Dr. Michael J. Provitera, Management Consultant, Business Book Author, Management Professor
Dr. Mostafa Sayyadi, Senior Management Consultant, The Change Leader Consulting, Inc,| Associate Fellow of Australian Institute of Management
Published 9-11-2021 (All Rights Reserved)
Copyright ®Dr. Michael J. Provitera September 11, 2021
Copy only with permission by the author (email, website)
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J eanty Remy, known as Remy, ran out of his home office with a staggering leap. He was on his work-from-home day which is three out of five; he is a nurse-practitioner and entrepreneur in Miami, Florida, USA, and he spends two days at the office and works from home remotely the other three days. He is a single Dad that drives his daughters to school every day. It was 6:30 am and he was heading into the dark sunrise with his daughter Tameka whom he was taking to school.
Remy was contemplating buying a Tesla because he was clocking so many miles each week. His girlfriend, Wendy, lived two-hours away in Naples, Florida, and the cost of gas was burdensome. Costco premium was topping at 3.29$ a gallon, and his Jaguar was punching about 28 miles per gallon on the highway. A typical Saturday to Sunday week of driving would cost close to 100$. Electric cars may rack up 19$ in spark for the same distance. Remy loved his Jag, but reality was beginning to set in, and the electric car was calling him. Besides, his 19-year-old daughter, Alexa, loves the Tesla. Yep, she loved everything about it. From the way the car drives to the expansive technology to the gaming capability.
He thought about a Hybrid and investigated the local Lexus dealer, found one certified. Spoke to a salesperson about the car in mind. The car of interest, clocking in at 39 miles per gallon highway and 40 miles per gallon city, Remy thought he should look. After turning down an appointment with the salesperson he spoke to that day, Remy drove to the dealer anyway. He felt that the Hybrid Lexus was not meant to be. Well, he got to the Lexus dealer and the car was not showing. The salespeople were all busy looking at computer screens and meeting with customers. There was such an abundance of cars that the thought of digging out the one of interest was a long shot. Remy thought the car was up front and that he can view it immediately. Not the case and there were cars everywhere. No shortage of cars at this dealership. Remy said to himself “Even if I bought the car, it would only save me about 30% in gas each week.” The fact that he did not have to plug it in was the draw. However, going 100% electric was still calling him. The Lexus, while great cars (the newer hybrid was getting 44 miles per gallon), lead to a short-lived experience.
The Tesla Corporation
The Knowledge management at Tesla is what Remy would call “State of the Art.” Here is Remy’s idea of how Tesla meets the demands of a Knowledge Management System:
1) Tesla provides the buyer less time searching for information because it is all on the website page with only a few options (color option @ 2,000$, Full-Self Driving @ 10,000, etc.)
2) Tesla offers the customer less time asking for information with the no haggle pricing of vehicles
3) Team Tesla is super responsive (i.e., instantaneous financing option at 2.49% with a personal credit rating of 650 or higher)
4) Tesla employees are all one-team working together to support the customer experience
5) Tesla provides an internet dashboard that states your personalized page for each customer with detailed information to support the purchase of the vehicle and accessories. (i.e., Remy’s Tesla)
6) Tesla offers continuous customer learning experience about features and purchase options with comparison to fuel-injected vehicles
7) Tesla’s knowledge management helps the organization as one big “Tesla family,” including customers
8) Tesla does not place unnecessary pressure on customers as the customer-knowledge about the car-buying process unfolds
9) Tesla uses knowledge management as a precursor to let the buyer beware of the state-of-the-art of electric vehicles
10) Tesla does not ask from large sums of money upfront and does not persuade the customer, in any way, to buy the car, which builds a true knowledge management customer service system based on real-time data
One advisor at Tesla told Remy. If you buy a car in May, in any given year, and a new light technology is discovering, the light is installed on the newer cars and your car is left behind on that implementation, unfortunately. However, when a software update is available, your car is immediately updated at no charge.
At the Tesla corporation, strategic objectives are constantly being tweaked to include supplier support and vendor relationships as the world manages the post-pandemic recovery. The primary function of knowledge management is to restructure unclear and vague situations into a set of organizationally resolvable problems. Solutions are key to Tesla’s success as the pandemic evolves. Thus, Tesla’s Knowledge Management is implemented and formulated to efficiently deploy the organizational capabilities and interact with the global environment.
Remy’s Options
Remy is sticking with the Tesla Model 3 Long Range, which has the capacity to go about 350 miles on one charge. He knows that other car manufacturers are attempting to not only catch up but surpass Tesla Motor Corporation technology. The American made Tesla car is still producing a better, more responsive battery, but how long can this last.
Tesla, with the stock ticker (TSLA) currently has a very clear technological lead over its competitors. One teardown in 2020 estimated it to be six years ahead of Toyota and VW. There seems no stopping the share price of the company either. In fact, Tesla doesn’t just have a higher market cap than Toyota, it’s nearly four times as much now and recently passed Facebook to become the fifth most valuable US company. But although Tesla is awash with investor cash and producing cars that have significantly more range and performance than other vendors, there are signs already that its market lead is eroding, and competitors are starting to catch up. (James Morris, 2021, Tesla’s Dominance Could Be Under Threat Sooner Than You Think, Forbes )
Right now, Remy feels that similar to customer relationship management, knowledge management is an enabler for identifying and satisfying customer’s needs and the idea manifests itself as a significant driver that motivates the development of relationships with customers. Remy feels that searching further, at this time, is not an option for him.
With automobile chips on hold and scarce to come by, Remy realizes production of his new vehicle is the only option. He cannot afford the S-class Tesla, which is 85,000$, not including the 10,000$ software upgrade for Full Self-Driving Capability.
Remy feels that Tesla is creating a conducive organizational climate that fosters knowledge management which, he feels, is not only the key to post-pandemic recovery, but also the best way to solve his financial crunch due to the cost of gas and his driving status.
The Deal
Sunrise unfolded nicely as Remy drove to work, arriving at his office at 7:30 am. By lunch time, Remy was set upon buying a Tesla. He asked his daughter Alexa, who was at the office that day, if she thought it was a good idea to buy a Tesla. Alexa said, “Dad, it’s expensive. A huge investment, sure I would love a Tesla but you sure you want to do it?” “Yes, Alexa, gas is costing me too much and I am racking up miles each week which will bring the value of my Jaguar down substantially, besides, I come out of warranty in May of 2022 and that is only about 7 months away,” Remy replied.
Remy called the Tesla team and got a voice. Amber, at Tesla, was nice and helpful. She mentioned that there are no cars in the Florida area with the specifics that Remy desired. She located a car in Atlanta and gave Remy the zip code and told him to go to the Tesla website and search with the Atlanta zip. Remy did and found it. A black Tesla with white interior, a 2021model 3 long range, Tesla. White interior was a 1,000$ upgrade and Amber did not tell Remy, but the color black was an upgrade also, $2,000. The car was priced at 51,000$, plus an optional software upgrade of 10,000$ for Full-Self-Driving Capability. The car was a demo because it had 3,000 miles on it. The price adjustment for the miles is 784$. The car had to be picked up in Atlanta, however, a ten-hour drive. Remy agreed, paid the 250$ online fee and bought the car. Yep, Remy bought a 61,000$ car, online, with no salespeople engaged. Once he bought it, more screens came up to finalize the purchase. Cash, finance, or lease was an option, and Remy wanted to finance with some money down to lower his coupon payment. He filled out a quick form and instantly, less than 30 seconds, he got a text message on his phone with approved financing from a Bank that he never heard of but was happy to do business with them.