Question

Analyze the strategic advantages to global sourcing and production in the automobile industry relative to an export strategy

Answer 1

Analyze the strategic advantages to global sourcing and production in the automobile industry relative to an export strategy

The characteristics of auto industry's business strategy consist of business vehicle manufacturing and distribution policy, global procurement policy, and global product growth strategy. Managing globalisation, from the point of view of political decision taking, is also one of the main concerns. In the other hand, globalisation management is directly linked to localisation management. All car companies have to address this problem by following global strategy: how they can integrate and link their global strategy with their localization strategy. Considering global sourcing in the automobile sector, it is also interesting to look at the perspectives of other sectors, including companies such as Wallmart, IBM, GE, Otis, P&W, Boeing and the Semiconductor Industry and Micro-Computer Sectors. They are also perfecting global procurement, extending their national sector to different markets across the globe. With this growing global market perspective, they can quickly locate vendors in the best locations possible. The complex technology of production and intelligence is more important than ever before. Such practices have a significant influence on global-based car manufacturers-and therefore even on vehicle assemblers. Reducing the amount of suppliers would therefore encourage the convergence and consolidation of component vendors, fostering a process whereby small and medium-sized suppliers will enter multinational networks who can not turn themselves into major players yet have original techniques. Of course not every manufacturer will transform into a global manufacturer. With first-tier suppliers in particular, turning into a multinational supplier may be dangerous due to the tremendous R&D and overseas expenditure needed. Car assembler usually also wants its nearby suppliers. But the behavior of the auto-maker will be more global, decreasing number of suppliers and focusing on the suppliers available for the system module.