INTRODUCTION
Tesla Inc. is an automotive company that manufactures solar energy systems, solar storage
systems, and electric vehicles. Its first name was Tesla Motors Inc. Two engineers, Martin
Eberhard and Marc Tarpenning established it in 2003. Eberhard identified a market niche for sports
cars that were eco-friendly. He saw a market opportunity for engineering high-performance
electric sports cars since the existing battery technology could cater to that. He realized he could
tap into the existing supply chains for the car parts instead of designing and producing every aspect
of the vehicle (Schreiber, n.d.). This was due to the growth of the automotive industry for a century
since the significant contributors of the automobile industry had contracted out the surplus
products of their production to achieve a competitive advantage (Hitt, et al., 2010). Eberhard
recruited Tarpenning as a partner by convincing him of the need for a powerful, effectivelydesigned clean energy vehicle in the automotive industry. Elon Musk was their first noteworthy
shareholder who took over as CEO in 2007 before Tesla delivered its first product, the Roadster.
The electric automobiles industry is an emerging industry because it consists of a few sectors
dependent on new technologies. The market structure of Tesla is an oligopoly because it has few
sellers of the same product. Tesla leads the market in the USA (Abdou, 2019). The prices of Tesla
cars are increasing because of supply pressures attributed to the increased cost of raw materials in
the automobile industry. This is caused by the Russia and Ukraine conflict, which has led to a rise
in the prices of raw materials used in cars manufacturing, that include aluminum used in making
car bodies from aluminum in the bodywork, nickel used in car batteries, and palladium used in
catalytic converters (Musk, 2022).
For my research on the value creation of Tesla operations and marketing theories, I will do
intensive research from journals, books, and websites and critically analyze the findings through
knowledge acquired from this class.
CASE STUDY
Product Development
In 2008, Tesla introduced its first into the automotive market with The Roadster sports car that
was fuelled by a battery. Its Power storage mechanism was the Lithium-ion batteries, and it became
the first-ever car that could go up to 200 Miles on the strength of a single battery. In 2012, Tesla
introduced the Model S luxury sedan, which has become the best car in the electric vehicle luxury
class. Model S has the most extended range compared to other electric vehicles by combining
safety, performance, and efficiency. The over-the-air program development makes it better over
time. It has a performance of 0-60 mph acceleration time of 2.28 seconds, hence becoming the
world's best-selling solar-powered vehicle by 2015. In 2015, Tesla launched Model X, the safest,
fastest, and most competent sport utility car in history that is highly rated regarding safety, across
every category, as per National Highway Traffic Safety Administration. In 2017, Tesla launched
the Model 3, a cost-effective, with the highest towing capacity and high-volume electric car. Tesla
revealed Tesla Semi immediately after Model 3, the safest and the coziest truck vehicle. It was
designed to save customers on fuel costs. In 2019, Tesla introduced Model Y, a mid-size SUV
with a capacity of seven passengers, and the Cyber truck, which has better utility than a traditional
truck and better performance than a sports car (Tesla, n.d.).
Tesla has a series of charge stations over the USA, in specific European areas, and in Australia,
where they are easily accessible to electric car owners, and they are not charged for the service.
The chargers can charge up to 60% battery in 20 minutes. Today, Tesla produces a large number
of its cars in Fremont- California, Shanghai, Texas, and Berlin- Branden burg to cater to the
European market. Currently, Tesla has Gigafactories in Nevada and New York to produce car
batteries, electric motors, powertrains, solar panels, solar roofs, and electric components for
supercharges (Tesla, n.d.).
Supply Chain
Tesla's annual income for 2021 was $53.823 billion, a 70.67% rise from 2020. In 2020 the yearly
revenue was $31.536 billion, a 28.31% rise from 2019, and the yearly income for 2019 was
$24.578 billion, which was a 14.52% rise from 2018 (Macrotrends, 2021). The company has
experienced an increase in revenue every year since 2010. In 2021 Tesla achieved a net gain of
$2.32 billion (Seifert & Markoff, 2022)
Safety Practices
Tesla takes a proactive approach to ensuring safety by having a training program for the production
employees before commencing work. After that, the company provides training while workers are
on the payroll and tracks performance every day to ensure advancement and efficiency. This results
in an increased safety rate with a production increase. Tesla continues to make products available
and pocket-friendly to an increasing number of people, hence primarily expanding the provision
of clean transportation modes and the use of clean energy. In 2019, Tesla had the safest year yet
at the Fremont factory, with a decrease in the rate of injury per vehicle by 50% compared to the
previous year (Shelby, 2020).
Leadership
Tesla's leader, Elon Musk, precisely knows what he wants the Tesla business to achieve, meaning
he has a specific goal for the company. He wants Tesla to be involved in changing the world view
on sustainable sources of energy. This is shown in his excellent management of Tesla and Solar
City and in leading them to form a partnership (Steward, 2016). Musk is involved in developing
robust technologies in the automobile industry by investing human resources and money to
develop these technologies by creating high-efficiency electric cars and establishing Gigafactories.
His leadership characteristics are a mixture of flexibility and strong-willed. He has an intense
persona when communicating his thoughts and opinions, but he is also versatile and accepts and
bears the risks involved in developing innovations. His communication style is authentic, downto-earth, and evident (Miller, 2022). These traits enable people to believe in Tesla's vision and
motivate their pursuit of it. On the downside, he is aggressive, making him wrong at conflict
resolution, ignorant of employees' diligence, and dismissive of complaints (Vance, 2016). An
example of this would be when in 2016, some suppliers had a hard time meeting Musk's production
goals; hence some of them, like the Mobil Eye company, ended their relationship with Tesla, and
the company Mobil eye ended its relationship (Ramsey, 2016).
Structure
Tesla’s organizational structure is functional, enabling it to experience substantial business control.
The system is a function-based hierarchy, centralized, and has divisions. The departments involved
are;

Human resources department

Business development department

Engineering department

Processes and Autopilot department

Manufacturing and Design department

Global Sales and Services department
This structure aids Tesla in maximization of its ability to execute new strategies and manage its
operational processes.
Tesla has a minimum number of regional divisions in Norway, the USA, and China. These
divisions allow Tesla to tailor their operational strategies, marketing campaigns, and financial
reporting to different geographies with different customer populations and legal requirements.
Decisions generated by a central group govern Tesla's entire company. (Meyer, 2018)
Culture
Tesla's organizational structure critically influences its culture. Tesla believes in personal mastery
as a learning organization, and employees are encouraged to think creatively and critically to
develop innovative ideas. Tesla rewards reward employee ideas. Tesla employees are encouraged
to have a shared goal of having out-of-reach goals. This ensures unity and minimizes conflicts.
Moreover, employees are inspired by their managers to use complex mental models in finding the
root cause of issues and respond to problems fast and practically. Tesla has training programs that
introduce its human resources to their culture. In conclusion, Tesla highly values team learning
and effective teamwork (Meyer, 2019).
Environmental strategy
Tesla is at the forefront of providing solutions to environmental problems. From 2003 up to 2015,
Tesla's main organizational objective was the provision of electric automobiles with zero
emissions. Hence decreasing dependence on fuel vehicles that harm the environment, Tesla also
introduced a closed-loop recycling system for batteries to make its production process more ecofriendly by taking lead-acid batteries and recycling them through a closed-loop system (Carleton,
2021).
Tesla also produces a power wall, a rechargeable lithium-ion battery product that stores and
supplies electric power to households and small-scale businesses. Tesla commenced its energy
conservation era by providing solar ability to cater to people's needs. People can use solar power
more responsibly and effectively with the help of a power wall. Power wall works by storing excess
electricity generated by the solar panel system during a sunny day and using it when there is
insufficient electric power generation. Afterward, Tesla released the Solar Roof, which works with
the Power Wall to gather solar energy and convert it to electricity. Tesla's vision is to see electric
automobiles on the road, reducing fossil fuel consumption. Tesla has a unique ability to integrate
organizational development and social responsibility by engineering electric vehicles that meet the
company's goals and customers' needs.