This document analyzes the competitive environment within the global mass-market automobile industry strategic group. It discusses the challenges facing European mass-market auto manufacturers like Renault, Peugeot and Citroen due to overcapacity and tougher competition from German brands expanding into lower market segments. It also examines the strategies of companies like Toyota, Volvo, and Skoda to differentiate themselves and maintain cost leadership. Finally, it provides additional insights from an institution-based view, discussing how formal institutions like government policies and regulations have impacted automakers' ability to internationalize through acquisitions and investments.
Mc Kinsey & Company - The road to 2020 and beyondLionel Martins
The document discusses trends in the global automotive industry and projections out to 2020. It finds that while overall profits for automakers have recovered since the financial crisis, their sources have shifted significantly. Profits are increasingly coming from emerging markets like China rather than Europe, Japan, and South Korea. By 2020, emerging markets are expected to account for about two-thirds of total industry profits. China alone will be responsible for over half of the projected $25 billion increase in profits industry-wide by 2020. North America remains profitable but established markets in Europe and Asia will see little profit growth. The key challenges automakers face are complexity/costs, adapting to diverging regional markets, meeting digital demands, and a shifting competitive landscape.
International Competitiveness Automobile Cluster In GermanyNikunj Gupta
The automotive cluster in Stuttgart, Germany developed due to the region's strong education and technology focus, as well as government support for research. Stuttgart is home to renowned universities that supply the automotive industry with well-trained specialists. The automotive industry in Germany grew significantly after WWII and further with reunification and EU integration, driven by high domestic demand for quality products. Stuttgart pioneered the automobile with Carl Benz and Gottlieb Daimler developing the first car there in 1887. Today, the cluster includes major automakers like Daimler, Porsche, and suppliers like Bosch, and benefits from linkages to related industries like electronics, logistics, plastics, and steel.
The Chinese auto industry is facing significant changes over the next decade as it deals with evolving customer demands, competition, and new technologies. Nine major trends were identified that will impact revenues, costs and profits for automotive companies, including the acceleration of sustainable mobility solutions driven by the Chinese government, increasing diversity of customer demands, and new entrants bringing innovative business models focused on connectivity and electrification. To succeed, automotive companies will need to carefully evaluate their investments in China to develop a strong local presence while also protecting their global competitive position in the face of these shifts.
This document provides a marketing report on the UK new car market. It examines the market characteristics and shares of Ford and Vauxhall. The report outlines its objectives to review the market, promotional mix theory, and application of theory to Ford and Vauxhall. It utilized secondary research, primarily a 2011 Mintel report, to analyze the market and companies' use of advertising, sales promotions, and personal selling. The report concludes with strategic recommendations for Ford and Vauxhall based on its findings.
The document discusses the state of the global automotive industry, focusing on challenges in the United States, Germany, and United Kingdom. It notes that major US automakers GM and Chrysler were on the brink of bankruptcy as sales declined significantly. This has impacted parts suppliers and other related industries. Germany's automotive industry has faced difficulties as well but managed to remain competitive through investment in research and development. The UK automotive industry also faces challenges but remains diverse and technologically advanced, particularly in design and engineering. Overall, the automotive industry struggles have significant economic ramifications globally as car sales decline affects many related businesses and sectors.
Kotabe global competitive marketing strategy ch08jcpham
This document discusses global marketing strategies. It begins by explaining how information technology has reduced the relevance of political borders and increased global competition. It then covers developing a global strategy by assessing industry drivers of globalization and competitive structure. Next, it discusses developing a global marketing strategy that balances standardization vs. adaptation and global integration vs. local responsiveness. It also addresses regionalization of marketing strategies. Finally, it discusses using SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats when developing a competitive strategy.
This document presents a research proposal to review the marketing strategy of British Airways and assess its effectiveness. The proposal includes an introduction outlining the research questions and background on British Airways. A literature review is presented justifying the research and highlighting challenges faced by British Airways such as increased competition and economic factors. The methodology section explains that a qualitative research philosophy will be used involving semi-structured interviews and secondary data collection to analyze the marketing strategy and address the research questions.
This chapter discusses global marketing strategies and concepts. It covers the impact of information technology and global competition on firms. Global strategies require understanding global industries, competitive advantages, and interdependencies between countries and competitors. Developing effective global marketing strategies involves balancing standardization across countries with adapting to local needs. Firms must also coordinate their research and development, operations, and marketing on a global scale. The chapter concludes with discussing regional approaches to global strategies and using tools like SWOT analysis to develop competitive strategies.
Mc Kinsey & Company - The road to 2020 and beyondLionel Martins
The document discusses trends in the global automotive industry and projections out to 2020. It finds that while overall profits for automakers have recovered since the financial crisis, their sources have shifted significantly. Profits are increasingly coming from emerging markets like China rather than Europe, Japan, and South Korea. By 2020, emerging markets are expected to account for about two-thirds of total industry profits. China alone will be responsible for over half of the projected $25 billion increase in profits industry-wide by 2020. North America remains profitable but established markets in Europe and Asia will see little profit growth. The key challenges automakers face are complexity/costs, adapting to diverging regional markets, meeting digital demands, and a shifting competitive landscape.
International Competitiveness Automobile Cluster In GermanyNikunj Gupta
The automotive cluster in Stuttgart, Germany developed due to the region's strong education and technology focus, as well as government support for research. Stuttgart is home to renowned universities that supply the automotive industry with well-trained specialists. The automotive industry in Germany grew significantly after WWII and further with reunification and EU integration, driven by high domestic demand for quality products. Stuttgart pioneered the automobile with Carl Benz and Gottlieb Daimler developing the first car there in 1887. Today, the cluster includes major automakers like Daimler, Porsche, and suppliers like Bosch, and benefits from linkages to related industries like electronics, logistics, plastics, and steel.
The Chinese auto industry is facing significant changes over the next decade as it deals with evolving customer demands, competition, and new technologies. Nine major trends were identified that will impact revenues, costs and profits for automotive companies, including the acceleration of sustainable mobility solutions driven by the Chinese government, increasing diversity of customer demands, and new entrants bringing innovative business models focused on connectivity and electrification. To succeed, automotive companies will need to carefully evaluate their investments in China to develop a strong local presence while also protecting their global competitive position in the face of these shifts.
This document provides a marketing report on the UK new car market. It examines the market characteristics and shares of Ford and Vauxhall. The report outlines its objectives to review the market, promotional mix theory, and application of theory to Ford and Vauxhall. It utilized secondary research, primarily a 2011 Mintel report, to analyze the market and companies' use of advertising, sales promotions, and personal selling. The report concludes with strategic recommendations for Ford and Vauxhall based on its findings.
The document discusses the state of the global automotive industry, focusing on challenges in the United States, Germany, and United Kingdom. It notes that major US automakers GM and Chrysler were on the brink of bankruptcy as sales declined significantly. This has impacted parts suppliers and other related industries. Germany's automotive industry has faced difficulties as well but managed to remain competitive through investment in research and development. The UK automotive industry also faces challenges but remains diverse and technologically advanced, particularly in design and engineering. Overall, the automotive industry struggles have significant economic ramifications globally as car sales decline affects many related businesses and sectors.
Kotabe global competitive marketing strategy ch08jcpham
This document discusses global marketing strategies. It begins by explaining how information technology has reduced the relevance of political borders and increased global competition. It then covers developing a global strategy by assessing industry drivers of globalization and competitive structure. Next, it discusses developing a global marketing strategy that balances standardization vs. adaptation and global integration vs. local responsiveness. It also addresses regionalization of marketing strategies. Finally, it discusses using SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats when developing a competitive strategy.
This document presents a research proposal to review the marketing strategy of British Airways and assess its effectiveness. The proposal includes an introduction outlining the research questions and background on British Airways. A literature review is presented justifying the research and highlighting challenges faced by British Airways such as increased competition and economic factors. The methodology section explains that a qualitative research philosophy will be used involving semi-structured interviews and secondary data collection to analyze the marketing strategy and address the research questions.
This chapter discusses global marketing strategies and concepts. It covers the impact of information technology and global competition on firms. Global strategies require understanding global industries, competitive advantages, and interdependencies between countries and competitors. Developing effective global marketing strategies involves balancing standardization across countries with adapting to local needs. Firms must also coordinate their research and development, operations, and marketing on a global scale. The chapter concludes with discussing regional approaches to global strategies and using tools like SWOT analysis to develop competitive strategies.
AUTOMOTIVE TYRE INDUSTRY: RESTRATEGIZING DURING PANDEMICShellyBhede
Tyre manufacturing and its distribution or service shops around the globe have adjusted to a new way of business with safety precautions in the worksite and less foot traffic as efforts to stop the COVID-19 virus spread.
ARTIFICIAL INTELLIGENCE (AI) ENABLED TRANSPORTATION - DISRUPTING AND OPTIMIZI...ANNATHOMAS89
The automotive tyre industry has had to restrategize during the COVID-19 pandemic. Tyre manufacturers and distributors have implemented safety precautions in worksites and dealt with less foot traffic. The industry is volatile and closely linked to automobile production as well as raw material availability and prices. New technology and innovation are forcing companies to rethink business models. Global supply chain disruptions and the pandemic's economic impacts have dramatically affected the tyre industry's operating margins and automotive OEM margins. The outlook for the automotive tyre sector in 2020 remains cautious with a expected over 20% fall in annual sales.
This document provides a case analysis and recommendations for Bombardier regarding its options in dealing with subsidies provided to its competitor Embraer by the Brazilian government. It analyzes three options for Bombardier: 1) urging Canada to impose trade sanctions on Brazil, 2) negotiating directly with Brazil and Embraer, or 3) having Canada match Brazilian subsidies. It ultimately recommends the second option of restarting negotiations as posing the fewest risks in terms of costs and public opposition, while still allowing the other options if negotiations fail. The analysis draws on academic literature regarding international trade, political strategies, and subsidies to support this recommended course of action.
The document discusses the increasingly globalized economic environment and factors influencing country competitiveness. It covers the rise in international trade and foreign direct investment. Major trade agreements and organizations like the WTO are examined. Emerging markets and regional economic blocs are important recent trends. Information technology is changing competition while intellectual property issues remain. Multinational corporations now hail from many countries and account for over half of global GDP.
Automotive Industry In Mexico. Segment Analysis of Luxury Carsscmsnoida5
The internationalization strategy of the luxury
car companies in México is usually performed
through direct export, since it only involves the sale
of products made by firms in their home country to
customers in other countries. But the Audi brand
is the first to build a plant in Mexico, which has
an investment of over one billion dollars and will
generate 8,000 jobs, either directly or indirectly;
currently in the second stage, which is to build
the warehouses that have the assembly plant, the
first in the country to arm luxury SUVs.
The document summarizes a study on the future of the global truck industry in 2020. It finds that while established truck makers in Western Europe, North America, and Japan face pressure from saturated home markets and economic downturn, manufacturers in emerging markets continue to see strong growth. The industry is rapidly globalizing, with makers from both established and emerging markets looking to expand internationally. The study identifies strategies for success depending on whether a company is based in established or emerging markets. It examines differences between regions and segments that will converge over time.
The document is a cover sheet and introduction for a student paper analyzing the internationalization strategy of Daimler Mercedes-Benz's automotive industry. It includes the student's name and program information, as well as a table of contents for the paper. The introduction provides background on Daimler, outlines Lafley and Martin's Playing to Win model that will be used to structure the analysis, and previews the key questions that will be answered about Daimler's strategy according to the model's framework.
The document discusses the impact of the Covid-19 pandemic on the automotive sector in Central and Eastern European (CEE) economies. It notes that while the automotive industry plays an important role in CEE economies, the pandemic hit the sector hard with declines in car production and sales. However, the recovery was initially fast. Going forward, car demand is expected to remain low due to anticipated slow economic growth in major trading partners in Europe. This poses risks to automotive supply chains in CEE and to attracting further investment if profitability declines. Policy priorities to support the sector include improving skills, access to infrastructure, and helping domestic firms connect with multinational enterprises.
2015 China Auto Marketing and Communication ReviewHavas
Since 2002, China has been the fastest growing automotive industry in the world. Numerous international
carmakers collaborate with Chinese counterparts to participate in the atrocious race on performances and
technologies, hoping to secure a larger share in this lucrative market. Facing the growing governmental
restrictions and the shrinking market demand, it is time for carmakers to enter the pit for strategic
adjustments and to get ready for the next race to begin.
As a leading global automotive marketing agency, Havas Worldwide has assisted
many international and Chinese carmakers to grow steadily and rapidly in China. In this report, we have
forecasted the 2015 trend in Chinese automotive industry based on our professional insights from market
and communication in 2014. As the first agency to devise trend forecasts exclusively for the automotive
industry, we wish to assist carmakers to get ready and win the next race.
Rolls-Royce Motor Cars Ltd (RR) manufactures and distributes luxury automobiles globally. The document analyzes how political, economic, social and technological factors impact RR. It finds that the Conservative party best supports RR's growth through tax cuts and reduced regulations to allow expansion. However, environmental policies from other parties pose challenges to RR's carbon footprint. Intercultural communication is also vital as 90% of RR's sales are international.
Industry report-trends-in-china's-automotive-component-manufacturing-industryIpsos France
L’industrie des composants automobiles en Chine devrait atteindre une croissance annuelle de 20% d’ici cinq ans grâce à la demande croissante en voitures neuves et du bon développement du marché de l’occasion. Le marché secondaire deviendra d’ailleurs le principal débouché pour les pièces automobiles, l'âge moyen des véhicules ne cessant d'augmenter et le nombre de voitures en circulation en Chine dépassant dorénavant les 100 millions.
En parallèle, le marché chinois de la contrefaçon de pièces automobiles – le plus important au monde évalué à 40 milliards de dollars – ne fera également qu'accroître avec le développement du marché légal.
87 chapter 2 e commerce fundamentalsnote that covisint (waman341480
1. The case study describes the history and growth of the social media platform Facebook from its launch in 2004 for Harvard students to becoming available worldwide.
2. An early intellectual property dispute arose over whether Facebook copied source code from another social media platform.
3. Facebook received investments in 2006 and 2007 that helped fuel its international expansion while also dealing with privacy concerns over user data.
4. The introduction of new features like News Feed prompted feedback from users about balancing new functionality with disruption to existing habits on the platform.
Car seat covers market 2019 segmentation, application, technology, opportunit...GeetaBajaj4
The report titled “Global Car Seat Covers Market” has covered and analyzed the potential of Worldwide Car Seat Covers Industry and provides statistics and information on market dynamics, growth factors, key challenges, major drivers & restraints, opportunities and forecast.
This document provides information for a group presentation on international business. It discusses the objectives of the presentation and tutorial program. It provides topics for the group presentation on regional economic integration and the implications of a single currency in the EU. It defines key terms in foreign exchange and the implications of exchange rate movements for managers of international businesses. It includes sample questions that could be addressed and links to relevant videos.
This document provides a summary of a World Bank policy research working paper on global value chains. The paper aims to provide a framework and tools to measure countries' performance in global value chains and provide guidance on how countries can join, maintain participation in, and move up global value chains. Global value chains have become an important source of opportunities for trade, competitiveness, and development. The paper analyzes what global value chains are, why they are important, and provides context on how production has increasingly fragmented across borders through various organizational models like outsourcing and offshoring.
New frontiers-of-the-automobile-industry-exploring-geographies-201-516-1-299Helenise1
This document discusses strategies adopted by Fiat Chrysler Automobiles (FCA) to improve quality and deal with the automotive industry crisis. It summarizes:
1) FCA has focused on producing more premium and luxury models like Alfa Romeo, Ferrari, Maserati, and Jeep to improve quality and compete internationally.
2) FCA has also aimed to reduce costs through strategies like platform sharing, plant coordination, and eliminating waste using production systems like World Class Manufacturing.
3) However, changing industrial relationships in Italy to be more like the US has been challenging due to clashes between old and new contractual systems for unions and manufacturers.
The document provides an overview of how economics has affected the automobile industry. It analyzes the industry using Porter's Five Forces model, discussing factors like potential entrants, supplier power, buyer power, threat of substitutes, and industry rivalry. It also examines demand shifts, elasticity, price discrimination, and bargaining power in the industry. The analysis finds that while buyers have significant power, barriers to entry are high. Supplier power is low, and competition from substitutes and rivals is strong. Demand for automobiles is elastic and responsive to price changes.
Reconfiguration of supply_chain_at_volkswagen_group_to_develop_globalnajibah04
Volkswagen has reconfigured its global supply chain to adopt modular production concepts. It began with three stages of modularization: 1) designing products for logistics, 2) collaborating on shared platforms at the product group level, and 3) modularizing both products and production processes. This allowed Volkswagen to standardize components while still offering product differentiation. It experimented successfully with a "modular consortium" model in Brazil. These changes helped Volkswagen become the second largest automaker globally and positioned it to potentially overtake Toyota, the industry leader, by taking advantages gained from modularization and supply chain integration.
The 10 Commandments of Globalization - Wharton Magazinegiorgiomoise
The document outlines 10 commandments of globalization based on the author's 25 years of experience working with multinational companies expanding into global markets. It provides examples of companies that succeeded or failed in China based on their adherence to the 10 commandments. Commandment 1 is to globalize, as companies that did not were suffering. The document analyzes various companies' performance in China in relation to how well they followed the 10 commandments. It concludes the commandments provide a useful framework but that their importance varies by industry and company size.
Economic Report Africa 2014 feature story SOUTH AFRICADr Lendy Spires
A new wave of investments is coming into South Africa's automotive industry, with Toyota investing $33.2 million in a new parts warehouse and assembly line in Durban, and German auto company Friedrich Boysen putting $16.4 million into a new plant. The industry accounts for 30% of South Africa's manufacturing output and contributes significantly to GDP and exports. However, concerns remain about the growing imports of vehicles from Asia and Europe.
El documento describe diferentes modelos de papeleras fabricadas con materiales como polietileno, acero o aluminio. Ofrece una variedad de diseños funcionales y resistentes en diferentes capacidades, fabricados bajo estrictas normas de calidad para su uso en la recolección de residuos de manera eficiente.
El documento habla sobre las redes sociales y los Tratados de Libre Comercio (TLC). Explica brevemente qué son las redes sociales y los TLC, y luego argumenta que las redes sociales pueden ayudar a aprovechar mejor las oportunidades que brindan los TLC, facilitando la comunicación, colaboración y actualización para mejorar los procesos de enseñanza-aprendizaje y las relaciones comerciales.
AUTOMOTIVE TYRE INDUSTRY: RESTRATEGIZING DURING PANDEMICShellyBhede
Tyre manufacturing and its distribution or service shops around the globe have adjusted to a new way of business with safety precautions in the worksite and less foot traffic as efforts to stop the COVID-19 virus spread.
ARTIFICIAL INTELLIGENCE (AI) ENABLED TRANSPORTATION - DISRUPTING AND OPTIMIZI...ANNATHOMAS89
The automotive tyre industry has had to restrategize during the COVID-19 pandemic. Tyre manufacturers and distributors have implemented safety precautions in worksites and dealt with less foot traffic. The industry is volatile and closely linked to automobile production as well as raw material availability and prices. New technology and innovation are forcing companies to rethink business models. Global supply chain disruptions and the pandemic's economic impacts have dramatically affected the tyre industry's operating margins and automotive OEM margins. The outlook for the automotive tyre sector in 2020 remains cautious with a expected over 20% fall in annual sales.
This document provides a case analysis and recommendations for Bombardier regarding its options in dealing with subsidies provided to its competitor Embraer by the Brazilian government. It analyzes three options for Bombardier: 1) urging Canada to impose trade sanctions on Brazil, 2) negotiating directly with Brazil and Embraer, or 3) having Canada match Brazilian subsidies. It ultimately recommends the second option of restarting negotiations as posing the fewest risks in terms of costs and public opposition, while still allowing the other options if negotiations fail. The analysis draws on academic literature regarding international trade, political strategies, and subsidies to support this recommended course of action.
The document discusses the increasingly globalized economic environment and factors influencing country competitiveness. It covers the rise in international trade and foreign direct investment. Major trade agreements and organizations like the WTO are examined. Emerging markets and regional economic blocs are important recent trends. Information technology is changing competition while intellectual property issues remain. Multinational corporations now hail from many countries and account for over half of global GDP.
Automotive Industry In Mexico. Segment Analysis of Luxury Carsscmsnoida5
The internationalization strategy of the luxury
car companies in México is usually performed
through direct export, since it only involves the sale
of products made by firms in their home country to
customers in other countries. But the Audi brand
is the first to build a plant in Mexico, which has
an investment of over one billion dollars and will
generate 8,000 jobs, either directly or indirectly;
currently in the second stage, which is to build
the warehouses that have the assembly plant, the
first in the country to arm luxury SUVs.
The document summarizes a study on the future of the global truck industry in 2020. It finds that while established truck makers in Western Europe, North America, and Japan face pressure from saturated home markets and economic downturn, manufacturers in emerging markets continue to see strong growth. The industry is rapidly globalizing, with makers from both established and emerging markets looking to expand internationally. The study identifies strategies for success depending on whether a company is based in established or emerging markets. It examines differences between regions and segments that will converge over time.
The document is a cover sheet and introduction for a student paper analyzing the internationalization strategy of Daimler Mercedes-Benz's automotive industry. It includes the student's name and program information, as well as a table of contents for the paper. The introduction provides background on Daimler, outlines Lafley and Martin's Playing to Win model that will be used to structure the analysis, and previews the key questions that will be answered about Daimler's strategy according to the model's framework.
The document discusses the impact of the Covid-19 pandemic on the automotive sector in Central and Eastern European (CEE) economies. It notes that while the automotive industry plays an important role in CEE economies, the pandemic hit the sector hard with declines in car production and sales. However, the recovery was initially fast. Going forward, car demand is expected to remain low due to anticipated slow economic growth in major trading partners in Europe. This poses risks to automotive supply chains in CEE and to attracting further investment if profitability declines. Policy priorities to support the sector include improving skills, access to infrastructure, and helping domestic firms connect with multinational enterprises.
2015 China Auto Marketing and Communication ReviewHavas
Since 2002, China has been the fastest growing automotive industry in the world. Numerous international
carmakers collaborate with Chinese counterparts to participate in the atrocious race on performances and
technologies, hoping to secure a larger share in this lucrative market. Facing the growing governmental
restrictions and the shrinking market demand, it is time for carmakers to enter the pit for strategic
adjustments and to get ready for the next race to begin.
As a leading global automotive marketing agency, Havas Worldwide has assisted
many international and Chinese carmakers to grow steadily and rapidly in China. In this report, we have
forecasted the 2015 trend in Chinese automotive industry based on our professional insights from market
and communication in 2014. As the first agency to devise trend forecasts exclusively for the automotive
industry, we wish to assist carmakers to get ready and win the next race.
Rolls-Royce Motor Cars Ltd (RR) manufactures and distributes luxury automobiles globally. The document analyzes how political, economic, social and technological factors impact RR. It finds that the Conservative party best supports RR's growth through tax cuts and reduced regulations to allow expansion. However, environmental policies from other parties pose challenges to RR's carbon footprint. Intercultural communication is also vital as 90% of RR's sales are international.
Industry report-trends-in-china's-automotive-component-manufacturing-industryIpsos France
L’industrie des composants automobiles en Chine devrait atteindre une croissance annuelle de 20% d’ici cinq ans grâce à la demande croissante en voitures neuves et du bon développement du marché de l’occasion. Le marché secondaire deviendra d’ailleurs le principal débouché pour les pièces automobiles, l'âge moyen des véhicules ne cessant d'augmenter et le nombre de voitures en circulation en Chine dépassant dorénavant les 100 millions.
En parallèle, le marché chinois de la contrefaçon de pièces automobiles – le plus important au monde évalué à 40 milliards de dollars – ne fera également qu'accroître avec le développement du marché légal.
87 chapter 2 e commerce fundamentalsnote that covisint (waman341480
1. The case study describes the history and growth of the social media platform Facebook from its launch in 2004 for Harvard students to becoming available worldwide.
2. An early intellectual property dispute arose over whether Facebook copied source code from another social media platform.
3. Facebook received investments in 2006 and 2007 that helped fuel its international expansion while also dealing with privacy concerns over user data.
4. The introduction of new features like News Feed prompted feedback from users about balancing new functionality with disruption to existing habits on the platform.
Car seat covers market 2019 segmentation, application, technology, opportunit...GeetaBajaj4
The report titled “Global Car Seat Covers Market” has covered and analyzed the potential of Worldwide Car Seat Covers Industry and provides statistics and information on market dynamics, growth factors, key challenges, major drivers & restraints, opportunities and forecast.
This document provides information for a group presentation on international business. It discusses the objectives of the presentation and tutorial program. It provides topics for the group presentation on regional economic integration and the implications of a single currency in the EU. It defines key terms in foreign exchange and the implications of exchange rate movements for managers of international businesses. It includes sample questions that could be addressed and links to relevant videos.
This document provides a summary of a World Bank policy research working paper on global value chains. The paper aims to provide a framework and tools to measure countries' performance in global value chains and provide guidance on how countries can join, maintain participation in, and move up global value chains. Global value chains have become an important source of opportunities for trade, competitiveness, and development. The paper analyzes what global value chains are, why they are important, and provides context on how production has increasingly fragmented across borders through various organizational models like outsourcing and offshoring.
New frontiers-of-the-automobile-industry-exploring-geographies-201-516-1-299Helenise1
This document discusses strategies adopted by Fiat Chrysler Automobiles (FCA) to improve quality and deal with the automotive industry crisis. It summarizes:
1) FCA has focused on producing more premium and luxury models like Alfa Romeo, Ferrari, Maserati, and Jeep to improve quality and compete internationally.
2) FCA has also aimed to reduce costs through strategies like platform sharing, plant coordination, and eliminating waste using production systems like World Class Manufacturing.
3) However, changing industrial relationships in Italy to be more like the US has been challenging due to clashes between old and new contractual systems for unions and manufacturers.
The document provides an overview of how economics has affected the automobile industry. It analyzes the industry using Porter's Five Forces model, discussing factors like potential entrants, supplier power, buyer power, threat of substitutes, and industry rivalry. It also examines demand shifts, elasticity, price discrimination, and bargaining power in the industry. The analysis finds that while buyers have significant power, barriers to entry are high. Supplier power is low, and competition from substitutes and rivals is strong. Demand for automobiles is elastic and responsive to price changes.
Reconfiguration of supply_chain_at_volkswagen_group_to_develop_globalnajibah04
Volkswagen has reconfigured its global supply chain to adopt modular production concepts. It began with three stages of modularization: 1) designing products for logistics, 2) collaborating on shared platforms at the product group level, and 3) modularizing both products and production processes. This allowed Volkswagen to standardize components while still offering product differentiation. It experimented successfully with a "modular consortium" model in Brazil. These changes helped Volkswagen become the second largest automaker globally and positioned it to potentially overtake Toyota, the industry leader, by taking advantages gained from modularization and supply chain integration.
The 10 Commandments of Globalization - Wharton Magazinegiorgiomoise
The document outlines 10 commandments of globalization based on the author's 25 years of experience working with multinational companies expanding into global markets. It provides examples of companies that succeeded or failed in China based on their adherence to the 10 commandments. Commandment 1 is to globalize, as companies that did not were suffering. The document analyzes various companies' performance in China in relation to how well they followed the 10 commandments. It concludes the commandments provide a useful framework but that their importance varies by industry and company size.
Economic Report Africa 2014 feature story SOUTH AFRICADr Lendy Spires
A new wave of investments is coming into South Africa's automotive industry, with Toyota investing $33.2 million in a new parts warehouse and assembly line in Durban, and German auto company Friedrich Boysen putting $16.4 million into a new plant. The industry accounts for 30% of South Africa's manufacturing output and contributes significantly to GDP and exports. However, concerns remain about the growing imports of vehicles from Asia and Europe.
El documento describe diferentes modelos de papeleras fabricadas con materiales como polietileno, acero o aluminio. Ofrece una variedad de diseños funcionales y resistentes en diferentes capacidades, fabricados bajo estrictas normas de calidad para su uso en la recolección de residuos de manera eficiente.
El documento habla sobre las redes sociales y los Tratados de Libre Comercio (TLC). Explica brevemente qué son las redes sociales y los TLC, y luego argumenta que las redes sociales pueden ayudar a aprovechar mejor las oportunidades que brindan los TLC, facilitando la comunicación, colaboración y actualización para mejorar los procesos de enseñanza-aprendizaje y las relaciones comerciales.
El documento define la enfermedad ocupacional como aquella causada directamente por el trabajo o la profesión de una persona, o como consecuencia de un accidente laboral, pudiendo causar desde incapacidad hasta la muerte. Explica que factores como el tiempo de exposición, concentración de agentes contaminantes, presencia de varios contaminantes y condiciones de seguridad determinan las enfermedades profesionales. Finalmente, señala algunas de las dificultades para determinar la causalidad de una enfermedad profesional.
Advanced Analytics and Data Science ExpertiseSoftServe
An overview of SoftServe's Data Science service line.
- Data Science Group
- Data Science Offerings for Business
- Machine Learning Overview
- AI & Deep Learning Case Studies
- Big Data & Analytics Case Studies
Visit our website to learn more: http://www.softserveinc.com/en-us/
7. Wikipedianischer Salon zum Thema "Creative Commons: Innerhalb und außerhalb der Wikipedia", 06. November 2014, Berlin
Aufzeichnung auf YouTube: https://www.youtube.com/watch?v=AZz1ZhxxSrQ
Este documento presenta información sobre los isómeros de la glucosa. Explica que existen dos tipos principales de isomerismo en los azúcares: el isomerismo D-L, determinado por la configuración espacial de los grupos alrededor de los átomos de carbono asimétricos, y el isomerismo aldosa-cetosa, que depende del tipo de grupo funcional (aldehído o cetona) en el carbono anomérico. También describe los diferentes métodos de representación de la estructura de los glúcidos,
Cross-border payment innovation for the caribbeanGermaine4IBIS
IBIS Management Associates, a Dutch-Caribbean based company, and Ripple are working together to provide Caribbean banks with cross-border payment solution. IBIS Management has always strived to bring operational excellence to the Financial sector, so leading the path in cross-border payment innovation is at the top of the company's list.
Este documento presenta un conjunto de problemas de física clásica destinados a estudiantes preuniversitarios. Incluye problemas de unidades, vectores, cinemática, dinámica, trabajo y energía, movimiento armónico simple, óptica y electricidad y magnetismo. Proporciona las soluciones a cada uno de los problemas de manera ordenada y gradual en complejidad. Además, incluye un capítulo sobre las fuentes documentales básicas relacionadas con la física.
Esta presentación fue presentada en el Desayuno de la Asociación Peruana de Empresas de Investigación de Mercada el Viernes 21 de Agosto del 2009 en el Hotel El Pardo (Lima-Perú).
La conferencia estuvo a cargo de Cristina Quiñones, Director Gerente de Consumer Insights EIRL, consultora especializada en la generación de insights del consumidor para la innovación de marketing. Asistieron cera de 80 particpantes de diferentes empresas comerciales y de servicios interesados en obtener capacitación en insighs del consumidor. Más información?
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El documento resume la historia del análisis de Pareto y cómo construir un diagrama de Pareto. Wilfredo Pareto observó que el 20% de las personas controlaban el 80% de la riqueza en Italia. Joseph Juran aplicó esta observación a problemas de calidad. Un diagrama de Pareto ordena los factores por importancia y muestra gráficamente la relación 80/20 para ayudar a identificar las causas principales de un problema.
Conferencistas confirmados para el 10° Congreso Iberoamericano de Sistemas de Conocimiento - CISC 2012, evento institucional anual de la Comunidad Iberoamericana de Sistemas de Conocimiento (CISC), organizado por la Fundación País del Conocimiento la cual presido, que se realizará este año en la ciudad de Bucaramanga, los días 13, 14 y 15 de noviembre (pospuesto un mes para garantizar la presencia de miembros de la Comisión Europea y altos dignatarios del gobierno francés), cuyos ejes temáticos se desarrollan sobre CONOCIMIENTO, INNOVACIÓN Y TECNOLOGÍAS para el Desarrollo Económico y Sostenible, orientados hacia las Ciudades del Futuro.
Fundado en 1971 por Michael Hart en la Universidad de Illinois, el Proyecto Gutenberg se propuso difundir gratuitamente obras del dominio público de forma electrónica. En los años 90, con la popularización de la web, el Proyecto Gutenberg ganó nueva vida al alcanzar una difusión internacional gracias a miles de voluntarios que digitalizaron cientos de obras en formato de texto. Inicialmente las colecciones eran principalmente en inglés, pero con el tiempo se hicieron multilingües con sitios web en varios países. El Proyecto Gutenberg
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La lista contiene los nombres de 30 personas junto con los años de 1977 a 2007. Parece ser una lista de recuerdos o fotos de personas a través de los años.
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This paper offers an interesting analysis of the automobile industry. The paper covers a number of subjects include the structure of the industry, level of competition and behavior of players.
April 2003
Toyota Prius; Marketing Communications Plan
Executive Summary
Full service agency “Oakly & Oakley” has been asked to prepare a three-year communications plan for
the Toyota Prius, which is to be launched in the UK. Market analysis identified the target market, which
consists of two groups: private and corporate buyers. Next to the demographic profile, three different
psychographic profiles amongst the private buyer and their media usage have been identified.
Consequently a communications strategy that makes use of these media has been created. The
strategy will use PR, Advertising, direct mail and Personal Selling. TV, Print, Outdoor and the Internet
will be the main media. The Creative strategy is designed to emphasize the unique selling points of the
Prius and weaken the target markets objections. The budget has been allocated, however it is
suggested to change the allocation from £3m yearly to £4m, £3m, £2m in the course of the three
years. The majority of the budget will be spent on TV and print advertising.
Industy Case Study-The Global Automotive Manufacturing SectorKevin Rivas De Paz
The automotive manufacturing industry is large and global, with the top 5 firms accounting for 70% of the market. Technological innovation is constant, with new features like autonomous vehicles being developed. Barriers to entry are high due to capital requirements and established firms' advantages. Costs such as materials, wages, and R&D account for the majority of expenses. Firms differentiate through technological features, vehicle types, and brand reputation. Vertical integration and diversification allow companies to cut costs and expand their product offerings.
This document provides a summary and analysis of Volkswagen AG's global business strategy. It includes an executive summary, background on Volkswagen and its brands, analysis using Porter's Diamond Model and PEST analysis, an examination of Volkswagen's generic strategy using Porter's framework, and recommendations. Key findings are that Volkswagen has strong competitive advantages due to Germany's factor conditions and demand for its high-quality products. Its strategy of diversification across multiple brands and lowering costs through shared platforms has proven successful.
The car industry is one of the fastest-growing sectors globally, a significant employer and R&D investor, and one of the EU's most powerful sectors. Even so, this industry has recently undergone several structural reforms and geographical transitions. For this cause, it appears critical to assess the automotive industry's competitiveness on a national basis, observe long-term developments around the EU, and place them in a global sense. This research examines the possible rewards of a contract, how they play out in various situations, and the potential pitfalls. The study also calculates trade diversion consequences and discusses the strategic ramifications of a free trade deal between the EU and India for Southeast Asia. This article also employs a traditional statistical study of discovered symmetrical comparative advantage indices to identify patterns that characterize the European automotive industry's shape and long-term growth. The authors point to significant shifts in manufacturing and exports from conventional Western European carmakers to new EU member states and the United States and Canada to modern, fast-growing developing countries in Southeast Asia and Latin America.
Individual-level data are used to analysis, including customer review and internal communication in this study. A sample of around 100 workers was used to gather information. To test the study's cross-level hypotheses, I used hierarchical linear modelling (HLM), a type of random coefficient model explicitly designed to accommodate nested data structures. The results indicated that industry and global or internal factors was affecting the trade and major affects the national’s economy and globally.
The car industry is one of the fastest-growing sectors globally, a significant employer and R&D investor, and one of the EU's most powerful sectors. Even so, this industry has recently undergone several structural reforms and geographical transitions. For this cause, it appears critical to assess the automotive industry's competitiveness on a national basis, observe long-term developments around the EU, and place them in a global sense. This research examines the possible rewards of a contract, how they play out in various situations, and the potential pitfalls. The study also calculates trade diversion consequences and discusses the strategic ramifications of a free trade deal between the EU and India for Southeast Asia. This article also employs a traditional statistical study of discovered symmetrical comparative advantage indices to identify patterns that characterize the European automotive industry's shape and long-term growth. The authors point to significant shifts in manufacturing and exports from conventional Western European carmakers to new EU member states and the United States and Canada to modern, fast-growing developing countries in Southeast Asia and Latin America.
Individual-level data are used to analysis, including customer review and internal communication in this study. A sample of around 100 workers was used to gather information. To test the study's cross-level hypotheses, I used hierarchical linear modelling (HLM), a type of random coefficient model explicitly designed to accommodate nested data structures. The results indicated that industry and global or internal factors was affecting the trade and major affects the national’s economy and globally.
Toyota faced significant challenges during the global recession as vehicle sales declined sharply. However, Toyota has since recovered as the global economy improved. While Toyota remains the largest automaker, it faces challenges like maintaining brand reputation after recalls and managing rising input costs. Opportunities for Toyota include targeting emerging markets with growing demand and investing in fuel efficient technologies.
This document analyzes the automotive industry and 10 major companies within it. It begins with a historical overview of the industry and then uses Porter's Five Forces model to analyze the industry's structure. Next, it examines DaimlerChrysler, Ford, GM, Honda, Hyundai, Maruti Udyog, Nissan, Shanghai Automotive, Toyota, and Volkswagen in terms of their market position, finances, and strategy. Major findings include attributes of successful companies and trends in industry consolidation, international expansion, and increased efficiency. The report concludes with recommendations on the near-future success of each company.
Renault, a French car manufacturer, is considering launching its new electric vehicle range, the ZE, in the United States. There are both proactive and reactive motives for this decision. Proactively, it allows Renault to capture a new market and increase sales and market share. Reactively, the large electric vehicle market in the US, led by Toyota, presents an opportunity Renault does not want to miss. However, launching internationally presents cultural and economic barriers between France and the US that Renault must address in its market entry strategy.
Ford Motors is a leading automobile company that was severely impacted by the 2008 recession but has since made a strong recovery. An analysis of Ford and the automobile industry highlights several key points. The industry has faced overcapacity challenges as production outpaced demand. Ford has implemented a "One Ford" strategy focused on restructuring, new product development, and improving its financial position. Looking forward, Ford's strategy should continue expanding into foreign markets through strategic alliances while addressing ongoing industry problems like excess capacity and high new product development costs.
This in-depth research offers a perspective on where the automotive industry is headed. It is based on many discussions and interviews with the top management of leading automotive original equipment manufacturers (OEMs) and an analysis of data from the top 17 (by sales) global OEMs, which comprise 80 percent of global sales. This work was designed to answer the most crucial questions:
> How are the industry and the market evolving?
> What are the future challenges and opportunities?
> How can OEMs benefit from these new challenges and opportunities?
> What are the implications for different market segments?
Running head AUTOMOTIVE INDUSTRY ANALYSIS13.docxtoddr4
Running head: AUTOMOTIVE INDUSTRY ANALYSIS 1
3
Automotive Industry Analysis
Team 5
Automotive Industry Analysis
Executive Summary
The following report is a strategic analysis of the Automotive Industry. This report will use several resources to analyze the industry and overall market. Additionally, including the information gathered from strategic and analytical recommendations are considered for the Automotive Industry analysis which could help achieve a greater market share in this industry.
The report analysis includes the external industry environment which includes, …. Additionally, a PESTEL analysis as well as Five Forces analysis has been conducted. These are important to understand the market environment of the industry needed by anyone trying grow or enter this market.
Introduction
The automotive industry is an industry that has been steadily growing over the several decades due to rising demand for vehicles. There is a considerable market share for the supply which occurs although the industry faces immense challenges to do with governance and political interests (Wells & Rawlinson, 2009). The consumers of the automotive sector mostly include individuals, organizations, governments, and institutions. The industry has been steadily marked by around five hundred players who have been regularly producing cars over the last few decades. The first boom that was related to the automobile industry was in the nineteen-hundred where the demand for vehicles shot up due to the change of governance and industrialization.
Background
The first dominant players in the market were France and closely followed by Germany. Eventually, Germany was the most significant car producers. The needs for mass production lead to the emergence of Japanese brands and the United States as well (Winkelhake, 2018). Many companies that first started as the most desirable brands are being phased out while others are barely making enough profit due to factors associated with the external environment of the industry. Strategic choices have to be considered to ensure survival in a highly competitive market. The industry has faced an immense shift in the external environment that has led to the market players having to be innovative to keep their competitive advantage.
Part 1: External Environmental Analysis
General Environmental Analysis
A PESTEL analysis was conducted to evaluate all relevant external factors and evaluating macro-economic influences the industry may have.
Political factors
The automobile industry has been having challenges of a political nature due to the interests that the governments have on the industry (Kaplan & Smolkin, 2009). The benefits are but of a positive and negative environment. For instance, fuel emissions from guzzlers are a significant issue of concern to the politics in a country such a United States of America. It has led to the imposition of tax on vehicles that have high emissions, and this affects the production a.
The document analyzes Honda's operations and marketing strategies in the European automobile market. It finds that Honda failed to understand important cultural differences across European countries and treated Europe as a single market. It also had a weak brand image, a standardized marketing approach, and a narrow product line. The recommendations include customizing marketing strategies and the mix for each country, expanding the product range, and allocating more resources to change negative brand perceptions.
“Comparative analysis of consumer preference between Hyundai’s i-10 and Marut...BHOMA RAM
The document discusses several key challenges facing the automobile industry:
1) Reducing greenhouse gas emissions and improving fuel efficiency to meet climate targets and regulations like the Kyoto Protocol. Over 75% of automotive emissions occur from vehicle use.
2) Complying with tightening emissions regulations for air pollutants from vehicles like particulate matter, hydrocarbons, and nitrogen oxides in Europe.
3) Improving road safety as traffic accidents remain a leading cause of death, especially for young people. Speed is a major factor.
4) Managing costs and restructuring and outsourcing operations while maintaining innovation, quality, and a skilled workforce. Dependence on suppliers is increasing.
“Comparative analysis of consumer preference between Hyundai’s i-10 and Marut...
ISO_Auto&AGRANA
1. Case 1 - AUTOMOTIVE INDUSTRY
A) Identify one strategic group from within the global automobile industry. Drawing
upon frameworks and concepts from the industry-based view of international strategy,
analyse the current global competitive environment within the chosen strategic group.
The answer should consider both industry structure and competitive strategies
INTRODUCTION
Dilemma in European Mass-Market Auto Industry
According to BBC (2012), European car makers were struggling from demand drop of an
average number of 10.8% across EU since previous year. South West of Europe was
observed to be the most deteriorated zone; the car sales drop in Greece reached almost
50% within a year. It was speculated that the concern was the effect of economic recession
in the Eurozone during 2011 to 2012.
However, the agony was not felt evenly throughout. Reviewing auto manufacturers by their
similar and dissimilar business models and strategies, they could be generally assorted into
3 main categories; Mass-Market players, Executive-Luxury, and the Ultra-Luxury. With a
profit of $20,000 to $30,000 per car (Peng, 2009), companies like Rolls-Royce, Lamborghini,
and Ferrari did not seem to be shaken by the crisis because they have positioned
themselves initially in the very low demand, yet very high income segment. The competition
in the Executive-Luxury players (typically German automakers, Mercedes-Benz, BMW, and
Audi) was substantially narrow since there were fewer players and due to their premium
prices, the margins remained healthy. While, with profits as low as $150 per car, it is clear
that the issue was in the Mass-Market industry.
2. COMPETITIVE STRATEGY
Market Segmentation
Over-capacity has left French auto industry (Renault, Peugeot, Citroen), and other mass-
market European manufacturers (Vauxhall, Skoda, Fiat, SEAT) with no choices other than
reducing their production capacity. Moreover, a tougher competition occurred when the
Germans decided to plunge into the lower market segment by downsizing their premium
cars. In early 2013, Mercedes-Benz launched CLA model to compete in the budget
saloon/sedan segment. BMW has strengthened its SUV division by launching X1, X4, and
X6 to supplement their current BMW X3 and X5. Germans' ambitious broader focus on
competitive scope has amplified the constraint amongst European mass-market players. Not
to mention the rivalry between the same mass-market industries with the Japanese
automakers.
Differentiation & Cost Leadership
Shimizu (2003) declared that Toyota was once depending only on export, but due to rigid
trade barrier policies, export activities are seen to be insufficient. The confrontations of
restricted quotas and prohibitive taxes have forced Toyota to convert their export-centred
strategy into localization approach. Under the supervision of Toyota-Astra Motor Corporation,
a compact MPV called Toyota Kijang ('Kijang' means antelope in Bahasa) only available in
Indonesian market. Through this localisation, Toyota is proficiently capable to create and
uphold its mass-market power in the hybrid position (Bowmans' Strategy Clock), which is
domestically valued and low in price.
Considering their economies of scale and scope in Europe, and perhaps of their cheaper
supply inputs, European mass-market players (Skoda, Vauxhall, SEAT) have sustained in
the cost leadership segment (Porter's Generic Strategy Dimensions). Yet, despite of being
3. the cost leader, these players should not ignore the importance of differentiation. Rather
than solely focus on cutting the price down, meeting customers' needs through
bespoke/tailored and innovative products can add values, resulting in the increased of
revenue.
Although it is assumed that most of differentiation offerings are in the luxury segment, there
are some car manufacturers who have unique perceptions on where to position their
strategic dimension. Volvo is a fine example; their vision on cars is neither about luxury,
horsepower, nor gas consumption. As the first auto manufacturer to develop a rear-facing
child seat, airbags curtain style, and even the invention of the modern seatbelt that is used in
every vehicle today (Bloomberg News, 2014), Volvo has demonstrated its narrow focus on
safety since it was first established in 1927.
Besides, Everitt (BBC, 2012) reported that the concentrated of sales in Europe were a
mistake. In today's globalisation, the exposure of international markets is growing, especially
in the emerging markets. Therefore, in order to survive, European mass-market players,
particularly Vauxhall, Skoda, and SEAT shall not be hesitant to internationalise (localisation
method) in order to keep up their core cost leadership (imitating Toyota), also to offer
product differentiation (like Volvo) for the sake of revenue maximisation.
INDUSTRY STRUCTURE
Grant (2010) believed that lack of external survey outside the company might affect the
persistency of an industry. Rather than merely winning competitive advantage by impressing
customers, Grant captured it from a wider macro-economic perspective. Based on Francis
(1967), there are factors derived from the core of the environmental influences, simplified as
PESTEL; political, economic, social, technological, environmental, and legal. Yet, the vital
points of every industry environment are the relationships created to customers, suppliers,
4. and competitors. Thus, it could be ascertained that Grant (2010) elaborated Francis'
PESTEL analysis that it eventually generate values to these three sets of actors [Fig.1].
Figure 1 (Source: Grant (2010) Contemporary Strategy Analysis, page 65)
As it shows in Figure 1, the three actors (Customers, Suppliers, and Competitors) are the
fundamental basis in the industry environment, and the external factors are the linkages to
support them. A coherence theory is discussed by Porter (1980), in which he demonstrated
a framework called 'Five Forces Model'.
First, the 'rivalry among competitors' (Five Forces Model) in automobile industry is intense,
where the crowded market has been overwhelmed by gigantic mass-market players such as
Toyota, Honda, and the American 'Big Three' (General Motors, Chrysler, and Ford).
Although emerging market is currently being the target territory, it was claimed that only
certain premium marques that enjoys lucratively. Instead, a huge glut of average/mass-
market vehicles forced vehicle prices to fall by 7% in China (Peng, 2009). Hence, studying
the competitors [Fig.1] is crucial, whereas the ability to forecast demands, detect
opportunities depend on the awareness of the competition.
Meanwhile, thanks to strict regulatory requirements, the entry barrier ('threat of entry', Five
Forces Model) is high these days. Apart from tariffs and customs, current threat such as
global warming has concerned many national environmental agencies to limit a set of
5. emission standards to automakers, particularly carbon dioxide. Thus, a reasonable access
for newcomers is to predict on what ways their 'green vehicles' will impact on customers
[Fig.1] in terms of economical fuel saving. A hybrid hatchback, Toyota Prius is the top-selling
hybrid vehicles, with over 3.8 million units worldwide (Motoring, 2013). Electric motor in this
case, certainly illustrated as an engineering innovation to substitute fuel and gas ('threat of
substitutes', Five Forces Model). Subsequent to Prius, the car industry now attempts to
strive in the hybrid segment. Peugeot for example, has newly revealed its hybrid air driven
car in Dongfeng Peugeot-Citroen factory in Wuhan, China (Malay Mail Online, 2014).
What is more, the bargaining power of suppliers presumably interacts out from the power of
buyers (Five Forces Model). The evolution of gadgets as in smartphones and tablets has
provoked customers to expect the most recent electronic advancement in their car. In this
matter, technological partnership with suppliers [Fig.1] is credible to keep pace with the
contemporary demand. For example, the partnership of Ford and Microsoft that was
established as Ford SYNC, a voice activated communication and entertainment system that
functions under user's command (Dsouza, 2014).
Word Count: 876
B) What additional insights can either the resource-based view or institution-based
view of international strategy (choose one perspective only) provide into the global
competitive environment in the chosen auto industry strategy group?
INSTITUTION-BASED VIEW
In the early years of establishment, automotive industries have committed to escalate their
productivity by exporting. Nowadays, many firms started with unconventional breakthrough
to internationalise, despite of traditional phases; export strategies - strategic
alliance/shareholding investment - FDI - and finally globalise. In fact, exploring the
institutional environment is essential, being a third complementary leg of the tripod.
6. Formal Institutions
Generally, institution is defined as 'the rule of the game'; providing a set of frameworks to
shape individuals and organisations; yet there are formal and informal institution. In this case,
formal institution includes rules, laws, regulations, and written constitutions.
A scenario was investigated by Chan Kim (2002) that in 1975, private-owned British car
industry was nationalised into British Leyland. The political enforcement seemingly schemed
the public that nationalisation of companies was enforced to guarantee the continuity of
employment (Chan Kim, 2002). It did not go so well until Ford Motor Company acquired
Jaguar from British Leyland in 1989, followed by BMW's acquisition of Land Rover in 2000.
Then, the two British brands emerged into Jaguar-Land Rover Automotive PLC after Tata
Group acquired both businesses from Ford in 2008. The commitment of £1 billion investment
from Tata Group has brought back the charm of Jaguar Land Rover. The Indian
conglomerate is captured as a saviour of these British brands. Hiring more than 1000
workers (Ruddick, 2011), the new plant based in UK significantly boosted British car industry.
Another case of formal institutional law is intellectual property regimes (IPR) in China.
Considered as one of the fastest growing economies, China has a weak institutional
regulation against copyright. Their car imitations are mostly inspired from the European
counterparts, from MINI to the luxury marques, the Rolls-Royce (Autoexpress, 2014).
Regardless the fact that copyright laws and rules of a country varies, it was disputed that
international copyright principles should be standardised. Henceforward, the implications of
these would deter automakers to plant their factories, R&D departments in China. Therefore,
based on Peng (1968), institutional framework could reduce uncertainties by providing
assumptions for firms to strategically move in the 'game' of global competition that may be
disastrous.
7. Informal Institutions
Informal institutions described by Peng (1968) that they consist of customs, conventions,
norms, and cultures. Even though it is not officially legislated, the society has practiced it
over a period of time. When it comes to international business, a sort of informal institution is
frequently related to relation-based businesses.
In China, the indicator to success is determined by whom you know, 'Guanxi' is the term
used to describe personal connections with certain people. Though it could be considered as
bribery in some cases, gift giving is an important gesture, necessary business etiquette to
build a relationship (Ewing, 2014). To understand and adapt with the culture, a rational mode
for Western auto industry to enter China's market is nonetheless by strategic alliance. A
resembling example is a Franco-Japanese partnership; Renault-Nissan Alliance.
Recently, BMW has extended local partner alliance with Brilliance China Automotive
Holdings in the interest of navigating the norms, ethics, and cultures (Ewing, 2014).
Thereupon, BMW gained insights that China's government is fighting against pollution. In
response to air pollution, BMW focused on increasing its sales of their modish hybrid
vehicles (the BMW i8 and i3) in China. Furthermore, BMW also teamed up with Chinese real
estate companies to enhance the instalment of charging stations in the areas. Chief
Financial Officer of BMW, Mr. Eichiner (2014) confirmed that China is the largest market for
new energy vehicles at the moment. Selling more than 220,000 cars within six months in
2014, BMW knew that being in relationship with the 'exclusive' individuals is an advantage
for their expansion.
Word Count: 512
8. REFERENCES
BBC (2012), 'European car sales 'fall for 12 months in row'.
Blomberg News (2014), Owned by the Chinese, Volvo swears its More Swedish than
Ever, [Online] last accessed 21st
July: http://www.businessweek.com/articles/2014-06-
26/volvo-seeks-u-dot-s-dot-sales-revival-with-return-to-swedish-roots
Booz&co (2013), 2013 Automotive Industry Perspective.
Chan Kim, Y. (2002), Japanese Inward Investment in UK Car Manufacturing, Ashgate
Publishing Limited.
Dcosta, A. and Edwards, G. (2011), PESTLE Analysis History and Application, [Online]
last accessed 20th
July: http://www.brighthubpm.com/project-planning/100279-pestle-
analysis-history-and-application/
Dsouza, R. (2014), CarTrade - Ford SYNC, How it Works? [Online] last accessed 21st
July: http://www.cartrade.com/car-bike-news/ford-sync-how-it-works-124475.html
Ebbs, C. (2014), AutoExpress UK - Chinese Copycat Cars: As China's car market booms,
we look at the shameless lookalikes Chinese car makers are selling - and see if they are
legal, [Online] last accessed 23rd
July: http://www.autoexpress.co.uk/car-
news/87772/chinese-copycat-cars
Ewing, J. (2014), New York Times - In Expansion, BMW to Make China-Only Models,
[Online] last accessed 23rd
July:
http://www.nytimes.com/2014/07/17/business/international/in-expansion-bmw-to-make-
china-only-models.html
Francis, J. (1967), Scanning the Business Environment, Macmillan, Inc.
Freyssenet, M., Shimizu, K. and Volpato, G. (2003), Globalization or Regionalization of
the American and Asian Car Industry, Palgrave Macmillan.
Grant, R.M. (2010), Contemporary Strategy Analysis, Chichester: John Wiley.
Jurgens, U., Malsch, T. and Dohse, K. (1993), Breaking from Taylorism: Changing Forms
of Work in the Automobile Industry, Cambridge University Press.
9. Madslien, J. (2012), BBC - Gloomy carmakers gather in Paris.
Malay Mail Online (2014), Peugeot Reveals Hybrid Air Driven Car, [Online] last accessed
21st
July: http://www.themalaymailonline.com/drive/article/peugeot-reveals-hybrid-air-
driven-car-video
Motoring (2013), Toyota sells 3 million Prius hybrids, [Online] last accessed 21st
July:
http://www.motoring.com.au/news/2013/toyota/prius/toyota-sells-three-million-prius-
hybrids-37496
Peng, M.W. (2009), Global Strategic Management, 2nd
Edition, Cengage Learning.
Porter, M.E. (1998), Competitive Strategy: Techniques for Analysing Industries and
Competitors, New York: Free Press.
Ruddick, G. (2011), The Telegraph - Jaguar plans UK expansion set to create 1000 jobs,
[Online] last accessed 22nd
July:
http://www.telegraph.co.uk/finance/newsbysector/industry/8470371/Jaguar-plans-UK-
expansion-set-to-create-1000-jobs.html
10. CASE 2 - AGRANA
A) How did changes in the formal institutional environment within Europe influence
Agrana and its international strategy?
INSTITUTION-BASED VIEW
Based on Peng, et al (2009), there have been long standing criticisms of one of the point in
Porter's Five Forces model, the 'rivalry amongst competitors' for instance. In the substance
of competitive strategy, such rivalry raises two underlying strengths, which are differentiation
and cost leadership. Within industry-based view ideology, Peng argued that cost leadership
is unethical in a certain institutional conditions. Predatory pricing or dumping in Japan is
banned, particularly on bookselling industry, where it could lead into serious legal actions.
On the other hand, the criticism applies to RBV's (Resource-based view) VRIO framework
as well, particularly when Barney (the creator of VRIO) himself justified that values are
dependent on specific market a firm operates. Consequently, in response to the critiques,
institutional perspectives draw many scholars' attentions. To begin with, formal institution
including government policy is the ground basis in shaping competition. An ideal example
would be commercial/advertisement regulation. Also, political factors such as the compliance
on privatisation determine investors' plan on post-acquisition.
Key Formal Institutions
In reference to the case study (Peng, 2009), Agrana, a Vienna-based holding food company
was certainly confident on their eagerness to expand. It was stated that within 19 years
(1988 to 2007), Agrana had accelerated its integration (from 5 to 55 factories) from CEE
(Central Eastern Europe) areas to global. It was suspected that Agrana's substantial
expansion was utterly fortunate. Another assumption was that the rising of Austrian firm was
11. as a similar aggression derived from informal ties, cultures of historical Austro-Hungarian
Empire that was once occupying CEE territory. In spite of cultural and irrational issues,
Porter (1990) came up with the basic determinants of competitive advantage of a nation, the
'Porter Diamond Model' [Fig.2]. The institution-based model below [Fig.2] has identifies four
factors, first, the firms' strategy, structure and rivalry within a country. Second is the
endowment factor that embodies human and natural resources. Third is a related-industry
circumstance, and fourth is the domestic demand.
Figure 2 (Source: Peng (2009) Global Strategic Management, page 99)
At that time, numerous CEE countries began to join EU, which it imposed an Austrian
domestic firm to enlarge their economies of scale. Moreover, the invasion of global giants
like PepsiCo, Coca-Cola, Nestle, and DANONE to the growing CEE countries intensified the
rivalry [Fig.2]. For this reason, in order to compete, Agrana focused on attracting investors
and persuading its corporate buyers to invest more. Thereafter, the pushing method has
resulted in the arousing of new suppliers and operations, and it expanded not only in Austria
and CEE, but throughout the EU. This indicates that the push strategy has successfully
directed the firm towards global integration.
When CEE countries started to open up their market in 1990s, there was heaps of potential
investments flow, along with high domestic demand in CEE. This was seen as a prosperous
opportunity for emerging companies, like Agrana. From foreign investors' point of view, to
12. identify the timing to invest, country risk analysis (CRA) is needed to diagnose the risks and
the degree of impacts to their return on investment (ROI). According to Fleisher &
Bensoussan (2007), CRA is segmented into six interrelated risks; economic, transfer,
exchange rate, location/neighbourhood, sovereign, and political. In addition, Meyer (2002)
responded that wholly owned ventures is more attracting in the eye of foreign investors
(Meyer, 2002).
Peng (2003) interpret that in the era of transition, when formal institutions are less developed,
a thoughtful step for entrants is through connections or ties with local authorities. The fact
that Agrana did not deal with it, could be implied that CEE has a relatively developed formal
market-supporting institution. Indeed, referring on Peng's 1st
Proposition (2009), the role of
institutional framework is to fix irrational pursuance of firms, preventing unclear informal
constraints. Eventually, as an Austrian firm with a smaller home market, Agrana has played
fairly, formally and confidently like a strong player. In essence of CEE attractiveness, Agrana
also picked up the challenge from EU integration as the driver behind their ambition.
Word Count: 668
B) What types of resources and capabilities underpinned Agrana's successful product
diversification and internationalisation strategies?
RESOURCE-BASED VIEW
According to Peng (2009), resource-based view is a perspective on what a firm's assets
(resources) are effectively executed (capabilities) in order to achieve its core competences.
In other words, core competence is a composition of resources and capabilities. For instance,
a core competency in innovative new product development is derived from the ability to
manage its R&D sector (capability) in order to develop the technological equipment
(resource) that a firm has. To some extent, Barney (2007) raised the underlying VRIO
framework as a benchmark for a firm to sustain its competitive advantage.
13. Product Diversification
After its emergence into CEE, Agrana has long been supplying core food ingredients; starch
and sugar. Their focus in the league of starch and sugar was running smoothly. Yet, due to
the restriction on exceeding the limit by EU competition law, Agrana determined to open up
new division on fruit. Within three years (from 2003-2006), the new integration has expanded
significantly from 20 to 55 production plants. Launching from zero into the largest division
with almost 50% of total revenue in 2006-2007, the new fruit division has overshadowed
Agrana's primary products; starch and sugar. The involvement in the fruit industry is seen as
a concern towards dietary awareness, thus it creates added value for customers and the
society as a whole, which would support Agrana's growth in the future.
Shifting into fruit sector was a bright move because it is closely related to Agrana's primary
starch and sugar businesses. In fact, Agrana noticeably attained two specific capabilities.
Firstly, the advantage of using particular existing equipment (intangible resource) certainly
saves the capital on new plant; thereby the capital could be invested for other departments
that required financing (for example: R&D or marketing). Secondly, the already experienced
employees in the food business are possessed as core resources. The capability to transfer
employees from one division to another has established flexibility and efficiency. Thus,
Agrana was able to manage its human resources towards the focus of refined processes,
which certainly leads to high quality products. Also, less dependent on hiring new specialist
could be implied as eliminating risks.
The entry into fruit industry provides further intangible resource regarding the reputation with
shareholder relations. Being in a relationship with food brand manufacturers from its starch
and sugar division since 1988, Agrana is able to gain a 'shortcut' to supply its fruit products.
After all, Agrana has committed to reinforce its economies of scale by emphasising its
operational synergy and good relationship amongst stakeholders. On the contrary, Peng
(2009) clarified that conglomeration or product-unrelated diversification seemed to be
14. persisting only in emerging economies (for example: India's Tata Group and Korea's
Samsung), and its core resource is on its financial synergy.
Not long after, Agrana's extensive knowledge on processing agricultural goods has driven
them to diversify again into Biofuel, which is made by the fermentation of carbohydrates
mostly found in sugar and starch. From their diversification evidences (fruit and biofuel), it is
concluded that Agrana applies a strategy of product-related diversification.
Internationalisation
The internationalisation of Agrana is obviously indicated from the fact that they have
geographically diverse plant locations in 26 countries around the world. It is hardly argued
that the initial stage to enter foreign market is mainly via exporting. However, due to its little
control over operations abroad and limited scale, export activities does not guarantee to be a
sustainable mode. In such a way, exporting could be described as 'testing the water'.
Alternatively, there are many entry modes to consider; licensing, franchising, alliances,
acquisitions and foreign direct investment.
Since its establishment in fruit industry in 2003, Agrana began to acquire Denmark's Vallo
Saft and 33% of share of Austria's Steirerobst. Afterwards, it was completed in 2006 after
the acquisition of France's Atys Group and fully acquired Streirerobst, following with the
Belgium's Dirafrost, Germany's Wink Group, and finally, a JV with China's Xianyang Andre
Juice Co. Ltd. Based from the commitment (scale of entry), Agrana had practically chosen
the path of hasty execution via mergers and acquisitions (within 3 years). Thereby, it is hard
to mention whether the internationalisation of Agrana fruit sector is applying the process of
'Uppsala Model' or being a 'Born Global'.
However, acknowledged from Agrana's acquisition of firms in within 3 years, it could be
affirmed that Agrana has implemented a quick, yet incremental commitment (Psychic
15. Distance). Referring to Ghemawat (2001), the pattern of its geographical sequence from
Denmark, France and lastly China, explains that European countries have similar culture,
administrative, economy, and closely located geographical distance (CAGE framework).
Therefore, Agrana tended to enter the 'psychically close' markets first, and then expanded
like a 'ripples of a stone in a pond'.
Aside from the benefit of gaining potential market share, this mode of entry could be tricky.
Meyer and Peng (2005) noted that in this globalisation era, local firms seek out for big
partnership with strong financial assets, technical and marketing capabilities. It is easy for
MNEs to search for local alliances, but the problem is in the selection of right partners.
According to Uhlenbruck and De Castro (2000), a JV or an acquisition often desires massive
resource transfers from the parent company. This may lead to overbalanced management
control, which affects the performance. Apparently, Agrana sought to access to local
markets by evaluating local companies' resources such as distribution channels. As a matter
of fact, the key of Agrana's expansion is the capability to associate with its acquired firms
and incorporate them as a team to be a global presence in the fruit industry. It could be
suggested that this capability is sourced out of the basis of LOF (Liability of Foreignness).
Word Count: 782
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