Evolution of the Automobile Industry: A Capability-Architecture-Performance Approach (Elements in Business Strategy)

By: Takahiro Fujimoto

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Synopsis: This Element applies capability-architecture-performance (CAP) approach of industrial analysis to the evolution of the automobile industry and the strategies of its leading manufacturing firms between the late 19th century and the early 21st century. It regards a manufacturing site ('genba,' such as factory, development facility, etc.) and a product (and other economic artifacts, such as processes) as the two basic units of analysis. Both an industry and a firm can be seen as a collection of sites, as well as a collection of products. The CAP framework predicts that dynamic fits between the sites' organizational capabilities and the product/process architectures lead to sustainable competitive performance. Such key concepts as flows of value-carrying design information, productive/market/profit performance, design-based comparative advantage, integral/modular architectures, multi-skilling, coordinative capability-building, evolutionary capabilities, industry lifecycle, and architectural evolution are discussed in a systematic and dynamic way.