FUTURE DRIVERS OF THE EU BLOCK EXEMPTION A Case Study of Automobile Manufacturers ’ Strategy Formulation

The need for multinational corporations to constantly adjust to external changes is of primary concern. By the end of 2001, the European Commission will present a proposal for legislative changes in the automobile industry with regard to the block exemption (Regulation 1475/95). The Commission is evaluating future alternatives in which different companies and organizations are involved. The purpose of this thesis is to study how automobile manufacturers could develop their strategy formulation to deal with the expiry of the Regulation. To facilitate our study we have used Mercedes-Benz as a case company. It is vital for the company to involve the internal and external settings and identify the most relevant opportunities and threats to enhance the current strategy. Thereafter, possible scenarios have to be formed in order to create a framework for the future strategy formulation. We have identified several aspects that will be of major importance in any scenario. The involved actors are playing a major role in the network surrounding the Commission, which Mercedes-Benz needs to be a part of. An improved legislative knowledge would diminish the vulnerability for future legislative changes. Moreover, a strong brand, well-established relationships, and efficient dealer networks will be the major sources of competitive advantage in an industry characterized by uncertainty and complexity