Corporate and Global Strategy

The fast development of previously less developed countries in East Asia and Latin America also means higher disposable income which the customers can spend on durable goods like automobile. Recognising the wider market and huge profit potential from these transformations, players in the global automobile manufacturing industry opted to pursue globalisation strategies. They have expanded beyond their local markets to serve and cater to the needs of customers abroad.
Thus, the current global automobile manufacturing industry is currently comprised of large players going beyond their traditional markets to foreign markets with the prospects of larger market, higher revenue, and higher profit. With the players’ decision to pursue internationalisation, they face important decisions about their product offerings and strategies. It should be noted that as industry players seek foreign markets, they are actually exposing themselves to an entirely different set of customers who can have different preferences and expectations about their products. …
er the global manufacturing industry is approaching globalisation or localisation, this paper will use 4Cs model which assesses the operations and external macroenvironment of car producers. In the discussion below, it can be seen that the global automobile manufacturing industry is currently midway between globalisation and localisation. However, it can be noted that the sector is approaching localisation as multinational organisations continue to respond to the specific preferences, culture, laws, and rules in its specific market.
The 4Cs framework is a strategic management tool which "can be used to assess actual and emerging trends and can assist in determining the extent to which an industry is moving towards globalisation or localisation" (Ellis and Williams 1995, p.107). This looks at three factors in the external environment of the sector namely customers, cost, country, and competition. The customers’ factors in this model are subdivided according to customers’ requirements, distribution, and uniformity of marketing. Cost drivers are in terms of new product development, scale economies, and transportation costs. Country drivers include trade barriers, technical standards, and cultural and institutional barriers. Lastly competitive forces refer to competitive interdependence and entry of new competitors.
The current global manufacturing industry is described as hypercompetitive which can is characterised by the more intense competition among players and high bargaining power of the customers (Kotler 2005). With automobile manufacturers becoming aware of the importance of tailoring their products to customers’ preferences, market niching and customisation has become a popular trend. According to Donald Peterson, former chairman of Ford Motor