Risk assessment in a major case of economic warfare in the automotive industry
A large, global automotive supplier based in Europe needed to assess the risks for its business operations stemming from the economic warfare between two major automotive makers involved in an industrial alliance, as a result of a legal case against their President.
The mandate was to:
- Conduct an in-depth analysis of the stakes in the legal proceedings
- Identify the likely impacts on the alliance’s strategy towards technological convergence and the consequences on the alliance’s procurement strategy
- Identify the new balance of power within the revamped Board of Directors
- Map the business, political and civil society stakeholders
Through this exercise, we are able to:
- Identify the stakeholders at the helm in the entire operation of economic warfare against the senior partner’s interests in the alliance, monitor network dynamics and isolate the nodes of information
- Analyze how the narrative against the President of the alliance was built and anticipate potential responses
- Draw prospective scenarios for the future balance of power within the alliance and its consequences on the business relationships with suppliers
For each prospective scenario, we made recommendations on risk mitigation and provided solutions in terms of tactical and strategic decisions to mitigate the negative impacts on business activity
- Industrial alliances can be hotbeds for divergent strategic views, particularly when built on an uneven balance of power. The junior partner in the alliance saw its financial situation improve dramatically, reversing the balance of power to its advantage.
- The local corporate environment had been under the influence of powerful political/business lobbies promoting an aggressive strategy of economic power. Regaining full control of strategic industrial assets had become a priority for local authorities.
- The alliance relied for its industrial coherence on its President, who had been fighting opposing pressures for increased capitalistic control on the one hand and a more even balance of power on the other hand. This made him a prime target for destabilization.