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How the Global Automotive Industry Compare

6 pages
1430 words
Sewanee University of the South
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The global competition strategy has become significantly important especially in the automotive industry due to globalization. The automotive industry is one of the most dynamic, competitive and performing sector due to the integration of global strategies in the world. Global competition is at the pick in this industry as automakers try to increase sales coupled with increasing research and development on style, technology, affordability, and product differentiation (Schmitt, 2016). The most popular automakers in the world are represented by three rival brands as per this analysis and include Volkwagen, Nissan, and Toyota. These companies are consistently expanding their brand representation on the global market. Due to the fierce competition, technological advances has become a critical milestone as these companies race in the production of efficient and performance oriented electric vehicles. For businesses to succeed in the global market, they must meet the global competencies aimed at client, adaptability and change, talent management, leadership, innovation and sales. These aspects are central to the models of culture adopted by Volkswagen, Toyota and Nissan.

Three Models Culture

Culture is a fundamental aspect in the global businesses. According to the three models of culture, an organization and its employees should fully comprehend the distinction in organizational, personal, and national culture. People have different values, norms, and customs that can impact decision-making and social cohesion in the workplace. Therefore, there should be a clear distinction of these aspects and a business institution should implement an organizational culture that appreciates diversity, innovation, performance, and teamwork (Cavusgil, Knight, & Riesenberger, 2016). With this note, Volkswagen utilizes the 7D model of organizational culture to capitalize on global competitiveness. The company obtains data through market research and development to help create products that meet the needs of the customers. Definition of the data helps to integrate the third aspect of design followed by the development of car models. After a successful development, the automaker delivers the product to the global market, deploys sales agents and determines the performance of a particular car model. This strategy has improved the competitiveness of Volkswagen across the globe.

Types of Economic Systems

My observation is that the most suitable and recommended economic system for the automobile industry is the product differentiation strategy. For automotive companies to remain competitive in the global market, they must offer options that are creative, innovative and technological advanced. This strategy creates brand recognition and loyalty for the company and consumers. By using this strategy auto companies can reach a larger target of consumers. Furthermore, the use of differentiation coupled with low cost strategy would attract a large pool of customers on the global scale. Currently, automakers are competing for technologically advanced vehicles as the 21st century continues to thrive through numerous technological advancements. There is an ongoing research on self-driving cars and on electric vehicles. As such, automotive companies that will crack the code and differentiate their products to cover the aspect of evolving technologies will reap huge market returns (Wells, 2010). Some global markets such as France, China and India have imposed a ban on diesel vehicles by 2040. Recent research indicates that there will be between 200-500 million electric vehicles on the road by 2040. Therefore, product differentiation in terms of technology, design innovation, and performance is the most effective economic strategy in the automotive industry.

The major effects of the economic system are supply and demand and sales revenue. The product costs and marketing of a target consumer allows the auto makers to offer makes and models at different price points in different regions. This allows for cost effectiveness and consumer satisfaction. Another potential effect of the economic system is labor costs. Labor costs influence the companys business revenues and profits. Labor costs for the auto company essentially adds employment to the region. In other words, product differentiation will have a significant impact on the demand and supply of certain brands in the industry. Sleek designs, technological integration, performance, efficiency and cost factors will determine the consumer ability and willingness. Likewise, these factors will determine the supply of vehicles to meet the market demand.

Economic Development and Generic Actions

Economic development is crucial for the growth of a nations GDP and ultimately economic progress. However, some countries experience slow economic development compared to others. Slow economic development is caused by a number of factors. Poor governance contributes to slow economic growth and development due to misappropriation of funds and corruption. In the developing nations like in Africa and Latin America, the level of corruption among government officials is very high. Therefore, it weakens the aspect of governance within a country. Likewise, poor education systems lead to slow economic growth. Some countries lack the resources to fund education, science and technology. Proper education nurtures creative minds that foster research in science and technology that stimulates entrepreneurial ideas. These ideas create employment and economic progress. Poor financial management leads to slow economic development due to tax evasion among other factors (Mankiw, Taylor & Ashwin, 2016).

Volkswagen, Toyota, and Nissan have the ability to make the world a better place and accelerate economic growth and development in least developed countries. These companies can invest in education to promote the growth of science and technology and ultimately innovation. Secondly, the automakers can accelerate industrialization by opening up vehicle assembly plants in these countries. Such initiatives create jobs for the locals and will accelerate industrialization. Lastly, these companies can advocate for the importance of proper governance that does not condone corruption and one that promotes transparency. These companies can spearhead measures to promote financial planning, accountability, and the importance of savings and investment, as key factors in economic growth and development.

If I was given an opportunity to be a lead an automotive company, I would choose to a Volkswagen global leader. Volkswagen has excelled in global performance because of the organizational culture. The company has a rich cultural diversity and talent management programs that steer it towards global domination. Nevertheless, to accomplish a senior leadership position, I would have to heavily invest in my education. Complete my undergraduate and pursue a masters degree in strategic management or any other postgraduate degree in business management. Apart from that, leadership entails strong qualities and skills. A great leader should be confident, knowledgeable, wise, smart thinker, courageous, focused, intelligent, and a strategic planner. In addition, a great leader should have strong social skills such as proficiency in communication skills. These are the factors I would look forward to attain for me to be a global leader at Volkswagen. Apart from that, I should be a strong negotiator to achieve business deals globally. Finally, a greater leader should be well-grounded on conflict management. Managing human beings is one of the hardest tasks. A strong leader should know how to deal with workplace conflict to nurture team effort and cohesiveness in the workplace.


For a company to achieve the set objectives towards global success while maintaining customer loyalty, it should align the global strategies with business needs. Customer satisfaction is crucial for retaining and attracting customers. The company should align the organizational culture to align with strategic global objectives, customer satisfaction being a top priority. Therefore, to enhance business innovations and expansion, I would strive to implement a global talent acquisition and management program. Talent management is one of the key functions of strategic management. As such, cultural diversity within an organization helps to integrate different business ideas into one to promote the organizational culture and business acumen (Lasserre, 2012). The second step would be to invest on technological research and development. This program would help to acquire and nurture innovation in the automobile sector by producing vehicles that meet the curiosity of companies. The company would focus on vehicles that attract demand due to technological advancement, performance, efficiency and safety features. On the other hand, the company could also focus on viral marketing to create awareness about Volkswagens products, organizational culture and behavior. Lastly, I would strive to nurture corporate social responsibility by sponsoring community events like helping the needy. Sponsoring students to college education and the green initiative aimed at reducing the carbon footprint.



Cavusgil, S. T, Knight, G., & Riesenberger, J. (2016). International business: The new realities (4th ed.). Boston, MA: Pearson.

Lasserre, P. (2012). Global strategic management. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.

Mankiw, N., Taylor, M., & Ashwin, A. (2016). Business economics. Andover, Hampshire: Cengage Learning.

Schmitt, B. (2016). Forbes Welcome. Retrieved 5 February 2018, from

Wells, P. (2010). Sustainability and diversity in the global automotive industry. International Journal Of Automotive Technology And Management, 10(2/3), 305.


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