I.

Literature review

The electric car market has expanded rapidly in recent years as buyers become more
interested in innovations, technology, and environmental preservation. Tesla has been
regarded as a pioneer and leader in this industry up to now. With the addition of new rivals,
including BYD, Wullang, Volkswagen, and others, competition is growing more severe. Tesla
has to put effort into maintaining their market dominance. Tesla was surpassed by BYD in the
number of electric cars sold in 2023 (Cheng 2024). It demonstrates that the firm has
difficulties that need to be addressed. Despite attempts to improve vertical integration, Tesla
continues to rely on suppliers for some components. However, while BYD can supply itself,
allowing the company to keep tight control over the supply chain, Tesla remains more reliant
on suppliers, indicating supply chain vulnerability.

II. Introduction

Analyzing the electric vehicle (EV) market landscape is a crucial task to do as Tesla's
consultant, with an ambition to contribute to the sustaining development of the company in
the face of growing competition. Competition from BYD, Wulang, Volkswagen, and GAC
Motor is a serious threat to Tesla, even with its lead position in innovation. The objective of
this paper is to suggest two specific strategies for Tesla: Supply Chain Enhancement strategy
and Customer-centric Communication and support to sustain and increase its market share
and maintain its market dominance by utilizing the 3I Design Thinking framework. In
addition, a new persona aligned with the suggested two strategies is created, and the
discussion on the way empathy affects customer persona development will be illustrated.

III. Inspiration

In design thinking, the inspiration phase involves finding a problem to solve or a possibility
to generate a competitive advantage. The revelation will surprise many and emphasise the
difficulties of many consumers, notably in Australia, where those who have finally opted to
switch to EVs are suffering significant wait times (Parkinson 2022). Tesla customers
experience a similar issue. Wait periods for Tesla's 2023 Model Y Performance have
increased by one to two months (Misoyannis 2022). When customers experience extended
wait times, they tend to seek alternatives, undermining the company's market dominance
(Appendix A).

Long wait times are mostly due to a fragile supply chain. Tesla plans to cease manufacturing
in Germany as the Red Sea battle disrupts supply networks (Sweney 2024). It is also stated
that due to a shortage of components, manufacturing at its factory near Berlin will be halted
on January 29 and resumed on February 12. Component shortages and production delays
highlight the supply chain's vulnerability. Secondly, as a result of the interruption, there is a
risk to the brand loyalty that Tesla has built up over the years due to the unsatisfied customer
base (Appendix A). One of the key factors in customer loyalty and retention is customer
satisfaction (Lysenko-Ryba & Zimon 2021). The solutions for mentioned issues need to be
addressed.

IV. Ideation

The idea-generation process should be used to address client issues. Two solutions are
proposed for implementation: Supply Chain Enhancement, and Customer-Centric
Communication and Support (Appendix B). The Supply Chain Enhancement strategy is
developed with the goal of improving supply chain resilience, allowing the organisation to
prevent supply chain disruptions and have a plan in place if they do occur. The plan should
begin with a supply chain analysis and supplier diversification.
Another strategy that Tesla should consider is Customer-Centric Communication and
Support, which aims to establish a two-way dialogue between Tesla and its customers,
demonstrating Tesla's efforts to address customer challenges and dissatisfaction while
offering assistance and solutions.

V. Implementation
Implementation is the final stage in the design thinking process. According to Appendix C,
the first stage in adopting the first plan is to form a cross-functional team of supply chain
experts, procurement professionals, and data analysts to conduct a full supply chain
assessment. It enables Tesla to anticipate and identify suppliers, crucial components, and
external variables that might cause a disruption. Based on the analysis, an adaptive action
plan, which includes inventory management optimization and an alternate sourcing strategy,
should be developed in response to the interruption. Furthermore, varied supplier partners
should work together to guarantee that if one of its main suppliers stops providing, others can
fill up the gap. The company and suppliers should come to mutual agreements on
risk-sharing, delivery terms, and a platform for suppliers to quickly notify of critical
information, including unforeseen circumstances or potentially delayed delivery. It will
promote cooperation and strengthen the resilience of the supply chain.

Secondly, the goal of a customer-centric communication and support strategy is to keep

consumers loyal. A 24/7 customer service chatbot employing AI is required to improve the
customer experience by concentrating on customer satisfaction. It is not only a tool for
offering immediate assistance and answers to client queries, difficulties, or concerns, but it
also serves as a platform for dealing with consumer complaints. A positive customer
experience is the result of high customer satisfaction. It is stated that a chatbot will most
likely have an influence on consumer loyalty since customer satisfaction leads to loyalty
(Jenneboer, Herrando & Constantinides 2022). Furthermore, Tesla should engage with
consumers proactively through several channels in order to keep them informed about
product availability, anticipated delays, and new items. They are touchpoints where clients
may continually interact with the brand. To successfully improve customers’ loyalty, a
corporation should apply two strategies: consistency across touchpoints and effective and
timely communication (Rane, Achari & Choudhary 2023).

VI. Empathy

A customer persona is created using a customer empathy map in correlation with the two
proposed approaches (Appendix D). Understanding the customers' challenges of obtaining a
Tesla vehicle amid a lack of supply and suffering a long wait time, two techniques are
developed. To come up with the acknowledgment of customer goals, challenges, the empathy
of customer experience is needed from Tesla. Empathy is the capacity to share another
person's emotions and experiences by imagining what it would be like to be in their shoes
(Hodges & Myers, cited in Lesley University 2019). An empathy map is a collaborative tool
teams can use to gain deeper insight into their users, which is used in creating customer
persona (Appendix D).
VII. References

Cheng, E 2024, ‘BYD beats Tesla for a second straight year after producing more than 3

million cars in 2023’, CNBC, 1 January, viewed 9 April 2024.

Jenneboer, L, Herrando, C & Constantinides, E 2022, ‘The Impact of chatbots on customer

loyalty: a systematic literature review’, Journal of Theoretical and Applied Electronic

Commerce Research, ​vol. 17, no. 1, pp. 212-229.

Lesley University 2019, ‘The Psychology of Emotional and Cognitive Empathy’, Lesley
University.

Lysenko-Ryba, K & Zimon, D 2021, ‘Customer behavioral reactions to negative experiences

during the product return’ , Sustainability, vol. 13, no. 2, pp. 448.

Rane, N, Achari, A & Choudhary, SP 2023, ‘Enhancing customer loyalty through quality of

service: Effective strategies to improve customer satisfaction, experience, relationship,

and engagement’, International Research Journal of Modernization in Engineering

Technology and Science, vol. 5, no. 5.

Misoyannis, A 2022, ‘2023 Tesla Model Y Performance wait time grows’, Drive, 15

September, viewed 9 April 2024.

Parkinson, G 2022, ‘Musk warns Tesla may stop taking EV orders because of huge delays’,

The Driven, 11 May, viewed 9 April 2024.

Sweney, M 2024, ‘Tesla pauses German production after Red Sea shipping attacks’, The

Guardian, 12 January, viewed 9 April 2024.

VIII. Appendix

Appendix A: Customer Journey Map

Appendix B: Mind Map

Appendix C: Mind Map

Appendix D: Empathy Map