Marketing strategies and organisational characteristics of British and German machine tool manufacturers

• Main Author: Shaw, Vivienne
• Published: University of Warwick 1992
• Subjects: 658; HF Commerce
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.333924

The aim of this study is to examine the differences and similarities in the approach to marketing of British and German companies in the machine tool industry. While the German machine tool industry is one of the most successful in the world the British industry is in decline and so, in addition, this research seeks to establish the factors that influence the success of German manufacturers and what lessons can be learnt from their success. Interviews were conducted with 40 managers in British and German companies. However, . difficulties experienced in obtaining data from German managers necessitated the inclusion of British-based subsidiaries of German machine tool manufacturers. This approach resulted in three distinct samples, small in size and with a bias towards larger, more successful German companies. In spite of the methodological weaknesses, the study provides a valuable insight into Anglo-German differences in a number of key areas. The British manufacturers are found to adopt a short-term approach to their markets emphasising goals such as shortterm profitability and survival. Their German competitors, meanwhile, pursue longer-term goals based on market share. Both the British and German manufacturers claim to pursue strategies based on product quality and reliability. German manufacturers, however, appear to be better at defining their target markets. In addition they are found to attach greater importance to the need for an advanced as well as flexible and responsive R & D capability. A commitment to new product development is evident in the 70% of German manufacturers that are selling products developed in the last ten years. This is matched by a premium pricing policy. British companies, however, are found to have less clearly define target markets, and although they appear to be investing more in R & D than their German counterparts a large proportion of them are selling products developed over twenty years ago. In organisational terms the overriding theme in the British companies interviewed is informality both in management style and planning and control systems. Whilst the German managers seem to prefer a more balanced approach to communications there is greater commitment to formal planning and control systems. Over 75% of German companies, compared with less than 20% of the British companies, are rated as being successful such that successful organisations are found to display many of the same characteristics as German manufacturers. These companies appear to display a strong product orientation, although a high degree of customer orientation is also found in many of the same companies. Finally, the British subsidiaries of German manufacturers do not appear to resemble their German parents very closely and so the parent subsidiary relationship is questioned.