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Automotive Industry Essay

3118 words - 13 pages

Business Information Analysis |

Table of Contents
Electronic Cover Sheet………………………………………………………………………1-2
Introduction………...................................................................................................................4
1. Key business issues and challenges……………...................................................................5 1.1 Globalisation, regionalisation and market convergence...........................….......................5 1.2 Increasingly diversified consumer aggregate patterns of behaviour...................................5 1.3 Accelerated modification and diversification of the product portfolio………………..….6 1.4 Pervasion of ...view middle of the document...

.................................................................9-10 3. The management decision making processes at each of the three levels of management...11 3.1 Top level of management...................................................................................................11 3.2 Middle level of management…………..............................................................................11 3.3 Lower level of management………….…………..............................................................12 Conclusion…………………................................................................................................... 13 References...........................................................................................................................14-15

Introduction

Globalisation, individualisation, digitalisation and increasing competition are only some of the challenges that the car manufactories are facing, more over this challenges are changing the car industry as we know. Furthermore, increasing safety requirements and voluntary environmental commitments by the automotive industry will also contribute to the changes that they are coming. The companies in order to survive they need to find new ways to create value because size is no longer a guarantee of success. In this paper I will present a brief synopsis of the automobile industry and try to analyse the current issues facing the industry. (Allen and Hamilton 1999)

1 Key business issues and challenges

The global automotive industry is subject to a range of factors that are increasing complexity and influencing the economic options available to automobile manufacturers. The majority of these factors interact with one another and have strong interdependencies. However, some of these factors are market-induced and, consequently, cannot be influenced directly by the automobile manufacturers. These factors include:

2.1 Globalisation, regionalisation and market convergence

Due to the effects of liberalisation, national markets are increasingly globalised. This gives original equipment manufacturers (OEM) the chance to expand to new markets, but also increases the threat of new entrants or increased competition in traditional markets. For example, European OEMs currently face an aggressive sales offensive by Korean OEM Hyundai. The reverse side of globalisation is regionalisation, which means that local tastes and consumer preferences have to be considered by companies. The concept of a standardised “world car” as promoted by Ford a few years ago would not succeed in today’s world. Another problem for an OEM is market convergence due to digitalisation of almost all products and value-add processes. On the market side, the increased pervasion of products with digital technology leads to new vertical and...

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