Corporate Strategy and Policy

A NEW CLOSE VERTICAL PARTNERSHIP IN THE AUTOMOBILE INDUSTRY.





EUGEN BABAN


INTRODUCTION
Restructuring and change have characterized the American automobile industry in the past decade. Over-capacity, increasing customer requirements, tougher environmental legislation and rapid technology development were among the most important factors behind this massive development. To stay competitive, car manufacturers and their suppliers therefore needed to continuously improve their performance. As a result more integrated relations have been developed between the powerful manufacturer and the dependent supplier. The vertical relation has changed, towards an outsourcing of activities to specialized suppliers, allowing the big companies to focus on their core competencies. But since outsourcing means that important activities are placed outside the boundaries of the firm, extended cooperation was needed to ensure efficient coordination of these activities. This requirement has for...