Managing the International Value Chain in the Automotive Industry
Strategy, Structure, and Culture
Stefan Schmid, Philipp Grosche
Table of contents
Foreword Authors Acknowledgments International value chains: Current trends and future needs, as exemplified by the automotive industry 1. Internationalizationofthevaluechainintheautomotiveindustry 2. Configurationandcoordinationascrucialdimensionsinshapinginternational valuechains 3. Bestpracticesandoptionsformanagingtheinternationalvaluechain Glocal value creation in the Volkswagen Group: Moving toward greater decentralization of production and development 1. TheVolkswagenGroup’snewglobalstrategy 2. …show more content…
areshowing alarmingweakness,havingrestedfortoolong onthelaurelsoftheirearliersuccessesandfailingtorecognizechangesthatweretakingplace inthemarket.
solelybysuchfactorsascost-savingproduction,leanprocessdesignorinnovativecapacity.Inordertoprofitfromtheglobalmarket,a companymustbeabletocreateandmanagean internationalvaluenetworkanddelegatevalue functionstothepropersites.Thisappliesto salesandprocurementaswellastolaborand capitalmarkets. Despitepredictionsthatglobalizationwouldlead toahomogeneousworldmarketwithbarelydifferentiatedproducts,ithasbecomeclearthat culturaldifferencesstillplayamajorrolein customers’purchasingdecisionsandinthecommitmentofacompany’semployees.Moreover, therearesubstantialdifferencesintheproductionandquality-relatedprocessesneededinthe emergingmarketsrelativetotheindustrialized countries,andthisaffectseverythingfromproductuse,pricinganddevelopmentpotentialto distributionandcommunicationschannels.
Today,thechallengeforacompanycompeting ontheinternationalstageistoadjustquicklyto localcircumstanceswhilesimultaneouslyintegratingitsdivisionsandsitesworldwide,based onidenticalprinciplesandasharedunderstandingofthecompany’spurposeandobjectives. Integratingthevarioussitesintocorporate
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1. Relate the Ecco case to the conceptualization of the organization as a global factory. What similarities and dissimilarities with the global factory conceptualization do you see and what solutions may it present?
In order for a firm to create competitive advantage, it needs to create a set of activites that can deliver value to the specific product and services it offers to its customers. To start talking about my life as a “value chain”, I may need to compare it to a specific product”. This is going to take precedence both in my personal life and professional life.
The value chain, made by Michael Porter, is really important to see how a company structure is created. The value chain is constituted by two parts: support activities (firm infrastructure, human resource management, technology development, procurement) and primary activities (inbound logistic, operations, outbound logistic, marketing and sales, service). (Johnson et al. 2011, p.97-99)
“A value chain is a set of activities that an organization carries out to create value for its customers. Porter proposed a general-purpose value chain that companies can use to examine all of their activities, and see how they 're connected. The way in which value chain activities are performed determines costs and affects profits, so this tool can help you understand the sources of value for your organization.” (https://www.mindtools.com/pages/article/newSTR_66.htm) With this in mind, we will be taking a look at Tesla Motors.
A company’s success in developing and sustaining its competitive advantage does not depend on its own value chain but on its ability to manage the value system on which it is a part. An example would be an automobile manufacturer that may have its suppliers set up facilities in close proximity in order to minimize transport costs and reduce parts inventories.
Value chain analysis looks at every step a business goes through, from raw materials to the eventual end-user. The goal is to deliver maximum value for the least possible total cost. It is a systematic approach to examining the development of competitive advantage. The most basic breakdown of primary functions includes inbound logistics, operations, outbound logistics, sales and marketing and service. People should use the other models and frameworks within this software to further differentiate between, and add to, these domains. Product Innovation is one area that is not normally included in the de jure model but is often included in the de facto model. Value Chain Analysis describes the activities that take place in
The value chain is a temporary competitive advantage for Zara. The major reason why it is not a sustainable advantage is that it is not rare. Barney stated that it is not a sustainable resource if a large number of other firms can also gain benefit from the same resource. It is clearly that Zara’s competition also get their global value chain. Therefore, no firm could get a competitive advantage on the common strategy. Nevertheless the value chain is difficult for new entrants to imitate cause it is costly in capital and time. Further, there is not another way
EU LAW (COMPETITION): The recent expansion of the European Union can effect Waitrose e.g. Entry of new competitors or products, which they may offer at cheap price (the minimum wage is some EU countries have low wage compare to U.K)
According to GM.com (2009) General Motors Corp. (NYSE: GM), is one of the world's largest automakers which was founded in 1908, in Detroit USA. It manufactures cars and trucks in 34 countries. GM employs 252,000 people in every major region of the world, and sells and services vehicles in some 140 countries. It sells cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. Its largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services.
Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This
1. Describe the competitive environment of ECCO and determine how well ECCO is positioned (vis-à-vis the competitors) to take advantage of changes in the industry.
The purpose of this report is to analyze the strategic situation of Malaysian Airline (MAS). The company was in 1963 it is a government owned airline, the airline operates both transatlantic and transpacific flights. Mas has received more than 100 awards since it started operating such as the leading airline (2011) Asia’s leading business class airline (2010) as well as the five star airline (2012). This has helped the company to build up its image as the top airline in Malaysia. They are a number of strategies which MAS can use to make the company to be more profitable strategy implementation which is the process used to overcome the external factors (Hambrick, 2007). A company can get affected if the company management
Kiichiro Toyoda was the founder of Toyota Motor Corporation and the automotive-centered Toyota Group. Kiichiro was a keen, skillful inventor and the continuous resolve of invention helped him to create the business base acquired from his father, Sakichi Toyoda. With the incessant drive towards innovation and invention, Kiichiro extended into the automotive business and build the groundwork of Toyota Group that you see today.
A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter (Porter, 2013)
Introduction - Total quality management (TQM) has been defined as ‘continuous improvement of every production output whether it be a product or a service, by removing inefficient variations and by improving the backbone of the work process’. International managers like their domestic counterparts have found that incorporating the notion of total quality management into their management process and style can give the competitive advantage.