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TESLA

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18 July, 2018

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Last name: Costanzi

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First name: Cristiano

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Maastricht University student ID number: 6201871

Semester: Summer os
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Year: 2018
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Last name: Graziano

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First name: Valeria

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Maastricht University student ID number: 6201879

Semester: Summer
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Year: 2018
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Course code: BUS3005

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Course title: Entrepreneurship, it is all about creating value

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Professor: Mark Bertrand

Number of pages: 23
Word count*: 5245 words
(* excluding title page, table of contents and literature references)
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1. Introduction 1

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2. Tesla today 2

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2.1 The origins of Tesla 2
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2.2 The Business Model Canvas 5

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2.3 The Nine Building Blocks 6
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2.3.1 Customer Segments 6

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2.3.2 Value Proposition 7

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2.3.3 Channels 8

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2.3.4 Customer Relationships 9

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2.3.5 Revenue Stream 10

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2.3.6 Key Resources 10

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2.3.7 Key Activities
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2.3.8 Key Partnerships 11

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2.3.9 Cost Structure 12

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2.4 Company’s trends and environmental trends
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2.5 Corporate Social Responsibility: strategy and mission 14
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2.6 Persona 15

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3. What will be about Tesla? C 17
3.1 Blue Ocean Strategy 18
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3.2 Corporate Social Responsibility 18

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3.3 New Business Model Canvas 19

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3.4 Tomorrow’s Persona 20

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REFERENCES 22
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1. Introduction

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In this paper we are going to analyze Tesla’s company by understanding how it borns, the
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mission, the why it decided to follow the innovation and sustainable path, how will do it

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and what are the products and services that will allow the change. One of the key point of

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the paper is analysis of the Business Model in order to understand the key elements that

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were able let Tesla became one of the most innovative and sustainable company ever and

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to which audience Tesla is referring to let the company grow and being a leader in the EV

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(electric vehicles) industry. Corporate Social Responsibility (CSR) is playing a crucial role
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for the company as nowadays is very important that a company - in order to be successful -

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need to make profit but also creating value for the community; it has to bring something to

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the society that would allow the society itself to improve and grow in a sustainable way.

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2. Tesla today
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2.1 The Origins Of Tesla
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Tesla is an American multinational corporation based in Palo Alto, California, producer of
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electric vehicles, photovoltaic panels and energy storage system. The objective of the

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company is to make accessible the electric vehicles for the mass market, or to offer them
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to the average consumer at an affordable price; furthermore, Tesla offers solutions to
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generate clean energy, arguing that the reduction of fossil fuels may lead to a better future.
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On July 1st 2013 Martin Eberhard and Marc Tarpenning founded the company; the name
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was for the electrical engineer and physicist Nikola Tesla, mainly because the car is
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powered by two electrics motors designed inspired by Tesla turbines. Later, Elon Musk
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became one of the main investors, carrying 180 million of dollars in less than five years. In
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2008 Tesla Roadster, the first car, is produced and it is able to travel 340km using
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lithium-ion battery cells, while over four years (2008-2012) more than 2.250 Roadster
models are sells in 31 countries. On the fifth anniversary of Tesla, Elon Musk becomes
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CEO of the company and, at the same time, the Model S is born, the first electric sedan

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designed for long journey, which became the world’s best-selling plug-in electric car in

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2015 and 2016. Combining performance, safety and efficiency, Model S has changed the
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vehicle idea of the twenty-first century by offering greater autonomy than any other

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electric vehicle, software via Internet that continuously improve performance and
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acceleration. 2010 was of particular importance for Tesla, as it established an agreement

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with Toyota to increase its investments in the development of electric vehicles. Two years

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later, Model S sales began to increase and Model X entered the market. This was a

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particularly significant event, as the first electric-powered SUV had been created. Model X

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was the best SUV, safer and faster in history which the National Highway Traffic Safety

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Administration has assigned a 5-star safety rating in all categories. In contrast, 2013 was

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not an easy year for Tesla, as the results of the financial statements were so bad that Elon
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Musk thought to sell the company to Google. In 2014 Tesla creates also produces an

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exclusive set of energy solutions, ie Powerwall, Powerpack and Solar Roof, which allow

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homeowners, companies and distribution facilities to manage the production, storage and
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consumption of energy renewable; so, Gigafactory 1 was born, a plant in the Nevada
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desert, created to reduce the cost of the batteries. In 2015 the sales of the Model S have

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reached 100.000 units and in 2016 Elon Musk’s “secret plan” was completed with the C
introduction of Model 3. In this year Tesla becomes the American car company of greater
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value surpassing Ford and General Motors in equity capitalization. The two main
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warehouse are located in Fremont (California) to distribute cars in North American market
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and in Tilburg (Holland) to provide Europe. This few lines represent only the beginning.
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Tesla intends to popularize a cheaper model of cars in order to be accessible to a wider

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audience and to spread up the transition to clean transport and sustainable energy
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production. In this way, it will be possible combine cars, electrics battery, production and
storage of clean energy to power their impact and to build a better future.1

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Official Tesla’s Website, ​https://www.tesla.com/it_IT/​;
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Tesla’s Wikipedia Website, h​ ttps://it.wikipedia.org/wiki/Tesla_(azienda)​;

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2.2 The Business Model Canvas

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The Business Model Canvas is a strategic managerial tool developed by Alexander

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Osterwalder, which offers an in-depth analysis of the key factors of a business model. The
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main feature of the model is a comparative analysis when one of the factors is modified

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due to an increase in investment. Overall, the Business Model Canvas can be defined as a
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tool used to create innovation in a business, to deliver it to customers and to capture value.

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In particular, four areas are identified: ​How ​(key partners, key activities, key resources),

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Who (relationships, customers, clients), ​What ​(the value) and ​Cost and Revenues centers​.

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Thus, the model takes on a double vision: the first one more general, the second one more

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casual, with processes and systems chosen ad hoc to sell the product or the service. Before

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choosing the ideal business model, a comparison is made between the different ones, as

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well as a product goes through several phases before reaching the final version.2 Before
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introducing a graphical approach to the Business Model Canvas is very important to define

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the Why, How and What of Tesla. During TED Talk3 Simon Sinek “a British-American

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author, motivational speaker and organisational consultant”4 described the ​Golden Circle
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is a simple model that allow to have a clear vision of why, how and what a company is
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offering as service or product. The reason why Tesla is working on a new way to move is

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“Accelerate the world’s transition to sustainable energy and transport” (why), because “It’s
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very important for the future of the world” by “Break the mould that electric cars are slow,
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ugly, low range and ​bad performance” (how) introducing “The affordable car, with
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$35,000 Model S”5 (what). We developed the theoretical Business Model Canvas for
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​Martin​, ​What is a Business Model Canvas?​,

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https://www.cleverism.com/business-model-canvas-complete-guide/ 
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​TED Talk, ​How great leaders inspire action​,
https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action/
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​Simon Sinek, h​ ttps://en.wikipedia.org/wiki/Simon_Sinek
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​Cornu F., ​The Why, How and What of the Tesla Model 3, 2016,
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https://medium.com/@floriancornu/the-why-how-and-what-of-the-tesla-model-3-1c656172e940 
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Tesla, with the Nine Building Blocks, in order to explain in a visual way how Tesla is

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running the business in order to reach the Value Proposition.

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2.3 The Nine Building Blocks

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The four fundamental aspects of a company are those that contribute to the creation of the
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product or service; these are represented in nine different categories within the Business
Model Canvas, which are described in detail in the subsequent printouts.
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2.3.1 Customer Segments

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Customer Segment represents the main part of any business model. Profitable
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customers are important in order to make a company survive for a long. In order to be
more efficient, a company may adopt segmentation strategy, or creating group of
customers basing distinct segments with a common needs, behaviors, or other
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attributes. Exist segment of different dimension and a company can decide to focus on

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a specific segment and to ignore another one. However, there are five factors which, if

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they are different, help company to understand if customers groups represent separate
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segments: distinct offer, distinct Distribution Channels, different types of relationship,

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different profitabilities, willingness to pay different aspect of the offer. When
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customer segment is chosen, company can start to understand specific customer needs.

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We can identify five types of segment: ​Mass market, Niche market, Segmented,

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Diversified ​and ​Multi-sided platforms (or multi-sided markets).6

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Tesla has a ​segmented target market which main characteristics are similar but
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varying needs and problems and Value Proposition, Distribution Channels, Customer

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Relationships and Revenue Stream are slightly different in order to serve all Customer

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Segment. In particular, Tesla identified three segment on which to focus: eco-friendly,
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tech-savvy and entry-level luxury buyers; 83.9% of buyers are men with an average

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income over $100,000 and with 45-64 years old.7

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2.3.2 Value Proposition
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Value Proposition is the expression of the reason why customers have to choose a

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particular company than another. It can be viewed as the bundle of services and C
products that is able to satisfy customers’ needs. In order to create value for the
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Customer Segment we need a mix of elements such as newness, performance,

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customization, design, brand/status, price, cost reduction, risk reduction, accessibility

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and usability. Elon Musk on 2006 declared that “Critical to making that happen is an
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electric car without compromises, which is why the Tesla Roadster is designed to beat
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a gasoline sports car like a Porsche or Ferrari in a head to head showdown. Then, over
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and above that fact, it has twice the energy efficiency of a Prius.”

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​Osterwalder, A., Pigneur Y., ​Business Model Generation,​ pp.20, 2010;
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​ ucchi, K., ​What drives consumers demand for Tesla?​,
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Tesla Value Proposition is focused on advanced electric technology, high miles per

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charge, free electric charging stations, supercharging network and superfast charging

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vehicles. One of the main issue in EV (electric vehicles) was the slow charging time,
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low miles per charge and small cars. Elon Musk strategy was to redefine the EV’s

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world providing fast cars with a sportive design and succeed in it.
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2.3.3 Channels

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Channels describe the way in which the communication is made in order to reach

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Customer Segments and to deliver a Value Proposition. They follow a five stages

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path, ​Awareness, Evaluation, Purchase, Delivery ​and ​After Sale ​and they represent

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customer touch point and for this reason they are important for customer experience.

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The choice of Channels is an important step for a company because it determine the
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proposal of Value Proposition to the market. A company can decide to use ​Owned

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Channels, Partner Channels ​or ​both.8
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Tesla has not a large inventory of cars because it does not follow the traditional
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approach; in fact, Tesla own its distribution channels. Customers can decided to ​buy a
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machine using an ​offline distribution channel, or choose the model and product
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characteristics in one of Tesla's multiple showrooms, where a car sample is also C
exhibited. Subsequently, the company will fulfill customer orders and when the
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product is available, it will be delivered via ships to Europe and Asia. Recently, Tesla
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has confirmed its intention to continue with a owned distribution, maintaining greater
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control over sales and local services. Furthermore, Tesla offers to customers also the
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possibility to buy a car using an ​online channel, where the characteristics of car are
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chosen by customers, improving their experience.

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2.3.4 Customer Relationships

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​Osterwalder, A., Pigneur Y., ​Business Model Generation,​ pp.26-27, 2010; 
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Customer Relationship describes the type of relationship a company established with

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specifics Customer Segments. As we have said previously, one of the starting points

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for the creation of a business is the choice of the segment to which one wishes to
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address. Relationship may be personal or automated and they may be driven by the

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following motivation: ​Customer acquisition, Customer retention, Boosting sales
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(upselling). We can distinguish between several categories of Customer Relationship:

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Personal assistance, Dedicated personal assistance, Self-service, Automated services,

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Communities, Co-creation.9

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Tesla’s customers are part of a ​Community where brand loyalty plays an important
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role. Some studies have shown that very often brand loyalty is supported by emotional

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connection: in particular, as opposed to being faithful to an organization as such,

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individuals are faithful to what that organization speaks to​. In general, the Community
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has the same background and a collective identity which, in this case, is represented

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by the common intention to adopt electric vehicles to achieve an improvement in

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environmental conditions. Individuals like driving a Tesla since they never again need
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to purchase gas, and as a reward, they're helping the planet all the while. I​ n addition,
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we must not forget that, in order for there to be a lasting loyalty brand, transparency

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by the company is a vital element. In this, Tesla is one of the few companies in the
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world to stand out, as in recent years has managed to create a process of
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communication to its customers using social media and its own blog. An event of
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particular importance was the Model S fire dating back to about a year ago; on that
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occasion, Elon Musk announced the new through social networks, like Twitter and
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Facebook, and publishing the mail correspondence of the owner of the burned car to
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offer the public the complete version of the facts. Thanks to this attitude taken by
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Tesla, consumers feel closely related to the company. Finally, in support of this, it is
worth considering the request to some people to Elon Musk to make changes to the
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Model S, a challenge that was clearly accepted, allowing Tesla to continue to cultivate

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brand loyalty.10

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2.3.5 Revenue Stream

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There is not just a single Revenue Stream but we can find many of them based on how

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many Customer Segments we are analyzing. In order to earn the company can choose

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differents pricing methods as an Asset Sale, Usage Fee, Subscription Fee,

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Lending/Renting/Leasing, Licensing, Brokerage Fee and Advertising.11

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Tesla has multiple source of income based on many services that they offers. Their

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main income is from Asset Sale, since their core business is selling electric vehicles.

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Stock Market represents also an important Revenue Stream. Licensing is very
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important stream of revenue thanks to the most advanced R&D in the green field.

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Tesla is partnered with Toyota and Daimler to provide them powertrains and

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renewable batteries. One point of strength is the Supercharger Network that today
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car manufacturers that want to develop their own vehicles and want to take

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advantage of Tesla’s network will need to pay an Usage Fee. Worldwide C
Governments are looking for new ways to avoid and to reduce pollution by giving
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incentives to companies that are producing with zero emissions.

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2.3.6 Key Resources

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In order to run a successful company we have to focus on Key Resources, which

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represents all the assets required in order to bring at life the Value Proposition to
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Customer Segment.

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​Rutter, T., ​Why Tesla has the most loyal customer​, 2014,
https://eu.usatoday.com/story/money/cars/2014/09/06/why-tesla-has-the-most-loyal-customers/15139377/​;  
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​Osterwalder, A., Pigneur Y., Business Model Generation, pp.31, 2010; 
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​Official Tesla’s Website, ​Charge on the road​, h​ ttps://www.tesla.com/supercharger?redirect=no​;
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Tesla is famous and well-know thanks to their advanced high-advanced technology in

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EVs and in renewable batteries. Key Resources can be categorized in Physical,

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Intellectual, Human and Financial assets.13 Buildings, manufacturing facilities,
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distribution networks represent for Tesla crucial assets.

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Tesla aim to be one of the most important supplier of green renewable energy,
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Gigafactory is one of their most challenging project in this field where Tesla aim to be

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able to produce green energy.. Another Key Resource is the Human Capital as

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currently is attracting the most brilliant minds to develop all the products that Elon

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Musk is focusing on.

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2.3.7 Key Activities

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company in order to successfully reach the Value Proposition. They can be

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categorized in Production, Problem Solving and Platform/Network.14

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Tesla is focused on all of those categories, in particular with Production as their aim is
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to deliver the most green and advanced products. One of the main issue of EV
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(Electric Vehicles) was their low milage with a charge. Batteries were not able to

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weight by making them small and uncomfortables. Tesla main activity was to solve
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this problem by developing a new standard for EVs. R&D in Tesla is very innovative
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and challenging for other car manufacturers and it is currently leading the innovation,
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making the Problem Solving activity a crucial one.

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2.3.8 Key Partnerships

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Key Partnership include suppliers and partners that make the business model work.
This kind of agreements are useful for a company to optimize their business model,

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​Osterwalder, A., Pigneur Y., Business Model Generation, pp.35, 2010; 
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​Osterwalder, A., Pigneur Y., Business Model Generation, pp.37, 2010; 
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reduce risk or acquire resources. Four types of partnership are identified: ​Strategic

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alliances between non-competitors, Coopetition: strategic partnership between

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competitors, Joint ventures to develop new business ​and ​Buyer-supplier relationship
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to assure reliable supplies. Moreover, we can distinguish three motivation for creating

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partnership: ​Optimization and economy of scale, Reduction of risk and uncertainty,
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Acquisition of particular resources and activities.15

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The main partner of Tesla is Daimler, german producer of cars and means of

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transport, who bought about 1o percent of the Tesla company giving it the possibility

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to be the only production automaker selling a highway capable electric vehicle in

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North America and Europe. Thus, the heart of partnership is the intention to integrate

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the lithium battery model developed by Daimler with the models made by Tesla, in

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no
order to continue to build the path towards electro-mobility and accelerating the
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commercialization of electric drives globally.16

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The second one Tesla’s partner is Nvidia, who provided the Model S, Model X and

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Model 3 with autonomous driving skills thanks to a “supercomputer”. ​The high
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technology of Nvidia is also given by DRIVE PX AI, an end-to-end IT system able to
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perceive and understand the surroundings of the car.17

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2.3.9 Cost Structure
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To run Tesla there are severals costs to cover and those can be summarized in the Cost
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Structure. It is very important for companies to cut down costs in order to keep high
C

profits and Cost Structure is very helpful to have a clear and precise vision of all the
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no

elements. We have companies that are Cost-driven or Value-driven. Cost Structures

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15
​Osterwalder, A., Pigneur Y., Business Model Generation, pp.38-39, 2010; 
16
​Official Tesla Website,​ Strategic partnership: Daimler acquires stake in Tesla​, 2010,
https://www.tesla.com/it_IT/blog/strategic-partnership-daimler-acquires-stake-tesla?redirect=no​;  
o

17
Official Nvidia’s Website, ​Tesla and Nvidia​, h​ ttps://www.nvidia.com/en-us/self-driving-cars/partners/tesla/​;
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have the following characteristics: Fixed costs, Variable costs, Economies of scale and

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Economies of scope.18

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Tesla as manufacturing company has many costs such the fixed ones for the salaries,
C

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real estates and manufacturing facilities. R&D represents the core of Tesla, it

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represents a intelligible asset and a crucial Variable cost. The more developed is the
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R&D, the more you can be competitive in the technology field; for that reason

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companies such Tesla have to cover that costs with huge funds. Tesla’s plan was

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defined by Elon Musk already on 2006, with a Blog post on the Official Website:

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“The strategy of Tesla is to enter at the high end of the market, where customers are

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prepared to pay a premium, and then drive down market as fast as possible to higher

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unit volume and lower prices with each successive model.”19 What Elon Musk is

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trying to focus on is the Economies of scale, which allows to reduce costs by
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increasing the production levels. Economies of scope plays another important role in

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the Cost Structure, as they allow to produce different products by cutting down costs.

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That is possible as it is more convenient and cost-effective to produce simultaneous
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products than producing on their single own.
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2.4 Company’s trends and environmental trends C
Tesla was a lightning in the storm as like never before our planet needs an help due the end
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of raw materials and global warming. Tesla has revolutionized the way we see auto
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industry by producing fancy, sport and green cars such the Roadster and Model S. Tesla is
C

not only cars but is also focused to bring clean energy at our houses thanks to Solar roof -
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no

a way to catch sunlight in order to produce electricity with advanced solar panels
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integrated on the roof - and Powerwall - a high-capacity battery that is able to store energy
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produced from the solar panels in order to keep everything working for days. The

18
​Osterwalder, A., Pigneur Y., ​Business Model Generation,​ pp.41, 2010; 
19
​ fficial Tesla’s Website, ​The Secret Tesla Motors Master Plan (just between you and me)​,
O
o

https://www.tesla.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me?redirect=no​;
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company has entered in market in one of the most important era for our environment

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pushing the whole car industry to start designing and producing EVs without compromises

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ta
such as low milage and ugly designs. Electrification is playing an important role in our
C

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society with an increase of application. The main issue is that 66% of energy is produced

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from fossil fuels and the 8% from nuclear energy20, too far away to reach a more
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sustainable future.

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2.5 Corporate Social Responsibility: strategy and mission

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Corporate Strategy Responsibility (CSR) implies that an organization assumes liability for

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the impacts of its business exercises on individuals, nature and business tasks. The

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organization settles on cognizant decisions to discover a harmony between people, planet

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and profit. Organizations could even go above and beyond and center around new market
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openings, development and advancement with benefit for individuals, society and the

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earth. Presently and later on.21

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Tesla manages to maintain an adequate social responsibility strategy through the adoption
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of batteries and solar panels that ensure its presence in terms of ecological commitment,
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combining minimal negative impact and optimal advantage. Tesla has the unique

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opportunity, given its global importance, to be a teacher for those activities that lead to a C
benefit of the global community. People are mainly interested in Tesla's projects, they feel
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understood and are satisfied by the initiatives taken by Tesla for the natural environment to
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be preserved or protected. Moreover, recently Elon Musk has announced the existence of
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some patents on construction sites by the company, aimed at creating new ecological
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technologies; this has attracted the curiosity and participation of many consumers.22 Not all
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the companies understand the importance of CSR, being inactive on that field and
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20
National Geographic, ​Non-renewable energy,
https://www.nationalgeographic.org/encyclopedia/non-renewable-energy​;
21
​Van der Groen, F., ​What is CSR?​, h​ ttps://mvonederland.nl/what-csr​;
22
Greenspan R., ​Tesla, Inc.’s Corporate Social Responsibility & Citizenship, Stakeholders​, 2018,
o

http://panmore.com/tesla-motors-inc-stakeholders-corporate-social-responsibility​;
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changing their strategy only thanks to internal stimuli. Even if those companies are usually

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efficient and profit-oriented they miss a important role in CSR that could even help them

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to stand out from competition. Tesla is truly focused on CSR, being a proactive company
C

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looking for suggestions and feedbacks from the community that they have created. We can

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identify Tesla as a Corporate Integrated Responsible thanks to the inside-out and
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outside-in strategies that allow to have a bidirectional communication with their

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customers. There is an huge difference between doing things good and doing good things

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in the right way.

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The company is currently communicate relevant information to the customers and at the

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same time customers are giving feedbacks to improve the work and to allow Tesla to reach

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their mission.

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2.6 Persona

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Tesla is focused on three different buyer persona, three different segments that allowed the

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company to become one of the most trending and appealing one. In particular, we want
no
analyze two of them and we can suppose to call them James Townsend and Cecilia Nixon.
tia

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James was born on August, 10 1978, he has 39 years old and he is Leo. He work as Senior

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PHP Developer at TicketComplex, a startup in Chicago that helps to exchange concert,
C
train and all the kind of tickets though an online platform in a secure and fast way. James
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live with his girlfriend, Sasha, in Hinsdale (IL) and every morning he needs 30 minutes
ris

with his Prius to reach Chicago. He is very tech-savvy and read a lot of blog posts,
C

especially on Reddit where he can can read all the news about technology and cars, one of
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his passion when he do not have to develop and fix bugs at computer. James has just found
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out that a new Tesla Supercharger was installed at Woodman's Markets, where he usually
ris
G

pick-up his collegue Javier to go at office. Even if James do not drive a Tesla he is very
informed about the Tesla’s activities and meetup in Illinois. He is helping the online
community on Facebook groups by giving tips and suggestion about Model S and Model
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X - is favourite one. His savings does not allow him yet to buy a Model X - priced between

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130.000$ and 150.000$ - but he is going to ask a loan to buy it, thanks also to the incentive

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ta
on EVs that the US is offering.23
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Think and Feel: James think that with the help of technology we can change our behavior

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in order to be more “green”.
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Hear: In the office he hear a lot of discussion about cars and he can see his colleagues

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arguing about cars all day long.

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See: ​Few of his colleagues are showing off their new cars, in particular luxury ones.

Va
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See and Do: James is really focused on saving money for his future with the help of his

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girlfriend.

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Pain​: James would like to become more independent and be able to reach his desidered

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Va
status.
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Gain:​ His saving mindset allow him to have a good vision in money management.

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Cecilia has just turned 20, she celebrated her birthday on 10 July with her family, her
no
boyfriend Mark and her dog Charlie. Cecilia is studying Management at Yale University,
tia

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New Haven, Connecticut and she usually reach the University with public transports as she

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is just 15 minutes away. On her free time she loves to take and edit pictures that will C
publish on her Instagram profile where over 1000 followers will saw them. Thanks to
no
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Instagram and her beautiful pictures she started earning few hundreds on the weekend by
ris

making portrait shoots at Box63 and she usually spent all of her money buying fancy bags
C

and the last Gucci sneaker, while her parents are covering the University tuition fees and
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no

all the other expenses. She is not really in green and sustainable economy but Tesla
zi

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represent a way to show off, as Model S is from her point of view both luxury and sportive
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car. For that reason she is looking for an used 2012 Tesla Model S, available for circa
35.000$ - a good price for her, even if the car has more than 100.000 miles on.
o

23
​Tesla.com, ​Electric Vehicle Incentives​, h​ ttps://www.tesla.com/support/incentives
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Think and Feel: Cecilia wants to be the most influencer person in the US. She is very

Va
n

zi
tia

zi
focused on her creativity to reach her aims. She is pretty frustrated as she is not recognized

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ta
as influencer by their colleagues.
C

os

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C
Hear:​ She is aware of global warming thanks to media and Social Networks.

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o
See: ​All her friends and colleagues at Yale own a car, they are showing off them in order
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to gain popularity between the others.

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See and Do:​ She see her peers and she would like to emulate them.

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le
Pain​: Despite she frequent a private University, she has to reach her destination by public

Va
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transport.

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Gain: Her creativity and “wannabe” mindset helps her to demonstrate to herself and to

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others that she is able to gain alone without the help of her parents.

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Va
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3. What will be about Tesla?

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C

3.1 Blue Ocean Strategy

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The Blue Ocean Strategy (BOS) is a method to evaluate possible changes in the Value
no
Proposition and by testing out new possibles Customer Segments; by changing one of the
tia

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elements that compose the Business Model we can see how the other components are

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changing.24 Tesla could improve their current Business Model Canvas by ​eliminating C
waiting time in order to receive the cars as currently one of the main issue was that Tesla
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did not respected the delivering time and that caused the cancellation of 23% of
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reservation of the Model 3 in the USA.25 Another way to improve the current situation
C

would be to ​raise​ the pre and post-sale assistance.

o
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Tesla is still not well-established as car-manufacturer compared to other well-know brands

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that are able to deliver their promises to customers since they are in the business since
ris
G

decades. At TrustPilot, a website where customers can leave a review for a company, we

24
​Osterwalder, A., Pigneur Y., ​Business Model Generation,​ pp.226, 2010;
25
​Lamberd F., ​Tesla Model 3 reservations keep growing but 23% were refunded, report says​, 2018,
o

https://electrek.co/2018/06/04/tesla-model-3-reservations-refunded-report/
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Va
can find a lot of complaints about post-sale assistance26 and that may undermine the

zi
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confidence that new buyers have in Tesla’s products. The company should also ​reduce the

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ta
time between the updates of their software in order to add new features - such us the
C

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C
autopilot level 4 - and it should reduce the number of the optionals that a customer can add

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Va
n o
to the car in order to increase the production by taking advantage of both economy of scale
tia

zi
and scope. Tesla should ​create a new way to engage the Tesla’s community in order to

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ta
C

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influence also the late adopters to switch to EVs. One of the main reason of the success is

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le
the figure of Elon Musk and the myth around him; by involving Tesla community’s

Va
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members they will have a crucial role in the Tesla’s project and they will be more loyal,

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even in case where the company fails delivering promises. Tesla could also ​create a

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“cashback” opportunity for the customers, where they earn rewards based on the miles

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runned each month.
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ta
C

3.2 Corporate Social Responsibility

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Since the first day Tesla come up, the company shared a green and sustainable vision,
no
becoming one of the most proactive ones and also a leader of the change; from fossil fuels
tia

zi
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to sustainable and renewable energy. Tesla is very good in communication, with an

ta
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important inside-out strategy becoming a model for other companies thanks to C
transparency and their views. Tesla should improve the outside-in process as on Social
no
tia

Media customers leave hundreds feedbacks each days. Tesla could also improve the
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working life of the employees by creating workspaces in order to create value between the
C

employees themselves and it can create special insurance plans for them and their families
o
an

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to provide them support even in company non-related activities.

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tia
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C
o

26
​TrustPilot.com, ​Tesla Motors Inc. Reviews​, h​ ttps://www.trustpilot.com/review/www.teslamotors.com
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o
People​: People represents one of the main asset for every company and the more loyals

an
o

Va
n

zi
tia

zi
can become Brand Ambassadors. Having customers and satisfied employees is crucial as a

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low turnaround may reduce costs and improve efficiency inside the company itself.
C

os

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r
Product​: Is very important to deliver a product that truly represents the values and the

le
Va
on
mission of the company. By using luxury and premium materials a wrong message could
tia

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be transmitted to potential clients who associate do not associate premium materials to

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sustainability.

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Place​: Regarding dealerships, Tesla could try to allocate the dealerships near point of

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interests related to the nature such parks or near historical monuments to highlight the

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difference between the ancient and the future.

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Va
3.3 New Business Model Canvas
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The current Business Model Canvas is pretty strong and reliable and for that reason it

n
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allows only minor changes. The ​Customer Segment ​should reflects the reason why and the
C

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C
mission of the company, as currently the Tesla’s brand appear stronger for his uniqueness
no
and popularity than for the benefits that is trying to bring to the community and to the
tia

nzi
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world’s environment. Tesla is currently selling his cars exclusively via own dealerships

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and that may limit the purchase of the cars by some customers. Nowadays we can find
C
multi-brand dealerships that are able to fulfill all the needs of the customers thanks to a
no
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extensive products’ offer without the need to look for a particular dealership of a brand. In
ris

order to keep to be successful, Tesla should works on both physiological and distribution
C

aspects: while it needs to create an exclusive community around the brand Tesla, it should
o
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no

also allows to buy a brand new car even on multi-brands dealership. One of the main
zi

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mission of Tesla is to reach the mass market and approaching to new channels could help
ris
G

the company itself to reach all the audience. Nowadays governments are giving incentives
to customers who choose an electric car than a fuel one and Tesla should focus on it to
improve the connection with ​Key Partners​. Tesla may partner with companies as Uber or
o
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Lyft (for the US market) or with energy provider (such ENEL, in Italy) to bring their cars

zi
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zi
to the mass market. There are several car sharing companies that are using fossil fuels cars

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ris

G
ta
to run their services; one one hand they results reliable, cheap to lease and in case of
C

os

r ia
C
damage they can be fixed everywhere. On the other hand, since car sharing companies are

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Va
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running mainly on big cities, they contribute to produce pollution and reduce life’s quality
tia

zi
of people who are living in that particular city.

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3.4 Tomorrow’s Persona

Va
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Defining a new buyer persona for Tesla would definitely be helpful and strategic as

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currently surveys demonstrate that the average buyer is not a wealthy customer that is

ta
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ia
looking to improve his/her life and the others one thanks to the attention to environment27

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C

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Va
no
but is a customer who is looking to show off the status gained from having a Tesla before
tia

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others - as early adopter. For that reason Tesla should start looking for a new Customer

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C

Segment that is able to understand the philosophy and the mission of Tesla, by taking part

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C
of the change. We identify tomorrow’s Persona in Eric Bradley, turned 26 in June and
no
born in Bronx, NY. He is working at FormulaGreen, a startup in the sustainability industry
tia

n zi
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that focus on the recycling waste in the ocean to help our planet and the marine creatures.

ta
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os
He is living with his girlfriend Lisa and their dog Taylor in a studio flat, in which all the C
resources are optimized and used sparingly. Lisa is a teacher and in few months she has to
no
tia

move in Peoria, Illinois and for this occasion they are looking for a new bigger apartment
ris

where they can install solar panels and be more energy independent.
C

Think and Feel: Eric believe in technology and in the sensitization of the human being in
o
an

no

order to be more green.

zi

tia
ra

Hear:​ He is very worried about global warming and to the planet’s health.
ris
G

See: ​Every day at office he see his colleagues with wrong behaviors related to savings and
been green.
o

27
​Korosec K., ​Tesla has a new kind of buyer​, 2015, h​ ttp://fortune.com/2015/07/29/tesla-millennials/
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o
an
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See and Do: With Lisa, he is trying to be focused on saving and be the more green as

Va
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possible.

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ta
Pain​: He is aware that he cannot do too much in order to change the others’ mindset .
C

os

ia
r
C
Gain: By saving and be resource efficient he feels well and also his lifestyle result

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Va
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healthier.
tia

nzi
ris

ta
C

os

ria
C

le
Va
no
tia

n zi
ris

ta
C

os

ia
er
C

l
Va
no
tia

nzi
ris

ta
C

os
C
no
tia

n zi
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ta
C

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C
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REFERENCES

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tia

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ta
Cleverism.com, ​What is a Business Model Canvas?​,
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r ia
C
https://www.cleverism.com/business-model-canvas-complete-guide/

le
Va
o
​The 3​,
n
Cornu F., Why, How and What of the Tesla Model 2016,
tia

zi
https://medium.com/@floriancornu/the-why-how-and-what-of-the-tesla-model-3-1c656172e94

n
ris

ta
C

os
0​;

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C

le
Greenspan R., ​Tesla, Inc.’s Corporate Social Responsibility & Citizenship​, Stakeholders, 2018,

Va
no
tia
http://panmore.com/tesla-motors-inc-stakeholders-corporate-social-responsibility​;

n zi
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