Analyzing Tesla: Competition, Innovation & R&D Lab in Greece

This case study examines Tesla's competitive position in the automotive industry and its decision to establish a research and development lab in Greece. It assesses Tesla's ability to compete with established automobile brands, highlighting its innovative features and brand image challenges. The analysis delves into the US automobile market's complexities, including brand loyalty and manufacturing capabilities, while also exploring Tesla's competitive advantages, such as growing sales and cost reduction in battery packs. Furthermore, the study investigates the rationale behind Tesla's choice of Greece as a location for its R&D lab, considering factors like specialized engineering talent, economic benefits, and strategic alignment with innovation goals. The case study also touches upon Tesla's contributions to the Greek technological sector and its potential impact on the country's economy and innovation ecosystem.

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Name of the student
Name of the university
Author note

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Table of contents
Question 1........................................................................................................................................3
Can Tesla give strong competition in to the others automobile brands?.........................................3
Question 5........................................................................................................................................5
Why Tesla has opened R&D lab in a “technologically peripheral” location like Greece?.............5
Reference list and bibliography.......................................................................................................9

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Question 1
Can Tesla give strong competition in to the others automobile brands?
Analyzing the traditional automobile industry, it has been identified that after the great
recession of 2008, the UK economy has brought huge impact on the automobile industry
(Rothaermel 2013). After 2016, the US automobile market has started recovering the situation. In
this situation the demands for big cars have been increased. In the year 2003, the automotive and
Energy Company namely Tesla was founded by a group of engineers. In the words of Mangram
(2012), the company has gained strong market position based on its technological innovation
strategies. In order to gaining competitive advantage, in the year 2016, in the month of March,
Model 3, the latest electronic car has been introduced by the company. Analyzing the features of
Model 3, it has been identified that with 75-kilowatt hour battery backup and 0-60 accelerate
facility within six seconds, it has become the highly innovate car (Moritz et al. 20915). With the
increasing promotional activities, the product has got high popularity in the market. However,
due to negative promotion regarding the internal working situation in Tesla, negative brand
image of the company has been developed.
Analyzing the US automobile industry, it has been identified that it is really very tough for a new
organization to enter in the US automobile sector (Laney 2017). Brand loyalty as well as gaining
the manufacturing abilities can create complex situation for the new entrants in the market. based
on the research in US automobile industry it has been identified that world’s most valuable
brands including Mercedes-Benz with an estimated brand value of $34 billion, Toyota, with an
estimated brand value of $45 billion, BMW with $31 billion, Audi with $14 billion and Honda
with $26 billion are ruling the market. Largest expenditure has been done by these organizations

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for making the acquisition between 2006 and 2016 (Laney 2017). The raw materials of
automobile business practices are being collected from the more than 7 million suppliers. The
supply chain business in automobile industry is highly fragmented. It is true that based on the
analysis, it has been identified that due to availability of three tiers of suppliers in the market,
bargaining power of the suppliers is low in all over the globe. The major competitive key factors
of Tesla are most notably, growing sales and lowering the cost to build battery packs, which has
made it stronger.
Analyzing the availability of car buyers in the US market, it has been identified that near
about 113 million registered passengers are available (Whalen et al. 2016). The rate of car
retention in US market is also very high. However analyzing the rate of driver licensing numbers
in 2014, it has been identified that the rate has been dropped from 92% to 77%. Thinking process
of people has been changed, which has mainly focused on MP3 players, satellite radio,
navigation system and mobile integration. In this situation it can be said that changing needs of
the customers has increased the bargaining power. Although Tesla has developed its strong brand
image in the market, but it cannot be denied that analyzing the complex situation in US
automobile business environment, it can be said that it will be tough for the company to gain
competitive advantages.
Analyzing the position of Tesla plants in US, it has been identified that the company has
major contribution for bringing the technological innovation in automobile industry. Tesla has
introduced different automobile manufacturing plants, among which California and South
Fremont plant have strong contribution in its productivity. In the east industrial area of South
Fremont, the large plan has been developed by the company, in which near about 10000 people
have been employed in 2018 (Laney 2017). In order to gain the positive net income Tesla has

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contributed in the automobile industry by introducing innovative products. In order to build the
business Tesla has focused on the selling its products in premium prices.
Tesla cars are being developed with the combination of speed and innovation. In order to
satisfy the needs of the customers, Tesla maintains its connection with the customers with 4G
wireless connections in the cars. Introducing the ludicrous mode, Tesla has brought the shaves
the zero-to-60 mph time by 10%, which can be retrofitted on the top-of-the-line P85D Model S
sedan. The biggest plus point of the company is it never denies to accept its failure to the world.
It helps the company to maintain its transparency with the customers. With the introduction of
smart air suspension system, it has brought the better position in the market. By targeting the
premium customers and maintaining the innovation process, the company aimed to establish its
position in the market (Chatzoglou, Chatzoudes and Georgilas 2016). In order to maintain its
reckless profitability rate, in the sale year the company has improved its profit gaining plans and
introduced the Model 3. In the year 2010, with the increasing offers from the investors, the
innovation has been introduced by Tesla through the Giant battery making Giga factory in the
Nevada desert. In order to introduce a different looking car with the innovative features, the
company has maintained its continuous design development process.
Based on the idea of Tesla regarding the uses of aluminum, the automobile industry has
got fertilized. Aerodynamics and range in the automobile industry. The complex innovation
process of Tesla has played an important role for assuring the business success of the company.
Complex problem solving ability as well as the innovative marketing strategies have helped the
company to expand its distribution channel. Therefore, it can be said that gaining the long term
benefits, IT function, huge expenditure on innovation process, strong relationship with the

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customers and the problem solving ability have helped the company to establish its strong
competitive image on the automobile manufacturing market.
Question 5
Why Tesla has opened R&D lab in a “technologically peripheral” location like Greece?
Tesla aims to bring the innovation by introducing innovations through its products. Based
on the analysis, it has been identified that Tesla is going to start a new research and development
team in Greece with the total numbers of ten specialist engineers. The aim of the research and
development team is to introduce an effective electronic motor technological innovation.
N.C.S.R. Demokritos research and development team has been developed by the global
innovation giant Tesla so that the talent of Greek engineers can be properly utilized
(Greeknewsagenda.gr 2019). By implicating the product function model, the innovative activity
capacity has been assumed by the company. Based on the assumption, it has become easier for
the company to introduce knowledge generating outputs. The central theme of developing the
research and development lab is to focus on managing the economic activities in the industry. By
introducing the research and development plan, the company has aimed to introduce effective
motor designs so that the Greece capital can be properly used in case of utilizing the talent of
local engineers. It cannot be denied that Greece can be considered as one of the popular
resourceful country that has strong contribution in electronic motor engineering process. Due to
the specialized skills in electronic motor technology, Greece has developed various technological
innovation opportunities in this country (Treré, Jeppesen and Mattoni 2017). By introducing
research and development lab, Tesla aims to retain the technological scientists in the company.
By developing the research and development lab in this country, the company aims to grab the
attention of the globe with an exception scientific force. In order to gain the higher rate of

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profitability, understanding the theoretical drivers such as economics, international business, and
strategy, Tesla has found the geographic benefits in Greece.
Physical attraction as well as geographic knowledge sourcing process play an important
influential role behind the establishment of research and development lab in Greece.basded on
the high institutional concentration, the development theory has influenced the need of local
connections for maintaining the knowledge inflows. Therefore, by extending the local industry
concentration, Tesla has tried to ensure the effcetive findings. Establishing Tesla research and
development lab in this country the company wants to introduce the prosperities for the true
talents in Greece (Giousmpasoglou, Marinakou and Paliktzoglou 2016). By introducing different
investment strategies, it aims to bring the high-tech technology in the technological sector so that
it will be able to give tough competition to thee existing automobile brands in the globe. It has
also been identified that based on the current situational analysis, it has been identified that the
through the research and development lab, it will be easier for Tesla to maintain its innovation
giant tag. Due to the specialized electronic engineering talents in this country, it can be easier for
the company to increase the rate of productivity. On the other hand, it can also play an important
role for increasing the efficiency of the employees, so that it can be able to maintain effective
service standard in the workplace.
In case of developing the Research and development center in Greece, the existing
model of the company can be improvised. Based on the application of Concentration ratio (CRI),
Tesla tried to measure the repressor in place of CR5. In the year 2014, the autopilot system of
tesla has brought huge changes in the car manufacturing industry. If the talents from Greece can
be involved in the manufacturing process, it will be beneficial for the company to develop its
strong position in the global automobile industry (Beauchemin et al. 2016). It cannot be denied

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that not only the strong innovation initiatives, but also Tesla has maintained the strong
performance rating system. Based on the innovative ideas of individuals, Tesla has appreciated
the employees in proper manner, which has maintained its strong retention policies.
By introducing new type of investment, not only the contribution of the company towards
the educational sectors in Greece, will be increased, but also the company has already prompted
other innovative companies for relocating at Lefkippos technological park. In case of developing
research and development lab, Tesla has contributed in the country development process. As a
result, it has got the chance for gaining the attention from Greece government, which can be
beneficial for the company to develop its strong impression in the Greece technological industry.
Analyzing the technology market in Greece, it has been identified that with the increasing
numbers of technological benefits in this country have major contribution for driving the
attention of Tesla towards investing in this country. By continuing this, it has also been identified
that due to increasing technological opportunities, it has become easier for entrepreneurs for
developing their business in this country (Chatzoglou, Chatzoudes and Georgilas 2016). Based
on the external environment analysis of Greece, it has been identified that Greece ranks 39th
position based on the GDP per capita rank. In the growing economy, effective uses of
technological talent, can play an influential role for the organizations, which can appropriately
utilize the talent of its human resources. By continuing this, it can be said that in the large Greece
economy and political stable environment, investing in this country, not only brings thee higher
productivity rate, but also it can be beneficial for Tesla to bring the positive growth in the
company (Giousmpasoglou, Marinakou and Paliktzoglou 2016). Using the effective talent of the
electronic engineers of Greece, Tesla aims to bring the revolutionary changes in the innovation
world, which has driven the company towards investing in the research and development lab.

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Reference list and bibliography
Beauchemin, C.E., Curci, E.A., Kenyon, H.D. and Young, K.C., 2016. Assessing Opportunities
to Improve Potato Farming with Smart Agriculture: The Case of Notia, Greece.
Chatzoglou, P., Chatzoudes, D. and Georgilas, A., 2016, September. INNOVATIVE
ENTREPRENEURSHIP IN AN ECONOMY UNDER CRISIS: AN EMPIRICAL RESEARCH
CONDUCTED IN GREECE. In 9th Annual Conference of the EuroMed Academy of Business.
David, F.R. and David, F.R., 2013. Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Giousmpasoglou, C., Marinakou, E. and Paliktzoglou, V., 2016. Economic crisis and higher
education in Greece. In Impact of economic crisis on education and the next-generation
workforce (pp. 120-148). IGI Global.
Greeknewsagenda.gr 2019. retrieved from:
http://www.greeknewsagenda.gr/index.php/topics/business-r-d/6655-tesla-opens-research-
department-in-greece [Accessed on 26th March, 2019]
Laney, D.B., 2017. Infonomics: how to monetize, manage, and measure information as an asset
for competitive advantage. Routledge.
Mangram, M.E., 2012. The globalization of Tesla Motors: a strategic marketing plan
analysis. Journal of Strategic Marketing, 20(4), pp.289-312.
Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S. and Wulfsberg, J.P., 2015, August.
Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile industry along

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the open source movement?. In 2015 Portland International Conference On Management Of
Engineering And Technology (picmet) (pp. 85-92). IEEE.
Rothaermel, F.T., 2013. Strategic management: concepts. New York, NY: McGraw-Hill Irwin.
Shortland, A., 2016. The Social Context of Technological Change: Egypt and the Near East,
1650-1150 BC. Oxbow Books.
Treré, E., Jeppesen, S. and Mattoni, A., 2017. Comparing digital protest media imaginaries: anti-
austerity movements in Greece, Italy & Spain. tripleC: Communication, Capitalism & Critique.
Open Access Journal for a Global Sustainable Information Society, 15(2), pp.404-422.
Whalen, P., Uslay, C., Pascal, V.J., Omura, G., McAuley, A., Kasouf, C.J., Jones, R., Hultman,
C.M., Hills, G.E., Hansen, D.J. and Gilmore, A., 2016. Anatomy of competitive advantage:
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