BUCHAREST UNIVERSITY OF ECONOMIC STUDIES [604364]

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BUCHAREST UNIVERSITY OF ECONOMIC STUDIES
FACULTY OF BUSINESS ADMINISTRATION
(ENGLISH TEACHING)
CREATIVE ECONOMY,
BUSINESS INNOVATION
AND
ENTREPRENEURSHIP
BASED ON A RESEARCH – TESLA MOTORS

STIENTIFIC COORDINATOR:
Associate Professor PhD Suciu
Marta -Christina GRADUATE:
Bizon Alexandru Mihai

Bucharest
June-July 2017

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CONTENTS
FORWARD ………………………….. ………………………….. ………………………….. ………………………….. …….. 3
INTRODUCTION ………………………….. ………………………….. ………………………….. ………………………… 4
THEORETICAL APPROACH ………………………….. ………………………….. ………………………….. ……….. 7
SEVERAL DEFINITIONS OF THE STUDIEDCONCEPT ………………………….. ………………………. 7
SEVERAL POSSIBLE CLASSIFICATIONS OF THE STUDIED CONCEPT ……………………….. 11
LITERATURE REVIEW ………………………….. ………………………….. ………………………….. ………….. 14
Properties of creative industries: ………………………….. ………………………….. ………………………….. 16
Models for the creative economy ………………………….. ………………………….. …………………………. 17
CORRELATIONS / IMPLICATIONS ON THE OTHER HR CONCEPTS ………………………….. … 19
PRACTICAL APPROACH ………………………….. ………………………….. ………………………….. ………….. 21
OVERVIEW OF THE COMPANY ………………………….. ………………………….. ………………………… 21
INFORMATION RELATED TO THE HIRED PERSONNEL ………………………….. …………………. 22
CURRENT SITUATION OF THE CHOSEN THEORETICAL CONCEPT WITHIN THE
COMPANY TESLA INC. ………………………….. ………………………….. ………………………….. …………. 27
CRITICAL ANALYSIS OF THE CURRENT SITUATION – RELATED TO THE CHOSEN
SUBJECT ………………………….. ………………………….. ………………………….. ………………………….. ….. 31
PERSONAL RECOMMENDATION FOR POSSIBLE IMPROVEMENTS ………………………….. .. 37
CONCLUSIONS ………………………….. ………………………….. ………………………….. ………………………… 41
BIBLIOGRAPHY ………………………….. ………………………….. ………………………….. ……………………….. 42
Reference books: ………………………….. ………………………….. ………………………….. ……………………… 42
Web references: ………………………….. ………………………….. ………………………….. ………………………. 42

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FORWARD

In the present paper, I am speaking about the concept of creative economy, business
innovation and entrepreneurship reflected in the company Tesla Motors, discussing about how
this criteria was applied in the management of the firm, how it was studied from different
perspectives, pe rceptions and approaches over the time.
The reason I have chosen to discuss about this theme is the fact that I wanted to apply
the theoretical concepts I have learnt in the three years of university, to see exactly how
certain concepts were applied to rea l cases or companies.
The fact that I liked the most in making this research is that I got the opportunity to
study the evolution of the Tesla Motors company, for witch I got an affinity from the times
when I was working in the stock market field. I have acknowledge how a company is run
from the point of view of the managemen t, marketing, growth, outlook. The thesis is
structured of forward, i ntroduction and three chapters. In the introduction I am discussing
about the importance of the chosen concept for one’s daily life and the importance of the
chosen concept for the company’s effective activity. The first chapter is treating the
theoretical approach regarding the studied concept. It is structured in four subtitles each of
them describing definitions of the concept, classification evolution and different perceptions
and approaches over the time in relation to the research. The second chapter is composed by
the practical approach – based on the research on the company Tesla Motors, discussing first
of all about the overview of the company, information related to the hired personnel, current
situation of the chosen theoretical concept within the company, critical analysis of the current
situation and also personal recommenda tion for possible improvements. The last chapter is
concerning conclusions taken out of the thesis, synthesizing the initial premises, the
conflictual situation, the personal resolution. As for tools I have used books with references
to the studied subject and also web references. In the last paragraph, I want to thank my
academic coordinator for helping me with the guidelines for my thesis, for introducing me to
the proper way to make a research about a concept and then putting it into connection to a real
company.

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INTRODUCTION

In this chapter I am going to discuss about the importance of the chosen concept for
one’s daily life and the importance of the concept for the company’s effective activity.
Business innovation is an organization's process for introducing new ideas, workflows,
methodologies, services or products. Like IT innovation, which calls for using technology in
new ways to create a more efficient organization, business innovation should enable the
achievement of goals across the entire organization, with sights set on accom plishing core
business aims and initiatives. Innovation often begins with idea generation, wherein ideas are
narrowed down during brainstorming sessions after which leaders consider the business
viability, feasibility and desirability of each idea.1
The te rm ‘creative industries’ began to be used about twenty years ago to describe a
range of activities, some of which are amongst the oldest in history and some of which only
came into existence with the advent of digital technology. Many of these activities h ad strong
cultural roots and the term ‘cultural industries’ was already in use to describe theatre, dance,
music, film, the visual arts and the heritage sector, although this term was itself controversial
as many artists felt it demeaning to think of what they did as being, in any way, an ‘industry’.2
Entrepreneurship – The capacity and willingness to develop, organize and manage a
business venture along with any of its risks in order to make a profit. The most obvious
example of entrepreneurship is the starting of new businesses.
In economics, entrepreneurship combined with land, labor, natural resources and
capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk –
taking, and is an essential part of a nation's ability to succeed in an ever changing and
increasingly competitive global marketplace.3
You've probably heard of him or even some of his creations: Space X, or Tesla
Motors. And yet, who is Elon Musk and how did he come to lay the foundation for our
future? Today I will tell you the success story of a South African boy who has become one of

1 Source: http://searchcio.techtarget.com/definition/busines s-innovation
2 JOHN NEWBIGIN, as Special Advisor to the Minister for Culture, Rt Hon Chris Smith MP
3 http://www.businessdictionary.com/definition/entrepreneurship.html

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the richest and most known peo ple on the planet, reaching the elite of those who influence the
way we live our lives and enjo y everything that is around us.
Still, who's Elon Musk? He was born in Pretoria, South Africa in 1971 and has a
brother and a sister, both smaller than him a few years. His father worked as an
electromechanical engineer, which also lit the young flame of engineering in Elon, and later
pushed him to become the p erson we see today. At the age of 10, he discovers the
Commodore VIC -20 computer, and in the following years he learns programming concepts.
At the age of 12, he manages to write the BASIC codes for a video game (Blastar), which is
immediately bought by a profile magazine in his country.
Pre-university education is done in South Africa, first at the Waterkloof House
preparatory school with Eng lish teaching, and then at the P retoria boys' high school. In 1989,
after getting her Canadian citizenship (her moth er, Queen, being born in Canada), she moved
to Canada, Ontario.
At age 19, Elon is accepted at Kingston University in Ontario, where he spends two
years, then transferred to Pennsylvania University where he earns his bachelor's degree in
physics. At the ag e of 25, he is also licensed in the Wharton School of Economics at
Pennsylvania University. Doctoral studies start at Stanford University in California, but he
does not take them to the end, leaving the institution shortly after the start of the program.
Okay, and how do you get from "I dropped m y Ph.D." to a multimillionaire? The
answer is with much imagination, vision and an ardent desire to progress. Musk's move to
California has coincided with the Internet boom, so that, along with Kimbal's brother, Elo n
sets up a small software company called Zip2. Their goal was to develop an online city guide
for the press. After managing contracts with both the New York Times and the Chicago
Tribune, Zip2 was bought in February 1999 by Compaq for $ 307 million in cas h and 34
million in shares. It sounds like a lot, is not it? For Zip2, Elon had bor rowed $ 28,000 from
his father.
But as money never makes any more money if they stay in place, Elon almost
immediately invested $ 10 million of his money and becomes a co -founder of X.com, an
online financial services and e -mail payments company. A year later, it merges with Confinity
and focuses on money transfer services, which would become PayPal. After removing Musk
as CEO of PayPal and eBay's purchase of the company, it is offset by $ 165 million.

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Let's look at some of their achievements: In 2006, Musk manages to negotiate a
contract with NASA for SpaceX, through which the latter committed themselves to further
developing and testing launch vehicles Falcon 9 and Dragon to transport freight To the
International Space Station (ISS). In 2008, he gains a contract with NASA for 12 flights to
ISS after NASA's Space Shuttle program was closed in 2011. In September 1009, SpaceX
became the first private company to successfully plac e a satellite in the Earth's orbit. In 2012,
SpaceX enters history as the first private company to succeed in anchoring and then docking
at the ISS, and seems to have no intention of stopping only at this achievement.
Tesla is a project initiated by Martin Eberhard and Marc Tarpenning in July 2003,
which captured the vision of Musk. In 2004, he leads th e A and A Series of Investments .
From the very first moment, Musk has taken an active role in the company and has followed
closely the design and production of the Roadster. In 2008, as a consequence of the financial
crisis, Elon becomes CEO of the company and "product architect", positions he holds at the
moment. Under his leadership, Tesla Motors gets to market its first product, the Tesla
Roadster sports ca r, which sells around 2,500 units in 31 countries. In 2012, the second S -type
4-door model was released, and the third, Model X, which was originally to be sold all in
2012, was postponed for September 2015.
SolarCity, Hyperloop and OpenAI – These are 3 o f the smaller, or under development
projects initiated by Elon Musk. The original concept for SolarCity was provided by Musk,
but the company was founded by Lyndon and Peter Rive's cousins. However, Elon Musk is
still a major shareholder. Musk's motivation to finance both SolarCity and Tesla Motors was,
according to him, the fight against global warming. In 2014, he pledged to build the world's
largest solar power plant near Buffalo, New York, three times larger t han the largest US
power plant.
Hyperloop is a project proposed by Musk due to its dissatisfaction with the California
High -Speed Rail system linking Los Angeles and San Francisco. Musk has named 12
engineers from both Tesla Motors and SpaceX to develop the basic concept and design
system design. The name of Hyperloop also comes at the initiative of Musk, who imagines a
subsonic transport vehicle that would travel for 560 kilometers and travel it in 35 minutes.

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THEORETICAL APPROACH
SEVERAL DEFINITIONS OF THE STUDIEDCONCEPT

CREATIVE ECONOMY. The term „creative economy” it is defined as the totality of
people and activities which result in artistic products and cultural and innovative services.
This system includes also the spaces where creators can present freely their works, spaces
where they ca n receive comments related to their work in exchange for new thoughts or ideas.
New ideas, not money or machinery, are the source of success today, and the greatest source
of personal satisfaction.
The main feature of creative economy is the fact that peop le are using their
imagination in order to boost the value of an idea. John Howkins invented the concept for the
creative economy in 2001 for describing the economic systems in which the value depends on
originality and creativity, and not on the tradition al resources as – land, labor and money.
Unlike the creative sectors, which are limited to specific sectors, the term “ creative concept”
describes the creativity of the economy as a whole.
“The creative economy is revitalising manufacturing, services, re tailing and
entertainment industries. It is changing where people want to live, work and learn – where
they think, invent and produce. ” (http://www.creativeeconomy.com/thebasics.htm)
More precisely, nowadays, the new ideas, and not the money or the technol ogy are the
sources of success; and, more important than that – the source of personal satisfaction. A
creative economy reflects to a new life in productivity, services, commerce and entertainment.
This changes the way people want to live, to work and to s tudy, but also the one that they are
thinking, inventing and creating. “ The creative economy is based on a new way of thinking
and doing. The primary inputs are our individual talent or skill. These inputs may be familiar
or novel; what is more important i s that our creativity transforms them in novel ways. In
some sectors the output value depends on their uniqueness; in others, on how easily it can be
copied and sold to large numbers of people. The heartlands are art, culture, design and
innovation. ” (http://www.creativeeconomy.com/thebasics.htm)
The creative economy is a sector of the global economy, which has been quickly
developing. This sector has been dynamic in revenue generating, creating new jobs and
developing the activity of exports, whereas it depends less on material resources. Pierre L uigi

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Sacco – economist and theorist in arts – likewise, he emphasizes that the creative economy is
the one that best reflects the local characteristics and preserve the identity in an era of
globalization. In his opinion, Ile -de-France from Paris, inland L ondon and Milan are the
places where creative economy is the most active in developing itself. The creative economy
brings together ideas about the creative industries, the cultural industries, creative cities,
clusters and the creative class.
However, th e concept of cultural and creative sector appeared later. In the opinion of
Pierre Luigi Sacco this concept has been related to the industrial revolution from the
beginning of 20th century. The technological innovations that took place in this period – the
radio, the recording, phonography, cinema and the improvement of the printing technologies –
those had been enabled a wider access to culture and had been influencing the creative
process.
John Howkins is a leading figure in the global development of th ese ideas. His book,
‘The Creative Economy’, published in 2001 and completely revised in 2013, was the first
account of the new economy, Howkins & Associates have developed the Creative Triangle
and the Creative Audit. These enable companies and policy -makers to benefit from the new
opportunities. A completely new edition was published by Penguin in 2013. It has been
translated into 11 languages including Chinese, Korean, Russian and Arabic. It starts with
each person's individual creativity and explores e motions, art, work, business, online
networks, intellectual property, and global trends.
It identifies a new ecology of learning and thinking. It is holistic and radical and
provocative, ranging over systems theory, emergent thinking in the arts and scien cies, and
new ideas about dialogue and collaboration. Throughout, the focus is how people have ideas
and how they can use ideas to develop, collaborate and adapt.
„The creative economy consists of the transactions in … creative products. Each
transaction may have two complementary values, the value of the intangible, intellectual
property and the value of the physical carrier or platform (if any). In some industries, such as
digital software, the intellectual property value is higher. In others, such as a rt, the unit cost of
the physical object is higher.” (John Howkins, The Creative Economy)
In his work, John Howkins idenfies the creative economy as being the central to the
emerging 21st century in global economy. Thus, he describes the economic potentia l of this

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concept as being enormous, by compering trivial values with intellectual property value,
making a case from the fact that – while data and knowledge are important resources – the
creative economy represents a significant development from the fami liar idea of the
knowledge economy.
„Today’s economy is fundamentally a Creative Economy. I certainly agree with those
who say that the advanced nations are shifting to information -based, knowledge -driven
economies… Yet I see creativity… as the key driver. In my formulation, ‘knowledge’ and
‘information’ are the tools and materials of creativity. ” (Richard Florida, The Rise of the Creative
Class) .
The key concept for the term is the fact that – in essence – there’s no space enough to
store creativit y, there is no process to find it or to analyse the information, it must be
trasformed into something valuable and new.
The creative economy appears as a result in the larger sift occuring within the global
economy, making referece to the shift from econ omies based on the production of goods to
economies based on the provision of services. Developed countries have now passed within a
knowledge economy where information and knowledge are important drivers of economic
groth. The move comes from an economy t hat was based on the production of goods and
services to a utter econemy based on ideas, information, fuelled by innovation, creativity.
On the other hand, the concept has emerged as a mean of focusing attention on the role
of creativity as a force in co ntemporary economic life, being a part of a larger process of
development. Today the most often cited definition of the creative econo my is from the UK
Department of Culture, Media and Sport (DCMS).
BUSINESS INNOVATION. „Business innovation is the creation of new value and
wealth for stakeholders to increase economic prospects .” (Lorente et al., 1999; Miller, 1995).
Business innovation is the creation of substantial new value for customers and the
company by creatively changing one or more dimension s of the business system (Sawhney et
al., 2006). In other words, business innovation is the creation and adoption of something new
that generates business value. This includes new products, services, or processes, such as
integrated supply chain solutions (Sawhney et al., 2006).

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Key steps towards business innovation:
a) Conduct an analysis of the trends in the market environment, your customers’
wants and needs and your competitors.
b) Consult with customers and employees for ideas on improving processes,
products and services both internally and externally. Find out more about
connecting with customers for ideas.
c) Seek advice. Use available resources such as business advisors, grants and
assistance to drive innovation in your business. This may include seek ing
Intellectual Property (IP) protection to commercialise your ideas. Learn more
about local collaboration and international collaboration with researchers.
d) Be open to new ideas and adaptive to change.
e) Develop a strategic, responsive plan, which promotes innovation as a key
business process across the entire business. Learn about creating an innovative
business culture and developing a strategy for innovation.
f) Train and empower your employees to think innovatively from the top down.
Jean-René Halde, Presi dent and CEO of the Business Development Bank of Canada,
says that the greatest source of innovation will always be business leaders with a sustained
commitment to doing things better and a willingness to seize opportunities – but first business
leaders ha ve to adjust their mindsets.
Innovation propels companies forward. It's an unlimited source of new growth and can
give businesses a distinct competitive advantage. Learn how to innovate at your own business
using Systematic Inventive Thinking, a method bas ed on five techniques that allow you to
innovate on demand. In this course, author and business school professor Drew Boyd shares
the techniques he's taught Fortune 500 companies to innovate new services and products.
Drew provides real -world examples of i nnovation in practice and suggests places to find your
own opportunities to innovate.

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SEVERAL POSSIBLE CLASSIFICATIONS OF THE STUDIED CONCEPT

The roots of today’s creative economy go back to two main aspects: the individual and
his work. The first concept refers to information, knowledge, urbanism, which has been
developed by economists. This idea was exposed in the first part of the 20th century by
expressions from The Post -Industrial Society, Information Society, Knowledge Society and
Network Soci ety.
According to Howkins, current issues in the creative economy include[21] Aesthetics,
Branding, Business Models (Value Chains), Networks (Systems, Ecologies), Culture
(intrinsic and instrumental values), Education and Learning, Intellectual property
(proprietorial and open source), Management, Digital and Online, Policy, Pricing, Public
statistics (definitions), Software, Start -ups, Tax, Urban design, and Work . (John Howkins,
‘Current Issues in Creative Economies’, Drucker School of Management, 2014).
This is the kind of economy where imagination and creativity decide what people what
to do and make.
The largest sectors are:
Advertising;
Architecture;
Art;
Crafts;
Design;
Fashion;
Film;
Music;
Performing arts;
Publishing;
R&D;
Software;
Toys and games;
TV and radio;
Video games
Table 1. Classification of creative industries. (Howkins 2001, pp. 88 –117)

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Another classification was made in a 2014 Creative Industries Study in the USA and
the sector has been categorized into 6 primary clusters:
Communications
Design
Entertainment;
Fine art
Software and hardware
Data science and creative industry support services
Table 2. Classification of creative industries. (Hesmondhalgh 2002, p. 12); (DCMS 2006)

General evolution of the creative economy

Fig.1. Evolution of Creative economy. (Pratt and Jeffcutt, 2009)

The present research it is designed n the context of acknowledgement, on a global
scale, on the basis of increasing importance which industries had acquired, in their quality of
components of post industrialized modern economies based on knowledge. Cultural
industries•Arts
•Cultural industy
Creative
industries•Cultural industries
•Creative economy

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The fast and progressive development of crea tive economies, where there are
predominant the activities based on services, had confirmed the necessity and urgency of
establishment and consolidation of a well -grounded and functional scientific support with the
purpose to make possible an elaborate ana lysis of the creative industries.
Per se, the research premise is the necessity for utilization of a model for measuring
the economy which can insure the compatibility for the obtained results. Independent form the
way that creative industries are defined there are no controversy to the fact that the totality of
them all forms what it is called in large terms “creative economy”.

Fig. 2. Concentric Circles in The Creative Economy (A recent report by the Work Foundation)
Similar to the creative industries, there is no u nanimously accepted definition for the
creative economy. It is a subjective concept, being in full expansion process, of modeling and
contextualization process.
The Rest of
the
Economy
Creative
Industries
and
Activities
Cultural
Industries
Core Crative
Fields

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LITERATURE REVIEW

1. Howkins, John (2001), The Creative Economy: How People Make Money From Ideas,
Penguin
From the reviews:
“Creative Economies, Creative Cities, an edited collection of articles by academics from
Europe, the Far East and Australia, puts Florida’s thesis in global and historical context. The
book mines a rich vein of d ebate that began long before 2002 about the effectiveness of the
Creative Economy idea. … The book is a kind of echo chamber for academics and policy –
makers … .” (Matthew J. Kiefer, ArchitectureBoston, September, 2009)
“One of the most valuable aspects of Creative Economies, Creative Cities is that it
identifies questions from recent years about the cultural and creative industries, a
sophisticated set of policy agendas regarding the development of creative economics and
creative cities. … This collection should be read by policymakers interested in design and
implementation of culture -led regeneration projects.” (Chang Bin Lee, International Journal of
Cultural Policy, Vol. 17 (3), June, 2011)
“The book has a strong inte rdisciplinary approach –effectively reflecting the variety of
topics and methods that characterise research in this area. … the book proves a solid
contribution and some of the chapters included will become highly cited within the field. … it
is the first a ttempt to adopt an inclusive view on the creative economy and give us a better
understating of the creative economies discourses and creative city policies taking place in
Asia. For this ground -breaking reason the book has to be praised.” (Roberta Comunian , Journal
of Cultural Economics, Vol. 34, February, 2010)
2. DCMS (2001), Creative Industries Mapping Document 2001 (2 ed.), London, UK:
Department of Culture, Media and Sport, retrieved 2007 -05-26
In the following document, the difference that appears from the first one is the
classification of creative industries. In here, there are described other aspects that constitute a
definition for the concept. They consider that education industry, including public services, is
forming a part of creative industry. ( Kultur & Kommunikation for Nordic Innovation Centre

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(2007), "Creative Industries Education in the Nordic Countries"; Mœglin, Pierre (2001), Les Industries
éducatives, Paris, Puf).
The DCMS classifies enterprises and occupations as creative according to wh at the
enterprise primarily produces, and what the worker primarily does. Thus, a company which
produces records would be classified as belonging to the music industrial sector, and a worker
who plays piano would be classified as a musician.
The total num ber of creative employees is then calculated as the sum of:
 All workers employed in creative industries, whether or not creatively occupied (e.g.
all musicians, security guards, cleaners, accountants, managers, etc. working for a
record company) ;
 All worke rs that are creatively occupied, and are not employed in creative industries
(for example, a piano teacher in a school). This includes people whose second job is
creative, for example somebody who does weekend gigs, writes books, or produces
artwork in the ir spare time . (DCMS 2001, p. 04)

3. Hesmondhalgh, David (2002), The Cultural Industries, SAGE
Related to Hesmondhalgh, the entire name of the concept has become an “issue”
regarding the search for a suitable definition for the idea, definition that can inc lude all the
aspects of creativity reunited with an economy based until that moment on the work force, on
the goods and services that were produced. He is referring to the term as a “contested issue”
with significant differences between the terms: “creativ e industries”, “cultural industry” and
“creative economy”. (Hesmondhalgh 2002, pp. 11 –14).
4. Florida, Richard (2002), The Rise of the Creative Class. And How It's Transforming
Work, Leisure and Everyday Life, Basic Books
The last document treats the aspects of the creative class, the difference from the
“knowledge industries” and the creative class and diversity, describing this sector as the
nature of the creative workforce. He pictures the importance of diversity and mul ticulturalism.
(Florida 2002) .

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Properties of creative industries:

According to Caves (2000), creative industries are characterized by seven economic
properties:

a. Nobody knows principle : Demand uncertainty exists because the consumers' reaction
to a product are neither known beforehand, nor easily understood afterward.
b. Art for art's sake : Workers care about originality, technical professional skill,
harmony, etc. of creative goods and are willing to settle for lower wages than offered
by 'humdrum' job s.
c. Motley crew principle : For relatively complex creative products (e.g., films), the
production requires diversely skilled inputs. Each skilled input must be present and
perform at some minimum level to produce a valuable outcome.
d. Infinite variety : Produc ts are differentiated by quality and uniqueness; each product is
a distinct combination of inputs leading to infinite variety options (e.g., works of
creative writing, whether poetry, novel, screenplays or otherwise).
e. A list/B list : Skills are vertically d ifferentiated. Artists are ranked on their skills,
originality, and proficiency in creative processes and/or products. Small differences in
skills and talent may yield huge differences in (financial) success.
f. Time flies : When coordinating complex projects with diversely skilled inputs, time is
of the essence.
g. Ars longa : Some creative products have durability aspects that invoke copyright
protection, allowing a creator or performer to collect rents.4

4 Caves 200

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Models for the creative economy

The following seven models were regularly encountered in the literature that was reviewed
and are key in illustrating the variety of ways in which the creative industries are defined and
have been refined over time.
I. Howkins model . In his watershed publication in 2001, Howkins broadly outlined 15
industries that contribute to the creative economy by generating creative products and
services, ranging from the arts to science and technology. He defined these industries
as providing “ an economic good or service that results from creativity and has
economic value.”
II. UK DCMS model . As mentioned above this model was developed by the UK defining
the creative industries as those requiring “creativity, skill and talent with the potential
for wealth and job creation through the exploitation of their intellectual property”
(DCMS, 1998).
III. Concentric Circles model . This model asserts that creative ideas originate in the core
creative arts in the form of sound, text and image and that these ideas a nd influences
diffuse outwards through a series of layers or concentric circles, with the proportion of
cultural to commercial content decreasing as one moves outwards from the centre
(Throsby, 2001).
IV. WIPO copyright model . This model is based on industrie s involved directly or
indirectly in the creation, manufacture, production, broadcast and distribution of
copyrighted material (World Intellectual Property Organization, 2003). Here the
emphasis is on intellectual property as the result of the creativity i nvested in the 5
making of the goods and services included in the classification. A distinction exists
between industries that produce the intellectual property and those that distribute the
goods and services to consumers. A further distinction is made of a category of partial
copyright industries where intellectual property is only a portion of their goods and
services.
V. UNCTAD model . This model is based on enlarging the concept of ‘creativity’ from
activities having a strong artistic component to “any eco nomic activity producing
symbolic products with a heavy reliance on intellectual property and for as wide a
market as possible” (UNCTAD, 2004). UNCTAD makes a distinction between
‘upstream activities’ (traditional cultural activities such as the performing or visual

18
arts) and ‘downstream activities’ (closer to the market, such as advertising or
publishing). From this perspective, cultural industries are a subset of the creative
industries.
VI. National Endowment for Science, Technology and the Arts (NESTA) mod el. This
model was created to further refine the DCMS model of creative industries for policy
purposes under the auspices of a national policy review for the sector entitled the
Creative Economy Program. It incorporates greater awareness of the differences
between and within sectors, and is intended to draw out commonalities based on the
ways in which commercial value is created, where this value is located, and
consequently how it can be enhanced. This model places the creative industries at the
heart of a wider economy that increasingly relies on creative processes and services
for its competitiveness. It augments analysis in the report The Economy of Culture
prepared by KEA European Affairs for the European Commission (2006), which
explores the relationsh ip between the creative industries and the less profitdriven
cultural sector.
VII. Conference Board of Canada/Statistics Canada model. Developed in 2008, this list of
industries and activities was a first step in measuring and understanding Canada’s
creative ec onomy. It closely reflects John Howkins’ understanding of the creative
industries as well at the UK’s earlier DCMS model.5

5 The Creative Economy: Key Concepts and Literature Review Highlights, Edited by the Policy Research Group,
May 2013, pg. 4 -5.

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CORRELATIONS / IMPLICATIONS ON THE OTHER HR CONCEPTS

There are many methodological approaches related to the enlargement of the sphere
which contains the creative industries, the most used being those from the U.K., the country
that had afforded the biggest importance to this domain in the last 2 -3 decades. These
industries are defined as being “those industries that have their ori gins in creativity, talent and
craftsmanship and those that have the potential to create new jobs and to generate prosperity
by the productivity and exploitation of the creativity, of the intellectual work and of the ideas,
thus, to the intellectual proper ty.6

Economic Activities CAEN Code
(rev.2)
Printing newspapers 1811
Other printing activities 1812
Preparatory services for pre -printing 1813
Reproduction of records 1820
Manufacture of magnetic and optical supports for recording 2680
Manufacture of musical instruments 3220
Retail of books in specialized stores 4761
Retail sale of newspapers and stationery in specialized stores 4762
Retail sale of disks and magnetic tapes with or without audio / video
recordings in specialized stores 4763
Book publishing activities 5811
Editing of guides, compends, address lists and similar 5812
Publishing activities 5813
Linkers and related services 1814
Publishing of journals and periodicals 5814
Other publishing activities 5819
Computer game editing activities 5821
Cinematographic, video and television production activities 5911
Cinematographic, video and television program post -production activities 5912
Cinematographic, video and television program distribution activities 5913
Motion picture projection 5914
Audio recording and music editing activities 5920
Radio broadcasting activities 6010
Television broadcasting activities 6020
Activities of news agencies 6391
Architectural activities 7111
Advertising agency activities 7311
Media representation services 7312
Specialized design activities 7410
Photographic activities 7420
Written and oral translation (interpreters) 7722

6 DCMS from the U.K. 7439

20
Rental of video tapes and discs (CDs, DVDs) 8552
Education in the cultural field (foreign languages, music, theater, dance, fine
arts, other fields) 9001
Performing arts (performances) 9002
Support activities for performing arts performances) 9003
Artistic creation activities 9004
Management of showrooms 9101
The activities of libraries and archives 9102
Museum activities 9103
Managing monuments, historic buildings and other landmarks of tourist
interest 9329
Other recreational and entertaining activities

Table 1. Economic activities that subscribe under the creative industries related to the CAEN Code in
Romania

21
PRACTICAL APPROACH
OVERVIEW OF THE COMPANY

Tesla Motors, Inc. Is a high performance electric car manufacturer in Silicon Valley
(Palo Alto). Tesla received special attention when launching the Tesla Roadster production
model, the first 100% electric sports car. The second car produced by Tesla is the S -model,
100% luxury electric sedan. There are two other models in development: Model X and Model
3. In June 2015, the sales model has passed the threshold of 75,000.
Tesla also produces Li -Ion batteries for Daimler and Toyota. CEO Elon Musk sees
Tesla as an independent company with the aim of producing at one time cheap cars for
consumers.
On February 1 , 2008, the first Tesla Roadster was delivered to Musk, the then
president of the company. Tesla produced the Roadster, which cost $ 109,000 by Jan uary
2012 and sold 2,450 units. In October 2008, Musk took over as CEO of the company, who at
the time felt t he effects of the financial crisis. The situation worsened in November, and Tesla
was on the brink of bankruptcy. On the last hundred meters, the board of directors has
appro ved a $ 40 million rescue fund. In March 2009, Tesla introduced the prototype for
Model S, and by May, over 1,000 reservations had already been made. Also in May, the
Daimler Germans made a long -term bet on Tesla, buyi ng 10% of the company's shares. Also,
in June 2009, Tesla received $ 465 million from the Department of Energy, which he
redeemed in May 2013.
In February 2014, Tesla announced that it will build a huge battery factory,
Gigafactory, in Nevada. In the autumn of the same year, Elon Musk introduced the Autopilot
system, which allows the car to go without a driv er but also to p ark on its own. Tesla makes
major changes to Autopilot. Musk: He's no longer actin g actor. He became a superstar!
Dismissal of Motors is preceded by the purchase of $ 2.6 billion of SolarCity, a deal approved
in November 2016. According to some observers, the move paves the way for Musk to
transform Tesla into a solar empire.7

7 Tesla Motors devine Tesla. Cum a ajuns compania lui Elon Musk din pragul falimentului la succesul de azi ,
article published by Camelia Siseia, on Saturday, 11th of February, 2017, 09:42, Ziare.com

22
INFORMATION RELATED TO THE HIRED PERSONNEL

What can you say about a car that has nearly 2.3 tons, costs only about 100,000 dollars
and catches it in 2.8 seconds? With all the comfort inside the world without forcing customers
to pay extra for minuscule equipment and especially without costing 1 -2-3-4 million dollars,
how much does it cost for cars that manage to achieve these accelerations?
Let's put things a little in context. The Porsche 918 Spyder is faster, it gets caught in
2.3 seconds, but costs almost 1 million euros. Bugatti Veyron also picks up a few moments
faster in 2.6 seconds, but costs over 2 million euros! Almost all Ferrari, Lamborghini and all
other supersport c ars are slower in a straight line, but they cost 3 -4-5 times more, although
many do not come with all the comfort of the SF that the Tesla sedan offers! In addition, the
Tesla Model S can quietly drive on the street without any extra energy when you're run ning
relaxed, but all other cars that do not have a hybrid system are consuming a lot in town, that is
exactly where you can only use A small part of the horsepower offered by internal
combustion engines.
The auto industry is reluctant, difficult, but it r eplicates. If Musk insists on lithium -ion
electric cars (it is building Tesla Gigafactory 1, the world's largest lithium -ion battery factory,
a $ 5 billion investment that will practically double the production of batteries of this type
around the world An d will reduce their price by up to 30%), carmakers are trying to focus on
a more polluting technology, but also to the liking of the oil industry – hydrogen cells and
power -driven machines in these piles.
While Musk wants to eliminate the dealers and not t o have the 8 -year cycle of the
launch of a generation of cars, on the contrary, to sell directly to customers through online
orders and to constantly update the models, sometimes even with Free updates to customers
who have older cars, the car industry is looking for solutions to keep dealers in existence and
to use common platforms to build on almost identical machines, which are often only
distinguished by marketing and logo From the shoe, then relieve them of money throughout
the car's use cycle.
Type Private society
Thiker NASDAQ: TSLA
Founded in July 1, 2003, Delaware, U.S.

23
Founders Elon Musk, JB Straubel, Martin Eberhard, Marc
Tarpenning, Ian Wright
Establishment/Headquarters Palo Alto, California, U.S.
Area Globaly
Key personalities Elon Musk (Chairman, CEO), JB Straubel (CTO),
Deepak Ahuja (CFO)
Industry Automative, energy storage
Products Electric vehicles, Tesla Energy
Revenue US$7.00 B (2016)
Operating income US$-667.3M (2016)
Net income US$-674.9M (2016)
Total assets US$22.66B (2016)
Total equity US$4.75 (2016)
Owner 10 controlling shareholders8
Subsidiaries SolarCity
Number of employess 30,000 (2016)
Table 1. Informaton related to the company’s management

In present, Tesla Motors has over 30,000 employee s, and the majority of them are
from the U.S. (25,000). At the global level, the carmaker has 18,000 employees, adding 700
tecjnicians and engineers in China and Germany, 300 in Mexicoand Canada, plus the 12,000
in the U.S. from the acquisition of SolarCit y.
At the end of 2015, the comany had only 14,000 emplyees, and had a growth of 30%
in the past 12 months and doubled them by the aquisition of SolarCity. At the beginning, Elon
Musk was the one that was personally interviewing new people for the company.

8 Elon Musk (20.6%)
Fidelity Management & Research (13.3%)
Baillie Gifford (8.15%)
T. Rowe Price Associates (7.30%)
Tencent Holdings (5.01%)
The Vanguard Group (3.47%)
BlackRock Fund Advisors (2.36%)
CTC myCFO (1.93%)
Jennison Associates (1.76%)
Morgan Stanley Investment Management (1.61%)

24
The employee structure by general hierarchy is the following:
1. Chairman & Chief Executive Officer
2. Chief Financial Officer
3. Chief Technology Officer
4. Vice President – Vehicle Engineering
5. Vice President – Powertrain Operations
6. Vice President – North America Sa les
7. Chief Designer
8. Vice President – Manufacturing
9. Vice President – Autopilot Hardware Engineering
10. Vice President – Worldwide Services & Deliveries
11. General Counsel

Img 1. Organisational Chart9
Information related to the hired personnel:
 experience: between 5 to 10 years, but not necessary in the auto field, \
 personal structure on ages:

9 Source for the picture: https://creately.com/diagram/example/har3e11j2/Tesla , last checked on 20.06.2016,
23.01

25
 studies: college graduated, multiple internships in the auto filed „and took part in
formula student, sae baja or an electric vehicle design challenge, you're gold. al so,
helps if you know catia.” says Anirudh Ramachandran, in the article i help people who
want high g rowth jobs, from aug, 11, 2014.
 seniority: the most hunted jobs are in accounting, finance and engineering.
The emplo yee structure of Tesla is composed on the followimg departments:
 Communications
 Design
 Energy
 Products
 Engineering
 Facilities
 Finance
 Gigafactory
 HR
 IT
 Legal
 Manufacturing
 Marketing
 Production
 Quality
 Retail
 Develop ment
 Sales
 Service
 Supply Chain
 Workplace

25
In the following regions:
 Asia Pacific
 Europe
 Middle East
 North America
The Role Responsabilities Requirements
 Are you an experienced
Marketeer? Tesla is
looking for someone to
help develop the
marketing strategy for the
Energy Products division
in the DACH region!

 The (Junior) Marketing
Manager will lead various
activities to create demand
and support local sales
goals for Powerwall and
Powerpack.

 In this role you’ll be kept
on your toes and no day
will be like any other.
You’ll get to be part of a
high- pace, high – energy
and highly innovative
team, and you’ll be
essential in driving our
mission forward  Develop the local
marketing strategy for
both Powerwall an d
Powerpack
 In-depth analysis of the
local energy storage
market, customers and
competitors to identify the
right local target
audiences, messaging and
marketing channels
 Develop local marketing
materials that drive
customer lead generation
and sales conversion
 Develop and roll out
(digital) campaigns, local
events and partnerships
that effectively reach the
target audience and drive
customer lead generation
 Optimize custo mer touch –
points, sales materials and
events for sales
conversion. Engage  Bachelor’s degree or
equivalent
 3-5 years of relevant work
experience
 Experience in developing
and rolling out m arketing
strategies
 Experience in designing
and executing a flawless
customer experience,
designed to deliver
excellence
 Experience in digital
marketing and event
organization
 Excellent written and
verbal communication
skills with proficiency in
building c lear, compelling
value propositions that can
be expressed in a variety
of media
 Knowledge of local
energy markets
 Maintain a high sense of

26
existing leads in a lead
nurturing program to drive
sales conversion
urgency and
entrepreneurial work ethic
that is required to drive
business outcomes

Table 2: Requirements for a job career in Tesla10

Structure of the number of Tesla employees in the period: July 2010 – December 2016

Img. 2 Tesla employees11

10 Exemple of the requirements for a job application for the function (Jr.) Marketing Manager Germany – Energy
Products (m_w) , department: energy products, location: Munchen, Germany, req. ID: 46640 , job type: full time –
www.tesla.com/careers
11 Complete source: https://www.statista.com/statistics/314768/number -of-tesla-employees/ , last checked on
20.06.2016, 22.52

27
CURRENT SITUATION OF THE CHOSEN THEORETICAL CONCEPT WITHIN THE
COMPANY TESLA INC.

When the servants pass over the boss's word or make decisions without asking, they
usually go out of the spark.
Do not be angry or argue with them. This may damage the company's business, slow
down sales, or cause problems for employees' physical and mental health. However, something
is necessary t o do. Elon Musk sent a letter when his sales policy was violated: "No negotiations.
No Reductions ".
Below you find the true leadership explained in a remarkable letter sent by Elon Musk to
his employees.
It is absolutely necessary to join, from the very b eginning, the policy of our company,
which we have been using unchanged for 10 years, from the moment when it was laid down:
"Without negotiations. No cuts ». This fundamental to our integrity has been maintained even
during the 2008/2009 recession.
It is a good idea to offer a discount on buying a car that is older in the case of a test check
or if it is damaged before delivery. Everything we do here has a good price for each vehicle. In
any case, what I mean is that never – and that is NEVER – there is no t a discount on a car that
will leave the factory in good conditions, at least until a well -grounded rational reason is
presented. I always pay the whole price when I buy a car because I respect the policy of that
company, and so, no matter if a member of my family, a friend or a celebrity comes, they apply
the same regime.
We also asked our finance group to make sure we only have a one -quarter delivery
machine. They will report me every case in which a car will be sold out of the set price.
Although this i s a minor case, it is much better if it does not exist. I'm sorry if I used to
draconian language. I want you to know that I am proud of the work you are doing, but take into

28
account that our integrity as a company depends on you, on all of us. Customers n eed to know
that they can fully trust Tesla, that it does the right thing. ”12
What can be deduced from his letter? Explains the situation using a direct language and
provides accurate examples. They make sure they understand what happened and that there wil l
be no such problems in the future by providing examples of the company's policy from the
beginning of its existence.
It is focused on one problem and its explanation. Thus, his message does not turn into a
list of complaints. Describes the stage of the b usiness and assumes responsibility for what has
happened. He thinks about solutions to make things better. He announces that he will personally
handl e the transaction verification. He ends up with a personal note in which he once again tells
his employees that he is proud of them in order to defend the morality and integrity of his
employees.
Therefore, expressive and clear communication is a necessary point for the creation of a
united, stable company with positive and open employees. The conditions in whi ch people work,
reflect the fact that Tesla makes some compromises to meet its ambitious production targets.
According to the Guardian report, on the one hand, employees feel pride in being a respected
global company, but the truth is that the stress level is very high, and many are exhausted.
As a result, there have been cases where employees have fallen to work and called the
ambulance. In reply, Tesla CEO Elon Musk said his employees "go through difficult times, work
hard and have heavy tasks," but he ca res about their health. In recent years, according to the head
of the car manufacturer, working conditio ns have improved significantly.
On the other hand, he said that his right arm numbs him and that scares him. The
company has argued that the work environment is safer than elsewhere, but it is not enough, so
other measures will be taken. Tesla employees complain about the tough working conditions of
the company's electric car assembly lines, claiming the pressures they face because of the
aggressive production targets of General Director Elon Musk, reported The Guardian, taken over
by News.ro. Musk has turned a used car factory in Fremont, California into a factory of the

12 Letter source: http://www.inc.com/diane -currie -sam/elon -musk -shows -how-to-be-a-great -boss-in-one-simple –
letter.html?cid=sf01002&sr , last checked on 2 0.06.2017, 23.21

29
future, where giant robots named after the X -Men model the board in an advanced , bluish white
Mecca. Musk's appetite for electric cars and his promise to change the car industry based on
carbon dioxide generators have made Tesla's market value exceed that of Ford and, briefly,
General Motors.
But some of the employees doing their job with robots complain of the giant pressure
they are subjected to, which they attribute to Musk's aggressive production targets. Since 2014,
ambulances have been called over 100 times for workers who have suffered fainting, dizziness,
loss of consciousness , abnormal breathing and chest pain, according to data from the Guardian.
Other hundreds of requests were for injuries and various medical problems. Musk also said that
Tesla should not be compared to other US automakers and that its stock market value of over $
50 billion is not worth it .
Musk's approach is different from that of 15 former and current employees of Tesla's auto
factory, who talked about the culture of high hours worked, intense pressure, sometimes through
pain and injuries, to meet the ambi tious production targets of the CEO .
"I saw a worker who fainted, fell on the floor like a pancake and broke his face. They sent
us to work around him while he was sitting on the floor, "said Jonathan Galescu, production
technician at Tesla. Another worke r, Richard Ortiz, spoke admiringly about the factory's high –
tech technology, but added that everything looks like the future, but not the employees. Tesla
seems to be at the intersection of a technological start -up, unlimited by the rules of the old
econom y, and a producer who needs to make physical goods.
The controversy is evident in its automaker, where Musk wants to reach 500,000 cars by
2018 (a 495% increase over 2016), which depends on the work of thousands of workers and
futuristic robots. Elon Musk launched Tesla as a kind of startup for applications and did not
realize it was not just about typing on the computer, one of the production workers said.
Tesla's production practices were the most dangerous in the first years of activity, when
the inciden ce rate was above the industry average in 2013 -2016. According to the latest data, this
rate was in the first months of 2017 with 32% better than the average for the auto industry,
slightly above this average in 2016. The company explained that the improve ment took place

30
following the decision to establish a third exchange, to create a team of experts in ergonomics
and to strengthen the teams safely.
Musk said security is essential to the company. "It's incredibly painful and fake that
someone says I do not care," said Tesla. He added that at the beginning of 2016 he slept on the
factory floor in a sleeping bag. "I knew people were hard, working hard, in difficult jobs. I
wanted to work more than them, several hours. Because that's what I think has to make a
director. We are doing this because we believe in a sustainable energy future, we are trying to
accelerate the adoption of clean transports and clean energy production, not because we want to
enrich ourselves, "Musk said.
The Tesla workers who spoke to th e Guardian share their pride and enthus iasm for the
company's mission. He also expressed general disappointment about working conditions and
injuries that could have been avoided. Others have described repeated stress -related injuries
linked to the long w orking schedule. Before Tesla reduced his working day schedule, in October
2016, workers were working in shifts for 12 hours, six days a week. Tesla said the change was a
success, resulting in a 50% reduction in the number of hours worked over the program.
Meanwhile, Tesla's production has increased every quarter. In the first three months, the
factory produced 25,000 cars, a record for Tesla. To meet Musk's goal, production should
increase fivefold.

31
CRITICAL ANALYSIS OF THE CURRENT SITUATION – RELATED TO THE CHOSEN
SUBJECT

Tesla redefines the automotive industry from a technological point of view. 100% electric
cars produced by the company already have an impact on the public and among competitors.
Notable performance, state -of-the-art technology, elegance, outstanding experience plus zero
emissions are amongst the Tesla models. But equally important, Tesla redefines the automotive
industry from the point of view of its business model and strategy.
Tesla will launch Model X at the end of September 2 015. It is an SUV, Roadster's third
product, a sporting model released in March 2008 and Model S, a luxury sedan launched in June
2012. Customers are delighted, analysts Are enthusiastic, investors are roaming around the
company. All of this projects a bea utiful image about the company and its products, but that does
not mean there are no difficulties either. Tesla is a pioneer in the electric car industry, and the
evolution from a good idea to commercial and financial success is plagued by countless
obstac les.
But there are two very positive aspects that give us hope about the future success of the
company. The first is the ability of Tesla's technical and managerial team to use and develop new
technologies in many areas to overcome the classic barriers to desig ning and building a car. The
second is represented by the innovations in the company's business model – the different self –
respecting approaches that Elon Musk, the CEO of the company and his colleagues have thought
and implemented or are about to do. Let' s review the most important.
Mission and strategy – Tesla's mission is "to accelerate the emergence of sustainable
transport through the widespread, convulsive, irresistible, and as soon as possible possible sale of
electric cars." In a recent statement, E lon Musk refines this definition and says the company's
mission is to transform how electricity is produced and used, especially in the transport sector.
In order to fulfill its mission, Tesla has developed a strategy in several steps that includes
the suc cessive launch of downwardly priced models. First was the Roadster, the sports model
launched in March 2008 and whose starting price in 2010 was about 109,000 USD. Until
December 2012, Tesla produced and sold 2450 copies. In June 2012 was launched Model S, a

32
luxury sedan with a starting price of 75,000 USD. Until June 2015, Tesla sold 75,000 Model S
cars. Model X, an SUV will be launched in September 2015. The basic version will be only $
5,000 more expensive than the basic version of Model S. Follows Model 3 to be Presented to the
public in 2016 and whose production will begin at the end of 2017. The starting price of a Model
3 will be about 35,000 USD and will be a high volume product. According to company officials,
Model 3 will be a car comparable to Aud i A4, BMW 3 Series and Mercedes C Class, but will
have a distinctive design.
This strategy is designed to support:
– development and testing of new power -based driving technologies;
– their transposition into production;
– achieving economies of scale from the optimization of manufacturing processes;
– the development of production capacities for a large number of vehicles;
– Covering the initial costs of introducing new technologies and entering the market by
selling more expensive products.
Batteri es – the key to competitiveness – An important element in terms of machine
performance, travel autonomy and cost is the electric battery. The question faced by Tesla's
specialists and management was how to lower the price of batteries. The obvious answer is
simpl e and inexpensive technology and a large production / sales volume that will lower the cost
per unit. Tesla will do this not by matching the number of batteries produced with the number of
vehicles produced, but by using batteries in a related field: produ cing, storing and using
electricity.
On May 1, 2015, Elon Musk announced the launch of Tesla Energy and its first two
Powerwall and PowerPack products for storing electricity in two types of applications: individual
(low power) and commercial (high power). Powerwall and Powerpack will store the energy
produced by various unconventional installations (solar panels, wind turbines, etc.) and will thus
combine the curves of variable energy production and exploitation to allow continuous use. To
produce these ba tteries, Tesla started the construction of a factory called Gigafactory in the

33
beginning of 2015, a $ 5 billion investment. The annual capacity of this plant will be equivalent
to the production of batteries for 500,000 electric vehicles. But for the comin g years, this
capacity will be shared between the energy and the automotive sectors. There is information that
Tesla has plans to expand battery production due to the already large demand.
Low transport cos ts – Tesla batteries can be charged in the classic al electricity network at
a very low cost, but the disadvantage is that the charging time is high. However, loading at
home, in the garage, overnight, or at the company's premises works very well. The cost to go
40km with the P90D (the most powerful) is $ 1.08, or about £ 11 / 100Km. The question is what
we do when we are on the road. Tesla has developed a network of charging stations called
Supercharge. An extra 270 km of autonomy can be provided in 30 minutes, and a total charge of
the battery is done wit hin 75 minutes (for the 85KW model). At the beginning of September
2015, there were 509 stations around the world, with a total of 2871 loading points. The network
was in full swing in the US, Europe and Asia and started from the idea of first covering t he main
car corridors. As time passes, the number of stations increases and drivers have more options for
loading. Note that Supercharge is free of charge for customers who travel long distances.
Tesla is currently testing the idea of temporarily changin g batteries at a cost of $ 60 -80
depending on their type. Long -distance drivers will have the option of changing the exhausted
batteries with the others loaded. The battery change time is 3 minutes. Swapping Stations will be
built in or near Supercharge ch arging stations. A person changing the batteries can take over the
original ones when he or she returns from the trip or can get them at home for a transport cost.
Also, a customer can opt to permanently change the original batteries with some more
perform ance, he can move to the next level of power and efficiency of the batteries when it is
available. Tesla's estimate is that technological progress makes it possible to make batteries more
efficient at a rate of 5% per year. This means the gradual increase in travel autonomy and
machine performance.
A great experience – Another innovation of Tesla concerns the channels of promotion and
distribution. Tesla models are displayed and sold in their own showrooms, located in malls. This
allows for a very good expo sure to a large number of people, but also a great information and

34
purchasing experience, in line with the company's promise. Distribution costs are also lower
because it eliminates intermediate firms and investments in dedicated spaces.
The company does n ot spend money on advertising preferring to invest in the most
important thing, namely product research and development. The launch of the new models takes
place in the context of some highly publicized event presentations. Instead, there is a very
enthusi astic community of customers and potential customers who communicate intensely
through the Internet and social channels. An interested person in the S model, for example, can
find out more about the product and about the buying and using experiences of cus tomers around
the world.
With regard to maintenance and service activities, Tesla operates an own service center
network. Electrical technology reduces maintenance costs for the user and also reduces the scale,
complexity and cost of services. The company also has mobile service units that move to the
customer's location and are capable of performing many operations of checking, intervening, and
updating software programs that manage the various components of the machine. As a matter of
fact, the strength o f Tesla vehicles is that they can become more performing over time as the
installed software is upgraded and updated "by air".
Tesla Motors has demonstrated that a well -established industry with a long tradition, such
as the automotive industry, can be rev olutionized through both technology innovation and
business modeling. Tesla is a new company, only 12 years old, but has already managed to seed
the seeds of radical changes and long -term profound consequences in the industry in which it
operates and in a few related industries such as energy. The future of passenger and electric
transport looks a lot more promising because of the people in Tesla who aim and manage to do
special things for the world today and tomorrow.13
Elon Musk inherited from Steve Jobs the title of the most admired CEO, and his electric
car company stole the crown of Apple's creativity. Here's a trip into the most innovative
company in the world.
The first thing you notice when you step on the production line of Tesla Motors is robots.
With a bright red 2.5 meters tall, the robots, who seem to come from the Transformers, crawl

13 Source of the article: www.teslamotors.com, www.bloomberg.com, www.wikipedia.org, www.youtube.com.

35
over each Model S Sedan, making their way through the Fremont, California factory located in
the east, Conformist Silicon Valley. Up to eight robots work at the sa me time on a single S –
Model in a perfect synchronization, each realizing around five tasks: welding, ripping, grabbing
and walking various components, bending metal and installing components. Henry Ford and the
next generation of automotive industry expert s would consider this strategy ineffective – each
robot would have to carry out a load one by one before transferring the other Transformer
machine.
It's a $ 3 billion criticism to be more accurate. This was the decline in the company's
market value in ea rly August, after Tesla reduced its sales forecast by 10% to 50,000 vehicles per
year, motivating the robust process by which robots are learning to work on Model S, And the
new Model X SUV. "The X model raises various challenges in its construction, being perhaps
the most difficult to build a car in the world. I do not know what could be harder, "says Elon
Musk, the founder and general manager of Tesla, who has the same roles for Space X.14
But neither the delays nor the money spent (1.5 billion dollars in just the last 12 months)
did not distract Musk. He just wants to focus his attention on building the best car in the world,
and S model may well attribute that merit. An all -electric vehicle that can provide up to one
week of autonomy for one load from an y free solar -powered charging station. He picks up
hundreds of kilometers per hour in less than three seconds, faster than any other four -door
limousine in the world, being the safest car in his class. You can order it online and get it at the
door, get wi reless notifications about its updates or maintenance alerts before something bad
happens. In addition, it's beautiful. Door handles open as you approach and then fold for better
aerodynamics. And you do not have to believe that word: Consumer Report has c alled it the best
car on the market in the past two years. These are the superlatives that raise Tesla Motors in
Forbes' top most innovative companies after the first year that we had enough financial
information about the company to include it in the rank ing. The word "innovative" always
follows Tesla. For several years, I studied the phenomenon of "disruptive" innovation, identified
by Clayton Christensen at Harvard Business School in the late 1990s. I quantified it based on the
differences between the pu blic market value of a company and the intrinsically measurable value
of that business – an innovative bonus if you want. Despite the buzz – we're trying to exclude this

14 Source for the article: Jeff Dyer, Hal Gregersen and Nathan Furr in Forbes

36
when calculating the innovation premium – we were a little bit confused by the success of the
company's success. Unlike the most powerful classical innovations, like its PCs, or in the car
industry, cheap Japanese import models, Tesla did not follow the classic route of lowering prices
and focusing on price -sensitive customers at first. It does not follow non -consumption, that is,
customers who usually do not. Tesla cars look and drive just like other cars, they use the usual
infrastructure, and much of their product innovation is geared around one thing: the propulsion
system.
All of this does not fit into the usual template to be considered a disruptive business in the
low-end category, where Tesla would play well. Not even Musk was sure of success at first. "I
did not ask for outside money for Tesla and Space X, because I thought they wou ld fail," he says.
But Tesla turned out to be another type of innovation, a more exclusive version.
Disruptive innovations in the high -end area are difficult to imitate quickly. In relation to
the essential attributes, innovative products in this category outweigh the already existing market
offer from the very beginning. They sell at a premium price instead of calling for discounts and
have as target audience the most profitable users. If you watch big companies, you can see as
examples: The Apple iPod ha s surpassed the Sony Walkman, Starbucks's sophisticated
atmosphere and coffee has replaced local cafés; Dyson vacuum cleaners now have a solid market
share; Garmin GPS Garmin Watches have taken a great deal of business from traditional
products. Traditiona l operators did not react quickly enough, and innovators stormed the market.
Tesla has built the entire company around this idea. The S and X models will be followed
in 2017 by a cheaper model 3, a $ 35,000 Tesla for ordinary people if everything goes acco rding
to plan. And despite the fact that Tesla has abandoned the idea of profit this year, investors are
still in the queue. Musk has spent $ 5.3 billion of equity and loans on Tesla since 2010, each
round being increasingly overpresented by investors, i ncluding a $ 650 million secondary offer
in mid -August, largely to Complete his giant battery production plant in the Nevada desert. "The
availability of markets to support the company with various funding structures makes me think
that everything will be fine, eventually, given that the model will prove viable," says Jacob
Cohen, senior associate at MIT Sloan Shool Of Management. To create a car that looks so
different, Musk designed an equally different team and procedures, which we can call the Musk
meth od.

37
PERSONAL RECOMMENDATION FO R POSSIBLE IMPROVEMENTS

The following chapter despribes the similarities between the management of Tesla and
Apple, as Elon Musk is considered the secont Steve Jobs.
From a fundamental point of view on February 12, 2015, the company reported an EPS of
-0.48 usd / share declining by 420% on T4 2014 . Analyst expectations (0.15 usd / share). For
2015, analysts estimate revenue growth of 217% over the previous year, and for the next five .
Nor estimate an average revenue growth of 24% / year. From a technical point of view, the share
price resisted again at the support of 188.7 usd / share, the indi cators are in the oversold area.
Are likely to come back from this level toward the resistance of 220 usd / share.15

Img. 1: TSLA's Revenue Growt h in the period 2008 – 2016

On October 6, 2011, when Steve Jobs died, shares stopped trading, and then declined
slightly after the opening of US scholarships. The decrease was 0.9%, compared to the previous
session, Apple's action reaching $ 374 .88.

15 Translation from
https://www.brkfinancialgroup.ro/uploads /tx_itanalizacalitativa/Opiniile_Traderilor_17.03.2015.pdf

38

Img. 2 Apple’s economic growth between 2004 – 2016

If in 2010 the company had $ 65.2 billion in revenue, the company earned $ 108 billion in
2011, largely being Jobs's merit, somewhat contributing to Cook. In 2012, Apple shares went up
64%. In the first months of this year, the company's shares had a very good performance in
March, surpassing the $ 600 price tag following the launch of iPad 3. Instead, in April, mobile
phone and tablet maker shares fell 9% , As investors were increasingly worried. A pple's share of
an important event in the IT industry (in San Francisco in June) started the growth engine for the
company. So, on August 20, Apple beat the record of the largest stock market capitalization. The
price of one share has reached 664.75 dollar s, which, given the number of market shares, leads to
a total capitalization of 623.14 billion dollars. 1.330% is the magnitude of the increase in Apple
shares registered over the period 2005 -2012.
The timing of viability should be around 2017, analysts sa y at Credit Suisse, when Tesla
expects to show its first significant cash flow or operating profit after capital spending. The other
values look perfect. The company is on track to earn $ 5.5 billion in revenue this year, up 54%
from 2014. Its shares ros e 15 times since 2010, from the initial public offering to a market
capitalization of 33 billion dollars today.
Many car companies are trying to get value through an established product. Working with
a radical uncertainty, Tesla has a process that is based on one criterion: speed. Like the big
carmakers, Tesla carries out bodywork, but also its own batteries and engines in the Fremont
assembly plant. He even manufactures his own plastic plastic carcasses – a component often

39
outsourced – because the supplier s (unfortunately for them) tried not to send Tesla to their top
teams, so it took them for months To understand the design line.
Musk's team selects candidates according to their ability to learn under certain conditions.
Every new employee – no matter whi ch department – must have demonstrated his ability to
resolve critical situations. "We always look for acquired skills in a CV," says Musk. "Success has
many sources, but we try to find out what it has caused. I do not care if they graduated from a
college or just high school. "
During the interview with Musk, he was convinced that this company would change the
world. Learning in an environment of uncertainty implies a willingness to admit mistakes and
move quickly, rather than concealing errors and failing to act for fear of recognizing failure. In
fact, obsessive attempts to avoid failures can lead to the greatest failure, to miss the great
opportunity.
When Model S was introduced in June 2012, it came with a "smart" suspension system
that adapts the car f or highway speed for better aerodynamics. One day, a Model S owner drove
off the highway and hit a parked caravan. It perforated the body and the battery over with
incredible force. No one was injured; The car alarm system told the passengers to evacuate t he
car before firing. Tesla quickly added a titanium protection shield to all the new cars and made
these improvements for the existing ones free of charge.
Most carmakers build a single design for their production lines to minimize costs, and
this design remains unchanged for many years. Tesla's manufacturing engineers continuously
change the plant structure to learn as much as possible. In the meantime, as T esla "squeezes" all
the uncertainty from the development and manufacturing process, it will turn to a more familiar
arrangement, a process that is already beginning to clash when it comes to the second and third
production lines S and X models. Tesla learn ed early on the benefits of staying agile, at
Roadster, when in an effort to cut costs, he tried to establish a global supply chain similar to the
big carmakers. Tesla was not prepared for this, the fact that it had dispersed factories leading to
major coo rdination problems. "Of course I did not succeed in the first attempt, not even close,"
says co -founder and technical director J.B. Straubel. "But in this way, we learn." Stakes rise
when Tesla introduces the future Model 3 on another production line. If a single component does

40
not work well, the entire factory is hitting an impediment. FiatChrysler, for example, postponed
the launch of the popular Jeep Cherokee for nearly six months due to problems with the new
nine-speed transmission.
Tesla's innovation p rocess is neither easy nor comfortable. A recent biography of Musk
tells us the story ahead of the launch of the original Roadster when Musk asked the already
overworked employees to shoot hard. "But we have not seen our families for weeks," said an
employ ee, and Musk's answer was, "You'll have enough time to see your family when we go
bankrupt." Musk does not even know the holidays when Was to die because of malaria after a
trip to Brazil and South Africa in 2000. "This is my holiday lesson: The Vacation k ills you."
The Tesla team manages to achieve almost impossible goals not only because it works
much more than others but also because it has an effective way to solve complex problems. "To
analyze the situation I use physics," says Musk. "Reduce things to the basic principles or
fundamental truths of a specific area, and leave here. Then you apply logic to axiomatic
principles to estimate what is really possible and what is seen as possible. "These methods lead
to innovative solutions that Tesla's executive team did not think possible.
"Elon challenges everyone to give their best. I know it sounds like a stereotype, but I
think it works from a slightly unusual angle, which is quite uncomfortable for most, but the
results are far from convincing. If they caus e people to work hard, they can do much better than
they think they can. Most bosses do not want to do that, "says Straubel. Doug Field, vice
president of engineering, adds: "We have confidence; It's like jumping out of the plane and
building our parachute as we land. "
This is the necessary approach when you are transitioning from a one -car company to one
that produces multiple machines on a large scale, and at the same time builds a gigantic indoor
energy storage business. This is the Musk method.

41
CONC LUSIONS

The following chapter is visualizing the initial premises, the conflictual situation and
personal resolution in relation with the research.
Firstly, I want to point out that this task was as difficult as beautiful and pleasant to
fulfill. I had chosen this domain because I consider that the economy, nowadays, is a very w ell-
known area, is a modern subj ect that affects us all.
Taking everything into account, I can trully say that “the creative economy, business
innovation and entrepreneurship” is an economic field which should be explored more because
the knowledge skills which I had learn are numerous and im portant, such as:
 knowledge of the basic concepts used in economic disciplines;
 knowledge of information technology bases and operating syste ms used in the processing
and analysis of economic,
 ability to identify and structure of economic and financial operations and activities;
 ability to develop business plans for activities in the fields of trade, tourism and services;
 ability to participate in different stages of a qualitative and quantitative marketing
research
 ability to develop and implement policies and strategies of marketing (product, price,
distribution and promotion)
 use different ways of written and oral communication, including at least one to two
foreign languages (English, French);
 use of information technology for business activities and goals;
 providing information to substantiate their businesses, strategies and processes in terms
of efficiency needed to fulfill the objectives pursued.
Considering everything said so far , I can really affirm that, even if this was a difficult
assignment, I had enjoyed my time writing about it and doing some research about this economic
field.

42
BIBLIOGRAPHY

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