Information technology and automobile distribution: a comparative study of Japan and the USA

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Abstract:

Automobile distribution has undergone a drastic change in recent years both in Japan and the USA, because of so-called ‘market globalisation’ and ‘digital/network revolution.’ The purpose of this paper is to provide an analytic framework of this change and to apply it to Japan and the United Sates to foresee differences in future development. We argue that the firm’s strategic positions can be summarised in the three dimensional ‘strategic-pattern’ space: 1 whether the firm is prone to ‘combinatorial optimisation’ or ‘process oriented optimisation’ 2 whether the firm’s products are based on ‘modular architecture’ or ‘integral architecture’ 3 whether the firm adopts ‘horizontal-dominance strategy’ or ‘vertical enclosure strategy’. We then characterise recent developments in the US and Japanese car markets as a result of car manufacturers’ and dealers’ adaptation to global competition and information technology. We identify three typical combinations of strategic patterns: 1 ‘dealer consolidations by manufacturers’ 2 ‘dealer consolidations by retailers’ 3 ‘informediaries’ initiative’. We examine advantages and disadvantages among the three strategic patterns. We argue that, whilst the three strategic patterns are likely to coexist in the near future in the USA, because of strong regulatory restrictions (dealer protection laws) manufacturer-driven changes are more likely in Japan. © 2002 Inderscience Enterprises Ltd.