Tesla Motors, Inc.: Driving Digital Transformation and the Digital Ecosystem

Abstract

Digital transformation provides industries with incomparable opportunities for value creation, where falling costs of advantaged technologies have revolutionized organizations and society (World Economic Forum, 2016). Moreover, digital transformation is more than exploiting new technology to improve and overhaul business processes and operations; it is about recognizing and generating new value propositions (Khan, 2016). It has been estimated that societal benefits in the automotive industry through digital transformation is worth a further $3.1 trillion of the industry through the year 2025 (Accenture, 2016). Tesla Motors, Inc. (Tesla) appears to be one of those car manufacturers that has disrupted the entire industry sector and its business model with their traditional ways of conducting business. Moreover, Tesla’s uniqueness and value is that it is the only car manufacturer providing automatic over-the-air firmware updates that allow the car to improve safety, performance, and infotainment capabilities remotely (World Economic Forum, 2016). According to Westerman, Bonnet, and McFee (2014), “Digital transformation is the use of technology to radically improve performance or reach of enterprises” (p. 1). Essential to its approach, digital transformation should include elements such as (a) significantly improving and recreating customers experience, (b) digitalization of operational processes, and (c) recreating new business models (Rao, 2016). Arguably, digital marketing is a specific area of digital transformation and drives the change in digital marketing (Edelman & Heller, 2015; Zinck, 2017).