunities he took to carry this message home. We must be willing to follow in his footsteps and leave our mark on society in a positive way.
Sincerely,
X

References Diamond, D. (2009). The impact of government incentives for hybrid-electric vehicles: Evidence from US states. Energy Policy, 37(3), 972-983. Simsekoglu, O. (2018). Socio-demographic characteristics, psychological factors and knowledge related to electric car use: A comparison between electric and conventional car drivers. Transport Policy, 72, 180-186. Tesla. (2013). Mission statement. Retrieved from https://www.tesla.com/blog/mission-tesla