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Tesla, A Knowledge Management Think Tank
Dr. Michael J. Provitera, Management Consultant, Business Book Author, Management Professor
Dr. Mostafa Sayyadi, Senior Management Consultant, The Change Leader Consulting, Inc,| Associate Fellow of Australian Institute of Management
Published 9-11-2021 (All Rights Reserved)
Copyright ®Dr. Michael J. Provitera September 11, 2021
Copy only with permission by the author (email, website)
docprov@msn.com
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Email: mostafasayyadi1@gmail.com
J
eanty Remy, known as Remy, ran out of his home office with a staggering leap. He was on his work-from-home day which is three out of five; he is a nurse-practitioner and entrepreneur in Miami, Florida, USA, and he spends two days at the office and works from home remotely the other three days. He is a single Dad that drives his daughters to school every day. It was 6:30 am and he was heading into the dark sunrise with his daughter Tameka whom he was taking to school.
Remy was contemplating buying a Tesla because he was clocking so many miles each week. His girlfriend, Wendy, lived two-hours away in Naples, Florida, and the cost of gas was burdensome. Costco premium was topping at 3.29$ a gallon, and his Jaguar was punching about 28 miles per gallon on the highway. A typical Saturday to Sunday week of driving would cost close to 100$. Electric cars may rack up 19$ in spark for the same distance. Remy loved his Jag, but reality was beginning to set in, and the electric car was calling him. Besides, his 19-year-old daughter, Alexa, loves the Tesla. Yep, she loved everything about it. From the way the car drives to the expansive technology to the gaming capability.
He thought about a Hybrid and investigated the local Lexus dealer, found one certified. Spoke to a salesperson about the car in mind. The car of interest, clocking in at 39 miles per gallon highway and 40 miles per gallon city, Remy thought he should look. After turning down an appointment with the salesperson he spoke to that day, Remy drove to the dealer anyway. He felt that the Hybrid Lexus was not meant to be. Well, he got to the Lexus dealer and the car was not showing. The salespeople were all busy looking at computer screens and meeting with customers. There was such an abundance of cars that the thought of digging out the one of interest was a long shot. Remy thought the car was up front and that he can view it immediately. Not the case and there were cars everywhere. No shortage of cars at this dealership. Remy said to himself “Even if I bought the car, it would only save me about 30% in gas each week.” The fact that he did not have to plug it in was the draw. However, going 100% electric was still calling him. The Lexus, while great cars (the newer hybrid was getting 44 miles per gallon), lead to a short-lived experience.
The Tesla Corporation
The Knowledge management at Tesla is what Remy would call “State of the Art.” Here is Remy’s idea of how Tesla meets the demands of a Knowledge Management System:
1) Tesla provides the buyer less time searching for information because it is all on the website page with only a few options (color option @ 2,000$, Full-Self Driving @ 10,000, etc.)
2) Tesla offers the customer less time asking for information with the no haggle pricing of vehicles
3) Team Tesla is super responsive (i.e., instantaneous financing option at 2.49% with a personal credit rating of 650 or higher)
4) Tesla employees are all one-team working together to support the customer experience
5) Tesla provides an internet dashboard that states your personalized page for each customer with detailed information to support the purchase of the vehicle and accessories. (i.e., Remy’s Tesla)
6) Tesla offers continuous customer learning experience about features and purchase options with comparison to fuel-injected vehicles
7) Tesla’s knowledge management helps the organization as one big “Tesla family,” including customers
8) Tesla does not place unnecessary pressure on customers as the customer-knowledge about the car-buying process unfolds
9) Tesla uses knowledge management as a precursor to let the
buyer beware
of the state-of-the-art of electric vehicles
10) Tesla does not ask from large sums of money upfront and does not persuade the customer, in any way, to buy the car, which builds a true knowledge management customer service system based on real-time data
One advisor at Tesla told Remy. If you buy a car in May, in any given year, and a new light technology is discovering, the light is installed on the newer cars and your car is left behind on that implementation, unfortunately. However, when a software update is available, your car is immediately updated at no charge.
At the Tesla corporation, strategic objectives are constantly being tweaked to include supplier support and vendor relationships as the world manages the post-pandemic recovery. The primary function of knowledge management is to restructure unclear and vague situations into a set of organizationally resolvable problems. Solutions are key to Tesla’s success as the pandemic evolves. Thus, Tesla’s Knowledge Management is implemented and formulated to efficiently deploy the organizational capabilities and interact with the global environment.
Remy’s Options
Remy is sticking with the Tesla Model 3 Long Range, which has the capacity to go about 350 miles on one charge. He knows that other car manufacturers are attempting to not only catch up but surpass Tesla Motor Corporation technology. The American made Tesla car is still producing a better, more responsive battery, but how long can this last.
Tesla, with the stock ticker (TSLA) currently has a very clear technological lead over its competitors. One teardown in 2020 estimated it to be six years ahead of Toyota and VW. There seems no stopping the share price of the company either. In fact, Tesla doesn’t just have a higher market cap than Toyota, it’s nearly four times as much now and recently passed Facebook to become the fifth most valuable US company. But although Tesla is awash with investor cash and producing cars that have significantly more range and performance than other vendors, there are signs already that its market lead is eroding, and competitors are starting to catch up. (James Morris, 2021,
Tesla’s Dominance Could Be Under Threat Sooner Than You Think,
Forbes
)
Right now, Remy feels that similar to customer relationship management, knowledge management is an enabler for identifying and satisfying customer’s needs and the idea manifests itself as a significant driver that motivates the development of relationships with customers. Remy feels that searching further, at this time, is not an option for him.
With automobile chips on hold and scarce to come by, Remy realizes production of his new vehicle is the only option. He cannot afford the S-class Tesla, which is 85,000$, not including the 10,000$ software upgrade for Full Self-Driving Capability.
Remy feels that Tesla is creating a conducive organizational climate that fosters knowledge management which, he feels, is not only the key to post-pandemic recovery, but also the best way to solve his financial crunch due to the cost of gas and his driving status.
The Deal
Sunrise unfolded nicely as Remy drove to work, arriving at his office at 7:30 am. By lunch time, Remy was set upon buying a Tesla. He asked his daughter Alexa, who was at the office that day, if she thought it was a good idea to buy a Tesla. Alexa said, “Dad, it’s expensive. A huge investment, sure I would love a Tesla but you sure you want to do it?” “Yes, Alexa, gas is costing me too much and I am racking up miles each week which will bring the value of my Jaguar down substantially, besides, I come out of warranty in May of 2022 and that is only about 7 months away,” Remy replied.
Remy called the Tesla team and got a voice. Amber, at Tesla, was nice and helpful. She mentioned that there are no cars in the Florida area with the specifics that Remy desired. She located a car in Atlanta and gave Remy the zip code and told him to go to the Tesla website and search with the Atlanta zip. Remy did and found it. A black Tesla with white interior, a 2021model 3 long range, Tesla. White interior was a 1,000$ upgrade and Amber did not tell Remy, but the color black was an upgrade also, $2,000. The car was priced at 51,000$, plus an optional software upgrade of 10,000$ for Full-Self-Driving Capability. The car was a demo because it had 3,000 miles on it. The price adjustment for the miles is 784$. The car had to be picked up in Atlanta, however, a ten-hour drive. Remy agreed, paid the 250$ online fee and bought the car. Yep, Remy bought a 61,000$ car, online, with no salespeople engaged. Once he bought it, more screens came up to finalize the purchase. Cash, finance, or lease was an option, and Remy wanted to finance with some money down to lower his coupon payment. He filled out a quick form and instantly, less than 30 seconds, he got a text message on his phone with approved financing from a Bank that he never heard of but was happy to do business with them.
Text Message: Financing for your Tesla has been approved. Go to your Tesla account for more details.
Next day text message from the Tesla advisor: Hi Remy, welcome to the Tesla family! Go to your account to get started on your pre-delivery tasks.
Remy’s phone began to ring and another representative from Tesla wanted to congratulate and talk to him about the new car purchase. She mentioned that he had to pick up the car in four days. This all happen so suddenly. Luckily, Remy was on his lunch hour and was not in a meeting.
“What,” Remy stated back in a text message to the Tesla advisor. “I am working, driving my children, and I do not even have a free weekend this week.” The represented said “That is the deal, you can see the specifics on your dashboard. Sure enough, it states: Estimated Delivery: September 21 – September 24. A four-day window and it is Tuesday, so pick up time is Friday, ten hours away, without a weekend to travel.
The trade in of the Jaguar was another issue that had to be sorted out. Kee, the Tesla advisor, mentioned that she would help. She texted back shortly with an estimated trade in value of $19,329. Remy thought this was low because the Kelly Blue Book mid-range was about 22,000$. The next day, Remy visited the Carvana website, and he got an instant quote of 25,000$. It appeared in seconds, with a pickup date in 2 days at his home. Obviously, there was some leeway in the trade in value with that large of a margin. “Trading a car in saves on taxes on the new car,” Remy thought.
Flying High in April Shot Down in May
It was 1PM and Remy owned a Tesla with a down payment on a credit card of 250$. Remy told Tameka that he just bought the car but had to go to Atlanta to pick it up. She said “Atlanta?” Remy replied, “Yes, I am not sure if I can swing it.” He texted a picture to Tameka, who was at school, and said I bought the Tesla. Tameka replied “Wow, Dad, that is amazing.”
After watching some videos on youtube.com, Remy decided to call the representative to inquire about the wear and tear of the Tesla car because it is a demo with 3,000 miles on it. The representative mentioned that you will be buying the car “As Is.” Remy said, “What, I noticed a video that mentioned that some Tesla’s rattle and they may also have a seat cushion disfunction. What happens then? Am I covered for that?”
“Unfortunately, not, because you are buying the car used and that is not covered,” the reprentative mentioned.
Remy, now baffled, called off the deal because he could not make it to Atlanta within the timeframe and even another day would not work since it is a ten-hour drive one way, and he was running a motivational seminar on Saturday. Keeping his money in the game, he thought he would wait and see what happens.
After further contemplation, Remy decided to buy brand and build his Tesla model to order. He put that in motion. His delivery window was November to December 2021. Pick up in Ft. Lauderdale. Sweet!
Reflecting on Remy’s Motivation
“I am quick to make decisions and never look an opportunity with a shy eye,” Remy always said about his motivation, and most of all, “I love to go beyond the status quo and do more and work as hard as I can to provide for my children.” With two kids in private school, times were tough for him, but Remy did his best to ensure his children were happy and well educated. Cutting down his huge gasoline expense may help relieve some of his financial burden. He always tries to lead his children with optimism. Robert Iger, CEO of Walt Disney Corporation, quotes:
Optimism is a very very important part of leadership. People don’t like to follow pessimists.
-Robert Iger
This was Remy’s focus to always remain positive. Remy has a plague in his office by L. P. Jacks that said:
A master in the art of living draws no sharp distinction between his work and his play; his labor and his leisure; his mind and his body; his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence through whatever he is doing, and leaves others to determine whether he is working or playing. To himself, he always appears to be doing both.
Alexa asked Remy if the Tesla was a go and Remy responded with a delayed look on his face, “Probably not, definitely not right now.” Alexa was disappointed but understood the logistics of the Atlanta deal. Remy told his daughters to always go out and get what you desire. He remembered a quote of a great leader and kept this saying on his desk at work:
“Be who…you were meant to be, and you will set the world on fire.”
The Tesla Journey had Pitfalls
Remy decided to build his Tesla and take delivery in the November-December window. Thinking of a new car coming in around thanksgiving and Christmas was somewhat exciting. He thought to himself “I wonder when the new Tesla in 2022 will roll out, probably August 2022,” he thought.
He asked the representative via text, “When do the 2022s come out in mid-year?”
The representative responded, “It is a slightly different with Tesla – Any car made Jan 1, 22 will be a 2022. They are not changing from our 2021’s. Hope that answers the question.”
That helps, texted Remy. He also asked, “will the price change?” He did not receive a response.
Its September 24, 2021, Remy must make his purchase decision now. Delivery of a 2021 model 3 Tesla will be delivered in Fort Lauderdale, Florida, USA, with a November-December window. Lots to think about for Remy but a decision must be made, today.
Discussion Questions:
1. Is Remy making the right decision by buying a Tesla? Should he have the car delivered in the November/December window? Should he pay for the 10,000$ upgrade or purchase that later?
2. How effective is Tesla corporation at Knowledge Management?
3. Can you share your knowledge about Tesla, the organization’s global reach, or its stock price?
4. What are the advantages and disadvantages between a Hybrid and an electric car?
5. What kind of car do you drive? Would you consider an electric car? Is gas, miles per hour, oil changes, and wear and tear a burden to you or do you take it in stride because you love your car?
Michael Provitera, Assistant Professor of Organizational Behavior at Barry University, Miami, Florida, USA, prepared this case based on the post-pandemic recovery of the automobile industry as the basis of class discussion at both the graduate and undergraduate level, for business school, rather than to illustrate either effective or ineffective handling of an automobile sale. The case is based on the purchase of a modern state-of-the-art electric car called “Tesla,” and the company is a publicly traded organization on the New York Stock Exchange with the stock ticker of TSLA. This case study is not a view of actual details and all the information is fictitious and created to encourage discussion-learning about the automobile industry. No permission to publish this case has been granted by the Tesla Corporation and this is not a positive or negative representation of a car-buying process. This case study should not encourage the buy or sale of a Tesla or its stock and is written for educational purposes only. For further information regarding this case, please contact the author at docprov@msn.com.
About the Authors
Michael Provitera is a Management Trainer and Associate Professor of Organizational Behavior at Barry University in Miami, Florida USA. He prepared this case based on fictitious information and some actual events that took place in his fifteen-year career as an executive in the financial industry. The case is unique for leadership and management discussion learning as the basis of classroom [or training] discussion at both the graduate and undergraduate level [and executive seminars] rather than to illustrate either effective or ineffective handling of an administrative or personal career or leadership situation. The case is based on leadership ideas and creative assumptions made without reference or permission of the people named [all names are made up unless otherwise stated]. For further information regarding this case or for permission to use it in the classroom or for corporate training, contact the author, Dr. Michael Provitera, at
docprov@msn.com
or visit the author’s website at
http://docprov.com
.
Mostafa Sayyadi is an international management consultant. He works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to HR.com, Conscious Company Magazine, The Canadian Business Journal and Consulting Magazine and his work has been featured in these top-flight business publications. In recognition of his work with Australian Institute of Management and Australian Human Resources Institute, he has been awarded the titles, “Associate Fellow of the Australian Institute of Management” and “Senior Professional in Human Resources”. The author can be contacted at: mostafasayyadi1@gmail. Com
