Integration and Responsiveness: Marketing Strategies of Japanese and European Automobile Manufacturers

Abstract

Formulating a strategy to compete effectively in international markets is one of the major challenges a firm faces. The authors provide insight into how automobile firms devise strategies that respond to the conflicting pressures for local responsiveness and integration in the context of Western Europe, where Japanese automobile firms compete with European-based manufacturers. The authors develop a conceptual framework to test integration-responsiveness in terms of marketing-mix responses and market conditions, using data that cover four major European markets (73% of Western European sales) and a critical period in European integration. The findings indicate that Japanese firms are successfully pursuing standardization strategies rather than fully combining integration and responsiveness. These firms competitively adapt to limited differences between markets, and this strategy appears to be quite successful compared with the European firms' strategies of combining integration and responsiveness. The European strategy appears to undermine the ability to respond to Japanese firms' targeted competitive moves, despite the presence of significant barriers to Japanese exports. Whereas Japanese firms were able to maintain market share, European firms' market shares decreased over the three-year period examined.

Knowing your boundaries: Integration opportunities in international professional service firms

“…Bartlett & Ghoshal, 1992;Birkinshaw, Morrison, & Hulland, 1995;Devinney, et al, 2000;Doz & Prahalad, 1991;Grein, Craig, & Takada, 2001;Roth & Morrison, 1992;Taggart, 1997). According to this framework, the tension between pressures to integrate globally and to be responsive locally is highest when a firm is pursuing a transnational strategy.…”

“…We suggest that a business model approach can potentially bridge organizational and competitive factors (e.g. industrial and environmental) (Fan, et al, 2012;Luo, 2001;Luo, 2002) with integration modes across functions (Grein, et al, 2001;Kim, et al, 2003).…”

There's No Place Like Home: A Strategic Framework to Overcome Liability of Foreignness in the German Car Market

“…The responsiveness vs. integration concept has been empirically tested and expanded (Devinney et al, 2000;Roth and Morrison, 1990). Grein et al (2001) highlight the importance of an adequate strategic fit between integration and responsiveness as a recipe for success in the automotive industry. Doz et al (2001) suggest that an intelligent international division of competencies and capabilities might even create additional, "metanational" competitive advantage.…”

“…This trade-off between integration and responsiveness (Bartlett and Goshal, 1989;Doz and Prahalad, 1984;Prahalad and Doz, 1987) is especially pronounced in the automotive industry (Grein et al, 2001). The high investments required to develop a new model, substantial fixed costs and long car model life cycles (typically 6 to 7 years) need to be addressed through large output volumes and subsequent economies of scale.…”

Perceived Factors Affecting the Integration-Responsiveness Framework: An Analysis from Chinese Multinationals Operating in Australia

“…The second perspective is to examine the I-R framework at the headquarter level (Birkinshaw, Morrison and Hulland, 1995;Kim, Park and Prescott, 2003;Johnson, 1995;Roth and Morrison, 1990;). The third perspective does not distinguish between headquarter and subsidiary, rather scholars (Grein, Craig and Takada 2001;Kobrin 1991;Johansson and Yip 1994;Paik and Sohn, 2004) treat MNC's headquarters and all subsidiaries as a whole when observing the determinants of the I-R framework.…”