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The Challenges of a B2B Market Entry Within the Automotive Industry

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The Challenges of a B2B Market Entry Within the Automotive Industry DEGREE PROJECT IN THE FIELD OF TECHNOLOGY INDUSTRIAL ENGINEERING AND MANAGEMENT AND THE MAIN FIELD OF STUDY INDUSTRIAL MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2019 The Challenges of a B2B Market Entry within the Automotive Industry ZACHARIAS RUDBERG OSCAR SANDELIN KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT Page intentionally left blank The Challenges of a B2B Market Entry within the Automotive Industry by Zacharias Rudberg Oscar Sandelin Master of Science Thesis TRITA-ITM-EX 2019:203 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM Utmaningarna vid en B2B Marknadsingång inom Fordonsindustrin av Zacharias Rudberg Oscar Sandelin Examensarbete TRITA-ITM-EX 2019:203 KTH Industriell teknik och management Industriell ekonomi och organisation SE-100 44 STOCKHOLM Master of Science Thesis TRITA-ITM-EX 2019:203 The Challenges of a B2B Market Entry within the Automotive Industry Zacharias Rudberg Oscar Sandelin Approved Examiner Supervisor 2019-06-14 Kristina Nyström Kent Thorén Commissioner Contact person The Case Company N/A Abstract This thesis investigates the factors to consider when implementing a business to business market entry strategy within the automotive industry. The aforementioned is conducted through an exploratory case study at a global industrial firm providing a comprehensive range of products and services within the motor vehicle industry. The case study is made on the foundation of existing theory, previous empirical research and interviews with relevant companies within the industry. The thesis provides an overview of the factors to be considered when executing a business to business market entry strategy on the automotive market based on existing literature and empirical research. Furthermore, the six main challenge areas that the case company faces in its work with entering a new market is displayed. These challenges are; (1) internal communication, (2) customer relations, (3) technical requirements, (4) strategic initiatives, (5) management support and (6) organizational alignment. In addition to the six challenges, potential strategic initiatives are discussed within each of the challenge areas. The six challenge framework can be used as a framework for other industrial firms striving to implement an industrial business to business market entry strategy. The main theoretical contribution of this thesis is the identification of challenges during a market entry within the automotive industry. Furthermore, the thesis concludes that the implementation of a market entry strategy can provide greater challenges than the development of the strategy itself, which is supported by both literature and empirical findings. Related to this, a misalignment between the business type and the marketing strategy type within the case company is identified. Key-words Strategy Implementation, Market Theory, Strategy, Industrial Business to Business Marketing, Motor Vehicle Industry, Assembly Tools, Market Entry, Customer Relations, Organizational Alignment, Market Strategy, Marketing Organization Examensarbete TRITA-ITM-EX 2019:203 Utmaningarna vid en B2B Marknadsingång inom Fordonsindustrin Zacharias Rudberg Oscar Sandelin Godkänt Examinator Handledare 2019-06-14 Kristina Nyström Kent Thorén Uppdragsgivare Kontaktperson The Case Company N/A Sammanfattning Detta examensarbete undersöker vilka faktorer som bör beaktas vid implementering av strategier för att ta sig in på en ”business-to-business”-marknad inom fordonsindustrin. Detta görs genom en explorativ fallstudie på ett globalt industriföretag som säljer ett stort antal produkter och tjänster till fordonsindustrin. Fallstudien är grundad i litteratur, tidigare empiriska studier och intervjuer med relevanta företag inom industrin. Examensarbetet ger en översikt av de faktorer som bör beaktas då man implementerar en “business to business”-marknadsstrategi inom fordonsindustrin baserat på existerande litteratur och en empirisk undersökning. De sex främsta utmaningarna som fallstudieföretaget står inför identifieras, vilka är (1) intern kommunikation, (2) kundrelationer, (3) tekniska krav, (4) strategiska initiativ, (5) ledningsstöd och (6) organisatorisk sammstämmighet. Utöver de sex utmaningarna diskuteras potentiella strategiska initiativ inom varje utmaningsområde. De sex utmaningarna kan användas som ett ramverk för andra industriföretag som söker att implementera en marknadsstrategi. Det huvudsakliga teoretiska bidraget av detta examensarbete är identifiktationen av de utmaningar som uppstår vid en markandsingång inom fordongsindustrin. Dessutom visar examensarbetet att implementeringen av en marknadsstrategi kan visa sig vara en större utmaning än att ta fram densamma, vilket stöds av både litteraturen och den empiriska undersökningen. Relaterat till föregående kunde vi identifiera en obalans mellan fallstudieföretagets affärstyp och marknadsstrategi. Nyckelord Strategiimplementering, Marknadsteori, Strategi, Industriell Business to Business Marknadsföring, Bilindustrin, Monteringsverktyg, Marknadsingång, Kundrelationer, Organisatorisk samstämmighet, Marknadsstrategi, Marknadsorganisation Acknowledgements First of all, we are grateful to have been given the opportunity to write this master’s thesis, which marks the end of our five year long journey towards a degree within Industrial Engineering & Management at KTH. We would like to thank our supervisor at KTH, Dr. Kent Thorén, for encouraging us to always strive to learn more and to see things from a different perspective. We would also like to express our sincere gratitude to our supervisor, KL, and project sponsor, JA, at The Case Company’s headquarters for guidance and feedback as well as providing access to data points and interview objects throughout our thesis work. A special thanks also goes out to The Case Company’s German organization for their support in general and to our German supervisor, DB, in specific. Without DB’s effort of organizing interviews and field trips in Germany, this thesis would not have been possible. Additionally, we would like to thank all who have read our thesis and given us feedback on what could be improved. Last but certainly not the least, we would like to express our deep gratitude to all the people who were involved in creating this thesis, especially all our interviewees, who we could not have finished this thesis without. Abbreviations APC Application Center B2B Business to Business CoCo Cooling Company CRM Customer Relationship Management EV Electric Vehicle FA Final Assembly GKAM Global Key Account Manager GM General Motors HR Human Resources HT&B Heavy Trucks & Buses ICE Internal Combustion Engine MES Manufacturing Execution System MSC Multi-tier Supply Chain MTB Machine Tool Builder OEM Original Equipment Manufacturer R&D Research & Development RoCo Robotics Company RQ Research Question SIAR Scandinavian Institute of Academic Research TCC The Case Company VW Volkswagen Contents 1 INTRODUCTION 1 1.1 BACKGROUND ............................................................................................................................... 1 1.2 PROBLEM FORMULATION ............................................................................................................ 2 1.3 PURPOSE AND AIM ....................................................................................................................... 2 1.4 RESEARCH QUESTIONS ................................................................................................................ 3 1.5 DELIMITATIONS ........................................................................................................................... 3 1.6 CONTRIBUTION TO SCIENCE ........................................................................................................ 4 1.7 DISPOSITION ................................................................................................................................ 4 2 THEORETICAL FRAMEWORK 7 2.1 MARKET THEORY ......................................................................................................................... 7 2.2 STRATEGY IMPLEMENTATION ...................................................................................................... 18 2.3 PREVIOUS EMPIRICAL RESEARCH .................................................................................................32 2.4 SUMMARY OF THEORETICAL FRAMEWORK ................................................................................. 38 3 METHODOLOGY 45 3.1 RESEARCH APPROACH ............................................................................................................... 45 3.2 RESEARCH PROCESS ................................................................................................................... 46 3.3 QUALITY OF RESEARCH DESIGN ..................................................................................................53 3.4 ETHICS OF METHOD USED .......................................................................................................... 56 4 THE CASE CONDITION 57 4.1 INTRODUCTION TO THE CASE COMPANY .................................................................................. 57 4.2 THE CASE COMPANY ENVIRONMENT ......................................................................................... 59 5 FINDINGS 63 5.1 RQ1: WHICH FACTORS SHOULD BE CONSIDERED WHEN EXECUTING AN INDUSTRIAL B2B MARKET ENTRY STRATEGY? .........................................................................................................................................
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