You represent a large U.S. corporation that manufactures rubber tires, and you want to begin manufacturing

Strategy for Multinational Company

Amy Fjeld

Colorado Technical University

Management in International Business (MGM336-X-1503A-01)

Joseph Keller

07/31/15

Introduction

The focus of this paper would be a look at the top multinational company in the world including its international strategy over the last 10 years. The aim would be to respond to a raft of questions relation to the business strategy the company uses both at local and international level and whether or not the strategy is effective. The paper will also look at the competitive advantage or the company in its internationalization efforts as well as some the challenges that would come with the company expanding to other markets especially overseas.

Strategy

The multinational of choice is Harley- Davidson which is an American Motorcycle company established and founded by two childhood friends Arthur Davidson and William Harley in 1907 who decided to combine the surnames, that is, Harley and Davidson to form the company’s name, Harley Davidson (Mark, Bundgaard, & Hathaway, 2006).

Multinational vs. Local Companies

In terms of the policies and decisions making with regards to multinational and local companies, they differ greatly. In the case of HD, it is a local company in the United States but is also a multinational in that it has various plants spread across the world like in India and Japan among other locations (Mark, Bundgaard, & Hathaway, 2006). That means that the management of HD has to implement strategies and policies as well as make decisions that are relevant to the target population only and not use one strategy in all the markets. That is to man that international markets and local ones must use different strategies that really matter the specific markets (Mark, Bundgaard, & Hathaway, 2006). Given that the in the US market HD has had issue with service delivery, that should be improved in the international stage especially in the prediction department as well as reasonable number of employees to work diligently in shifts so that they adhere to quality production. In terms of HR practices, HD has a set payment limit for job holders in their US market but when it comes to international stage say in the Indian market, there must be improved pay for the workers so that they would be motivated to continue working hard (Harley-Davidson Annual Report, 2013). These are a few examples of how decisions and policies implements and made with regards to local and multinational companies.

Challenges

Socially, HD targets the aging population as they have an excess income that they can spend on purchasing Harley’s motorcycles as evident with the increasing number of Veterans (1.1%) owning motorcycles (Harley-Davidson Annual Report, 2013). Economically, the income inequality in the United States is advantageous to Harley in that it is the leader in the motorcycle market within the US with about 50%. Again, HD targets the market that is experiencing changing lifestyles among a majority of the youth (Harley-Davidson Annual Report, 2013). Legally, there are environmental protection laws that would require HD to produce motorcycles that are friendly to the environment. There are also human resources legislations that require the management to consider compensating the employees handsomely so that the company can gain more profits due to motivated employees (Harley-Davidson Annual Report, 2013). Politically, given the fact the environmental protection agency regulates the automobile and motorcycle emissions, a revision in the future in the same would negatively impact the industry.

International Orientation

HD’s management has an open communication between all levels of employees that is in turn critical to the success of the organization. The company makes sure that it communicates its high moral values, and educates the employees about the whole business environment in order to foster an organizational environment made up of employees who share the same vision and values as the company. There is also an excellent relationship between the management and the employee unions in that both have stuck by each other during good and bad time’s thus creating level of trust. That is an example of geocentricism kind of orientation.

Decision Factors

The decision factors for the expansion was on the basis of various elements including ready markets, less competition, availability of enough capital among other contributing element.

Core Capabilities

The company has focused on the baby boomers including corporate executives, lawyers and bankers who offer a sustainable competitive advantage since they earn highly in terms of salary and as such, they are capable of purchasing at higher prices (Sheila, 2010). There is also less competition among the many HD’s US subsidiaries of motorcycle business thus making it easier to operate in the market while the global market industry is attractive that it can accommodate many players (Harley-Davidson Annual Report, 2013).

Opportunities and Constraints

One of the opportunities is that many young generations especially the youths are willing to spend their last coin on classy lifestyle such as riding in high performing motorcycles brands and as such, have a higher purchasing power (Sheila, 2010). The only constraint to this is that most of the youths are unemployed thus cutting on the number of individuals who can afford HD’s products. Another opportunity is the target for corporate executives, lawyers and bankers among others due to their high incomes salary-wise. However, the se group is too busy to find time for riding motorcycles (Sheila, 2010).

Value Chain Dispersal and Integration Strategy

It is a high-level model through which a business receives raw materials in form of input, adds value to the raw materials and then sells finished products to customers. It relates to the integration strategy in that there is dispersal of value chain in discreet functions including production, assembly and distribution among others.

Conclusion

In this paper, there are various elements or strategies for HD have been extensively both in local and international market. The specific areas that have been discussed include company overview, policy and decision making with regards to local and multinational companies, PESTEL analysis, international orientation, decision factors for expansion, core capabilities, opportunities and constraints, and Value Chain Dispersal and Integration Strategy

References

Harley-Davidson, Inc. (2013). Financial and Strategic Analysis Review. Retrieved from, http://callisto.ggsrv.com/imgsrv/Fetch?banner=4d609cd7&digest=27b6b6d33026b58ef227e0025dda7d42&contentSet=SWOT&recordID=47405_GDAUT29887FSA

Mark, M., Bundgaard, T. & Hathaway, J. (2006). Strategic Report for Harley Davidson. Pandora Group.

Sheila L. (2010). Harley-Davidson, Inc.: A Strategic Audit. Retrieved from, http://scholarworks.wmich.edu/cgi/viewcontent.cgi?article=1552&context=honors_theses