Many companies opt to expand beyond their domestic market in order to gain access to new customers achieve economies of scale by increasing sales volume
business
Description
Question 1: Many companies opt to expand beyond their domestic market in order to gain access to new customers, achieve economies of scale by increasing sales volume, capitalize on core competencies, or spread risk across a wider market base. Companies can either set up operations outside their domestic boundaries or export finished goods to foreign markets. Harley-Davidson has chosen to compete in various country markets in Europe and Asia using an export strategy.
Visit the Harley Davidson website. Read the sections of the company’s latest annual report related to its international operations. Post a response to the following:
In the past, Harley Davidson avoided development production facilities outside the United States. More recently and in accordance with their annual report, they developed a production facility in India. Why in your opinion and preferably supported by their annual report and/or external sources, did the company develop production facilities outside the United States?
Under what circumstances might it rethink its current strategy and return production to the United States?
Question 2: One way to increase a company’s competitive edge is to diversify. Such a strategy is not without its risks and should be pursued only if such an action will build shareholder value. A company may diversify either by merging with or acquiring another company, or starting up its own operations as a new line of business.
Consider your company in the Business Strategy Game and post a response to the following:
Irrespective of whether your company has the option to diversify into other products or businesses, what specific resources does your company have that would make it attractive to diversify into related businesses?
List all the resource strengths you think are transferable to other businesses.
Indicate what kinds of strategic fit benefits could be captured with these resource strengths.
