Subject for study: Industry and market. Working on the text.

Ex.1. Read the text. Use a dictionary if necessary.

Industry and Market Structures. Part 3.

Finally Porsche (originally a Volkswagen with extra styling) repositioned itself as the sports car, the one and only car for those who still do not want transportation but excitement in an automobile.

But those smaller automobile manufacturers who did not innovate and present themselves differently in what is, in effect, a different business - those who continued their established ways - have become casualties. The British MG, for instance, was thirty years ago what Porsche has now become, the sports car par excellence*. It is almost extinct by now. And where is Citroen? Thirty years ago it was the car that had the solid innovative engineering, the sturdy construction, the middle-class reliability. Citroen would have seemed to be ideally positioned for the market niche Volvo has taken over. But Citroen failed to think through its business and to innovate; as a result, it has neither product nor strategy.

Another American, William Crapo Durant, saw the change in mar­ket structure as an opportunity to put together a professionally man­aged large automobile company that would satisfy all segments of what he foresaw would be a huge "universal" market. He founded General Motors in 1905, began to buy existing automobile companies, and inte­grated them into a large modern business.

A little earlier, in 1899, the young Italian Giovanni Agnelli had seen that the automobile would become a military necessity, especially as a staff car for officers. He founded FIAT in Turin, which within a few years became the leading supplier of staff cars to the Italian, Russian, and Austro-Hungarian armies.

Market structures in the world automobile industry changed once again between 1960 and 1980. For forty years after World War I, the automobile industry had consisted of national suppliers dominating na­tional markets. All one saw on Italy's roads and parking lots were Fi­ats and a few Alfa Romeos and Lancias; outside of Italy, these makes were fairly rare. In France, there were Renaults, Peugeots, and Citroens; in Germany, Mercedes, Opels, and the German Fords; in the United States, GM cars, Fords, and Chryslers. Then around 1960 the automobile industry all of a sudden became a "global" industry.

Different companies reacted quite differently. The Japanese, who had remained the most insular and had barely exported their cars, de­cided to become world exporters. Their first attempt at the U.S. mar­ket in the late sixties was a fiasco. They regrouped, thought through again what their policy should be, and redefined it as offering an American-type car with American styling, American comfort, and American performance characteristics, but smaller, with better fuel con­sumption, much more rigorous quality control and, above all, better customer service. And when they got a second chance with the petroleum panic of 1979, they succeeded brilliantly. The Ford Motor Company, too, decided to go "global" through a "European" strategy. Ten years later, in the mid-seventies, Ford had become a strong con­tender for the number one spot in Europe.

Fiat decided to become a European rather than merely an Italian company, aiming to be a strong number two in every important Euro­pean country while retaining its primary position in Italy. General Mo­tors at first decided to remain American and to retain its traditional 50 percent share of the American market, but in such a way as to reap something like 70 percent of all profits from automobile sales in North America, And it succeeded. Ten years later, in the mid-seventies, GM shifted gears and decided to contend with Ford and Fiat for leadership in Europe - and again it succeeded. In 1983-84, GM, it would seem, decided finally to become a truly global company and to link up with a number of Japanese; first with two smaller companies, and in the end with Toyota. And Mercedes in West Germany decided on yet another strategy - again a global one - where it limited itself to narrow segments of the world market, to luxury cars, taxicabs, and buses.

All these strategies worked reasonably well. Indeed, it is impossible to say which one worked better than another. But the companies that refused to make hard choices, or refused to admit that anything much was happening, fared badly. If they survive, it is only because their re­spective governments will not let them go under.

One example is, of course, Chrysler. The people at Chrysler knew what was happening - everybody in the industry did. But they ducked instead of deciding*. Chrysler might have chosen an "American" strat­egy and put all its resources into strengthening its position within the United States, still the world's largest automobile market. Or it might have merged with a strong European firm and aimed at taking third place in the world's most important automobile markets, the United States and Europe. It is known that Mercedes was seriously inter­ested-but Chrysler was not. Instead, Chrysler frittered away its re-sources on make-believe. It acquired defeated "also-rans"* in Europe to make itself look multinational But this, while giving Chrysler no additional strength, drained its resources and left no money for the in­vestment needed to give Chrysler a chance in the American market. When the day of reckoning* came after the petroleum shock of 1979, Chrysler had nothing in Europe and not much more in the United States. Only the U.S. government saved it.

* par excellence - высшего качества

* ducked instead of deciding - уклонилась от принятия решений

* "also-rans" - горе-компании (разорившиеся конкуренты)

* the day of reckoning - день расплаты

Ex.2. Напишите по-русски, что вы узнали из текста о:

1. судьбе компаний MG и Citroen;

2. управленческой деятельности по основанию и расширению GM;

3. Джованни Агнелли и его бизнесе;

4. изменениях на автомобильном рынке в период между 1960 и 1980 годами;

5. стратегиях различных компаний и их результатах.

Unit 3.

SUBJECT for STUDY: Successful managerial performance.

Ex.1. Read the text. Use a dictionary if necessary.