Porter Diamond Theory Case Study: German Car Industry Essay

2500 Words Mar 26th, 2012 10 Pages
Abdullahi Miriam 0917517 PO3034 The EU and the Global Economy

PORTER DIAMOND THEORY Case study: German car industry

Date of submission: 16 November 2009

The luxury cars industry is one of the most prestigious mass-production industries in Germany. The country is recognised by many as the native land of the automobile; in fact in 1901 900 vehicles a year were already produced.
Throughout the century the sector turned out to be the pillar of the national economy. Germany's famous premier brands such as Porsche, Audi, Volkswagen, Mercedes-Benz
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The existence of economies of scale is another strength point in favour of the home market. Sophisticated costumers push car companies to innovate and create new features to satisfy the buyers need. For instance in 2007 BMW presented a retrofitted IPod connection which put them at the leading edge compared to other manufacturers. Consumers in Germany and Europe and in the USA and Japan as well have become more demanding about fuel efficient cars. Germany automobile producers were not the first to introduce hybrid cars but Mercedes, Daimler AG, Chrisler and BMW recently joined General Motors GM in The Global Hybrid Cooperation in order to build next-generation, hybrid powertrain technology (AMR research) which was an important step in addressing the steadily increasing demand.

RELATED AND SUPPORTING INDUSTRIES

Strong and dynamic related supported industry have a strong impact on competitiveness.
Moreover suppliers play an important role in the car industry. Today, components are more complex and advanced in order to cope with the diversified demand and the need for heterogeneity in car industry. Some suppliers are large and produce various goods for other industries as well. Most suppliers are, however, small and medium-sized firms. There are two types of suppliers. The first type of firms works in close cooperation with

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