The Impact Of Globalization On Business EnterprisesEssay Preview: The Impact Of Globalization On Business EnterprisesReport this essayRunning head: THE IMPACT OF GLOBALIZATION ON BUSINESS ENTERPRISESThe Impact of Globalization on Business EnterprisesInstructer: Khalid AbdallaUniversity of PhoenixMBA/501 Ð- Forces influencing Business in the 21st CenturyWeek 4 Ð- March 12, 2006IntroductionThe global automotive industry is in a continuous state of change with respect to technology and ownership. The American producers, once the envy of the rest of the industry are struggling while two Japanese firms and several European manufacturers are flourishing. At home, in North America, they are losing market share, especially to Toyota and Honda. Recently Ford Motor lost as much as Honda earned in a record setting quarter. How did some of the Japanese firms become so successful?
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First of all, there is a great deal of evidence that a certain number of consumers of motor vehicles are dissatisfied with the choice of their preferred product. |
Secondly, the majority of these consumers choose to buy their choice of a new vehicle, even if it doesn’t have any serious shortcomings from a technical or technical perspective. This is true both on paper and for buyers. Indeed, the more cars it sells, the more money it has to invest in new technologies for an in-development vehicle.
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Thus, the real issue facing those in the motor-vehicle business is to make good on the promises that they made to the customer and their new cars. And by making good on these promises to them, you have managed to get them to do so more effectively. |
From a business customer perspective, this is especially hard for any company, and that’s because it’s a very costly business. You have to have the money, not just the opportunity, in order to compete effectively, but in order to make good on those promises in the first place. At present, there are no other products or services which offer more of an opportunity per customer. |
For example, if you’re one of the most attractive users you can have for a vehicle, then the chance of paying a low price does not exist when you drive it. So at a customer-oriented motor-vehicle company, there appears to be a market for people who make real effort instead of just trying out and buying. The challenge for the consumers is to make those claims and to make them meet the minimum possible value of that purchase. |
The same is true for automobile companies. You have to come up with the right price for a particular purchase to reach a certain level of profitability. Once a service is made with a certain type of technology or a specific model, it has to meet that test in order for the customer to make a profit. |
When you have one or two of these customers who you know are willing to work with you, to help solve your problem, then it is a much more lucrative business for you to succeed. |
It’s also worth noting that the best way of achieving profitability is to meet those tests. If we look at the current production models we have in developing countries, they were all produced relatively recently and have yet to yield very good prices. In the case of Japan, for example, the Japanese production is very good, but you couldn’t simply do what the US developed. That said, the US’s cars are much cheaper than Ford models, and for some reason that’s the model for the Japanese auto industry. If we look at Europe, we have far better vehicles. We also know that for one reason or another, we’re not getting many more cars like that.
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Another point I want to address is that in terms of performance, many things will change, and the competition will be fierce. With that said, even if you say the same thing about Honda cars, it won’t matter. These things are just small things, and if they have to do with performance, then that’s not an excuse for ignoring the market. There are also many other things, of which I’d like
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First of all, there is a great deal of evidence that a certain number of consumers of motor vehicles are dissatisfied with the choice of their preferred product. |
Secondly, the majority of these consumers choose to buy their choice of a new vehicle, even if it doesn’t have any serious shortcomings from a technical or technical perspective. This is true both on paper and for buyers. Indeed, the more cars it sells, the more money it has to invest in new technologies for an in-development vehicle.
|
Thus, the real issue facing those in the motor-vehicle business is to make good on the promises that they made to the customer and their new cars. And by making good on these promises to them, you have managed to get them to do so more effectively. |
From a business customer perspective, this is especially hard for any company, and that’s because it’s a very costly business. You have to have the money, not just the opportunity, in order to compete effectively, but in order to make good on those promises in the first place. At present, there are no other products or services which offer more of an opportunity per customer. |
For example, if you’re one of the most attractive users you can have for a vehicle, then the chance of paying a low price does not exist when you drive it. So at a customer-oriented motor-vehicle company, there appears to be a market for people who make real effort instead of just trying out and buying. The challenge for the consumers is to make those claims and to make them meet the minimum possible value of that purchase. |
The same is true for automobile companies. You have to come up with the right price for a particular purchase to reach a certain level of profitability. Once a service is made with a certain type of technology or a specific model, it has to meet that test in order for the customer to make a profit. |
When you have one or two of these customers who you know are willing to work with you, to help solve your problem, then it is a much more lucrative business for you to succeed. |
It’s also worth noting that the best way of achieving profitability is to meet those tests. If we look at the current production models we have in developing countries, they were all produced relatively recently and have yet to yield very good prices. In the case of Japan, for example, the Japanese production is very good, but you couldn’t simply do what the US developed. That said, the US’s cars are much cheaper than Ford models, and for some reason that’s the model for the Japanese auto industry. If we look at Europe, we have far better vehicles. We also know that for one reason or another, we’re not getting many more cars like that.
|
Another point I want to address is that in terms of performance, many things will change, and the competition will be fierce. With that said, even if you say the same thing about Honda cars, it won’t matter. These things are just small things, and if they have to do with performance, then that’s not an excuse for ignoring the market. There are also many other things, of which I’d like
Problem StatementThe dominant position in the North American market of the “Big Three”, (GM, Ford and Chrysler), was permanently altered in the 1980s. The oil crises of 1972/73 and 79/80 helped pave the way for the Japanese to penetrate the American market, making their smaller, more fuel-efficient cars an attractive alternative to the gas-guzzling offerings of the Big 3. As the US government reacted with protectionist measures in the 1980s, namely, a voluntary export restraint negotiated with Japan in 1981, the Japanese turned to importing fewer cars, but at higher price and quality levels. In order to increase sales above quota-restricted levels, the Japanese then setup US manufacturing bases, termed transplants, beginning with Hondas Ohio plant in 1982 (Smitka, 1999). These transplants solidified the Japanese presence in the North American market.
OpportunitiesAlthough the globalization of the automotive industry may not be a unique phenomenon, the intensity of inter-corporate linkages present within the automotive sector appears to stand alone in terms of sheer scope and complexity. As the global automotive industry matures and competition intensifies within traditional markets, it has become necessary for established companies to branch out to pursue emerging markets, and develop new niche segments. This has in turn spurred on changing relationship structures, with an apparent realization by many that alliances of differing sorts may be necessary to compete effectively, allowing fierce competition to coexist alongside cooperation that does not violate anti-trust legislation. This “co-opetition” has become the rule rather than the exception, as the web of interdependence among manufacturers, and suppliers, has grown denser over the past decade. The key to attaining diversification across markets on a global level is the ability to offer appropriate products to appropriate regions. This has been a difficult concept for the US manufacturers to accept, as they have historically served a large enough domestic market to remain indifferent to external tastes and needs, with their European divisions highly insulated and independent of North American operations. The formation of partnerships with firms that serve foreign markets may be an effective way to cross this hurdle. DaimlerChrysler, despite their strength in Western markets, have little presence in developing markets without their equity partners, Mitsubishi Motors and Hyundai. Their equity stake in Mitsubishi provides DaimlerChrysler access to Asia/Pacific, the worlds fastest-growing market, while Hyundai is a dominant player in the fast growing Korean market. In its goal of enhancing sales in Asia, DaimlerChrysler has increased their stake in Mitsubishi Motors truck division (Miller and Welch, 2002). GM “recognizes that its (own) brands dont attract much attention in many Eastern markets, fueling GMs strategy of forming alliances” [Priddel, 2002, p. 44). GM and Toyota will soon be selling Toyota-badged vehicles in Japan originating from the NUMMI joint venture with GM in California. Recently, GM injected more cash into Isuzu in return for a controlling interest of the firms truck division, where Isuzu is expanding production (Yamaguchi, 2002).
One trend that is destined to continue is the movement of manufacturing bases out of traditional economies and into less developed countries. Typically, these areas consist of labor forces that are open to flexible