Evolution of the Automobile Industry: A Capability-Architecture-Performance Approach

The CAP framework applies the 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 and a product as the two basic units of analysis and predicts that dynamic fits between the sites organizational capabilities and the product/process architectures lead to sustainable competitive performance.

Format: Paperback / softback
Length: 75 pages
Publication date: 29 June 2023
Publisher: Cambridge University Press

This Element applies the 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 a 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.

Introduction:
The automobile industry has undergone significant transformation over the past century, driven by technological advancements, changing consumer preferences, and global economic trends. The CAP approach, which originated in the late 19th century, provides a framework for analyzing the evolution of industries and firms. In this Element, we will explore the application of the CAP approach to the automobile industry and the strategies of its leading manufacturing firms.

CAP Approach:
The CAP approach is based on the idea that a manufacturing site and a product are the two basic units of analysis. It emphasizes the importance of understanding the capabilities of the manufacturing site and the product/process architectures in order to achieve sustainable competitive performance. The CAP framework predicts that dynamic fits between the sites' organizational capabilities and the product/process architectures lead to sustainable competitive performance.

Manufacturing Site:
A manufacturing site is a physical location where products are produced. It includes various facilities, such as factories, development facilities, and testing centers. The capabilities of a manufacturing site include its equipment, technology, workforce, and management systems. The CAP approach emphasizes the importance of aligning the capabilities of the manufacturing site with the product/process architectures in order to achieve competitive advantage.

Product/Process Architectures:
A product/process architecture is the design and organization of the production process. It includes the layout of the manufacturing site, the equipment used, the materials used, and the processes employed. The product/process architectures of leading manufacturing firms are often characterized by their innovation, efficiency, and quality.

Dynamic Fits:
The CAP framework predicts that dynamic fits between the capabilities of the manufacturing site and the product/process architectures lead to sustainable competitive performance. This means that the manufacturing site must continuously adapt to changing market demands and technological advancements in order to remain competitive.

Sustainable Competitive Performance:
Sustainable competitive performance is achieved when a manufacturing site is able to consistently produce high-quality products at a competitive price. It requires a combination of organizational capabilities, such as innovation, efficiency, and quality, as well as product/process architectures that are aligned with market demands.

Key Concepts:
Several key concepts are discussed in the CAP framework, including 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.

Flows of Value-Carrying Design Information:
Flows of value-carrying design information refer to the flow of information between the design team and the manufacturing site. It includes the exchange of design ideas, specifications, and data. Effective flows of value-carrying design information are essential for achieving design-based comparative advantage.

Productive/Market/Profit Performance:
Productive/market/profit performance refers to the ability of a manufacturing site to produce high-quality products at a competitive price. It includes factors such as productivity, quality, and cost. Effective management of these factors is critical for achieving sustainable competitive performance.

Design-Based Comparative Advantage:
Design-based comparative advantage refers to the ability of a manufacturing site to produce products that are superior to its competitors in terms of design, quality, and functionality. It requires a deep understanding of the market demands and the capabilities of the manufacturing site.

Integral/Modular Architectures:
Integral/modular architectures refer to the design and organization of the production process in a way that allows for flexibility and adaptability. It involves breaking down the production process into smaller modules that can be easily modified and integrated.

Multi-Skilling:
Multi-skilling refers to the ability of the workforce to perform multiple tasks and skills. It is essential for achieving efficiency and productivity in the manufacturing process.

Coordinative Capability-Building:
Coordinative capability-building refers to the ability of the manufacturing site to coordinate its activities and resources in order to achieve its goals. It involves establishing effective communication channels, developing shared vision and values, and fostering collaboration among stakeholders.

Evolutionary Capabilities:
Evolutionary capabilities refer to the ability of a manufacturing site to continuously adapt to changing market demands and technological advancements. It requires a commitment to innovation and a willingness to invest in research and development.

Industry Lifecycle:
The industry lifecycle refers to the stages of development that an industry goes through over time. It includes the introduction of new technologies, the growth of the industry, the maturity of the industry, and the decline of the industry. Understanding the industry lifecycle is critical for developing effective strategies for sustainable competitive performance.

Architectural Evolution:
Architectural evolution refers to the changes in the design and organization of the production process over time. It includes the introduction of new technologies, the development of new processes, and the integration of new systems. Understanding architectural evolution is critical for developing effective strategies for sustainable competitive performance.

Conclusion:
The CAP approach provides a valuable framework for analyzing the evolution of industries and firms, including the automobile industry. By understanding the capabilities of the manufacturing site and the product/process architectures, leading manufacturing firms can develop effective strategies for sustainable competitive performance. The CAP framework emphasizes the importance of continuous adaptation, innovation, and collaboration in order to achieve long-term success in a rapidly changing market.

ISBN-13: 9781108468947