Monti and Market Dynamics:

In 2002 Mario Monti, the European Competition Commissioner (in the period 1999-2004), concluded that there was not enough competition in the European market for the distribution of cars and spare parts. Consumers were not getting enough benefit from the internal European market. Now that deregulation has come into effect, the dynamics in the sales and servicing markets have increased. Due to these changes, market players in the brand distribution chain face a lot of uncertainty and competitive complexity. This article describes: 1) the key issues arising from Monti's regulation; 2) the effects on market dynamics; and 3) the main strategic implications for an importer of cars and parts in The Netherlands, particularly in its relationship with its dealers. Using the Theory of Dynamic Capabilities, this article shows that continuously building on new knowledge, the proactive development of new concepts in pilot environments, and building strong relationships with players in a broader automotive environment, are key success factors in maintaining the competitive advantage in highly dynamic markets.