Global Strategic Management Analysis: Automobile Industry Strategies

This report provides an analysis of global strategic management within the automobile industry, focusing on the challenges and opportunities faced by major players like BMW, Ford, and Honda. The paper explores the impact of globalization, technological advancements, and environmental concerns on the industry's strategic approaches. It examines how companies are adapting to address global pressures such as increased competition, changing consumer demands, and the need for environmental sustainability. The report highlights strategic initiatives, including the shift towards electric vehicles, mobility services, and partnerships to develop innovative solutions. Various strategic theories, such as the resource-based view, competitive-based theories, and sustainability, are discussed to explain the development and implementation of these strategies. The analysis also considers the industry's response to factors like climate change awareness, economic fluctuations, and the increasing demand for customized and unique products, providing a comprehensive overview of the industry's evolving landscape and strategic responses to global challenges.

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Global strategic management
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Introduction
Globalization and technology development has enhanced the sharing of concepts among
people from different regions in the world. The impact of these factors is that the universe has
become virtually smaller over the last decade increasing the level of competition among
organizations and people. As such, multinational organization faces global challenges that
constantly threaten their survival. Moreover, with other pressures such as environmental
sustainability and upholding equality, corporations have developed new strategies to deal with
these issues and take advantage of the opportunities they provide. The automobile industry is one
of the industries that has faced not only global business management challenges but also has the
responsibility of dealing with global warming. Most recently, BMW spearheaded the transition
of this industry with two of its competitor, Ford, and Honda in introducing a strategy that
advertised on mobility rather than just cars. This paper will explore the automobile industry,
citing some of the strategies used to deal with global pressures.
Summary
Smith, S. 2013. BMW is turning itself into Zipcar—by selling mobility instead of cars. [online]
Quartz. Available at: https://qz.com/60626/bmw-is-turning-itself-into-zipcar-by-selling-mobility-
instead-of-cars/ [Accessed 15 Sep. 2017].
Following the article by Smith on the Quartz, BMW strategized to offer purchasers of its
newly invented electric i3 vehicle the alternative of a gas-fueled loaner BMW should they have
to make an outing that would surpass the vehicle's roughly a hundred-mile range. The
organization expects that drivers will make nine of out ten trips with the idea model, which it
touts as its megacity auto, inside that a hundred-mile extend. Yet it needs to offer the choice as

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an approach to help future proprietors not feel secured to one method of driving as it were. This
is especially basic, as the auto will apparently convey a fifty grand sticker cost when it hits
merchants. Given the current explode between electric auto producer Tesla's Elon Musk and the
New York Times over the genuine scope of the Tesla S, BMW's turn appears a reasonable PR
step. Be that as it may, it shouldn't be viewed as irregular among significant automakers, various
which are dealing with varieties of portability as an administration models that go a long way
past offering an auto and gathering secondary selling administration incomes on support, for
instance (Smith, 2013).
Smith, S. 2013. BMW is turning itself into Zipcar—by selling mobility instead of cars. [online]
Quartz. Available at: https://qz.com/60626/bmw-is-turning-itself-into-zipcar-by-selling-mobility-
instead-of-cars/ [Accessed 15 Sep. 2017].
Additionally, Honda and Ford have been taking a gander at changing the biological
system around electric vehicle possession. The latter reported a partnership with advanced indoor
regulator creator Nest Labs and other companies such as SunPower, Eaton, Infineon and
Whirlpool to enable buyers to shape a general home power administration system that can
decrease the effect of home vehicle charging on control bills. On the other hand, Honda will
offer financing for home sunlight based boards through the Musks' Solar City project to relieve
the burden other electric vehicles may put on the power network and family spending plan.
Indeed, even the Pentagon is taking a gander at various courses for electric vehicles to
conceivably pass power that has been stored back to the grid (Smith, 2013).

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Rumelt, R.P., 2013. How much does industry matter?. Strategic management journal, 12(3),
pp.167-185.
These sorts of organizations-positioning new era vehicles at the focal point of an
arrangement of administrations rather than an irregular item would have been unbelievable even
five years prior. Be that as it may, as the enormous auto organizations gaze at the real progress
before them, and endeavor to enhance returns alone monstrous ventures into elective power
sources, there is a probability that the globe is going to see a greater amount of these sorts of
declarations. They know the following decade will be spent pitching vehicles to a tight-fisted
millennial era, wary of overhauling auto advances. This companion has been usual to
communicating with items as progressively interconnected frameworks of administrations. A
thirty thousand dollars sticker price for an electric vehicle won't look so terrible if it accompanies
a suite of packaged administrations, access to different vehicles and methods of transport, and
lifetime redesigns (Rumelt, 2013).
Strategic significance
Belis-Bergouignan, M.C., Bordenave, G. and Lung, Y., 2012. Global strategies in the automobile
industry. Regional studies, 34(1), pp.41-53.
These strategies demonstrated by at least three global players in the automobile industry
has some significance to these and other companies. The strategies seek to define a world-
driving, propelled residential market concentrating on worldwide difficulties including
ecological and vitality restriction, and also promising worldwide operational nearness. They also
aim to encourage global operational nearness and empower local markets. Besides, advancing
cutting-edge vehicles through the making of interest, quickening of foundation improvement and

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developing innovative work of creative inside burning motors. These techniques work towards
making a far-reaching plan of action using a social framework focused on vehicles (Belis-
Bergouignan et al. 2012). Tending to an assortment of difficulties, including a maturing society,
urbanization, natural issues, and fiasco control, using a social framework focused on the vehicle
to create new wellsprings of aggressiveness which will drive the business to hold a main position
on the planet. Computerized driving by improvement of danger suspicion and evasion
innovations, a worldwide institutionalization of the advances, and concentrate on lawful and
administrative issues; and big information/data administration (Mohr, et al. 2013).
Hirsh, E., Singh, A., and Wilk, R., 2015. 2015 Auto Industry Trends. [online]. Pwc.com.
Available at: https://www.strategyand.pwc.com/trends/2015-auto-trends [Accessed 15 Sep.
2017]
Additionally, to deal with global pressures such as increased competition, the strategies
developed in the automobile industry direct endeavors for vital choice and fixation. In addition
for creating Research and Development and generation frameworks, while upgrading
coordinated effort structures through industry-the scholarly world association. In the midst of
developing requirements for cost decrease, enhancement of car models, and extension of
innovation fields concerned. They, improve coordinated effort systems for recognizable proof of
six organized fields, determination of the territories in which they team up, and definition of a
guide (Hirsh, Singh, and Wilk, 2015). Also, they seek after conjunction and co-thriving between
the vehicle business and the car parts, segments and materials industry to bolster for the
worldwide specialty top organizations, advancement of fitting exchanges of the automobile
business, creating a structure for consistency identifying with the opposition laws.

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Industry global pressures
Meti, 2014. 2014 Automobile Industry Strategy Compiled / Ministry of Economy, Trade and
Industry (METI). [online] Available at: http://www.meti.go.jp/english/press/2014/1117_01.html
[Accessed 15 Sep. 2017].
Key factors have worked towards introducing such pressure on the automobile industry.
First, well into late last century, noteworthy labels would assemble more than four distinct
prototypes off a secretive stage. All the same, auto buyers overall continue to be increasingly
demanding, looking for locale particular highlights, execution, and designing and an element of
uniqueness indeed, even in mass market items as an approach for distinguishing and accentuating
person taste and status (Meti, 2014). Most automakers respond to this request with an growing
number of holdings subjected to profit margin that are contrasted to average models. It is
definitely not unprecedented to have twenty or considerably more such subsidiaries, as
corporations look forward to benefiting from various market specialties. Despite that, running
more branches similarly builds a multifaceted nature. To cope with this many-sided quality,
counteract cannibalization, control costs and assurance that distinction is lined up with shopper
inclination, vehicle organizations must grow new international stage systems, counting measured
ideas (Law, 2017). They would require to completely examine specialties where subsidiaries
may still create a positive image. Be that as it may, this would necessitate more refined research
on client tastes and tenacious appraisals of client tradeoffs and cannibalization effects.
Additionally, vehicle organizations need to regulate their global scale, multifaceted nature, and
environment to meet consumer demands. In particular, automakers ought to contemplate
techniques and coordinate with other vehicle organizations and how to expand stage exploitation
crosswise over portions, value and locales levels (Pandya, 2012).

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Elkington, J., 2004. Towards the sustainable corporation: Win-win-win business strategies for
sustainable development. California management review, 36(2), pp.90-100.
Secondly, climatic change awareness has increased all over the world with most nations
joining towards a collective objective to deal with global warming. As automobiles through the
production of carbon compounds into the atmosphere have contributed to this climatic
conditions. It is in the best interest of the automobile industry to work towards environmental
sustainability and avoid regulations. As such, companies such as BMW, Honda and Ford are
working towards developing new car models whose engines run on renewable energy sources to
reduce the amount of pollution they cause to the environment (Elkington, 2004). These strategies
have developed towards achieving this goal and ensuring not only the sustainability of the
environment but also that of the corporations. This has been witnessed through the creation of a
partnership to ensure quality cars are availed o the consumers at low cost possible.
Strategic theories utilized
Porter, M.E. and Advantage, C., 2005. Creating and Sustaining Superior Performance.
Different theories on global strategies could be attributed to this development of policies
implemented in the automobile industry. The car industry is one that faces stiff competition as
well as whose future has both significant opportunities and threats. One of these theories is the
resource-based approach. It views that a corporation is a bundle of assets and abilities. These
assets and capacities are comprised of physical, money related, human and elusive resources
(Edwards, 2012). The hypothesis is molded in the way that assets are not homogenous and are
constrained in portability. A firm can decipher these assets and abilities into a key preferred
standpoint in the event that they are profitable, uncommon, and matchless and the firm is sorted

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out to abuse these assets. This approach has been utilized significantly in the car industry.
Though consumers are quite demanding and tastes are changing, companies such as BMW have
allocated their resources to not only provide a quality car but to also transform the mobility
service. Alternatively, Ford has made partnerships with companies in the energy field to improve
the quality of their cars based on the resources they have (Porter, and Advantage, 2005). These
and other multinational companies continuously compete provide the best cars in the industry.
Shimokawa, K., 2014. Reorganization of the global automobile industry and structural change of
the automobile component industry.
Secondly, In spite of the fact that the asset-based perspective of business technique
underlines the estimation of firm assets for the upper hand, it is additionally perceived that the
choices a firm makes regarding its activities and responses in connection to its rivals in a market
are a noteworthy determinant of firm execution. The competitively based speculations of the
business methodology developed to fill this hole and guarantee thoughtfulness regarding the
elements of rivalry between rivals (Hesterly, and Barney, 2010). Emphasize that the requirement
for firms to think deliberately is driven by the presence of rivalry. Different companies have
invented new generation automobiles to ensure that they have a competitive advantage. What’s
more, with BMW revealing its plan to develop and sell an electric i3 vehicle, other companies
have done the same to ensure that their brand is represented and can sustain competition
(Shimokawa, 2014).
Barney, J., 2011. Firm resources and sustained competitive advantage. Journal of management,
17(1), pp.99-120.

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Finally, the theory of sustainability has been used to develop strategies, especially in the
automobile industry. This industry has been faced with numerous challenges over the recent
years. For instance, the 2008-2009 recession period saw an aggregate decrease in car purchases
and the economy was deteriorating. This affected the revenues for this industry. Additionally, the
increasing awareness on the need to address global warming may pose yet another challenge for
automobile companies. Engines running on fossil fuels are increasing pollution levels in the
atmosphere and may be subject to regulation in the near future. Sustainable advancement
includes the coordination of ecological intuition into each part of the social, political, and
monetary advancement. Sustainability requires we focus on whole life cycles of our items.
Today, with our developing learning of the living earth, item advancement can mirror another
soul which enables nature and trade to productively coincide (Barney, 2011). Therefore, some of
these strategies are geared towards attaining this objective.
Bibliography
Barney, J., 2011. Firm resources and sustained competitive advantage. Journal of management,
17(1), pp.99-120.
Belis-Bergouignan, M.C., Bordenave, G. and Lung, Y., 2012. Global strategies in the automobile
industry. Regional studies, 34(1), pp.41-53.
Edwards, J., 2012. Mastering Strategic Management- 1st Canadian Edition
Elkington, J., 2004. Towards the sustainable corporation: Win-win-win business strategies for

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sustainable development. California management review, 36(2), pp.90-100.
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Hirsh, E., Singh, A., and Wilk, R., 2015. 2015 Auto Industry Trends. [online]. Pwc.com.
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pp.167-185.
Shimokawa, K., 2014. Reorganization of the global automobile industry and structural change of
the automobile component industry.
Smith, S. 2013. BMW is turning itself into Zipcar—by selling mobility instead of cars. [online]
Quartz. Available at: https://qz.com/60626/bmw-is-turning-itself-into-zipcar-by-selling-
mobility-instead-of-cars/ [Accessed 15 Sep. 2017].