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Tesla Motors’ and Volvo Cars’ Companies Merger Report


Introduction

In today’s business world it is more than important to have partners worldwide. In the era of globalisation, businesses should realise and assess the act of partnering with other corporations. Finding a merger partner is another option that is worth noting in the context of collaboration and teamwork. This memo chooses Tesla

Motors corporation as the merger partner for Volvo cars. It dwells on the history of the success of the company, explains the challenges that Tesla faces both internally and externally, and describes the role of organisational culture and leadership in its success. This memo also explains why Tesla Motors is defined as the perfect candidate for merging and projects future benefits of the partnership. It also proposes several effective ways to preserve the firm’s organisational and cultural structure.

Tesla Motors

Tesla Motors came into the limelight in 2013. Since then, the company is on the constant rise and frequently shows up on the news and social media (Culotta & Cutler 2016). Tesla took over the market and successfully won the niche of electric vehicles that had not been thoroughly explored before by any other company worldwide. Numerous reasons may be considered to be in charge of Tesla Motors’ success. First of all, it is the technology that Tesla uses. Model S is a technological phenomenon.

Furthermore, Elon Musk, Tesla Motors CEO, promised to continue to collaborate closely with technological giants. Another important reason is timing. Tesla Motors proved to be righteous regarding their ability to appear in the right place at the right time. This asset helped the corporation allocate its funds lucratively and win big. One more reason for Tesla’s success is monopolisation. The company took over the market of electric vehicles and showed the world the advantages of the cars that do not run on gas (Greenblatt 2016). One of the most important aspects of the company’s success is the team that is working together to bring outstanding quality to its customers. Elon Musk is never happy with average results but empowers and encourages his employees at the same time. This leadership style, demanding but passionate, made Tesla what it is today.

It is safe to say that Tesla Motors’ upsides allowed the corporation to conquer both home and world markets. Despite its popularity and the public and critical acclaim, Tesla cars are facing several challenges that hold back the progress of the brand (Labayrade, Perrollaz & Aubert 2010). First, its production centre is located in the United States. Its so-called “galleries” are mostly located in large metropolitan areas. Therefore, the corporation will have to expand its production overseas. Second, Tesla Motors needs skilled workers to build luxury vehicles with the most advanced technology.

The corporation requires experts in development, eminence, training, and dealer expansion. One of the instruments that are used to fight these weaknesses is Tesla Motors’ organisational culture. Their goal is to constantly innovate the process and the product and do the impossible to hit the target (Hardman, Shiu & Steinberger-Wilckens 2015). Tesla Motors’ team organisational culture allows the employees to work in a conflict-free environment and minimise their struggles through teamwork. The organisational culture of Tesla Motors corporation helps to maintain its competitive advantage and improve the performance of the company and its staff.

The attractiveness of the Candidate

Selection of the candidate

Before choosing Tesla Motors as the main candidate for merging, two other contenders, Toyota and Apple, were reviewed. To reach an unbiased verdict, the CAGE distance framework was used. Toyota turned out to be a mismatch for the reason of a huge cultural (behavioural) gap between Sweden and Japan. Despite the feasible common goal, the issue of conflicts based on different mindsets looks inevitable. Moreover, there would be a complexity comprising the closed economy of the Japanese corporation.

Adding to this the difference in size and geographic remoteness makes Toyota a weak merger option for Volvo Motors. Apple corporation possesses more valuable assets than Toyota does but still does not measure up to be the perfect contender. First, Apple Inc. is more of a hi-tech than a vehicle manufacturer. It is rather doubtful that its Apple Car project will be a decent rival for the technologically advanced and quite stylishly-looking Tesla vehicles. Second, its staff is trying to reach different markets and is not looking for partners. To conclude, Apple Inc. would be a respectable partner, but it does not have the features that Volvo Motors corporation is in search of currently.

Expected benefits and compatibility

Bringing Volvo and Tesla Motors together would be beneficial in different explicit and implicit ways. First, Volvo might be able to gain more insight into the electric vehicle technology. Volvo might also create a concept of a self-driving vehicle similar to Tesla’s prototypes (Cheong, Song & Hu 2016). Because Volvo is one of the most reliable cars on the market, the employment of an intellectual system would spark the interest of the customers (both long-time users and fans devoted to Volvo and new drivers who are looking for a car that would incorporate both luxury and possibility of everyday use).

The collaboration between Volvo and Tesla Motors would help amalgamate Swedish comfort and American energy (Pohl & Elmquist 2010). Tesla’s potential prospect, in this case, would be the European market and a possibility to open multiparty facilities in Sweden. This would minimise the risk of geographic remoteness, help popularise Tesla brand in European countries, and make the cars more affordable. Another key point is Volvo and Tesla Motors’ CEOs have relatively similar leadership styles so the merging of these two companies would only be beneficial regarding professional and personal experience exchange (Mangram 2012). This partnership would offer Volvo a possibility to adopt certain characteristics of Tesla’s organisational culture and vice versa.

Preserving organisational culture

Steps to preserve Volvo’s organizational culture would include keeping the focus on the corporation customers’ success and their trust in the brand, being innovative and finding smart ways to create and collaborate, and exceeding both company’s and customers’ expectations. The company should thoughtfully create a plan to upsize considerately.

Most importantly, the board and the employees should keep the core values in mind even though Tesla Motors’ values do not significantly differ from Volvo’s. The leaders of the company should be properly trained to manage the team and collaborate with the company’s partners efficiently. The managers should also be able to motivate the staff to provide their best effort and comply with the customs established within the company.

Conclusion

The prospects of merging with Tesla Motors look very promising. Both Volvo and Tesla will benefit from the partnership, being granted access to the valuable resources and new clientele. The merging process would result in a lucrative collaboration based on innovation and preservation of the core values of both companies.

Reference List

Cheong, T, Song, S, & Hu, C 2016, ‘Strategic Alliance with Competitors in the Electric Vehicle Market: Tesla Motor’s Case’, Mathematical Problems in Engineering, vol. 2016, no. 1, pp. 1-10.

Culotta, A, & Cutler, J 2016, ‘Mining Brand Perceptions from Twitter Social Networks’, Marketing Science, vol. 35, no. 3, pp. 343-362.

Greenblatt, N 2016, ‘Self-driving Cars and the Law’, IEEE Spectrum, vol. 53, no. 2, pp. 46-51.

Hardman, S, Shiu, E, & Steinberger-Wilckens, R 2015, ‘Changing the Fate of Fuel Cell Vehicles: Can Lessons Be Learnt from Tesla Motors?’, International Journal of Hydrogen Energy, vol. 40, no. 4, pp. 1625-1638.

Labayrade, R, Perrollaz, M, & Aubert, D 2010, ‘Sensor Data Fusion for Road Obstacle Detection’, Sensor Fusion and Its Applications, vol. 1, no. 12, pp. 1-3.

Mangram, M 2012, ‘The Globalization of Tesla Motors: A Strategic Marketing Plan Analysis’, Journal of Strategic Marketing, vol. 20, no. 4, pp. 289-312.

Pohl, H, & Elmquist, M 2010, ‘Radical Innovation in a Small Firm: A Hybrid Electric Vehicle Development Project at Volvo Cars’, R&D Management, vol. 40, no. 4, pp. 372-382.

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IvyPanda. (2020, August 5). Tesla Motors' and Volvo Cars' Companies Merger. Retrieved from https://ivypanda.com/essays/tesla-motors-and-volvo-cars-companies-merger/

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"Tesla Motors' and Volvo Cars' Companies Merger." IvyPanda, 5 Aug. 2020, ivypanda.com/essays/tesla-motors-and-volvo-cars-companies-merger/.

1. IvyPanda. "Tesla Motors' and Volvo Cars' Companies Merger." August 5, 2020. https://ivypanda.com/essays/tesla-motors-and-volvo-cars-companies-merger/.


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IvyPanda. "Tesla Motors' and Volvo Cars' Companies Merger." August 5, 2020. https://ivypanda.com/essays/tesla-motors-and-volvo-cars-companies-merger/.

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IvyPanda. 2020. "Tesla Motors' and Volvo Cars' Companies Merger." August 5, 2020. https://ivypanda.com/essays/tesla-motors-and-volvo-cars-companies-merger/.

References

IvyPanda. (2020) 'Tesla Motors' and Volvo Cars' Companies Merger'. 5 August.

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