strategic management in the ailing automobile industry.pdf

Several joint ventures also in the past decades

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several joint ventures also in the past decades, though they usually did not last longed. Now the car makers have to focus on how to maintain these large systems. They have to open doors to their competitors and cooperate with them. Entering into a strategic relationship with another firm for the purpose to improve capabilities is not uncommon within the automotive sector. But the concept of strategic alliances 7 has become extremely pervasive in the 1980s. General 7 Strategic alliance refers to the cooperation of two or more independent partners in certain predefined areas while, as a rule, they still compete in other areas. Duration and scope of the cooperation depend on the formulation of the agreement between the alliance partners.
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49 objective of alliance is the competitive advantage for all parties involved. Specific objectives can be the easier, faster and more cost-efficient access to new markets, the cost reduction through economies of scale, the access to know-how in a time- saving way, reduction of risks and strengthening of competitiveness through focusing on core competencies. According to Fujimoto and Takeishi there are eight types of alliances within the automotive industry: equity investment, joint venture, provision of production technology, supply of complemented car, supply of components, join R&D, join manufacturing and joint marketing. The capability of managing international alliances will be in the future one of the most important strategic success factors. But I have to stress that it requires healthy firms and is not a solution for ailing companies. The further precondition for success is the selection of right partner who is equal and culturally compatible. Furthermore the cooperation partners have to define clear and realistic initial expectations. And a crucial operative challenge is the harmonizing of interfaces between the partners. This form of collaboration is much more flexible than mergers and acquisitions. It involves considerably less capital input and integration problems. However, coordination problems can arise. But this can be perceived as the first step of the learning process between the parties.
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50 Summary I started my thesis with a Porter’s five forces analysis that is suited for describing the industry structures and the way they change. It showed us that automobile industry is a very complex market with fixed players who fight a red battle for survival. In the second chapter I presented the currently ruling trends, such as green cars, globalization and the increasing role of emerging markets. After this I scrutinized the S-curve theory of A.T. Kearney consulting company, and the existing companies’ attempts at market growth through mergers and acquisitions. Furthermore I analyzed the changes of value chain within the industry.
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  • Spring '14
  • Holtsclaw,ChariceL.

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