Strategic Decisions in the European Automobile Market

Introduction to Topic and Objectives

Uncertainties in the business environment have made it difficult for managers to understand the full impact of their strategic choices on corporate goals and objectives. Particularly, this is true for the European automotive industry, which is undergoing strategic reforms because of changing micro-and macro-economic factors (Rumeser & Emsley, 2019; Huemann, Ringhofer, & Keegan, 2019). This paper seeks to use business analytics tools to understand strategic decisions made by car companies in the European automotive industry through a business game analysis.

The findings of this investigation will be useful in understanding the implications of decisions made by car companies operating in this sector on different aspects of their performance, including profitability and market share outcomes. The overall aim of this study is to use business analytical methods to understand strategic decisions in the European automobile market. The following main activities will be undertaken in this study:

  • Undertake data collection and analysis, such as game guide, data provided in the literature
  • Document personal advantages and work arrangement of team members
  • Analyze simulation results and compare them with competitors’ product strategy
  • Reflect on the results of each round of simulation game
  • Summarize the link between business analysis and project management

Broadly, this paper uses game data to obtain information from a simulated activity that had 13 rounds of engagement.

The Rationale for the Literature Review

The Impact Of The Changing European Automotive Market Environment On Business Performance

The European automotive market is one of the most competitive economic sectors in the region. It is characterized by a high concentration of leading car companies, such as Mercedes Benz, Jaguar Land Rover, and BMW (Badillo, Galera, & Moreno, 2017; Wei, Hsu, Chao, & Yang, 2019; Wang, Wang, & Jian, 2020). Uncertainties in the global business environment have caused these companies to adjust their operational plans to align with current market conditions influencing their businesses (Rumeser & Emsley, 2019; Huemann, Ringhofer, & Keegan, 2019). The same issues have made it difficult for managers to convince their shareholders that their interests and investments are safeguarded (Whittle, Gilchrist, Mueller, & Lenney, 2020). Consequently, business analytical tools have been proposed to improve decision-making in this unpredictable environment. However, their success is pegged on a keen understanding of risks that may affect sales strategies.

Risks That May Affect Sales Strategies

Protecting a business from inherent market risks is an important quality mark in building its resilience. Consequently, firms need to monitor different risk profiles to thrive in an uncertain business environment (Valentini & Kruckeberg, 2018; Peric, Durkin, & Vitezic, 2017). In the context of the automotive industry, risks that could affect business performance include cost escalations, reputational damage, and loss of market share (Wei et al., 2019). Price and cost escalations could also impact the sales strategies of automotive firms because the industry offers slim profit margins due to stiff competition (Kriz, Harviainen, & Clapper, 2018). Collectively, the pressure on managers to cut operational costs and complete project management objectives on time has compounded these factors (Kaneda, Cui, Sahab, & Sadiq, 2020; Wu, Sun, Grewal, & Li, 2019). Collectively, these pressures outline risks that could affect sales strategies. Brands that have aligned themselves with these risk factors have reaped the benefits of having a positive brand image in the industry (Suman, Chyon, & Ahmmed, 2020; Van den Hoogen & Meijer, 2016). New and emerging car automakers, such as Tesla, are developing their brand images based on such trends.

Lastly, market share is another risk factor that may affect the sales strategies of cars in the automotive market. A low market share means that a car brand has failed to have a significant impact on the market, while a high market share means that it is offering immense value to customers who will purchase more units in return (Opata, Xiao, Nusenu, Tetteh, & John Narh, 2020). Therefore, the higher the market share, the better the performance of a car brand, and the lower the market share, the easier it is to believe that the products are of low quality. Figure 1 below shows the cumulative market share for car companies in the European automotive sector.

Market share in the European car industry 
Figure 1. Market share in the European car industry 

As highlighted in the graph above, Daimler Chrysler, which produces Mercedes Benz, has the highest market share in Europe, followed by Porsche and BMW, in that order. The car companies enjoy these coveted positions because they have managed to balance external business dynamics with internal competencies.

Factors That Influence Market Decisions

Varying elements of a market environment affect the kind of decisions that will be made in the sector. In the context of this study, these environmental elements need to be evaluated in the context of the European automotive industry. Consequently, changing consumer tastes and preferences, actions of close competitors, and the legal environment of the target market are factors that influence market decisions in the sector (Tereso, Ribeiro, Fernandes, Loureiro, & Ferreira, 2019). The fierce competition in the global car industry is perhaps one of the most impactful forces affecting market decisions today. The situation has been exacerbated by the entry of formidable competitors from Asia, such as Nissan and Toyota, in the European car industry (Kaneda et al., 2018). Furthermore, most of these newcomers have been able to keep their production costs low, thereby providing customers with relatively cheap cars, which undermines the efficacy of their market strategies (Guo, Jiang, & Yang, 2017). Therefore, in an industry that has low margins, price and cost controls affect market-oriented strategies (Clapper, 2015; Pavlínek & Ženka, 2016). Changing consumer tastes and preferences are also other forces that influence market decisions made in the automotive market. The most notable trend that has happened in the industry within the last decade is the pull towards energy-efficient, hybrid and electric cars.


The structure of this literature review has made it possible to identify risks that may affect sales strategies used in the European automotive market, find out factors that influence market decisions, and estimate the impact of the changing European automotive market environment on project management and business performance. In subsequent sections of this paper, the efficacy of using business analysis tools to understand strategic decisions will be investigated by appraising their competencies in addressing the scope of issues impacting real-life decisions, competitive behavior, and product positioning strategies in the European automotive market.


Research Approach

Based on the nature of the research topic under review, the quantitative approach was used as the main approach for conducting the investigation. The main purpose of using this data analysis tool was to estimate the impact of business decisions on enterprise management performance, as alluded by Law (2019), Hartono, Wijaya, and Arini (2019). This technique was employed by following four key steps outlined below:

Step 1: Formulating Clear Objectives. The research objectives were based on the team’s game simulation model and design. The process of formulating objectives involved analyzing the results of game data across all 13 rounds. The review also involved analyzing the research environment, subject to changing customer preferences, tastes, and patterns (Hartono, Wijaya, & Arini, 2019). This information was vital in predicting market trends and evaluating how strategic decisions affect the overall business plan (Harviainen, Vaajakallio, & Sproedt, 2016). The team was comprised of ten members who were assigned different tasks and responsibilities.

Step 2: Data Collection. The data collection process provided the foundation for all data analysis procedures undertaken in the study. The information available for review was obtained from the “executive” section of the simulation game website. On this platform, important information relating to business performance, including market data, sales information, and environmental analysis data on market development were generated (Martinsuo, 2020; Nair, Ramalingam, & Ravi, 2015). These pieces of information were used to verify the research objectives. Overall, the data collection and analysis process was done comprehensively to improve the accuracy of information retrieved from the investigation.

Step 3: Data Processing and Analysis. The data analysis process was undertaken to understand the impact of marketing decisions on corporate performance. To do so, several tools proposed by Olejniczak, Newcomer, and Meijer (2020) were used to evaluate the data, including tables and graphs. To get the most comprehensive and accurate information, “Zoho” was used as the main data analysis software. Two team members completed the data entry and collation processes, while another two completed data mapping activities.

Step 4: Findings. The last step of the quantitative research process included an evaluation of how the data helped the researcher to achieve the objectives of the study. The findings chapter of this dissertation will be used to analyze the impact of the strategic decisions made on the enterprise project, as proposed by Nijhuis, Vrijhoef, and Kessels (2018). The limitations of the study, including an evaluation of viable proposals for improvement were made in this stage of the research process.

Process and Analysis of Business Game

The analysis of the business game data was done on two fronts. The first one discussed team cooperation and estimation on business performance, while the second one involved an analysis of all game-related data for purposes of answering the research questions. The marketing strategies designed to appeal to each unique segment of the market were designed after evaluating the impact of external market forces and internal organizational competencies on the overall strategic plan to create the right marketing mix that would appeal to customers’ unique preferences and needs. Al Badi (2018) recommended the use of this approach in data analysis in support of the recommendations of Hanaysha (2020), Kumar, Rahman, and Kazmi (2016) in formulating the right marketing mix of place, price, production, and promotion strategies. Collectively, their views were instrumental in identifying the right marketing positioning strategies for the simulated game.

Description of Business Game Team and Work Done

Two members were given the task of analysing customer preferences in the market and another two were given the responsibility of evaluating the European car industry for emerging market entry opportunities. A different duo was given the responsibility of analyzing substitute products in the market, while the rest were assigned the responsibility of collating all data and reviewing them for purposes of developing the most effective market positioning strategies. Therefore, each team member assumed specific management roles that were instrumental in providing a holistic view of the market. The business game analysis involved the simulation of a virtual company as a UK-based automotive manufacturing plant. The company is known as FTG and operates in the European automotive industry. An analysis of the associated business game process is provided below.

Analysis of Business Game Process

The models of cars produced by the company are named after the movie Iron-man and are designed to appeal to different market categories. FTG’s products were designed to meet the needs of five different sub-segments of the market, including small cars, medium-sized vehicles, and large luxury automobiles. The marketing strategies designed to appeal to each unique segment of the market were designed after evaluating the impact of external market forces and internal organizational competencies on the overall corporate plan to create the right marketing mix that would appeal to unique preferences and needs.

Al Badi (2018) recommended the SWOT method to review the pieces of information needed for formulating the right marketing mix of price, production and promotion strategies in the car industry. In sum, there were eight competing companies in the G2 team, each with different strategic approaches to the research problem. Considering companies that compete to have the highest market share try to base their success on bringing new products to the market, the main goal of the simulation was to evaluate their strategies and find out their impact on the automotive industry.

Analysis of Main Decisions and Results for All Periods

In this business simulation game, we selected five different market segments from the analysis of the game guide manual and designed five different automobile models, including small, medium-sized and luxury cars. Subject to the data analysis plan and key performance metrics (gross margin results, market share analysis, and price) from different figures, the gross margin was computed as follows:

Gross Margin Results

At the initial stage of product design, based on the analysis of limited market data and guidance manual, the gross profit margin for all models was set at between 30% – 40%. However, after the second round of games, it was established that the sales of the first four small and medium-sized cars designed by other competitive enterprises in the market were not ideal for use in the actual market operation. After the discussion, our team redesigned the product and reduced the profit margin.

The above-mentioned proposals helped to increase the sales volume, but the profit margin declined due to market forecast errors and inventory backlogs, which did not improve until the 7th round was complete. Throughout this process, after each round of the game, team members adjusted decisions based on market data movements and by comparing the products of competitive enterprises. However, the gross margin analysis table revealed that the fifth luxury model was a more effective framework to use because of its high-profit margin. Consequently, it can be inferred that the company’s strategy and market decisions will have the most direct impact on product benefits.

Stemming from the above insights, in the context of enterprise project management, companies strive to achieve higher efficiency ratios and maximize resource allocation options. At the same time, operation decision-making needs to consider not only time, quality, risk, and other factors but also the impact of enterprise cost and profit on project benefit. In other words, project management can help enterprises deal with complex problems that need to be solved across different fields. Figure 2 below provides a summary of the percentage of gross margin for all the models involved.

Percentage of Gross Margin for all models 
Figure 2. Percentage of Gross Margin for all models 

Price & Sales

Controlling the production cost and price of some production units could also help to achieve the above-mentioned goals by enabling managers to expand their sales volumes through a market share increase. From the development of new products, the company could also increase its profitability. For example, according to figure 3 below, changing the number of units sold in each market would lead to variations in gross margin outcomes.

Price, sales, and profitability estimates 
Figure 3. Price, sales, and profitability estimates 

Additionally, business analysis tools could be used to forecast predictions in the market as well as provide robust market analysis data for review. For example, by varying production, sales, and inventory expenses, market costs can be changed and management expenses reduced to improve efficiency and profitability. Moreover, as seen in figure 3 above, which was developed after analyzing four to eight rounds of market data, sales and profits vary with price fluctuations. In other words, sales volume is a function of price and profitability is a product of the relationship between the two marketing concepts. Therefore, according to the market data obtained in this report, an increase in sales volume is not only linked with market share increases but also a reduction of inventory levels and an increased pace of product development.

Overall, although the technical market analysis provided sufficient grounds for proposing several market strategies, the lack of practical experience selling cars in the offline market by team members could have made it difficult to make the most effective decisions because of the lack of practical knowledge to draw inspiration from when making important product development decisions. Therefore, most of the plans made in the simulated game were hinged on strong theoretical as opposed to empirical support. Lastly, the lack of face-to-face discussions and challenges in miscommunication, which have been highlighted in this paper, means that project team members held discussions regarding the formulation of business decisions without a keen understanding of the effects of employing such tools, beyond the scope and context of the business analysis. Nonetheless, these limitations were mitigated by the presence of multiple inputs from team members, which minimized bias in decision-making.

Market Share

According to figure 4 below, data obtained from the business simulation plan was pivotal in making market segmentation and resource allocation strategies.

Percentage of Total Market 
Figure 4. Percentage of Total Market 

Based on the findings highlighted in this section of the report, the process of planning and distribution of resources could be improved to exploit market opportunities for underserved populations. Indeed, according to the findings highlighted above, the principle of market segmentation could be used to formulate better market positioning strategies to exploit opportunities that exist in the market. For example, by understanding customer needs and preferences, resources can be better reallocated to exploit emerging market opportunities by formulating an effective marketing strategy that addresses the business’s needs and preferences.

According to research on market segmentation of purchasing groups in the commercial game guide manual, customers who were under the age of 25 dominated the market share for small cars in the first year – before the implementation of the business plan. Comparatively, clients who were aged between 41 and 55 years commonly bought medium-sized cars during the same period. Comparatively, large and luxury vehicle segments were dominated by clients who were in the same age group, thereby elevating their profile as one of the most important demographic segments of the market. This outcome is supported by the principle of market segmentation, which allows marketers to use customer groups, purchasing habits, and preferences to formulate effective marketing strategies. According to Figure 5 below, the highest market share was FTG-1, while the smallest market share was attributed to FTG-4.

Percentage of Market Share of Car Brands
Figure 5. Percentage of Market Share of Car Brands

The proportion of market control for each model varies. Relative to this statement, there are several obvious fluctuations in the line chart of the market share from the fifth to the thirteenth rounds. It can be seen that when our team makes market decisions, whether in terms of product design or cost and price control, they are experimental adjustments and modifications based on the analysis of only some game data. For example, the market share of the FTG-1 model significantly fluctuated in the 7th-9th and 10th-12th rounds, followed by FTG-2’s value movements in the 8th-12th round. Comparatively, the market share of FTG-3 increased significantly in the 9th-12th round.

Broadly, the main challenge for team members was that they could only communicate with each other through network software, which made it difficult to fully consider everyone’s point of view when making decisions – a time-consuming process. This issue poses a challenge to strategic decision-making because it may force team members to encounter difficulties and losses in strategic decision-making. It may also be difficult to address such issues promptly because not all members of the team may be online. Therefore, to solve this problem, there is a need to establish strong communication channels.

Subject to an analysis of market share data of each car in the game, enterprises need to rely on effective project management when making the company’s operation strategy or business decision. Additionally, project management processes also require correct strategic decisions as guides. When our team starts a new round of games, there will be a need to reasonably review coordination, control, and organization activities in the process of this round of simulation games. Through correct business strategic decision-making, the rational use and distribution of enterprise resources, in the prescribed time, will help to achieve desired strategic objectives.

Results Analysis

According to figure 6 below, and based on the closing bank balance outlined in rounds 1-13 of the game simulation data, the funds improved from a low of -611.82 in round 1 to 7331.52 in round 13.

Results Analysis

Closing Bank Balance 
Figure 6. Closing Bank Balance 

From the analysis of the above data, it can be concluded that there are two main reasons for the loss in the first four rounds of the game. The first one is the failure to understand the European automobile market and the presence of team members who had no practical work experience. Secondly, the division of work among team members was unclear and the work content was chaotic. On the other hand, there were external reasons, such as the adjustment of market policy at any time and the lack of advantages compared with the products of competitors. Therefore, between the fifth and seventh rounds of the simulation, team members focused on the analysis of policies, market data, and competitors’ products. The SWOT analysis was also used to analyze the strengths and weaknesses of new marketing strategies.

From an organizational perspective, following the above-mentioned processes means that key strategic decisions made by the team helped to improve the overall financial performance of the company. Collectively, data show that the strategic decisions made by team members have improved the overall financial situation of the company. Furthermore, in the context of enterprise project management, the company hopes to achieve higher efficiency ratios and maximize resource allocation. At the same time, the firm’s business decision-making should not only consider factors such as time, quality, product, risk but also review the impact of enterprise cost and profit impacts on project benefits.

Overall, a successful project management process can avoid some risks in the process of project implementation. In other words, project management can help enterprises deal with complex problems that need to be solved across multiple domains of operation. From this analysis, the business simulation game emerged as a useful market analysis tool because it requires limited resources and time. Furthermore, it helps researchers to understand improvements in the business environment of the enterprise and enables them to achieve the ultimate goal of the project.

Results Analysis from Msc Field

As explained in section 3.0 of this study, the data used in this research was obtained from the business game simulation. This platform was designed to provide the most accurate and updated information relating to the European car market. The data also allowed the researcher to obtain practical and actionable pieces of information associated with the success of proposed business strategies implemented in the industry. For example, according to figure 7 below, the data obtained from the business simulation was pivotal in making market segmentation and resource allocation strategies.

Percentage of the total market for customers 
Figure 7. Percentage of the total market for customers 

Based on the findings highlighted above, the planning and distribution of resources could be improved to exploit market opportunities for underserved populations, such as the “over 55” age group. Indeed, according to the findings highlighted above, the principle of market segmentation could be used to formulate better market positioning strategies to exploit opportunities that exist in the market. For example, by understanding customer needs and preferences for the “over 55” age group, resources can be better reallocated to exploit emerging opportunities by formulating an effective marketing strategy that addresses the aforementioned needs and preferences. This outcome is supported by the principle of market segmentation, which allows marketers to use customer groups, purchasing habits, and preferences to formulate effective marketing strategies.

Broadly, business analysis tools could be used to forecast predictions in the market as well as provide robust market analysis data. For example, by varying production, sales, and inventory expenses, market costs can be changed and management costs reduced to improve efficiency and profitability. For example, as seen in figure 7 above, which was developed after analyzing four to eight rounds of market data, sales and profits vary with price fluctuations. In other words, the sales volume is a function of price and profitability is a product of the relationship between the two marketing concepts. Therefore, according to the market data obtained in this report, an increase in sales volume is not only linked with a market share increase but also a reduction of inventory levels and an increased pace of product development.

Critical Reflection as a Team and Results for Further Improvements

Critical Reflection

Although several researchers, such as Whyte (2019), Van Lankveld, Sehic, Lo, and Meijer (2017) highlight the benefits of teamwork in project management, I found it difficult to work within such a decision-making context without a clear protocol of engagement for members. This is because my colleagues had different views and each one of them wanted to be heard. Failure to do so could breed resentment and the lack of cooperation among members (Kriz & Auchter, 2016; Kourounioti, Kurapati, Lukosch, Tavasszy, & Verbraeck, 2018). Our team also had a tacit understanding of the research topic, a clear division of labor and actively played to personal advantages to complete the project. For example, each group in the team actively participated in the game according to their professional knowledge. Even though opinions from different majors sometimes clashed, we still established a team culture belonging to FTG.

By undertaking the simulated game analysis, we were also able to gain professional insight into effective team management and market plan analysis. Despite the imperfections of the results obtained, it was possible to get a practical understanding of the kind of conflicts that could emerge in the offline environment. Part of this process involved using the insights gathered in the literature review section of the paper as a basis for analyzing and understanding contemporary strategic decisions. Stated differently, the data gathered from this analysis will be instrumental in critically evaluating market decisions that would improve company performance in the current project management context.

One challenge that emerged in this study was the different conceptions adopted by team members regarding the project management plan. Before undertaking the game simulation exercise, members were supposed to familiarise themselves with techniques for collecting relevant data, government policies affecting the industry, competitor actions, and product specifications, as proposed by Roungas, Bekius, and Meijer (2019). However, since the game data were updated in real-time, members could have made erroneous judgments on various aspects of market data analysis, which emanated from information obtained from pre-research findings. This problem is associated with complex game plans with multiple variables (Carter, 2019; van Amstel, & Garde, 2016; Bekebrede, Lo, & Lukosch, 2015). It highlights the importance of using complex analytical tools that accommodate all variables during the market analysis process.

Results for Further Improvement

A successful market plan is often well developed and executed. Chatha (2019), Mäntysalo, Olesen, and Granqvist (2020) support this statement by drawing attention to the importance of developing sound strategic plans because they provide the basis for developing all future organizational policies, including how firms use their resources. Relative to this assertion, Camillo (2015), Tracey, O’Sullivan, Lane, Guy, and Courtemanche (2017) say one of the most important attributes of strategic planning is the identification of the target market whose interest should align with those of the company. This requirement draws attention to the need to understand demographic findings as a basis for making marketing decisions. I made this observation not only to undertake an effective market positioning analysis but also to understand how to improve team performance.

In the simulated game, most of the team members were of Chinese descent and may have been susceptible to personal biases and beliefs when making decisions about the European car industry, depending on their home experiences. De Jong and Warmelink (2017) suggest that such cultural influences could affect varied areas of decision-making. For example, they could influence trend pattern analyses and product-positioning plans because European car buyers prefer to use small and medium-sized cars for their daily use, while most car buyers in Asia prefer buying big vehicles with similarly big engines (Chen, 2019). Therefore, from the need to undertake a future market review of the European car market, Asian students must understand the dynamics of this market in the shortest time. Doing so will contribute to developing effective marketing decisions (López-Cabarcos, Göttling-Oliveira-Monteiro, & Vázquez-Rodríguez, 2015; Kriz, 2018). Therefore, understanding local market dynamics should be the most important component of developing future marketing plans.

Conclusion, Recommendations, and Self-Reflection


An overview of the insights gathered in this paper suggests that customer demand and market segmentation are the most important elements of a successful marketing plan. Furthermore, these concepts are important in making strategic market decisions, especially when reviewing the impact of competitors in the market. Therefore, in the current business environment, accurate market analysis is the first activity an enterprise should participate in to succeed. Particularly, this is true when making market forecasts and estimating the impact of deployed strategic decisions. Alternatively, an effective step in developing sound strategic decisions is trying to predict the type of changes that would happen in the business environment, subject to changing consumer tastes and preferences. Relative to its implementation, the pieces of evidence provided in this paper suggest that business analytics has helped to track changes in consumer tastes and preferences but have failed to anticipate how the actions of their competitors would support the same changes. Based on this challenge, the following recommendation is proposed.


Develop a sound business strategy based on the willingness and capability of companies to anticipate their competitors’ actions. Anticipating the actions and strategies that competitors would use in the market plays a significant role in improving the sustainability and profitability of associated firms (Lukosch, Bekebrede, Kurapati, & S. Lukosch, 2018). This proposal requires the integration of more variables in business analysis tools.


The contents of this last part of the dissertation stem from data obtained from the business data and the subsequent analysis of it. The evidence is also gathered from the cumulative team experience gained from undertaking the project. Overall, I found that conflicts could arise at different stages of the project management cycle. Therefore, they need to be curbed immediately to prevent their spread to other areas of decision-making. In the present study, this problem was exacerbated by the challenges of talking virtually as communications among team members were done online. Furthermore, it was difficult to arrange for a physical meet-up because of the health and social distancing challenges brought by the COVID-19 pandemic. Consequently, there were several instances of miscommunication and delayed schedule times occasioned by the challenges of arranging a virtual meeting. Consequently, future engagement should involve physical interactions.


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