Innovation, Change, and Leadership in Tesla Inc.

This document explores the concepts of innovation, change, and leadership in the context of Tesla Inc. It covers the SWOT analysis, PEST analysis, and different models of innovation. It also discusses the importance of change management and the Lewis change management model. The document highlights how Tesla is leading the way in the electric vehicle industry.

Leading innovation
and change

Table of Contents
INTRODUCTION.................................................................................................................................3
Introduction to the business...................................................................................................................3
Innovation.............................................................................................................................................5
Change...................................................................................................................................................7
Leadership.............................................................................................................................................9
CONCLUSION...................................................................................................................................10
Recommendations...............................................................................................................................11
REFERENCES....................................................................................................................................12

INTRODUCTION
Innovation is stronger, quicker, or less expensive than your competitiveness. This leads to
continuous changes which can contribute to the development of an innovative concept that
shifts laws (Beard and Burger, 2017). Innovation means developing and implementing
concepts that change the manner in which things are performed or accomplished. New goods
or services, new or better business practises, improvements in the direction the products are
sold, or the implementation of new technologies can lead to innovation. In order to survive an
organisation must always innovate. Changes in a company contribute to several beneficial
things that stay important in the industry sector so this maintain a competitive advantage.
Change promotes creativity, developing talents, developing employees and improving
employment opportunities and moral standards for employees. Tesla is considered in this
report. It is founded by Elon Musk and is founded in year 2003 and the headquarters of this
organisation is in Palo Alto, California, United States. This report covers SWOT analysis,
PEST analysis, and innovation along with models, change management and the use model of
change, leadership and styles in context to selected organisation.
Introduction to the business
Tesla, Inc. is an American company headquartered in Palo Alto (California) for electric
vehicles and renewable power. Tesla offerings currently involve power vehicles, household
storage battery, solar power and renewable wall panels and associated goods & services.
With a share of the market of 16% of the adaptor market and 23% of revenue for the battery
powered segment. In 2020, Tesla is listed as the greatest autonomous passenger vehicle
connector and recharger producer in the world. They built various models such as Model X,
Model S, Model Y and Model 3 which have different features, design, battery power and
style as well as many more. The different types of model help them to attract customers
towards their brand in order to build brand image and reputation which help them to
maximize performance and productivity (Behnam and Cagliano, 2019).
The sales of Tesla's electric vehicles rose in the first three months of the year, announcing a
record quarterly profit. The inquiry is one out of two decades into Tesla's car accidents. The
largest portion of Tesla's operating expenses in most quarters is selling, general,
administrative or SGA expenses, representing over 2/3 of the overall operating expenses.
R&D and research expenditure ranks 2nd and accounts for about 1/3 of net running costs.

SWOT analysis
A strategy is to evaluate the company four aspects. A SWOT analysis will aid them in
identifying areas that work good in your market. These fields are the key performance drivers
and their strategic advantages for the market. SWOT analysis of Tesla Inc. is mentioned
below:
Strength
 Tesla Inc. has luxury vehicle market
as they innovate their products in
order to meet the needs and demand
of customers.
 They have large market share from
their competitors.
 Selected organisation has strong sales
in the market in order to attract
investors to invest (Bratton, 2020).
Weakness
 The batteries of the electric vehicles
in Tesla come from one source as
they have hurdle of the limited
supply.
 As they are biggest innovators but
they have no proper customer service.
 Tesla provides luxury cars which is
the drawback as the average
customers cannot buy the products.
Opportunities
 Selected organisation target large
amount of customers in all over the
country which leads to increase
profitability.
 They can maximize their sales and
revenue by reaching average people
and manufacture as per their price
range.
Threat
 The main challenge is their
competitors.
 When there is an unfavourable
regulation then it impacts their
business.
PEST analysis: A study by PESTLE is also required to find a wide range of facts. It allows a
company to identify external factors which might affect organisational decision-making. By
considering such external variables, the opportunity is maximised and risks to the enterprise
can be minimised. Mentioned below is the analysis of Tesla Company which is described
below:

Political: This is the factors which involve trade restrictions, labour law, foreign trade,
political stability and government policy.
Positive impact: Government has taken initiative for promoting electric vehicles which help
Tesla to increase sales and growth of the electric vehicles as it decrease the pollution in an
environment (Cunningham and et. al., 2019).
Negative impact: Change in political affect the business operations of Tesco which impacts
negatively to them as they impose different rules and regulation.
Economic: It includes economic growth, exchange rate, interest, disposable income and
unemployment rate.
Positive impact: Decrease in prices of batteries help them to maximize the production of the
electric vehicles so that the average customers can also buy the products as well as services.
Negative impact: Every region has different cost as they have reduced the overall cost of
engine which impacts negatively on their sales.
Social: This signifies population growth rate, age distribution, career attitudes, health
consciousness as well as lifestyle attitudes.
Positive impact: Improve in the carbon footprints impacts positively on Tesla Inc. in order to
improve overall efficiency of business. Improvement of the hazardous gases in environment
helps them to achieve business performance.
Negative impact: Lifestyle attitudes impacts negatively on selected organisation as they have
to update and implement their innovation (Datta, 2018).
Technological: It comprises of technological incentives, level of innovation, automation and
R&D activity.
Positive impact: Adapting various technology in their business help them to reduce carbon
footprints which impacts positively on Tesla to growth their business performance and attract
customers towards their brands.
Negative impact: It takes huge amount to invest in the automation and to update as well as
implement their technology which need more cost for the adaption of the new things and
produce them in the market.

Innovation
Innovation is the design, production and execution, with the goal of increasing performance,
productivity or competitiveness, of a product launch, method or operation. Effective use of
innovative ideas is critical for an undertaking which can improve its operations, sell new
goods and services, improve their effectiveness and, above all, maximize its profitability.
Tesla set kilometres of tracks only with their quick loading renewable batteries (Halibas,
Sibayan and Maata, 2017). Tesla's developments now enter the domestic utility and
infrastructure energy processing areas. Tesla's most important breakthrough has made electric
cars trendy not just safe and sustainable but also stylish, superior to Formula 1, and self-
driving. For this reason, Tesla is the only autonomous vehicle in the industry to win over
conventional cars. There are various types of model in innovation which are mentioned
below:
 Technology push: It signifies that where advanced technology discovery and
advancement stimulates product innovation. It appears to begin with the creation and
application of an advanced technology for a firm. They concentrate on basic linear
sequence, R&D and chemistry.
 Marketing pull: It is a situation where the market asks or determines an issue for a
commodity form, and the suppliers react in the manufacturing and supply of that item.
They emphasize that the industry focus is the root of new Research and development
innovations.
 Coupling: This model is focused on an immersive framework focusing on the
retroactive impact of market analysis processes and prior model structure.
 Interactive: The fourth generation platform employs a distinct immersive approach
from that seen in prior versions. In addition, the paradigm views the mechanism of
creativity in tandem with all the organisational roles.
 Network: Its primary emphasis is macro environmental participation. The model also
emphasises on efficient connectivity with the outside world. When creativity depends
on direct and indirect networks, it stresses that the connections among the different
routers must be established Hayes, 2018)(Horsch and Richter, 2017).
 Open: This model signifies that to integrate their assets and experience with the firm's
own creative mechanism, this framework entails competitive and controlled
knowledge interchange with stakeholders outside the limits of an organisation.

In context to Tesla, technology push is the best model of innovation model which they
have adapted in their business as Elon Musk produce as well as manufacture their own
framework to build the electric vehicles. Science and business innovation can contribute
to new findings that would be adapted to enhance current products or to produce new
goods. The so-called "development drive" occurs well before product is demanded by
consumers. Technology Drive provides an opportunity to obtain a whole new innovative
technology and design management product while keeping older, out-dated curriculum
design less responsive workplaces.
Innovation raises the possibility of reacting and discovering new ideas. It will also promote
the competitiveness of your consumers, and it enables Tesla to create quality goods and
services. They will remain aware of the market with innovation. It gives many benefits from
emerging technology through innovation. This improves productivity by selling more
reliable, cost-effective goods of excellent quality and enhanced recruitment of employees.
Employees enjoy working in collaboration and creative thinking careers. Strong
environmental practise as it is capable of following up on industry developments. But there is
risk in innovation (Howaldt and Schwarz, 2017).
Many studies are uncertain and the potential sales and earnings are not guaranteed. The
greater the period of production, the higher the chance that rivals would surpass the analysis.
R&D must bid for insufficient funds, like other market practises. R&D needs a good return
on investment, considering the uncertainties involved. In other words, the cost of investment
in R&D is very significant for companies with small cash capital. Top management of
Tesla must require longer effort to think to build and enhance their decision-making
framework in order to handle innovation which effectively manages their work under which
they evaluate their individual inventions.
Change
Change management is described as a business's practices and techniques for describing and
implementing change in both operational processes. Planning and motivating employees,
identifying the appropriate transition measures, and reviewing change operations to enhance
efficient execution are all part of this process. Developing a change management strategy aids
in successful changes. You can initiate improvements, but when you do not have a strategy
for implementing, monitoring, and reporting on their progress, you're building them up for

failure. Change management allows you greater leverage over the whole operation,
irrespective of the kind of change you choose to make. In context to Tesla, the recent changes
made by selected organisation is that they have unveiled the Tesla Cyber truck, an all-
electric, battery-powered light-duty vehicle. There are three models, each with a range of
250–500 miles (400–800 kilometres) and a 0–60 mph time of 2.9–6.5 seconds, depending on
the model (Nam, 2019).
Lewis change management model: Kurt Lewin proposed a three-step change model:
unfreezing, modifying, and refreezing. The framework is a clear and realistic approach to
comprehending the transformation process. The mechanism of change, according to Lewin,
involves first establishing the illusion that a change is required, then progressing toward the
current, desirable level of behaviour, and finally reinforcing the new behaviour as the
standard. This level is adopted by Tesla so that they make the changes in an effective way.
The steps are mentioned below:
 Unfreezing: The first and most important step of transformation in the change
management process. It entails cultivating a realisation for going from one's current
comfort zone to a changed circumstance in order to improve people's preparation and
openness to adjust. In relation to Tesla, they have analyse the need to change in their
production and motivate their staff to accept the changes. So, that they can sustain in
market and can innovate the new cars and models in order to remain competitive in
market.
 Modifying: This stage is also known as the Transition Stage. It entails a willingness to
consider change within the organization. The people are unfrozen at this stage, and the
real transition is enforced. This stage necessitates proper preparation, efficient
coordination, and promoting individual participation in adopting the change. With the
reference to selected organisation which is Tesla, they implement the changes but the fear
is to change. It means that they believe that there are uncertainties because there are
various competitors in market (Noles and et. al., 2019)
 Refreezing: Individuals change from the stage of transition (change) to an even more
stable position that we can refer to as the stable state, at this stage. The final stage is
refreezing, where people embrace or internalise new forms of living or change, accept it
as a part of their lives, and establish relationships. In relation to Tesla, employees can be
rewarded, respected, and given constructive reinforcements in order to improve and

promote the current behaviour or improvements in the way of operating. Supportive
strategies or systems may also assist in enhancing the improved working methods.
The evaluation change management is Tesla has they follow steps in order to implement
the changes in an effective manner. The first step is to define the change or where the
changes need to be done. On the other hand, second step is to build a team so that they can
implement changes in proper manner. Then the selected organisation implements change by
collecting the data and plan so that they can sustain in market for long time period. In other
words, it can be said that it is one of the most significant success drivers for successful
change management is effective communication. If the transition streams, those participating
people must consider the development through the different phases to see the outcomes.
Leadership
The practise of inspiring a group of individuals to work together for a shared purpose is
known as leadership. Methods by which an individual may lead, instruct, and control the
actions and function of others in order to achieve clear goals in a given situation is known as
leadership. A supervisor's desire to inspire trust and commitment in his or her employees is
known as leadership (Oeij and et. al., 2019). Leadership is the ability to control others'
actions. It can also be described as the ability to persuade a group to do something. In context
to Tesla, Elon Musk adopts the leadership as he believes that employees openly acknowledge
that performing with him is both demanding and satisfying. He has credibility for being equal
parts brilliant and workaholic. He knows there is always a smarter way to do it, and he strives
for continuous change. He has ambitious plans and needs to rally his team around his vision
and goals.
Leadership style
Some of the common leadership style is mentioned below:
 Authoritarian Leadership: Authoritarian leadership styles enable a manager to set
goals and set objectives. In cases where a leader is the most experienced member of
the team, a one-person display may be good. In other words, it can be said that they
do not involve any employees in decision making process.
 Participative Leadership: In this type of leadership explains that they involve
leaders so that they can take the innovative ideas of employees. In this they motivate

their employees and tell them to take participation in decision making. With the help
of this organization can effectively achieve business goals (Rosenau, 2018).
 Delegative Leadership: A delegative leadership model, also known as "laissez-faire
leadership," emphasizes on assigning responsibility to group members. If co -
workers are capable, take responsibilities, and generally work alone, this can be a
good approach.
 Transactional Leadership: Transactional leadership models utilize "transactions"
between a leader and his or her supporters, such as incentives, penalties, and other
trades. The leader establishes common objectives, and team members understand
how they can be compensated with their cooperation.
 Transformational Leadership: The norms of the organization are constantly being
"transformed" and improved by transformational leadership. Staff members may
have a simple set of duties and targets to achieve each week or month, but the
manager is actively moving them outside of their boundaries (Senbeto and Hon,
2020).
In context to Tesla, they use transformational style of leadership which means that Elon
Musk as he knows there is always a smarter way to do it, and he strives for continuous
change. He has ambitious plans and needs to rally his staff behind his vision and goals.
Employees will turn from employers to participants ready to go beyond and beyond to
reach a higher target during this period. Musk constantly inspires individuals to enhance
their performance. In other words, it can be said that leader as they focus on direct
reviews lets him and others identify places that they can develop. Musk also sees
difficulties as ways to develop. Failure is inevitable when developing emerging
technologies. Failures, on the other hand, have the best chances for learning new skills.
Moving technologies forward involves a lot of uncertainty.
The effectives of leader are that organization does their best so that they can effectively use
their leadership. So, that they guide and direct those in an effective way so that selected
organization can achieve business objectives. The leadership helps organization to retain
their employees for long time period. In this way they can they can maintain the positive
work environment so that they can motivate their employees. With the reference to Tesla,
they guide their staff members to adopt the latest technology and should use proper
resources. So, that they can enhance their productivity and can gain competitive advantage

in industry. With the help of this, the selected organization can increase the level of
satisfaction and can enhance the brand awareness. Moreover, they can attract customer and
can increase their profitability ratio (Sölvell, 2018).
CONCLUSION
From the above analysis, it is concluded that the SWOT analysis is a basic and valuable tool
to analyses the capabilities, shortcomings, opportunities and risks that the company requires.
It lets them draw about what they know well, to deal with what you do not have, to minimize
risk and to maximize the probability of success. Self-awareness is regarded as one of the
major leadership skills to be built by managers. Effective management is to implement the
strategy of the organization and to establish the mood and the environment for that individual
company. Leadership involves the development and preparation of assets and the search and
improvement of mistakes.
Recommendations
It is recommended that while innovating products and services they have to follow all the
rules and regulation to update and implement products which help them to increase
performance and productivity. Tesla innovate their electric vehicles to reduce carbon
footprints and eliminate all the hazardous substance from the environment as it increase the
business performance from their competitors. To help its growth, Tesla intends to identify
more service centres and increase the number of employees in its current centres and mobile
service. Tesla began as a differentiator for premium cars and now pursues a strong
differentiator strategy on the market. In its marketing strategy, the firm uses its profited
media and web platforms, while automation, provider partnerships and analysis distinguish
their goods. their products (Nam, 2019).

REFERENCES
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