Delphi Exhaust Company In China's Alliance Strategy Research

As one of the organizational systematic innovation, Strategic Alliance was widely used in the global economy in 1990s, and became an important method to enhance competitiveness. With the rapid development of economic globalization, more and more enterprises implemented alliance. The alliance is not only between customers and suppliers, upriver and downriver product providers, but also direct competitors. Alliance helps enterprises reduce risks and costs, and gain profits at the same time. It is beneficial to investigate alliance and to explore the new alliance mode to improve the implementation of alliance in the future enterprise reorganization and development. In this paper, the related literatures were searched and gathered together to explain the alliance related theories.The vehicle market distribution changes along with the imbalanced global economy. The Occident market is slow down, while the developing area markets, including Chinese market, grow rapidly. With the economic depression in United States, the automotive and component manufacturers in Detroit stick into difficult situations, the 6-groups formed in the end of last century would collapse, and global automotive industry faces reorganization. In this paper, I analyzed global and domestic automotive and component industries and described the difficulties for global market and the opportunities for Chinese market.As one of the largest automotive component suppliers in the past, Delphi experienced sales stagnation and great losses, while American economy depressing, major customer facing trouble, industry competing furiously and the manufacturing cost increasing rapidly in US. Delphi United States announced US Chapter 11 bankruptcy protection and began restructuring in October 2005. According to the automotive market and Delphi sales distribution, China becomes one of the most important markets for Delphi.Delphi sold Catalyst business in October 2007. Bosal Delphi announced release from the full exhaust system alliance in May 2008. The environment for Delphi Exhaust China is changed. The company should consider and implement new strategies to maintain and develop the market share. In this paper, I introduced the essential situation of the exhaust system and the Five Forces, analyzed the internal resources, internal and external environment, expectations of stakeholders, SWOT advantages and disadvantages, and the strategy choices for Delphi Exhaust China. The strategy of setting up strategic supplier alliance to expand the manufacturing capability footprint was selected and the implementation was explored.