Navistar Case Study

BP 6918 Strategic Management

Individual Assignment on 3rd Case study of Navistar [pic 1][pic 2]

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Navistar

Company Overview:

A $12 billion worth of company with over 180 years of history is a company naming Navistar International Corporation (NAV) – which has transformed from being a farm equipment giant to a company that deals with truck, bus, and diesel engine markets. Although Navistar is a billion-dollar worth company with almost 2 centuries of history, the company has been a victim of declining economy which has led the company in the delay of shipping fewer goods and fleet upgrades. However, even though there was the 50-year low on the demand of the truck in 2010, Navistar still emerged as the standout to take win over the turmoil and still gained market share, increased profit, and invested in technologies and other areas of business. This is because Navistar adapted and got accultured in being entitled for its innovative strategies. Their innovative strategies have made them stand out from their competitors and unlike them, Navistar have been able to adapt well during the volatile market situation.

Navistar, focusing on being innovatively different than the competitors, the major reason why it stands out from the competitor is because they have met the 2010 US emission standard with no additional after treatment.

History:

Initially Navistar International was named as International Harvester. International Harvester’s first global movement was in 1905, when it opened its first plant in Sweden. At that time, The Farmall was the first to manufacture purpose tractor followed by International Harvester to make heavy trucks in 1928. By 1937, International Harvester claimed its spot being entitled as the largest manufacture in both medium and heavy duty.  During WWII, International Harvester had to face many challenges due to underfinance and lot of other new competitors. At this time, International Harvester lost market share. In 1980, International Harvester was at the edge of bankruptcy and had to sell its construction equipment, agricultural equipment and also its famous name. However, in 1986, the company came up again as Navistar International with new look, new attitude and focusing on the medium and heavy-duty truck markets. In 1992 and 1993, there was a drastic demand rise for heavy trucks that resulted in increase of retail deliveries. Navistar also purchased one third of AmTran in 1991 and two third in 1995 and then was re-branded as Integrated Coach (IC) – which is still the leader in international bus market.

Competitors:

1. PACCAR Inc:

The main segment if PACCAR are trucks and busses, engine parts, and financial services – which is similar to Navistar. PACCAR has 24.1% of market share in North American truck market and also 15.1% in Europe being well known for producing high quality products and use of advanced technologies.

1. Volvo Group:

It’s a Swedish motor company which produced its first car in 1927, first truck in 1928 and first bus in 1934 and also expanded its growth in manufacturing aircraft engines later. Volvo focuses the market mainly on production of trucks of 63% of net sales followed by construction equipment of 20% net sales, buses 8% and other 9% of aircraft and marine engines and financial services. Volvo remains focused on sticking strictly to the quality and durability from its brand.

1. Daimler Group:

This company focuses on 5 main segments i.e. Mercedes Benz Car, Daimler trucks, Mercedes-Benz vans, Daimler Buses, and financial services. The company manufactures and distributes globally under many brands like Mercedes Benz (truck, busses, and vans), Freightliner Trucks, Orion, Mitsubishi Fuso, and Thomas Built Buses.

1. Cummins, Inc:

Cummins is the competitor of Navistar in terms of engine market who supply engines to PACCAR, Volvo, Daimler, Ford and also Navistar. The company has expanded into 4 business units: engines, power generation, components and distribution. Cummins focus on innovation, persistence and commitment to the community.

1. BAE systems:

Provides system and support services for military customers and is one of the largest defense contractors providing military combat, artillery, and engineering vehicles which bring competition with Navistar in this market.

1. Oshkosh Corp:

The company over the years have expanded manufacturing facilities across North America, Europe, Australia, and China which produces brand names such as Oshkosh, JLG, Jerr-Dan, and many others. It competes with Navistar in military vehicle segment as Oshkosh specialize in military and fire engines.