Integration and Responsiveness: Marketing Strategies of Japanese and European Automobile Manufacturers

Abstract

Formulating a strategy to compete effectively in international markets is one of the major challenges a firm faces. The authors provide insight into how automobile firms devise strategies that respond to the conflicting pressures for local responsiveness and integration in the context of Western Europe, where Japanese automobile firms compete with European-based manufacturers. The authors develop a conceptual framework to test integration–responsiveness in terms of marketing-mix responses and market conditions, using data that cover four major European markets (73% of Western European sales) and a critical period in European integration. The findings indicate that Japanese firms are successfully pursuing standardization strategies rather than fully combining integration and responsiveness. These firms competitively adapt to limited differences between markets, and this strategy appears to be quite successful compared with the European firms’ strategies of combining integration and responsiveness. The European strategy appears to undermine the ability to respond to Japanese firms’ targeted competitive moves, despite the presence of significant barriers to Japanese exports. Whereas Japanese firms were able to maintain market share, European firms’ market shares decreased over the three-year period examined.