Global Networks and Competitive Strategic Alliances in the Automotive Industry. The Case of declining Europe.

Globalisation has redefined the rules of competition: the rapidity with which supply and demand are changing, the obsolescence arising from innovation and imitation processes and hyper-competition of over-supplied and saturated markets lead the market players to establish competitive relations to generate networks for the achievement of viable economies of scale. Firms have to manage a global alliances portfolio leveraging network intangible assets and cross-cultural management. In the automotive sector competitive strategic alliances have the concentration in a few large groups that compete on the market with similar strategies and based on similar structures. The sector paradox lies in the fact that in a saturated market these large groups must invest in flexible and simplified plants, using production modularisation and common platforms (technological convergence) to achieve significant advantages in terms of cost reduction, development times and introduction on the market. Although Europe has been a pioneer in the construction of cars it is in a situation of decline: the national champions are generally suffering except in the premium segment and British industry no longer exists after have been more than a century old. 8 main motivations describe European auto industry decline: impact of industry dynamics on profitability; excess of production capacity; demand stagnation; demography; market fragmentation and lack of a unique regulation; labour market, unemployment and labour unions; R&D expenditures and innovation; false environmental focus.