Modularity in automakers: a research under the strategy point of view

Abstract

The relationships between the application of modularity in the car industry and the organizational strategies are a study field which needs to be better understood. This study is intended to research the organizational strategies and competencies inherent to the modularity process in the car-making enterprises. Case-based research was conducted in two car-makers. The study shows that the modularity process has been used to transfer fixed costs to the suppliers generating dependence among the enterprises and making the change of supplier difficult whenever necessary. There is concern of the car-makers in creating strategies capable of preventing the loss of know how. For this reason, not all the projects of the modules are outsourced. It was found that the enterprises studied reached partially the essential competencies and operate at the level of the distinctive competencies, but enough to give support to modular strategy. The set of organizational strategies and competencies conquered held in the construction of competitive advantage in those enterprises.