Internationalization of Automotive Industry

The industrial innovations that continue to manifest each day are pretty intriguing. Each innovative product is better than its predecessor. It enables the innovators to take pride in their work for groundbreaking discoveries within their industry. The automotive industry is a true reflection of innovation in progress each time. The key stakeholders within this sector are at the forefront of spearheading the changes that lead to exquisite vehicle masterpieces. These innovative vehicles often gain traction among the domestic markets?(Chatterjee and Hambrick, 2007 p351-355).?Celebrities, car lovers, and automobile collectors are among the frequent buyers of luxury cars. With a booming reception in the domestic markets, automotive industries desire to push their products into the international frontier even though success in domestic markets does not guarantee success in foreign markets.

The automotive industry’s success is not an overnight experience. Many tangible factors come into play to aid this industry to thrive within the local frontier. This industry depends heavily on research. There is a need to rely on the government and private data to brainstorm on the automotive sector?(Finkelstein, 2005 p9-13). It is through this intertwining of different key entities that attributes to the true meaning of innovation procedures. The creation of limited car editions, among other masterpieces within this industry, plays a crucial role in boosting the domestic economy. That is why these innovative systems emphasize geographical and technological-focused thinking. It enables one to acquaint with modern automotive innovation systems. Learning more about electric vehicles, solar photovoltaic technologies, and other composite materials is evident throughout the innovation procedures. It is critical to work with a comprehensive analysis scheme because it is the lifeblood of technological innovation systems. Embracing an appropriate functional approach assists in deconstructing the complex automotive industry’s innovation system.?

The Perspective of Innovation Systems

Innovation systems perspectives are pretty versatile and seek to cover beyond the known basics. There is a need to focus intensely on innovation development procedures, diffusion, and technological innovation utilization. The technological innovation systems (TIS) have several indicators and data types that attribute to its success. It is not a smooth ride all through as stumbling blocks exist along the way. Any weak indicator can delay the development procedure and affect the internal systems (Henry, 2011 p6).?The benefit of agreeing on every detail within the automotive industry is crucial, leading to a significant milestone. When everything seems to run smoothly, it is eminent to factor in the market uncertainties. The policymakers also play a notable role in the success or failure of the automotive industry. It is because they formulate policies that act as roadmaps to ensuring the innovation systems run efficiently.?

The Globalization of Research and Development (R&D), Knowledge, and Innovation

The automotive industry foundation lies in the in-depth research investment by key stakeholders. It is paramount to focus beyond the basics and ensure they experiment on each development before realizing any product to the public. The vital actors within the industry incline to display their role in realizing the innovation process. Multinational business enterprises run the global R&D activities, resulting in the quick change in the home country’s R & D (Langley, 1995 p63-65). It is made possible by the globalized network changes in adopting a method that boosts sales and profits. R&D focus on each detail from the automobile and parts, computer services and software-rendered in the industry, and the electronic and electrical parts, among other industrial sectors. The firm size, industrial sector, and geography are vital in setting up the global R&D.?

Global R&D in the automotive industry is a move that enables organizations to reap substantial benefits. It is a step that has made it possible to access a vast pool of skilled workforce to meet up the huge domestic market demand. The automotive companies delight in a conducive business climate and a vast range of experienced researchers. Automobile organizations also enjoy reduced operational costs, which trickles down to better profits and ROI. Through these integrated global R&D networks, the major participants need to stay in the loop in any component development. The international innovation process is not always rosy. There exist creative tensions that lead to debates on global efficiency while comparing it to local effectiveness (Mellahi and Wilkinson, 2004 p21-24). The company is on edge while comparing tacit knowledge and explicit knowledge. Dealing with long-term technological anticipation is worrisome because it might be at the expense of emerging innovative technologies. Another challenge is whether focusing on the immediate customer needs is of benefit or if this will include the future needs of their client base.?

Embracing the Global Strategy

The automotive industries take pride in concurring the home markets and beyond, leading to strengthened internationalization drivers in the foreign markets. These industries experience a competitive advantage while venturing into newer territories. The global strategy is made possible by immeasurable resources, a national environment, and impressive capabilities, among other success factors. For the automobile industry to thrive, there is a robust value chain set in place. For this value chain to run without any glitch, an excellent framework is adapted (Salvetti, 2010 p3-5). It is essential to make the automobile acceptable and widely attractive in the international markets, but the companies often encounter some setbacks while venturing into newer territories. The competitor's retaliation is a challenge to any new entrant. For this reason, it is paramount to acquaint with their risk levels and other investment opportunities that one might use to their advantage because a company can only control the amount and the ownership percentage that it has. The new automotive markets should not be scary because it is a chance to know about essential joint ventures, the needed licensing, export strategy used, and franchising, among other subsidiaries.??

The Corporate Failure

Visualizing and implementing bold ideas are significant steps that organizations take once they are flourishing within the domestic markets. In the process, these companies boost their reach into the international markets by testing new markets because it provides a learning ground. Some automotive industries find themselves in a fix while marketing their automotive parts or the vehicles themselves, and without a proper plan, their success becomes short-lived (Hamilton, 2006 p1-2).?Other companies have become lucky enough to enjoy market dominance for more than five years and become notable brands through generations, for instance, the Toyota and Mercedes-Benz brands. There are substantial untapped foreign markets, but success in the global market is just a dream without proper research.

There is a need for excellent strategies to approach the new international markets. Every automobile industry is on a bid to win over the foreign markets with their outstanding works, and this increased competition, which on the other hand empowers competitors to improve their products. The complexity of these markets calls for excellent managerial perception and change of the organization’s ecology before focusing on the markets. Any inappropriate strategy often contributes to a significant setback into the new markets (Merchant and Wim, 2003 p12).?Any inaccurate acquisition of resources could lead to the company’s failure. The automobile company executives are accountable for each progress made. The cash control management system needs to go under extra scrutiny. Any misappropriations of funds could wreck-havoc to the entire organization. There need to be detailed reports while conquering these markets because blurry reports often lead to poor resource allocation (Hammond, Keeney and Raiffa, 1998 p3-5). Some automobile industries fail to check their financial audit until damage takes place. It is paramount to hire experienced accounting experts to avoid accounting scandal that ultimately tarnishes its image.

Conclusion

In summary, thriving in domestic markets does not guarantee success in the international market. The essay has argued that innovations within the automobile industry, globalization, R&D lead to the success of the automobile industry. The future keeps getting brighter within the automobile industry. Conquering and thriving in new market ventures is a dream that most companies delight in implementing. Properly executed plans are vital from the onset of any project, taking note of acquisitions and partnering with suitable mergers. There is a need to embrace calmness and not become intimidated by the competitive pressure that is eminent. Spotting any early detection that might cause the automobile industry’s failure is essential. The automobile stakeholders and workers can deduce an effective strategy that will improve the business. The innovation procedures within the automobile industry are just at the preliminary stages. However, relying upon these procedures alone is not enough to thrive in foreign markets. It is essential to embrace challenges and curb them while venturing into the foreign market space.?

However, the corporate failures within the industry are also a huge blow that might lead to its downfall. Venturing into the global markets might not guarantee similar success as domestic markets.

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Reference List

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Hamilton, S., 2006. Sarbanes-Oxley Will Make Little Difference-Understanding the Real Reasons for Corporate Failure.?Perspectives for Managers, (135), p.1.

Hammond, J.S., Keeney, R.L. and Raiffa, H., 1998. The hidden traps in decision

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Henry, A. (2011). Understanding strategic management, 2nd?edition, Oxford: Oxford University Press.

Langley, A., 1995. Between'paralysis by analysis' and extinction by instinct'.?MIT Sloan

Management Review,?36(3), p.63.

Mellahi, K. and Wilkinson, A., 2004. Organizational failure: a critique of recent research and a

proposed integrative framework.?International Journal of Management Reviews,?5(1),

pp.21-41.

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