Read the case below and answer all the questions that follow The German Automotive Industry Germany is the largest manuf

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Read the case below and answer all the questions that follow
TheGerman AutomotiveIndustry
Germany is the largestmanufacturer of automobiles in the European Union with marketreaching a value of $54.02 billion (Data monitor, 2004). It is hometo the BMW, Audi, Mercedes-Benz and Volkswagen cars which are worldfamous for their innovation and quality.
The automobileindustry is the largest contributor to the German economy.According to the figures of VDA (2010), the production of Germanvehicles was 6.0 million in 2008 and 5.2 million in 2009, whichputs it at the top among other European countries. The Germanautomobile industry is also an important employment sector.According to the data from ACEA (2010), around 1.4 million peoplework in the automotive sectors or related sectors in Germany.
While lacking innatural resources, Germany holds other advantages to maintain itscompetitiveness in the automobile industry in Europe. Highlyeducated, qualified and motivated employees are the crucial part ofits factor conditions. Germany overcame its lack of naturalresources by developing advanced factors conditions. Education inGermany is relevant to local industry requirements, particularly inscience and high- technology. German workers are better educated intheoretical and technical knowledge, which enhancestheir skills in practice in specific technical fields.
The German automotiveindustry is well known for its related and supporting industries.For example, the region around the city of Stuttgart is the core ofMercedes-Benz and its suppliers. The other related industries nearBMW’s facility in Regensburg and similarly for Volkswagen are goodexamples. All these leading brands in automobile manufacturing havebenefited from their industrial clusters. The suppliers aroundautomakers’ areas are supported by smaller components providers,such as metal, plastic, iron and steel producers. Buyers andsuppliers reinforce each other to enhance their respectiveindustries. Therefore, there are various opportunities for buyersand suppliers to cooperate regarding new productions and improvingthem, which improves the competitiveness of the particularindustry.
The availability ofcars of high quality, innovative products and excellent service ofthe German automobile industry has earned its customer’s loyalty.German automakers pay attention to the international market andtheir dominance is embodied in dealing with the relationships amongindustry, strategy and firm performance. Furthermore, in a recentInternational Motor Show, among 100 automotive manufacturers, therewere 55 companies from Germany, which proves its competitiveness inthe automobile industry.
Germany’s automotiveindustry is faced with a challenging and demanding domestic market.The number of consumers in the German market is the highest in theEuropean
Union. Germanconsumers are willing to buy larger, better equipped and highervalued automobiles. As a result, Germany focuses on higher value,high quality automobiles that are globally renowned.
The German automobilefirms are required to face international competition independently,while the government plays a vital role in industrial advancement.The automobile manufacturing requires technicians and scientists tocontinuously improve product quality and the German governmentsupports the industry in terms of education system and policies todevelop industry-relevant workforce and research investmentfunding.
Germany sufferedhardships and great losses due to the two world wars. Yet the positive effects outweighed the negative asGermany made great achievements in post- war industrialcompetition. Porter (1998. p.179) mentioned that the wars createdopportunities for Germany in producing high technology products andcomplex components.
Hofstede (1983) holdsthat national and regional cultures influence management, involvingmultinational, multicultural organisations in both public and private sectors. The German automobilecompanies are very efficiently managed. The competitive advantageslike technology can be duplicated by other companies, whereasculture is the unique characteristic of a nation or a company.Therefore, the culture also can be a factor of competitiveness.
(Source: https: www.grin.com, accessed11 Apr 2021)
Question 1
Explain using generalexamples (exclude the German automotive industry) Michael Porter’sNational Competitive Advantage Theory.
Question 2
Based on the National CompetitiveAdvantage Theory, analyse the German automotive industry.