The paper "Internationalization Strategy of Suzuki and Volkswagen Companies" is a great example of a management case study. The Suzuki Company, since its establishment as a textile industry venture, and the subsequent later diversification into the motor vehicle industry, has applied the subsidiaries expansion approach. In this regard, besides having its key manufacturing facility in Japan, Suzuki expanded its operations into India and Pakistan among other Asian nations through establishing organizational subsidiaries in the respective markets. A subsidiary expansion approach involves the development of organizational production unites in the new markets, which, besides following the strategic guidelines and strategies as per the headquarters, have their own production schedules and designs.
In this regard, the subsidiaries operate as unique and autonomous profit unit centres in the respective markets. Volkswagen Company On the other hand, the Volkswagen Company adopted and applied the partnership approach as its internationalization strategic approach. In this regard, the approach involves the process of developing a feasibility study in which key and potential partners in the foreign markets are evaluated and prioritized base on the development of a cost-benefit analysis.
As such, the most preferred partnerships for the venture are those with immense benefits in the long term period at reduced production costs. In this context, through alliances with other motor vehicle manufacturers, the organization as of 2011 consisted of over 342 group companies both in Europe and beyond. As such, the organization has relied on the influence and the presence of the group partners on the global foreign markets to exert its growth and spread as well as brand image development. Question2: Internationalization Strategies Analysis Suzuki Internationalization Approach The internationalization strategy adopted by the Suzuki Company has its share of advantages as well as disadvantages.
On one hand, the autonomous nature of the venture subsidiaries allows it to increase its diversification and focus on the respective markets. In this regard, instead of developing and manufacturing standard vehicles across the Asian market, the Suzuki Company has developed an initial approach through which the respective culture needs are served with unique small vehicle designs. To this end, this has promoted its access and possibility for increased market penetration in the region. In addition, Lohr (2014, p. 5) argued that the adoption and use of subsidiaries adopted by the company increase the overall organizational flexibility in responding to consumer needs.
As such, the regional officers and managers have the power and mandate to make strategic decisions, with minimal headquarters consultation. Therefore, this increases the organizational decision making speed, and eventual consumer response rate, satisfaction and thus loyalty. On the other hand, the internationalization strategy approach has a disadvantage in the retention of organizational culture. In this case, it is clear that through the system, the respective subsidiaries have their administration and operational liberties, independent of each other.
Consequently, this leads to the establishment and development of diverging cultures. Consequently, it is not easy to retain a standard and unique organizational culture across its subsidiaries. Therefore, the sustainable competitive edge of a unique and cohesive culture enjoyed by its peers in the motor vehicle industry, enhancing smooth organizational operations and reduced costs of production is lost for Suzuki Company.