Regional follows global: strategy mixes in the world automotive industry

The authors posit the question of whether companies should formulate their strategies according to a global or regional corporate mindset. In this study, they explore the strategic responses of multinational automotive companies embedded in a simple framework of interdependent industry forces, total globalisation barriers, and competitive regionalisation advantages. Regional strategies could be viewed as alternative, potentially superior solutions vis-à-vis fully globally integrated or locally responsive approaches. The presented evidence suggests that there are some valid reasons for companies to follow an eclectic course of regionalisation as well as globalisation. Such an approach involves clustering countries that exhibit similar market conditions and addressing homogenised regional consumer tastes, while minimising adaptation costs. In the context of the automotive industry, however, the preliminary findings suggest that a car producer should first become a global company, in order to efficiently and selectively regionalise in a second step. Overall, regional strategies could be associated with later, rather than earlier, stages in the evolution of a company's global strategy.