Distance Learning Project on

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1 UNIVERSITY of FLENSBURG International Institute of Management Chair for Strategic and International Management Prof. Dr. Susanne Royer University of Lodz Faculty of Management Department of Entrepreneurship and Industrial Policy Dr. Pawel Glodek RADBOUD UNIVERSITEIT NIJMEGEN Nijmegen School of Management Prof. Dr. Hans van Kranenburg, Drs. Joost Bücker & Dr. Gerrit Willem Ziggers February 28, 2011 Distance Learning Project on The role of small players, the benefits of innovative formats and the challenges of cooperative activities in car distribution In the summer semester 2011 a cooperative course is held by the University of Lodz, Poland, the Radboud University of Nijmegen, Netherlands and the University of Flensburg, Germany. The course deals with recent trends and developments in the European automobile industry with the focus on the activities in the area of distribution. The retailing and distribution sector is vital to the car industry. It entails supplying new cars to dealers, selling them to final customers (and financing the sale), providing service and repair, and then re marketing used cars. The course focuses on new forms of organising value adding activities in this industry context. Current developments indicate changing competitive landscapes and new

2 relationships between actors in this sector. Automobile manufacturers have heavily restructured their value adding activities and processes recently and these activities are ongoing. While in production, manufacturers reduced the number of direct suppliers and transferred extensive quality, quantity, time and cost responsibilities for assembly groups or modules and sometimes even for complete models to their suppliers, even more revolutionary changes happened in the area of distribution: Large multi brand dealer groups gained importance and took over functions which were previously fulfilled by the automobile manufacturers themselves. Traditional family businesses had to struggle to survive, new models to bundle resources as a consequence came into being. New relevant actors have to be considered such as manufacturer independent banks and leasing firms that offer distribution services besides their traditional financial products (e.g., complete mobility solutions including new car ordering, fleet management up to remarketing of the car). These services gain strategic importance with the growing share of business customers in Europe. Private customers then again are increasingly buying young used cars instead of new ones. In the consequence car distribution becomes more fragmented with impacts on customer expectations and products and services. Today, many distributor groups work together with the increasing segment of business customers and less focus on private end customers. These are only a couple of trends that do indicate that further investigating this field may be a fruitful area of research regarding cooperative activities as well as new forms of value creation. This project is designed to acquaint the participants with in depth theoretical and practical knowledge of the selected field. Further the participants gain experience in cooperating in international teams regarding these topics backed by a cultural role play (called ECOTONOS) and supported through various group projects. The following research topics are to be investigated. The seminar is structured into three core topics. Regarding these core topics the participants have to go into depth into one specific sub topic each. Relevant questions regarding these topics are outlined below to illustrate possible avenues of investigating these topics.

3 CORE TOPIC A: Reconfiguration of new car retailing Topic for Group 1: Actors in European car retail sector and their resources and capabilities How can the different types of players in new car distribution be systematized? What are the distinctive characteristics? How did these players change over time and what retail model is recently under pressure and which is supported? What resources and capabilities are strategically important for the different players? How to overcome restrictions on resources and capabilities? What strategic perspectives do traditional family businesses have in such a market context and in front of such resource requirements? Topic for Group 2: Multi franchising in new car distribution: Models and Synergies What synergies can be obtained by multi franchising concepts? What types of multi franchising are possible? What is the most established form of multi franchising in European car distribution? What innovative approaches of car distribution can be found in terms of multifranchising concepts in both market areas the European and the US markets? What type offers which synergy effects? What are the inherent threats of different types of multi franchising? What are the implications on the competitiveness of the concept? What are the strategic implications from the undertaken analyses for this dealer type in new car retail? CORE TOPIC B: Why does it make a difference to sell used cars? Topic for Group 3: Used cars: selling products, selling services or both? What are the underlying product characteristics of a used car? What makes it different from new cars and why are services a core ingredient of selling used cars? What used car segments can be systematized and what are the inherent customer expectations? How can the so called lemon problem be solved? Which role do services around the product such as financing or repair play in this context? Which strategic approaches to used car sale result from the undertaken investigation of product characteristics? Which impact do product specificities have on the organisational forms to be suggested? Outline a continuum between pure selling (specialisation) and all inclusive packages (generalists) and try to establish a criteria catalogue that helps evaluating business models in the different markets.

4 CORE TOPIC C: Service and repair: exploitation of industry s last profit resort Topic for Group 4: Towards a typology of service and repair organizations What different types of organisations can be differentiated? How are these concepts distributed in the European market? Who are the franchise coordinators and what are their core objectives? How can the relationship between franchisor and franchisees be characterised in the different concepts? By what strategies can these objectives be fulfilled? What are the strategic advantages of the different organisation forms? Preliminary Outline: February 01 10:30 (MS 225) April 13 April April + May May 4 May 11 UF: Preliminary kick off for the Flensburg students LU: Preliminary kick off for the Lodz students RU: Preliminary kick off for the Nijmegen students UF: Meeting for the Flensburg students with final planning of joint Kick off workshop Joint kick off with the participants from the partner Universities in Flensburg with: international team building cultural role game (ECOTONOS) introduction lectures regarding the three core topics discussion of the selected topics introduction into a general research framework students presentations regarding their research projects. Group work at the different locations supported by video conferences in which each participant group briefly presents and afterwards discusses the current state of their work (10 minute presentations) as well as communication via other channels such as e mail and the BSCW Server UF: Discussion of topic structuring and preparation of the video conference for the Flensburg students LU: Discussion of topic structuring and preparation of the video conference for the Lodz students RU: Discussion of topic structuring and preparation of the video conference for the Nijmegen students Video conference I

5 May 18 May 25 May June 15 July 3 UF: Discussion of topic structuring and preparation of the video conference for the Flensburg students LU: Discussion of topic structuring and preparation of the video conference for the Lodz students RU: Discussion of topic structuring and preparation of the video conference for the Nijmegen students Video conference II (optional, if students see need for it) Common workshop at the University of Lodz with lectures as well as group presentations comparing the work results of the different groups UF: Discussion of the current state of the research papers for the Flensburg students LU: Discussion of the current state of the research papers for the Lodz students RU: Discussion of the current state of the research papers for the Nijmegen students Delivery final paper

6 Aims and objectives: to experience working in an intercultural team to integrate knowledge from different modules and apply it into a research study to learn how to set up a small empirical research to learn how to present the research results to experience working in a distance learning project Tentative Assignment The final goal of this course is the production of a paper dealing with one of the outlined subjects in a team of Polish, Dutch and German students to give final presentations about them at the University of Lodz/Poland. The topics should not only focus on theoretical facets of the specified topic but also look at the practical side of it. If students are able to collect primary data via interviews or surveys that is laudable. If such possibilities do not exist, it however is also possible to gain the required data by doing secondary research, analysing homepages and other relevant material. Further, the participation in the kick off part at the International Institute for Management at the University of Flensburg, Germany (including a cultural role play (ECOTONOS), teambuilding activities and introductory lectures) as well as in video conferences are compulsory parts of the course. The paper of each group should consist of approximately 25 pages excluding attachments, table of contents etc., printed in Times New Roman 12 pt. spacing 1.5. Next to the Credit Points given for the course at the different Universities, the students get a joint certificate signed by the partners about their participation in the project.

7 Helpful Books and Articles ACEA: European Automobile Industry Report B0035F273/$File/IndustryReport05.pdf, Akerlof, G. A.: The market for 'lemons': Quality uncertainty and the market mechanism, in: The Quarterly Journal of Economics 84 (3), 1970: Booz Allen Hamilton: Multi branding strategies in the German automotive market Bozon, L. et. al.: Dealer groups in Europe: Their growth and strategies, ICDP Research Report 02/2005, Solihull, UK Bruce, M., Moore, C., Birtwistle, G.: International retail marketing: a case study approach, 2004, Oxford. Buzzavo, L. & Montagner, L.: Dealer Margin Structures for New Vehicles in Europe. ICDP, Buzzavo, L. & Pizzi, C.: Trade Marketing and Vertical Restraints: the case of automotive distribution in Italy. Paper presented at the European Marketing Trends Congress, 21st 22nd January 2005, Paris. Capgemini: Cars Online 04/05: Driving growth through collaboration Chieux, T. & Guillaneuf, C.: The European aftermarket trends in the market and pros pects for authorised and independent repairers, ICDP research report 05/05, Solihull (UK), Chieux, T. & Stratmann, U.: Evolution of the independent repair sector, ICDP Spring Forum 2007, Amsterdam, Chieux, T., Guillaneuf, C. und Stratmann, U.: Working with independent repairers. Strategy issues for suppliers and dealers, ICDP Management Briefing No. 53, Solihull, UK Chieux, T., Stratmann, U., Waller, Ben und Whiteman, John: Models for car distribution in 2015, ICDP Management Briefing No. 56, Solihull, UK Dietl, H. M., Royer, S. & Stratmann, U.: Value Creation Architectures and Competitive Advantage: Lessons from the European Automobile Industry, in: California Management Review Vol. 51, No. 3, 2009: Dietl, H. M., Royer, S. & Stratmann, U.: Wertschöpfungsorganisation und Differenzierungsdilemma in der Automobilindustrie, in: Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung (ZfbF), Vol. 61, Juni 2009, S DTI: Car Servicing and Repairs, Mystery shopping research

8 Glodek, P., Stratmann, U., Royer, S. & Bozon, L.: Used Cars in Poland, ICDP Management Briefing 64, London Economics: Developments in car retailing and after sales markets under Regulation No. 1400/2002, European Commission McKinsey & Company: Overhauling European Car Distribution. The McKinsey Quarterly, January Royer, S., Stratmann, U. & Seeba, H. G.: Mehrmarken Franchisesysteme in europäischen Wartungs und Reparaturmärkten für Pkw Eine effizienzorientierte und strategische Analyse, in: Zeitschrift für die gesamte Wertschöpfungskette Automobilwirtschaft (ZfaW), Vol. 12, No. 1, 2009: Royer, S. & Stratmann, U.: Wettbewerbszange, in: Autohaus 19, 2008: Royer, S. & Stratmann, U.: Value Net Organisation and Strategic Competitive Advantage: The case of value net design in car repair and maintenance services in Europe, in: Festing, M. & Royer, S. (Eds.): Current Issues in International Human Resource Management and Strategy Research, Schriftenreihe Internationale Personal und Strategieforschung, Band 1, München, Mering: Hampp Verlag, 2008: Royer, S. & Stratmann, U.: Independent entrepreneurs as an obsolete model? considerations for the European automotive repair and service markets, in: International Journal of Globalisation and Small Business, 2 (1), 2007: Royer, S.: Strategic Management and Online Selling: Creating Competitive Advantage with Intangible Web Goods, Routledge Advances in Management and Business Studies, London/New York (Routledge) Tongue, A. & Whiteman, J.: Understanding BER 1400/02 New roles in a new re gime? ICDP research report 06/03, Solihull (UK), 2003 Wade, P.: The Future of Car Dealerships, HWBI Management Briefing, 5/05/02, Zentes, J., Morschett, D., Schramm Klein, H.: Strategic retail management: text and international cases, 2007, Wiesbaden.