Globalization Drivers Essay

Globalization drivers extremist extravagance car application Luxury car application thither ar four contrasting kinds of take aims in the luxury car manufacturing. The levels secern the actors of the market into different levels depending on their grade of luxury. We tolerate chosen to centering on the towering ge best level of luxury cars the ultra luxury cars. The main players of this level are companies such as Ferrari, Mercedes-Benz and Porsche, but the level also includes the not as big companies as Cadillac, Aston Martin and Maserati 1.All these companies have in usual is that they are international companies with a ii-way communication amid the crack quarters and the different desks scattered around the knowledge base. The head quarters weaken and supplies the desks with main car models while the desks receives the customers preferences so they together feces learn custom made cars 2. Segment The companies in the Ultra Luxury Cars industry directs to a narrow group of equalumers, which be grands to the hurrying class or upper middle class all(a) over the world. They are all share almost the resembling main needs, which consists of location, speed and transportation.The customers achieve these needs by buying the ultra luxury cars because they represent a very high level of exclusivity, individuality and craftsmanship 3. Since the customers share the same needs overall, it could be termed as Levitts (1983) convergence perspective. Where the needs of customers all over the world are becoming much converged, which is typical for the market of luxury goods. Since the customers in the segment, which the ultra luxury car companies focus on, share overall the same needs and then they are localized all over the world, the industry considers a globalized market.Most companies that are involved in buying strenuous machinery or other(a) large purchases have high fixed cost and the railcar industry is no exception to this. However th ere are still differenes within the whole industry, for example the demand and production of a Porsche may not be as huge as with Toyota for example, which fundamentally means that a luxury cars fixed cost per unit is higher than an ordinary family cars. The rent of a pulverisation and all the other different expenses to keep the production running act the fixed costs.As the bear on expenses for example are a dole out cheaper in Asia, most car companies, including the luxury ones, have migrated their production there. The gouge for globalization is clear, but still there are some luxury automobile companies that have stayed loyal to manufacturing the cars in their country of origin, such as Aston Martin. (https//www. honk. com/aston-martin) Experience curve Most luxury automobile companies have umpteen decades of experience in manufacturing their cars, which means both skilled expertise in technology as well(p) as categorys of building a strong and distinguished strike out. In luxury cars especially the signifi cornerstonece of the brand is very important as many of the customers purchase these cars exactly for the status symbol that they give its owner. Building a solid brand normally takes years of work in exceeding the customers expectations, it demands strong- bequeathed marketing, filling a specific niche at a right time. Sourcing Luxury automobile companies usually favour centralized purchasing which means that they buy the split that they need from one location for all the locations within the organisation. This provides standardization of a product which is quite essential in luxury cars, as well as some cost-savings.Automakers universally outsource production of parts or sections of vehicles, and for example Porsche is known to use a Finnish company, Valmet Automotive, to assemble its two main product lines, the Cayman and the Boxster. (http//www. just-auto. com/news/porsche-to-outsource-boxster-production-to-osnabrueck_id121470. aspx)Produc t development costs Because of the record of the product, the development and research of new technologies can be quite pricey within the automobile industry. Technological changes The last decades the technological development for luxury automobiles has gone very quickly.For example the first luxury automobiles were noted as luxury just by having seat heating or high beams. Nowadays luxury is more about buttons for technological equipments, voice command, sack efficiency and safety for the car driver. With having this thoughts in fit, you can considerate the technical changes in the luxury automobiles industry as a pressure for globalization. Of extend there are still some exceptions, for example Rolls Royce that is having a more of a British approach in their cars, with less buttons and simpler interior and equipment.These things can point against a more localization approach. Favourable logistics The logistics for the luxury automobiles depends for how long distance they ha ve to be transported, so for the consumers it will be cheaper if they can find an automobile as close as possible. Another aspect is that depending from which country the automobile is imported from you have to pay a different amount of taxes and insurance fees and even other regulations can appear. Therefore the companies will have an advantage if they are locally settled, even though the sincerely rich clients wont care about the cost for the transports. rattling this may be why many automobile companies has started factories in Asia, though for example the German automobile companies had made a between 30-40 % cut-rate sale growth in China. They may by this decision not only gain low labour costs but also light transport costs. Country specific differences If you look at last years statistic for automobiles producing, low labour cost countries standardized China, Japan, South Korea and India is all in the top fiver, the other country in top five is Germany.This shows that man y automobile brands have factories in these countries just for the low labour costs. In Germany the automobile industry is one of the biggest employers in the country, one author is that Germany have many famous car brands and they have a component of experience in the country. Between the different luxury automobile brands it differ a lot from where they are produced, like Mercedes-Benz have factories in a lot of different countries, Ferrari is only produced in one city and like for example Aston Martin is only produced in cities in UK.Therefore you can feel out that there is different kind of localization and globalization approaches. Competitive globalization driver The next driver concerns the competitive environment, eg the amount of competition from other countries and continents as well as if there is any interdependence between countries. agree to Yip (2003), globalised competitors and country interdependence are pressures for globalization. Globalised competitorsIn the luxury car industry, there are competitors from for example the US (Cadillac), Germany (BMW, Mercedes-Benz, Maybach, Audi), Italy (Maserati, Ferrari), Japan (Lexus, Acura) and England (Aston Martin, Rolls-Royce). According to Stonehouse et al (2004) a company that faces global competition has to compete on global terms as well. Therefore these facts indicate that this specific industry has become or are becoming globalized since there, given the examples above, are competitors from Europe, Asia and pairing America.Interdependece of countries In todays economy and as a ensue of specialization, companies are focusing on their core competences. For example, the German brand Mercedes are mainly focusing on innovation and design (Mercedes. com) while Acura have environmental friendly performance and innovation in the center of direction (acura. com). The headquarter of Mercedes is placed in Stuttgart and the production is taking place in Germany, Japan, USA, France, England and