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Is diversification a Strategic Advantage? The Example of Automotive Components in the Czech Republic

Author

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  • Lukáš Mohelský
  • Hana Machková

Abstract

The automotive industry is a key sector of the Czech national economy. Its share of GDP represents more than 8% and the Czech Republic is the 14th biggest producer of personal cars in the world. The goal of this article is to analyze the development of the customer portfolio of automotive suppliers in the Czech Republic from the perspective of their international location. The diversification of the portfolio can be measured in many ways. The approach in this article relies both on the usual statistical tools (concentration ratio, Lorenz curve, Gini coefficient, Herfindahl-Hirschman index) and on specific approaches such as the number of partners, geographical diversification and average distance travelled by exported component. Even though the export volume has been dynamically growing, it has remained focused on a limited number of crucial countries, which are mostly located in the close neighborhood of the Czech Republic.

Suggested Citation

  • Lukáš Mohelský & Hana Machková, 2012. "Is diversification a Strategic Advantage? The Example of Automotive Components in the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2012(2), pages 37-45.
    • Handle: RePEc:prg:jnlcbr:v:2012:y:2012:i:2:id:16:p:37-45
    DOI: 10.18267/j.cebr.16
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    Citations

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    Cited by:

    1. Eric Thivant & Hana Machková, 2017. "An Analysis of French Mergers and Acquisitions in Different Sectors of the Czech Economy," Central European Business Review, Prague University of Economics and Business, vol. 2017(1), pages 48-60.
    2. Hana Machková & Paul-Marc Collin, 2015. "Market Entry Strategies of Passenger Carmakers - The Case Study of the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2015(3), pages 23-34.

    More about this item

    Keywords

    diversification; strategic management; automotive industry;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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