In order to investigate the competitive strategies concerning the inter-organizational development systems, production systems and transaction systems of automobile industry in China, case studies were conducted on foreign-affiliated enterprises (Tianjin FAW Toyota Motor Co. Ltd, FAW VW Automobile Co. Ltd., and Beijing Hyundai Motor Co. Ltd.), a private-owned Chinese enterprise (Great Wall Motor Co. Ltd.) and a state-owned Chinese enterprise (FAW Car Co. Ltd.). The followings are the key findings from the case studies. First, foreign-affiliated car manufacturers have integral types of inter-organizational development systems that enable them to develop high quality cars, but they strategically differentiate their inter-organizational production systems and transaction systems to compete in the medium and medium-high class car segment. Second, Great Wall Motor has a modular type of the inter-organizational development system and production system that enables the company to develop and produce cars at a low cost by copying and remodeling original Japanese cars and to focus on the low-class car segment. Third, FAW Car has a modular type of inter-organizational development system and production system, and an integral type of the inter-organizational transaction system in order to maintain its independent Chinese car brand and sustain market share in the medium-high class car segment. The major implication from these findings is that, in order to obtain competitive advantage, the characteristics of inter-organizational systems should fit with the characteristics of the target market segment. Therefore, when a company plans to change its market strategy, such a company should decide which direction to shift its strategic position in the three-dimensional space with the axes of the inter-organizational development system, production system, and transaction system.
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