Navistar Case Study

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Corporate Level Strategy:

- Navistar has accomplished diversification practice from 4 main business segment i.e. large fleet and buses such has buses and military segment, government entities, OEM manufacturers and having a dealership with Ford Motors.

- Navistar also made the vertical acquisitions in order to decrease its reliance on suppliers. So Navistar established a new engine line – Maxxforce, which led them depend less on Cummins for supplying the engine products. Navistar also acquired Pure Powe Technologies which is an emission solution company and Holley Performance Products which manufactures engine valve technologies.

- Navistar has also created and established many strategic alliances with many companies. Navistar has already joint ventured with Indian company Mahindra & Mahindra to form Mahindra Navistar which deals engines, commercial trucks and busses in India. It’s cooperative level strategy is a combination of diversifying alliances as well as synergistic alliances.

Business Level Strategy:

In the business level strategy, Navistar has focus on practicing differentiation strategy. This is by using a new technology – EGR technology. As the whole industry embraces SCR technology, Navistar choose to utilize the innovative EGR technology. In this technology, the motor circulation exhaust gas back into the engine cylinder and burn exhaust again which provides cleaner, cheaper, lower maintenance solution.

Recommendations:

- As Navistar is following the differentiation strategy on being the company to choose to manufacture EGR emission technology, the company should be able to influence the customers with its benefits in order to change the mentality concept of the buyers who are mostly relied on SCR technology.

- Navistar has made several acquisitions and should be careful while making acquisitions because it might be tricky since most of the business fail to operate well after acquisitions. Navistar should be cautious in checking every aspect of financial performances of the firm that they are acquiring.

- As Navistar has high level of customer loyalty by winning J.D. Power and Association 2010 US Heavy Duty Truck Customer Satisfaction Award, the company should take benefit from it in influencing the customers towards using EGR technology.

- Since Navistar is currently very active in global strategy movement in BRICS countries, it should focus more in South African market as there is stronger potential and also existence of huge market.