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Understanding Competitive Advantage Formation in the Automotive Industry: A Grounded Theory Study of Lighthouse Firms

In: Proceedings of the 2026 3rd International Conference on Applied Economics, Management Science and Social Development (AEMSS 2026)

Author

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  • Jiaxuan Mai

    (University of Birmingham)

Abstract

This study examines competitive advantage formation in automotive industry lighthouse firms by conducting a multi-case analysis of representative listed companies, including CATL, GAC Group, SAIC Motor, and Guizhou Tyre. Based on textual data from annual reports covering the period 2020–2024, a grounded theory approach is employed to conduct three stages of coding: open coding, axial coding, and selective coding. Through this process, a pathway model of competitive advantage formation in the automotive industry is developed. The findings indicate that cost efficiency, technological and production innovation, brand positioning and market strategy constitute the three core pathways through which lighthouse firms build competitive advantages. Specifically, cost efficiency primarily supports cost leadership, technological and production innovation drives differentiation advantages, and brand positioning and market strategy strengthen focus advantages. In addition, industrial ecosystem collaboration and green and internationalization pathways play important supporting and reinforcing roles in sustaining competitive advantages. Within the theoretical framework of Porter’s competitive strategy, this study systematically reveals the underlying mechanisms through which automotive lighthouse firms form competitive advantages and provide practical insights for manufacturing enterprises in formulating strategic choices under the context of digital transformation and high-quality development.

Suggested Citation

  • Jiaxuan Mai, 2026. "Understanding Competitive Advantage Formation in the Automotive Industry: A Grounded Theory Study of Lighthouse Firms," Advances in Economics, Business and Management Research, in: Domitilla Magni & Esthela Galvan Vela & Sikandar Ali Qalati & Wenke Zang (ed.), Proceedings of the 2026 3rd International Conference on Applied Economics, Management Science and Social Development (AEMSS 2026), pages 219-233, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6239-672-2_21
    DOI: 10.2991/978-94-6239-672-2_21
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